JCB has scaled back production at its UK factories, cutting the working week for 4,000 employees, due to expected component shortages from Chinese suppliers hit by the coronavirus outbreak.
As of this week, the firm is to pay employees for their usual 39-hour weeks but they will only work 34 hours. They will be expected to make the time back later this year. All overtime has also been suspended.
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.”
He said production has been unaffected by the situation in China so far but more than 25 per cent of the company’s suppliers in the country are closed and others are working at reduced capacity, so a shortage of components is expected in the next few weeks.
Turner added: “These measures will ensure that, while we will produce machines in lower than anticipated numbers, we will do so with the same number of employees, whose skills we will need 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.”
Last week Arcadis revealed its operations in China, which accounts for 4 per cent of the consultant’s revenue, had been hit by the outbreak.
China has reported 70,635 cases of the COVID19 coronavirus to the World Health Organization with the death toll standing at 1,772. There have been 694 confirmed cases in 25 other countries, with three deaths.
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