JCB cuts production levels amid coronavirus outbreak

British manufacturer JCB is set to cut working hours for thousands of its staff due to predicted supply issues caused by the coronavirus outbreak.

The move will mean a 34-hour week for around 4,000 UK production employees until further notice, starting on Monday 17th February. There has also been an immediate suspension of all overtime.

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 per cent 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.”

Mr Turner said the measures will ensure that, while the company will produce fewer machines that anticipated, it will do so with the same number of employees, whose skills are necessary 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,” he added.

JCB has discussed the measures with the GMB union and says it will pay employees for a 39-hour week. They will bank the hours and work them back later in the year.

There have now been more than 60,000 cases of coronavirus, or Covid-19, and over 1,300 deaths – mainly in China where the outbreak originated.