JCB, the UK maker of yellow diggers, is poised to cut production and working hours at its UK factories as it faces component shortages from China, marking the first major domestic impact of the coronavirus outbreak on a British company.
The British company will reduce the working hours of about 4,000 employees from Monday from 39 to 34 hours a week. The decision follows an immediate suspension of overtime, the group added.
More than 25 per cent of JCB’s component suppliers in China remain closed as a result of the Covid-19 outbreak that has spread from the city of Wuhan in Hubei province and killed more than 1,100 people worldwide.
The factories that are open are working at reduced capacity and struggling to make shipments, the construction equipment producer said on Thursday.
Global supply chains have been disrupted by the coronavirus outbreak as manufacturers struggle to source products and get shipments out of China.
“The inbound supply of certain components from Chinese partners will be disrupted in the coming weeks as they seek to replenish their stocks,” said Mark Turner, chief operating officer. “This inevitably means we will not have the required amount of parts needed to build our forecast number of machines in the short term.”
Known for its distinctive yellow machines found on building sites around the world, JCB is privately owned by the Bamford family and makes manufacturing equipment used in construction and demolition.
The Staffordshire-based company said it is reviewing the situation and gave no timeline of when normal production would resume.
“While this course of action is very unfortunate, it is absolutely necessary to protect the business and our skill base,” said. Mr Turner.
