Tata Motors warns job cuts after $520m loss
Mumbai, June 27, 2009
Slumping demand drove Tata Motors into its first annual loss in eight years and India's top vehicle maker warned of more job cuts and plant shutdowns at the loss-making Jaguar and Land Rover unit.
Tata Motors reported a consolidated net loss for the year to March this year of Rs25.05 billion ($520 million) versus net profit of Rs21.68 billion a year ago. Net sales rose to Rs703.70 billion versus Rs354.09 billion.
The firm said it was readying for major belt-tightening, including deferring capital expenditure wherever possible to keep a tight rein on costs.
'The lightening struck some time in the middle of last year, and there was a huge unprecedented global meltdown,' vice-chairman Ravi Kant said.
'We have sent people on sabbatical, gone for cheaper low-cost country sourcing and tight control in cash flows, and are assisting Jaguar Land Rover (JLR) for a major belt tightening.'
Tata Motors said the JLR unit posted a loss after tax of £306 million ($504 million) in the 10 months of the fiscal year to March this year as a brutal global recession crippled car sales, primarily luxury and sports utility vehicles.
JLR sold 167,000 vehicles for the 10 months to March, compared with 246,000 in the same period the year before.
Kant said JLR's performance was better than expected in the new fiscal year but said further job cuts or plant shutdowns at the unit would depend on how the market situation evolved.