The car that saved JLR - Coursework Example

 The car that saved JLR Introduction In present day scenario, with growing competition, companies are facing greater number of challenges than ever before. Market is more consumer inclined that is products are strictly being made as per consumer specification. The surrounding environment of an enterprise is continuously changing because of multiple internal and external factors. The reason behind constant transformation of organisational environment is the impact of internal and external factors on decisions and strategies of an organisation. These decisions, in turn, affect human resource and corporate culture of a company. The current scenario of the market place suggests that for survival of an organisation, well-organised human resource, timely recognition and exploitation of opportunity, improved quality of product, competitive pricing and innovation in production related technology are necessary. Jaguar Land Rover (JLR) is a United Kingdom (UK) based business that was owned by United States (US) automobile giant, Ford Motor. In 2008, Tata Motors, India’s largest automobile company, had bought it from Ford as the latter wanted to focus on its core car business in US. JLR was a liability to Ford as it was not making enough profit and with financial crisis in US, Ford needed to raise money for its own survival. Hence, the company sold JLR to Tata Motors at a comparatively less price. Many analysts and investors initially called this investment an expensive mistake of Tata Motors, but eventual success of JLR was extremely surprising (The New York Times, 2012). The analysis of the given case study, “The car that saved JLR”, emphasises on cultural aspects entailed by merger and acquisition with respect to JLR’s acquisition by Tata motors. This essay highlights the strategic framework implemented by Tata motors in order to manage human resource and diversity in work environment, which had led to the present day success of JLR (Reed, 2012). Culture The culture of an organization is an eminent part of countless decisions made in business. The ideas, assumptions, ethics, values, attitude and belief of an enterprise govern ways in which employees think and behave. Culture is considered as a base of organizational strength that directs the resources and holds them together. Culture is often defined as a concoction of inheritance, customs, values, life style and tradition shared within a social group (Hanges, et al., 2004). Although the definition of organizational culture is unclear, yet it is very important for every organization. The organization culture differs from one organization to another. At many situations, the terms ‘organization culture’ and ‘corporate culture’ are used interchangeably. Corporate culture is the reflection of an organization’s personality. It takes into account shared values, methods and policies that are implemented by an organization and its employees in order to meet every day business problems (Milne, 2007). The corporate culture of an organisation is reflected in its employee’s attitude and behaviour. The culture of any enterprise adds meaning, clarity and dimensions to its various functions, thereby helping to achieve organisational goals. The organization culture allows employees to be on the same platform and defines the way they interact among themselves (Seel, 2000). According to Fincham and Rhodes (2005), main attributes of culture is that it is symbolic, unifying and holistic in nature. It helps in promoting healthy competition at the workplace. In Tata group, a strong work culture is followed, where stress is on ethic and moral values. The group of companies undertake various social welfare activities for communities associated with its industrial units. The Tata group cherishes the strong bond shared by its employees, which is foundation base for a dedicated team. There is another theory related to culture as suggested by Edgar Schein, known as Schein’s three levels of culture. These levels are: Typical behaviour Stated values Fundamental assumptions This theory is often represented in the form of an iceberg where the tip represents typical behaviour format of an organisation. Typical behaviour is the most visible level of culture that consists of behavioural structure and cultural illustration. It is expressed in terms of facilities provided to employees, dress codes, specific application of technology and physical layout of the work area. Stated values are moral principles of an individual that determine his or her behaviour. However, these are underlying factor and are not directly observable. The last and most important level is the fundamental assumptions. These assumptions are hidden and unconscious in nature; they are mostly perception, assumptions, thoughts