New engine plant investment from Jaguar Land Rover

Posted on 19 Sep 2011 by The Manufacturer

Jaguar Land Rover today made a powerful proof of UK automotive manufacturing resurgence with the announcement of a £355m investment in new plant in Wolverhampton.

Business Secretary Vince Cable welcomed the confirmation of JLR’s investment intentions this morning.

Flipping popular perception on the direction of demand on its head JLR has said the site is primarily intended to supply mounting demand for its cars in Asia.

The new facility will be dedicated to engine production, a process JLR wants to take more control of due to increasing export demand.

A large proportion of JLR’s engines are currently produced by Ford at its Bridgend plant in South Wales and the Dagenham site in north-east London. It is not expected that the new Wlverhampton plant will adversely affect employment or production at these facilities.

It is estimated that the new JLR plant will create 750 direct jobs. Unite the Union, the biggest union in UK car manufacturing, has issued a statement welcoming the investment news.

Len McCluskey, general secretary of Unite said: “This fantastic news is the culmination of 18 months’ hard work by the workforce and their union Unite, the local council and local MP Jack Dromey, working with Jaguar to bring this plant to the Midlands.”

As a sign of its commitment to supporting manufacturing strength government has pledged £10m to assist in the build of the new JLR plant through its ‘Grant for Business Investment’ scheme.

The importance of the JLR investment has been recognised at the very highest level in government. Deputy Prime Minister Nick Clegg said:“Growing our economy has to be the number one priority for Britain, and the Government is not sitting on its hands. With initiatives like the Regional Growth Fund, putting up to £10 million into this new plant and Enterprise Zones boosting growth across the country, we’re making the UK a better place to invest and do business.”

The planned location for the plant will be the i54 business park in Wolverhampton, recently designated as an enterprise zone.

Simon Griffiths, chief executive of the Manufacturing Advisory Service – West Midlands has said the investment is likely to bring more job creation than the direct jobs at JLR and that the new business park will undoubtedly prosper under the devlopment. “Our advisers will be out on the ground talking to potential suppliers to JLR’s new engine plant and ensuring they are in a position to take advantage of new opportunities as they arise,” he stated.

JLR is a leading example of the way in which foreign investment in UK manufacturing can change its fortunes. Since the Indian company took ownership of JLR the UK has seen reported pre-tax profits rise from £14.6m in 2010 to £1.1bn in the year up to 31 March 2011. Revenues increased 51% to £9.9bn.

This rising affluence has been reinvested in the UK. The company has already hired 3,000 staff this year, including a record 350 graduates, and now employs almost 21,000 people in the UK.