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Output reduced at JCB due to anticipated component shortages from Chinese suppliers 14 February 2020

Disruption to the component supply chain due to the coronavirus outbreak

JCB is set to reduce production levels at UK factories due to anticipated component shortages from Chinese suppliers impacted by the coronavirus outbreak, the Company announced. The move will mean a shorter working week for around 4,000 JCB and agency shop floor employees from Monday (February 17th). This follows an immediate suspension of all overtime.

The measures have been discussed with the GMB union and will see the introduction of a 34-hour week for UK production employees until further notice. JCB employees will be paid for a 39-hour week and will bank the hours, working them back later in the year.

The 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 its skill base.

Production in the UK has so far been unaffected by the situation in China. However, more than 25.0% 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 JCB will not have the required amount of parts needed to build the forecast number of machines in the short term.

These measures will ensure that, while JCB will produce machines in lower than anticipated numbers, it will do so with the same number of employees, whose skills it will need to fulfil customers’ orders when the situation returns to normal.

JCB is keeping the situation under review and anticipate a surge in production levels once this period of supply disruption has passed.