and belief about organisation, employees and surrounding environment (Schein, 2006). Figure 1: Schein’s three levels of culture (Source: Author’s creation) When Tata Motors acquired JLR, it was obvious that there would be cultural differences as Tata Motor is an Indian company and JLR is a British company. JLR acquired the culture of its parent company, Ford because of long association. Ford had hierarchical culture with bureaucratic control, where power and influence were largely regulated by role and position of an employee. Highly defined jobs left no room for talent and personal skills to be expressed along with an environment, where adopting changes were not permissible. On contrary, work environment of Tata Motors is infused with organisational ethics and values. The company follow cultural control where job security and welfare of employees is assigned utmost importance along with customer satisfaction. Despite the work culture difference, participation of Tata Motors in JLR’s management did not result in cultural conflict. Tata Motors assured the employees of JLR that operations as well as job positions would stay unchanged. Moreover, they hired Ralf Speth as the CEO of JLR, who is German by birth and have no prior work experience with Tata group. The company hired him on the basis of knowledge, skill and experience. Tata Motors took another major step by delegating management of all operational activities in its UK based production plant to executives located there, rather than exercising control from their India-based headquarters. This helped in reducing cost as well as better management of resources by individuals who knew the workers better. Strategic human resource management In all international organisations, managing human resource is a key to success. The survival and performance of an enterprise to a great extent depend on human resource management (HRM). International HRM is way more complicated than traditional HRM; hence, demanding strategic approach. Strategic human resource management explains concepts and policies related to human resource that align management policies in accordance with organisation’s strategic and long-term goals (Mello, 2006). Strategic HRM provides foundation base for acquiring competitive advantage, in terms of economies of scale, communication strategies, structure and design of organisation and providing employee value proposition. Strategic HRM plays a crucial role in merger and acquisitions. It takes into account tactical planning that prevents cross-cultural confrontations and conflicts. Strategic HRM require vertical and horizontal integration of organisational resources. Vertical integration is to integrate human resource policies with strategies related to business and operation. On the contrary, horizontal integration implies that all HR policies should be complementary in nature (Wright, Snell and Dyer, 2005). Figure 2: Vertical and horizontal integration (Source: Author’s creation) Theoretical perspective of strategic HRM According to the strategic HRM theory, there are two approaches: Universality approach: The universality approach is mainly concerned with transforming traditional HR policies into a set of limited HR procedures, which are most appropriate. The approach explains that a multiple ways to manage resources and strategies. The policies under universality approach includes high degree of employee security, selective hiring method, team management, decentralization of decision making and comprehensive training methods (Schuler and Jackson, 2008). Cultural approach: The cultural approach is influenced by Hofstede’s four dimension theory of culture, where he mentioned that decisions and policies vary in different cultures. Cultures are fundamentally influenced by power distance index, uncertainty avoidance, individualism/ collectivism policy and masculine/ feminine approach (Hofstede, 2011). Tata Motors follow the universalistic approach in order to acquire, train and motivate its employees. Decentralisation of decision making is visible in their practice of delegating task to UK-based executives for managing plant activities at Liverpool. In addition, selective hiring practice has been exhibited in selection of German CEO (Reed, 2012). International HRM aspects Recruitment, development and training play an important role in management of human resources. Many multinational enterprises apply one or more of the three approaches, which are ethnocentric, polycentric and geocentric, for managing international resources. An enterprise with ethnocentric approach tends to staff parent country nationals at important positions such as, headquarters and higher authority. In polycentric approach, host country nationals manage local operations, while parent country nationals operate at the