JCB slows production as coronavirus hits suppliers
JCB is to slow production levels at its UK factories amid anticipated shortages of components from Chinese suppliers struggling with the impact of the coronavirus.
The construction equipment manufacturer said that there would be a shorter working week for around 4,000 of its employees and agency staff on the shop floor from Monday 17 February, following an immediate suspension of all overtime.
Around a quarter of JCB’s Chinese suppliers remain closed as a result of the outbreak of coronavirus, which started in Wuhan and has now infected around 60,000 people across the country, resulting in 1,350 deaths.
JCB’s UK production employees will work a 34-hour week until further notice. Following discussions with the GMB union, JCB employees will be paid for a 39-hour week and will bank the hours, working them back later in the year.
JCB chief operating officer Mark Turner said: “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.
“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 that the inbound supply of certain components from Chinese partners will be disrupted in the coming weeks as they seek to replenish their stocks. This inevitably means we will not have the required amount of parts needed to build our forecast number of machines in the short term.”
Turner added: “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.”