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Tata Motors' Jaguar Land Rover to cut output in UK plant

Castle Bromwich factory to have three-day work week until Christmas

In July, Jaguar Land Rover had warned that a bad Brexit deal would cost the company billions of dollars, jeopardizing its future investments in the U.K.   © Reuters

MUMBAI (NewsRise) -- Tata Motors' luxury unit Jaguar Land Rover is cutting its production schedule at a plant in the U.K. starting next month, citing the uncertainties triggered by Britain's exit from the European Union.

"In light of the continuing headwinds impacting the car industry, we are making some temporary adjustments to our production schedules at Castle Bromwich," JLR said in a statement Tuesday. The automaker said it is a "standard business practice," for JLR to regularly review its production schedules.

According to media reports, the change in schedule includes about 1,000 workers at the plant shifting from a five-day work schedule to a three-day one until Christmas this year.

The announcement comes as Britain braces to exit the European Union next year, marking one of the biggest policy shifts for the region in half a century. The lingering uncertainty regarding future economic relationships in the region has stirred fears of a so-called hard Brexit, where Britain would leave the bloc without a trading agreement with the EU.

In July, JLR, Britain's largest car maker, had warned that a "bad Brexit deal" would cost the company billions of dollars, jeopardizing its future investments in the U.K. Ralf Speth, the chief executive of JLR, called upon the U.K. government to urgently provide "certainty for business," including guaranteed tariff-free access and frictionless trade with the EU.

The U.K. auto industry is also bearing the brunt of a government move to curb diesel vehicles that has a cast a shadow over demand for cars in Europe's second-biggest car market.

Mumbai-based Tata Motors acquired the luxury automaker from Ford Motor in 2008 for $2.5 billion. JLR accounts for more than half of Tata Motors' revenue and nearly 90% of its operating profit.

The British car maker has been gradually bringing down its production in the U.K. in the face of political uncertainty. In January, the company said it would bring down production at its northern English plant in Halewood later in the year.

In April, it cut output at Castle Bromwich and Solihull that affected 1,000 workers. In June, it said it would move the production of its Discovery cars to the new plant in Slovakia.

Still, on Tuesday, the company reiterated its commitment to the existing plants in the U.K., where it has invested billions of pounds.

"We are, however, continuing to over-proportionally invest in new products and technologies, and are committed to our U.K. plants in which we have invested more than 4 billion pounds ($5.25 billion) since 2010 to future proof manufacturing technologies to deliver new models," JLR said.

Shares of Tata Motors lost 3.4% in Mumbai trading, while the benchmark S&P BSE Sensex closed 0.8% lower.

--Dhanya Ann Thoppil

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