headquarters. However, geocentric approach selects the best suited person for a position, irrespective of his origin (Treven, 2001). The operations of Tata Motors in UK consider both polycentric and geocentric approaches. They employed local executives to look after plant operations; whereas, hired Ralf Speth, the previous CEO of BMW, as CEO of JLR owing to his experience and knowledge (Reed, 2012). Best Fit Approach of HRM The best fit approach is very similar with contingency theory. This highlights the fact that effectiveness of a HR strategy depends on its appropriateness with regard to environment and organisational circumstances. The ‘Best Fit’ approach recognizes vertical integration of organisational strategies with HR policies in order to have a competitive advantage. Porter has identified three strategies that are necessary for securing competitive advantage: Innovation- to have a distinctive production line Quality- delivering exceptional quality products to consumers Cost leadership- ability to deliver without compromising with cost (Armstrong, 2012) In context of the case study, due to inappropriate strategy implementation by Ford, JLR faced crisis and was running in loss. Yet, with proper business strategy in terms of investment, recruitment and allocation of resources, Tata Motors was able to revive the brand and deliver profit in a cost-efficient manner. Figure 3: Best Fit approach model (Source: Author’s creation) Equality and Diversity approach at work environment Working in a global framework requires equality and diversity as a part of organisational behaviour, with respect to workforce as well as workplace. Equality and diversity is greatly necessary for people management. They are also crucial for strategic planning of an organisation. A work environment, where practicing human rights is included in daily goals and behaviour, is known as inclusive workplace. The concept of inclusive workplace is considered significant because such an environment is very important for international HRM. In an inclusive workplace, work culture defines dignity and respect for everyone, fair practice of recruitment, employee welfare, compensation and human rights, regardless of gender or country or origin of an individual. In this framework, tall hierarchies are discouraged and open communication method is followed. Workplace discrimination In an international workplace, discrimination is often observed in terms of age, gender, race, sexual orientation and so on and so forth. There are also instances of gender segregation at work place. Gender segregation is a stereotypical concept where work is allocated to men and women by judging their ability in terms of gender. Gender or occupational segregation is of two types: Horizontal segregation: Many organisations or sectors employ workers based on gender. For example, hospitals mostly have women for nursing job, whereas factories hire male workers. Vertical segregation: Vertical segregation is considered worst as it deters a particular gender from experiencing equal opportunities to progress in their career within an enterprise. Vertical segregation affects women more than men. In 1998, there was an incidence of Ford Motors, where female employees of its Chicago plant complained about sexual and verbal harassment (National Organization for Women, 1998). Equal opportunity approach and managing diversity The conventional equal opportunity approach focuses on dealing with direct and certain form of indirect discrimination through application of various acts and legislations. This approach stresses upon procedural justice through firm’s rules and policies. Nevertheless, there are certain drawbacks of the equal opportunity theory, given that it is a stringent procedure. Besides that, this theory fails to identify individual differences and does not contribute towards improving performance. Keeping in view the increasing obsolescence of the conventional equal opportunity theory, an alternative concept of ‘managing diversity’ has been developed as global enterprises are increasingly expressing interest towards the same. Managing diversity is to understand and manage cultural and social differences among employees in the workplace in a positive manner so as to enhance productivity and performance (Stredwick, 2013). The differences between these two approaches are represented below (Torrington, Hall and Taylor, 2002): Table 1: Difference between managing diversity and equal opportunity approach Aspect Managing Diversity Equal Opportunity Purpose Utilise employee potential to maximum advantage Reduce discrimination Responsibility All HR managers/ organisation culture HR department Focus Individuals Groups Perspective Integrated approach Detailing with different needs of different groups Benefits for employees