Rolls Royce is to cut production, as the luxury car maker found it is no longer immune from the crisis engulfing the car industry. Photo: Andrew English
The company admitted that demand had been “softening” in recent months as even the super-rich have felt the pinch.
Rolls Royce, which has called in officials from the Unite trade union to outline its planned cutbacks for next year, is just the latest in a series of manufacturers forced to rein in production.
Details of the company’s economies came within days of car manufacturers sending a delegation to Lord Mandelson, the business secretary, to plead for Government action to rescue the stricken industry.
But already the company has extended the Christmas shutdown at its plant in Chichester, West Sussex from two weeks to three.
There will also be a number of “non production” days, including Monday and Tuesday next week, when the 450 car-builders come in for work.
In addition 40 of the company’s temporary staff have been laid off, although none of the 700 permanent workers have been made redundant.
Further production cuts are planned for the New Year, but Rolls Royce declined to disclose details, nor comment on suggestions that orders had been cancelled nor that the factory would be forced to shut down for one week a month next year.
“Rolls-Royce has been reasonably insulated from the economic downturn so far with continued growth in the first three quarters of the year and anticipated double digit percentage growth at year end,” a spokesman said.
“We are, however, beginning to see a softening in sales in a number of regions and as a consequence are adjusting our production accordingly.”
Evidence of the slowing down of orders came from the company’s global network of 82 dealers.
With cars being built to order, the impact of the economic slump was bound to be felt later by Rolls Royce than most other companies.
It is on course to sell more than the 1010 cars it achieved last year, but the order book for the New Year is far less encouraging, forcing Rolls Royce to take what it described as “prudent” measures.
Union sources admitted that the prospects did not look promising for the company and its workforce.
“Sadly, it looks like even Roll Royce is not immune to the global downturn,” said Dave Osborne, Unite’s national negotiator.
“Unite has been asked to attend a national level meeting this Tuesday, which we will of course be attending, to hear more about the difficulties the company is facing at this present time.
“With reports of bad news within the car industry on almost a daily basis it is now more important than ever that Government takes direct action to make low cost loans available to the car industry.
“It is vital that we help these businesses through the current crisis and keep jobs and skills within our economy.”
With prices starting from £265,000, the Rolls Royce aims at an even richer market than Bentley – the car of choice for some of the country’s best-known footballers.
It too has felt the pinch, having cut production from four days a week to three in having announced plans for a month long shutdown at Christmas.
With sales across the industry plummeting most other manufacturers have also been forced to cut back, from Ford vans to the smaller cars such as the Mini and Nissan Micra.
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