JCB is to reduce production levels at UK factories due to anticipated component shortages from Chinese suppliers impacted by the coronavirus outbreak.
The move will mean a shorter working week for around 4,000 JCB and agency shop floor employees from 17 February.
Go deeper with GlobalData
This follows an immediate suspension of all overtime.
The measures have been discussed with the GMB union and will see the introduction of a 34-hour week for UK production employees until further notice. JCB employees will be paid for a 39-hour week and will bank the hours, working them back later in the year.
“The disruption to the component supply chain in the UK comes at a time when demand for JCB products is very strong, so while this course of action is very unfortunate, it is absolutely necessary to protect the business and our skill base,” said JCB COO, Mark Turner.
“Production in the UK has so far been unaffected by the situation in China. However, more than 25% of JCB’s suppliers in China remain closed and those that have reopened are working at reduced capacity and are struggling to make shipments. It is therefore clear inbound supply of certain components from Chinese partners will be disrupted in the coming weeks as they seek to replenish their stocks.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData“This inevitably means we will not have the required amount of parts needed to build our forecast number of machines in the short term. These measures will ensure that, while we will produce machines in lower than anticipated numbers, we will do so with the same number of employees, whose skills we will need to fulfil customers’ orders when the situation returns to normal.
“We are keeping the situation under review and we anticipate a surge in production levels once this period of supply disruption has passed.”