Opportunities improved for all employees Improved opportunities for disadvantaged groups Remedies Cultural change Modification in system and practices (Source: Author’s creation) According to Simon Lenton, who is HR director of JLR, the organisation faces certain HR challenges related to international context, but none of them are too significant. The employees of JLR are highly motivated and loyal towards the organisation. Their commitment is related to emotional attachment towards the organisation, which is a result of honest and open flow of conversation. The director added that turnover rate of the company is also quite less. The employee engagement program involve competitive pay package, employees welfare benefits and value proposition. In addition, JLR follows managing diversity approach where they concentrate upon interpreting need and requirement of different cultures and management, as opposed to taking decision based on assumption (Noronha, 2013). Conclusion In the present competitive era, creation of an inclusive workplace with diversified workforce, justified human practices and cross-cultural approach is an ever-challenging task for HR managers. In a diversified work environment, managers must undertake strategic approaches in order to utilize the productive potential of individuals. The managers must encourage cross-cultural involvement to have broader horizon, in terms of marketplace and workforce, while maintaining cultural harmony. An enterprise that combines both equal opportunity approach and managing diversity approach for minimising cultural differences forms an example of ideal work environment. Reference list Armstrong, M., 2012. Armstrong's handbook of human resource management practice. London: Kogan Page Publishers. Hanges, P. J., Javidan, M., Dorfman, P. W. and Gupta, V., 2004. Culture, leadership, and organizations. Thousand Oaks, CA: Sage. Hofstede, G., 2011. Dimensionalizing cultures: The Hofstede model in context. Online readings in psychology and culture, 2(1), pp. 8. Mello, J. A., 2006. Strategic human resource management. Mason, US: Thomson/South-Western. Milne, P., 2007. Motivation, incentives and organisational culture. Journal of Knowledge Management, 11(6), 28-38. National Organization for Women, 1998. Ford Motor Company under Fire for Workplace Abuse [online] Available at: [accessed 09 May 2014]. Noronha, C., 2013. 'Developing our people for growth is the key at JLR' [online] Available at: [accessed 09 May 2014]. Reed, J., 2012. The car that saved JLR. [online] Available at: [Accessed 8 May 2014]. Schein, E. H., 2006. Organizational culture and leadership. New Jersey: John Wiley & Sons. Schuler, R. S. And Jackson, S. E., 2008. Strategic human resource management. New Jersey: John Wiley & Sons. Seel, R., 2000. Culture and complexity: new insights on organisational change. Organisations & People, 7(2), pp.2-9. Stredwick, J., 2013. Introduction to human resource management. New York: Routledge. The New York Times, 2012. Tata Motors Finds Success in Jaguar Land Rover. [online] Available at: [accessed 09 May 2014]. Torrington, D., Hall, L. and Taylor, S., 2002. Human Resource Management. England: Pearson Education Limited. Treven, S., 2001. Human resource management in international organisation. Management, 6(1-2), pp. 177-189. Wright, P. M., Snell, S. A. and Dyer, L., 2005. New models of strategic HRM in a global context. The International Journal of Human Resource Management, 16(6), pp. 875-881. Appendix Article The car that saved JLR By John Reed Jaguar Land Rover’s factory in Merseyside is open 24 hours a day and produces a car every 77 seconds, evidence that British carmakers are on a recession-defying roll ©Michael Bodiam Full throttle: Range Rover Evoque shells line up at the JLR plant in Halewood, Merseyside On the assembly line at Jaguar Land Rover’s cavernous factory in Halewood, Merseyside, a young green-uniformed worker takes a long, clear plastic strip to which the chrome letters “Range Rover” are affixed. He presses these on to the bonnet of an Evoque, Land Rover’s compact sport utility vehicle, then carefully pulls the strip away. Nearby, another worker is securing a rear-view mirror on to the inside of a windscreen. “All fiddly jobs,” Sarah Livingston says of her new job in a Scouse lilt. “I didn’t think I’d like it because it’s so manual, but I do enjoy it ... It’s always busy because the line’s always moving.” Livingston, who is 21 and left school at 15, joined the carmaker in July after seeing a newspaper advertisement. She is one of 1,000 new recruits JLR hired to keep up with demand for the Evoque, which it began building 24 hours a day at Halewood last month. In a regional unemployment “black spot” still recovering from the decline of the Liverpool shipyards and Lancashire coal mines, JLR