JCB reduces output due to coronavirus

JCB will 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 employees and agency shop floor employees from Monday 17 February.

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.

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 that the move means that JCB keeps the same number of employees and so will be well placed to fulfil orders when the situation returns to normal, and that the company is keeping the situation under review.

At the time of writing the death toll for the coronavirus was more than 1,300 worldwide out of more than 60,000 confirmed cases. The vast majority of those infected with the virus are in China.

It is feared that global supply chains will be affected by the virus; although some Chinese workers are beginning to return to work many are still staying at home.

Volvo CE has commented that, regarding the virus, ‘a cross functional working group has been established to coordinate mitigating actions when it comes to first tier suppliers and logistics.’