Traditional British labor strife confronts new Indian owner Tata over cost cutting.

The labor union representing Jaguar Land Rover workers publicly attacked its management today over plans to close one of two plants in the West Midlands, even though the company claims the planned consolidation by the middle of next decade will not result in the loss of jobs.

The Indian-owned luxury vehicle maker is also seeking to restructure or eliminate pensions, create a multi-tiered wage structure that could cut wages by as much as 20%, and expand low-cost country sourcing.

New vehicle sales of Jaguar and Land Rover are down globally by 30%. This has resulted in manufacturing capacity utilization of less than 60% at the struggling company, which was losing money for decades when Ford Motor owned it, well before the current economic crisis.

Tata, the Mumbai-based owner said it ran up consolidated net losses for the year to March of 25 billion rupees (£315 m) compared to net profits of 21.68 billion rupees a year ago.

Unite, the labor union representing workers, said, “Earlier this year, this company and our union agreed a framework agreement intended to support JLR through this tough economic period. Our members said then that JLR could not be trusted to uphold that agreement. Today this has proven to be true.”

The Unite national secretary for the automotive sector, Dave Osborne, went on to say, “by far the biggest liability is the company’s leadership team.”

“Well, Unite’s members will not be paying for management’s incompetence and we will not stand by while those responsible continue to wreck havoc on this business,” Osborne concluded. It is unknown if he is related the John Osborne, one of a group of “angry young men” who wrote Look Back in Anger for the London stage.

It appears that the bloody trade disputes that post-war  British car companies excelled at is about to reappear as one of the main topics in Britain’s “red top” tabloids.

The latest row was triggered by huge, unsustainable losses at both Jaguar and Land Rover as the global Great Recession drags on, and Tata’s ongoing need to cut costs.

With Jaguar and Land Rover more closely integrated than ever before, all future plans will have to address the two brands together, to varying degrees. One move will close either the Castle Bromwich or Solihull plants.

Jaguar Land Rover Chief Executive Officer, David Smith said: “This is a plan that recognizes the impact the economic collapse has had on our business, and at the same time the opportunities that lie ahead for these two great brands. We are confident that a new more efficient and competitive structure combined with future investment will unlock the true potential of this business.”

Unfortunately, this means tough steps in an economy with 10% unemployment that is  already reeling from the financial crisis. So far this year production was reduced by more than 100,000 units; spending and costs were cut; employment reduced by 2,500; and pay frozen and bonuses cancelled.

Smith now says this was not enough to offset the full magnitude of the downturn and ” significant losses” during the past 12 months. he claimed that actions taken have started to reverse the trend and “we now have to take the company to the next level of competitiveness.”

The new plan identifies global competitive benchmarks. These recognize that Jaguar Land Rover has to “match if not beat the levels of cost and efficiency achieved by competitors” that manufacture in multiple locations around the world.

This appears to be corporate speak for the ongoing race to the bottom in  an attempt to obtain union concessions for wages and benefits that match impoverished Indian or Chinese workers.

The new plan also includes a production version of the LRX Concept, which TDB has covered extensively, the smallest, most fuel-efficient Range Rover ever. It will be built in the Halewood plant in Liverpool, subject to “quality and productivity agreements,” needed from a very angry unionized workforce.