had 30,000 applicants for the jobs. The Evoque is a downsized, tarted-up reimagining of the SUV for the 21st century, worlds away from the first boxy, agrarian Land Rovers made by Rover, as it was then, from 1948. JLR designed the car with the aim of attracting more female, foreign and other new buyers to the brand, who now account for 80 per cent of its customers. The Evoque has hit a sweet spot on the automotive Venn diagram, where London’s yummy mummies meet China’s new rich; JLR has sold more than 93,000 of the SUVs – a generous number for any luxury model – since launching last year. The car’s status as a global hit is confirmed by the “build shippers”, bar-coded slips of paper taped to the metal carrier that pulls cars down the line. Each lists the destination: there are Evoques headed to China, the US, Italy, Australia and Hong Kong. The Halewood plant, Europe’s largest under one roof when it was built by JLR’s former owner, Ford Motor, in 1962, is making Evoques, along with Land Rover’s older Freelander, at the rate of one every 77 seconds. With last month’s move to 24-hour production, Halewood begins its working week at 5am on Mondays, and carries on until 12:30am on Saturdays. Over the past two years, the factory has trebled its staff to 4,500 to keep up with the insatiable global demand. Halewood has not worked night shifts since the 1990s, the heyday of Ford’s Escort, and even then it did not work around the clock. “At the moment, we are maxed out in terms of our capacity,” says Richard Else, the plant’s operations director, as he leads me around, taking care to avoid the small electric vehicles that zip across the floor ferrying parts. “Based on what we have on at the moment, we are above capacity.” The body shop at Jaguar's XJ Factory, Castle Bromwich Business Centre A Jaguar XJ arrives into the final inspection line before the bodywork is painted XJs are lined up for a bodywork inspection Two workers inspect an XJ Worker Anthony Lee inspects the bonnet of an XJ A hinge to body air tool The "Trim & Final" section of the factory at Castle Bromwich XJ doors await assembly Completed dashboards at the end of the build line await collection The engine dress line The Body & Side build section, with robot The Seat Adjust station for Jaguar Land Rover at Johnsons Controls, Halewood, Liverpool The rear seat back assembly line at Halewood A finished Range Rover Evoque in the inspection area The shell of a Range Rover Evoque in the skills training area for theTrim & Final section of the plant 21-year-old Sarah Livingstone stands by a shell of a Range Rover Evoque in the skills training area The body plant door storage area at Halewood In automotive terms, this is a small miracle. Most of Europe’s car plants right now are cutting shifts or working days because of a slowdown in demand. Three-shift, 24-hour production is a rarity in this part of the world, apart from at a few successful companies such as Germany’s premium car giant BMW or South Korea’s fast-growing Hyundai and Kia brands. Less fortunate producers, including PSA Peugeot Citroën, Ford and Fiat, are considering closing plants on the Continent. . . . But Britain’s carmakers are on a recession-defying, expansionary roll. The industry is benefiting from popular models such as the Evoque, the efficient factories that make them, and the reserves of British engineering, design and shop-floor talent that survived the industry’s long decline from its early-1970s peak. Elsewhere, Nissan – whose efficient Sunderland plant, now Britain’s largest, also works around the clock – is creating about 3,000 jobs, including at suppliers, to build two new models. BMW, Honda, Toyota and General Motors have all recently announced they are adding jobs, building new products or investing more in their UK operations. Over the past year and a half, carmakers have committed £5.5bn to projects in the UK, according to government figures. JLR itself is in the midst of a five-year, £7.5bn investment programme approved by its owner, Indian carmaker Tata Motors, in 2010. It has hired 8,000 people at its three UK plants over the past two years. It is investing £370m in its Solihull factory, which already works 24 hours, to make the all-new Range Rover, favoured by royals and – increasingly – the world’s new rich navigating the potholed roads of Moscow, Rio de Janiero and Mumbai. The car is the first to have been developed entirely under Tata’s ownership, along with the F-Type, the two-seat roadster unveiled by its sister brand Jaguar at the Paris auto show this week. ©Michael Bodiam Driving ahead: A Range Rover Evoque waits for an outer body inspection at Halewood Tata bought Jaguar and Land Rover just as the car industry was heading into a deep crisis in 2008, paying Ford $2.3bn when no other top-drawer carmaker wanted