U.K.-based JCB is stopping production at all of its U.K. manufacturing plants as disruption resulting from the worldwide Coronavirus pandemic has caused an unprecedented reduction in global demand.
The firm’s nine manufacturing plants in Staffordshire, Derbyshire and Wrexham closed on March 18th as disruption resulting from the worldwide Coronavirus pandemic caused an unprecedented reduction in global demand. At that stage, only shop floor employees were affected by the move and were paid in full during this period, while office staff continued to work a 39-hour week from home.
The news of today’s extended shutdown will mean that the vast majority of JCB’s 6,500 workforce will now be asked to stop working until at least the end of April. During this period, all affected JCB employees will be paid 80% of their basic pay. Senior JCB Directors will not be taking a salary from the company until further notice.
JCB CEO Graeme Macdonald said: “These are certainly unprecedented times and none of us expected to find ourselves in this situation. In announcing that all those JCB colleagues asked not to work will receive 80% of their pay, we hope to remove any financial concerns that many people will undoubtedly have had.”
JCB also intends to make an application to the Government’s Coronavirus Job Retention Scheme to help offset the cost of its support of employees during this challenging period. The scheme is designed to support employers in continuing to pay part of employees’ salaries, for employees who would otherwise have been laid off. The Government scheme pays 80% of an employee’s salary up to a maximum of £2,500 per month. In devising its scheme, JCB has set no cap and will pay 80% of each affected employee’s pay.
JCB CEO Graeme Macdonald said: “These measures are unprecedented in the history of JCB but are absolutely necessary to protect the business. As we continue to deal with the health implications of the COVID-19 pandemic, it has become more challenging to maintain business continuity in this volatile economic climate. JCB is a global exporter and worldwide demand for our products has dropped sharply as customers cancel orders and defer deliveries. This is not just a U.K. issue, it is worldwide and with countries like France, Spain and Italy going into lock-down, those key markets for construction equipment disappear overnight.
JCB’s plant in Pudong, near Shanghai, ceased production last month as the impact of the pandemic initially took hold. After several weeks of disruption, the factory is now fully operational again.