Former Land Rover Jaguar CEO David Smith

The chief executive officer of Jaguar Land Rover, David Smith, leaves the British luxury carmaker. The company said Smith’s departure was not associated with the recent failure of negotiations with unions regarding pay and pensions.  Jaguar Land Rover, part of India’s Tata Motors, is seeking to reduce wages and pension provision for new personnel. Ravi Kant, vice chairman of Tata Motors Ltd., will assist with the handover of Mr Smith’s duties and assume the day to day responsibilities of the chief executive role until a permanent successor is announced.

The company expressed its gratitude to Mr. Smith “for his efforts in the role and for his service to Jaguar and Land Rover over many years”.  Smith took on the job in 2008 after Tata Motors bought Jaguar Land Rover from US group Ford in June 2008 for $2.3 billion or roughly £1.4bn.

Talks between Jaguar Land Rover top executives and unions hit the skids last week after six days of dialogue. The talks focused on the proposed changes to pay and pensions that the company announced in September as part of its strategic review. Jaguar Land Rover has offered to guarantee that 8,000 full-time personnel will be kept on until 2015 in return for cuts to new starters’ salaries and pensions. The company wants to trim the wages of new employees by as much as 20%, and close its final salary pension scheme to new members.

Jaguar Land Rover is pursuing efforts to cut costs after its sales plummet by more than a quarter in 2009 while its Parent company, Tata as a whole swung to profitability. To stop the bleeding, Jaguar Land Rover cut 2,500 jobs, froze pay and cancelled bonuses. Sales across the company’s two brands fell by as much as 26% last year. Those of Land Rover – including Range Rover – were down by 23%, while those at Jaguar declined by 33%. However, sales picked up in December, with Jaguar adding 5% from a year earlier and Land Rover’s rising by 45%. In September, Jaguar Land Rover announced its plan to shut down one of its two manufacturing facilities in the West Midlands – either Solihull or Castle Bromwich in Birmingham – by 2014. The company also has a factory in Halewood on Merseyside.

Jaguar Land Rover’s sales in the United States also dipped, although less than that of the broader auto industry. The company got its much-needed boost when J.D. Power awarded the Jaguar nameplate its top recognition for vehicle dependability last March. However, at the time, company executives stated that Jaguar’s quality reputation had been on the downturn in the U.S., despite the company’s efforts to pour its resources into upgrading vehicle technology and design.

In October, Jaguar Land Rover announced that it had secured a £175m loan from the State Bank of India.  The British government offered assistance, but Tata Motors said the terms were quite onerous.