them. JLR was then part of Ford’s Premier Automotive Group, the US carmaker’s luxury brands division that also owned Aston Martin and Volvo. Ford was not a negligent owner – ploughing some $10bn into the two brands – but failed to get the vehicles or fundamentals quite right. Land Rover struggled with quality problems; Jaguar had few diesel models. By 2007, the US carmaker, heading for a record financial loss, decided to sell its overseas brands to focus on its faltering US business. Its bankers tried to interest established carmakers such as BMW in buying JLR, but none bid. In the four years since, it has defied sceptics. “Tata came in at an opportune moment and got JLR at a good price,” says David Bailey, a professor of business and economics at Coventry University. “They were in the right place at the right time, but equally they were willing to take a punt at a time when no one else would have.” As corporate turnround stories go, this a very post-colonial one, with a script that could have been written by Danny Boyle: an ageing dowager of an SUV brand (Land Rover) and an older gentleman who makes executive limousines (Jaguar), wards of a penurious American uncle (Ford), are given a new lease on life by an Indian benefactor (Tata) who revives them with a £7.5bn investment. JLR and its carmaking peers are now a splash of colour and life on a sombre British industrial landscape. Amid anxiety over an economy too skewed toward services such as banking and real estate, Britain’s carmakers are adding good-quality manufacturing and engineering jobs that multiply into many more down the line. The industry, a symbol of decline in recent years, is on track to break its previous production record of 1.92m cars by 2015. Little wonder that car plants have become a favoured evening-news backdrop for coalition politicians. ©Michael Bodiam Sam Garritty works on the leather seats at Johnson Controls, a JLR supplier JLR’s better state of health also creates new jobs at supplier companies that serve it. Hard by the Halewood plant is Johnson Controls, a US auto supply company that makes seats for Freelanders and Evoques. The plant, which employs 373 people, builds each seat on a just-in-time basis to keep inventory down. Every time a car leaves JLR’s paint plant, the factory receives a broadcast signal and their staffs collect parts in proper sequence from a “supermarket area”. “Because of the success of the Evoque, we have been working a lot of overtime,” says Andy Wallis, the plant’s manager. The factory, mirroring Halewood, has recruited 90 people, and moved to three shifts. Johnson Controls has its own network of plants, getting foam from Wednesbury, near Birmingham, and metals from Birmingham and Coventry. “It’s positive news because it’s more jobs,” Alan Johnson, a senior shop steward, says of the move to night work. “On a personal level it changes things – but you only do one night in three.” In the car industry, a rule of thumb is that for every job created at an automobile plant, at least four more are added at suppliers. This multiplier effect is the reason why politicians fight fiercely to protect car jobs. When GM was considering closing its nearby Merseyside plant earlier this year, business secretary Vince Cable flew to New York to plead its case with management. In the end, GM spared the factory after workers agreed to shoulder sacrifices on pay and hours – the kind of compromises that have kept JLR in business too. DHL, which handles logistics for the three plants, is also profiting from JLR’s expansion and has added close to 5,000 jobs, 1,300 of them in Halewood. (Elsewhere in the UK, DHL is adding jobs for work at Bentley, another UK carmaker reporting record sales.) “The brands are bulletproof, and they are adding new products; the Range Rover will be fantastic as well,” says Stewart Robertson, a DHL executive. “They are on this journey; who knows where it will end?” . . . Ratan Tata, the Indian group’s soft-spoken, cerebral chairman is a petrolhead, with a small collection of cars that includes a Ferrari and a Range Rover. Some of his relatives had owned classic Jaguars in the 1960s. “Ratan was fascinated by the brands themselves,” says an executive who has worked with Mr Tata. The Indian group was no newcomer to the UK: Tata already owned two venerable British businesses, Tetley Tea and Corus steel. During due diligence, Mr Tata and Ravi Kant, now Tata Motors’ vice-chairman, were given a look into Ford’s product pipeline and liked what they saw, including early work on the Evoque. ©Michael Bodiam The XJ door line at Halewood JLR’s workers were nervous about the prospect of a new owner and Ford asked Tata to present to the unions, alongside the other two bidders – Mahindra & Mahindra, another Indian carmaker, and One Equity Partners, a private