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The Mini owner, BMW, has ended 180 agency staff contracts at its factory in Oxford as the British car industry grapples with global economic uncertainty and steep US tariffs.
Donald Trump announced 25% tariffs in March, hitting all cars imported to the US from overseas from 3 April, in the hope of forcing carmakers to invest in production in the US. The tariffs have left British manufacturers who sell large numbers of cars to the US scrambling for a response.
However, Britain’s largest automotive employer, Jaguar Land Rover (JLR), has just restarted shipments to the US despite questions over whether it can make a profit on its cheaper models. JLR last month paused shipments to try to work out how to respond to the tariffs.
The tariffs arrived as the British car industry was already in a perilous state, with UK car production in 2024 half the level seen in 2019, before the coronavirus pandemic. Carmakers are also struggling to shift to electric car production.
The Oxford Mini plant has been running well under capacity for five years, with 2024 production of 110,000, compared with 234,000 at its peak in 2018. The 180 staff whose contracts were ended in April were all agency workers.
The job cuts represent only a small proportion of the 3,500 workers at the Oxford factory, and it is understood the company often uses temporary workers to manage fluctuations in production. Nevertheless, the cuts illustrate the difficulties facing British carmakers.
Mike Hawes, the chief executive of the Society of Motor Manufacturers and Traders (SMMT), a UK lobby group, last month said the tariffs would have a “severe, significant and immediate” impact, with job losses likely “within weeks”. Aston Martin, which makes sports cars, this week said it was limiting exports to the US.
On top of the tariffs, carmakers have had to contend with slower growth in demand for electric cars than previously expected. BMW had already reacted in February by delaying a £600m investment to upgrade the Mini factory for electric production. It is understood BMW does still plan to go forward with that investment, although a formal decision on the timing is yet to be made.
JLR, owned by Indian conglomerate Tata, also has electric models to consider. The electric version of its leading Range Rover model is going through final testing, with sales due to start this year.
However, a bigger question mark remains over the timing of the next Jaguar. JLR last year launched a bold rebrand of the ageing Jaguar marque, with a December launch event in Miami that emphasised its hopes of targeting a global, moneyed class of buyer. Trump’s tariffs would add 25% to the cost of the car from the factory gate, adding a major obstacle to a profitable launch.
The company had already cut back production of cheaper models made at its Halewood factory in January, with hundreds of voluntary redundancies and payouts for people taking early retirement as it changed shift patterns.
The production cuts were brought in as JLR prepared to upgrade the factory to be able to make further unnamed electric cars. Trump’s tariffs could make it harder for JLR to justify increases to production again.
JLR’s biggest moneymakers have long been its most expensive models, such as the £105,000 Range Rover and Range Rover Sport, which are built in Solihull in the West Midlands. Those vehicles make large enough profit margins to absorb some of the tariff hit. Production of the popular Defender model is also thought to be little changed.
A JLR spokesperson said: “The US is an important market for JLR’s luxury brands, and 25% tariffs on autos and auto parts remain. As we work to address the new US trading terms with our partners, we are enacting planned short-term actions as we develop our mid- to longer-term plans. We will give a further update at our full-year results in May.”
Further JLR job losses are expected by people with knowledge of the internal situation, though no redundancies have yet been announced.
BMW declined to comment.