equity group fronted by Jac Nasser, a former Ford CEO. “Tata you could tell was buying the business for the long term,” says Kenny Smith, Unite’s plant convener at Halewood. Workers endorsed the bid, and Ford closed the deal with the group in June 2008. Almost as soon as the ink was dry, demand for SUVs evaporated because of higher petrol prices and the fallout from the US subprime crisis. On the weekend Lehman Brothers collapsed that September, JLR had US customers cancelling orders; within weeks, some of its overseas markets were down by half. By early 2009, JLR had let 3,500 workers go on a voluntary basis, and the company’s production was at a crawl. At Halewood, workers were engaging in busy work, such as maintaining robots and repainting stripes on the factory floor. A low point came that October, when JLR said it would have to close one of its two west Midlands plants. Solihull and Castle Bromwich are just eight miles apart, but then operated separate overheads, and workers did not move between them. Tata was hinting that it might move more of its production to low-cost India. ©Michael Bodiam Building rear axles at JLR’s plant in Castle Bromwich, west Midlands JLR – and Halewood particularly – had a tradition of union militancy that stretched back to the many wildcat strikes that plagued Ford. The unions were initially defiant, vetoing the conditions management was seeking to keep the plants open: a closing of the final pension scheme and a cut in starting pay. The impasse lasted for several months before a compromise emerged, when JLR dangled an ambitious product plan before the unions. This would allow the carmaker to grow into its outsize UK manufacturing footprint: £7.5bn invested in new cars, engines and variants over five years. In exchange, unions agreed to let workers move between the two west Midlands plants. They also signed off on a novel pay structure under which new hires join as temporary workers for a year at 80 per cent of normal pay, then as staff at 90 per cent pay after a year. “There were some very brave, far-sighted leaders at the plant level who were able to say, ‘Confrontation hasn’t worked in the past – let’s try a new approach,’” says Des Thurlby, JLR’s head of human resources. The compromise allowed JLR to factor lower manufacturing costs into its business plan and also rejuvenated the company’s workforce. Today, half of the workers at Halewood are aged 25 or under. Steve Cooper, 53, who is old enough to have helped build Escorts, works alongside newcomers such as Patrick MacMullan, 24, who joined in January last year, initially as a temporary worker. “I’ll be honest with you – I didn’t want them coming on at a lower wage,” says Cooper. “But we accepted it, to give the likes of Patrick a chance.” MacMullan, who graduated from a four-year apprenticeship straight into the recession, is grateful to have a job. “I’m 24, and I’m making a very reasonable living,” he says. New workers starting at JLR make about £26,000 – a good entry-level salary in the car industry – even at the initial lower rate. Management at JLR, as at other carmakers, likes to have temporary staff as a buffer to smooth out volatility in demand. Halewood now has a “Celtic, Liverpool-like community” spirit, says Thurlby. “With our success comes enormous buzz and pride.” But narratives in the business world are rarely one-way – least of all in the competitive car industry, which is subject to external shocks and the changing whims of consumer taste. JLR could still be tripped up by a number of future threats, ranging from a consumer backlash against SUVs to the economic slowdown in India. Tata warned investors of some of these in the “risk factors” of a New York regulatory filing released with its second-quarter earnings. ©Michael Bodiam Ralf Speth, CEO of Jaguar Land Rover Ralf Speth, the German CEO, invites me into his office at JLR’s engineering centre near Coventry. The facility is expanding and recently built a three-level office block to work on engine development, due to serve a brand-new engine plant JLR is building near Wolverhampton. Speth points out the glass office opposite his own, where JLR’s Indian owners sit when they visit the UK. By Speth’s account, Mr Tata can rattle off details of a car’s engine, displacement or torque running back to the 1950s. “He is a library in cars in general, but also in technical solutions,” he says. While Mr Tata takes an active interest in Jaguar’s cars, he leaves running the business to Speth, who works with Kant. The Indians can afford to leave JLR to its own devices: the business now generates £1.5bn cash a year, the same amount Tata paid to buy it. JLR has repaid the £1bn plus Tata lent it to survive the crisis, and now finances itself. JLR is having a good year, with record sales and good reviews for the new Range Rover and Jaguar F-Type. However, it has formidable competitors. In a business where the biggest producers have the greatest competitive advantage, JLR sells about 400,000 vehicles a year – a fraction of the 1.7m sold by BMW, the industry’s largest premium producer, or the 1.3m sold by Volkswagen’s Audi. Jaguar on its own sells fewer than 100,000. “VW has a higher profit than we have turnover,” Speth acknowledges. “They have really deep pockets.” However, he adds: “For a company of our size we have a solid situation … we are proportionally overinvesting.” JLR has also been a latecomer to overseas manufacturing in the emerging countries that now provide most of the car industry’s biggest growth. China is one of Land Rover’s biggest markets, but it pays steep tariffs to get its cars in. The company is remedying this: it is close to finalising a plan to build its first factory there. JLR is also considering assembling Freelanders from kits in Brazil, as it does in India. This, in turn, is making unions anxious, potentially causing threats to JLR’s competitiveness. Tony Woodley, Unite’s executive officer says he is “delighted” that JLR is adding thousands of jobs in a recession. However, he adds: “We want plant and job security for Britain.” As this story went to press, the union was pushing management to guarantee the safety of its UK plants into the 2020s, and to end the two-tier wage structure that prevails on the factory floor. ©Michael Bodiam Alysson Cresshell in the paint select area, Halewood Speth declines to comment on the talks, but offers this assurance: “We will be investing heavily in infrastructure and people in the near future; it’s quite clear that we will continue,” he says. “We have a clear commitment to the UK we want to keep.” Back at Halewood, workers assume the expansion will continue. Most think the future will be bright. On the line, word is that the factory might be making a soft-top version of the Evoque. “We know this car is hot at the moment [but] if there are any more cars in the model mix, we want them here,” says Smith, the union convener. “We want this place really buzzing.” John Reed is the FT’s motor industry correspondent ....................................................................... From Mumbai to Merseyside Ravi Kant remembers only too well the risks his company took by picking up JLR in 2008, writes James Crabtree. “There were many naysayers,” recalls Tata Motor’s vice-chairman, who leads the parent company in Mumbai and is a longtime lieutenant of the conglomerate’s outgoing head, Ratan Tata. “There were many who said that Tata Motors would not be capable of handling such premium brands, and that it would sink Tata Motors along with it.” These doubters have changed their tune, as a gambit that at first threw the $83bn conglomerate into crisis has since appeared inspired. Nonetheless, all is far from clear on JLR’s road ahead. The first problem lies at the heart of Tata Motors. The company is a curious two-headed beast, awkwardly combining a prestigious European brand with a mass-market Indian car and truck-maker. The mixture makes little strategic sense, with the ailing domestic division providing a dismal contrast to JLR’s international success. “Tata Motors has lost its way,” says one industrialist close to Mr Tata. “Ratan has been trying to resurrect the whole thing, but unless you have people within the organisation who can do this, it is difficult.” The two divisions are run separately, but some feel the struggles of the Indian arm will provide a distraction at board level. Both halves of the business also need major investments, as Tata tries to turn round its fortunes in India, and JLR attempts to repeat Land Rover’s performance with its Jaguar brand. But while the conglomerate has deeper pockets than most Indian businesses, they have their limits too – raising rumours they will float their British prized asset. It is at the top, however, that JLR’s future is least clear. In December, Tata begins arguably its most significant ever change of leadership, as Mr Tata hands over the keys to 44-year-old Cyrus Mistry, previously a director of the Tata, the first time in more than a century that the group will not be headed by a Tata family member. Mr Tata’s deep knowledge of cars is often cited as crucial in the company’s growth. But while early profiles of his successor mentioned his love for cars, the incoming head remains something of an unknown quantity. Tata-watchers speak warmly of Mistry’s abilities, but many also seem to take solace in the fact that Mr Tata may not drive off into the sunset just yet. “His views have been very productive and important,” Kant says, “We would very much like him to continue to be associated.” James Crabtree is the FT’s Mumbai correspondent Read More