Change management approach deployed at Jaguar

Halewood
A Critical Analysis
learned ways of coping with By 1998, almost ten years after
experience that have developed the acquisition, it was thought
CHANGE IS DIFFICULT, yes
during the course of an that Jaguar cost Ford more than
difficult to conceive because
organisation’s history, and which $6 billion taking into
managers must deal with the
tend to be manifested in its consideration purchase price,
associated human resource
material arrangements and in the investments, loans, and
issues and future uncertainties.
behaviour of its members” accumulated annual losses.
Furthermore, the consequences
according to Brown (1998, p. 9).
associated with implementation
are difficult to predict and
Restructuring Jaguar
harder to track, hence, this can
Organisations such as Jaguar 
create a dynamic of their own.
have been synonymous with Even though organisational
However, organisational
high performance since it was culture comes in many forms
change has become a way of and the popular view of
founded in the 1920s and
life, with mergers, takeovers, culture and its implications for
reputed for being one of the
redundancies, deregulation, job instigating any kind of change
foremost British luxury car
is clear and simple, according
cuts, increased competition and
brands. However, Ford being to Schwartz and Davies (1981,
the constant emergence of new p.35) “Culture is capable of
considered as one of the most
technology having become blunting or significantly altering
successful car manufacturers in
daily occurrences. the intended impact of even well
the world, in 1989, Ford
thought out changes in an
acquired Jaguar for £1.6 billion organisation,” thus culture can
to give it a stake in Europe's have either positive or negative
Within this very concept of
luxury car market and a global impact on change.
change, organisational culture Hence, within the context of
luxury car brand to rival BMW
has been defined as “the organisational change, culture,
and Mercedes-Benz.
patterns of beliefs, values and product and processes, this

1 | energypolicylab | April 2016

 Change management approach deployed at Jaguar Halewood
assessment will explore the
challenges and problems facing
the European car market and
the organisational change
management approach adopted
by Ford in the reorganisation of
Jaguar at Halewood. It shall
also critically analyse if the
location and reputation of the
Halewood plant as a centre of
excellence had any influence in
the strategic reorganisation of
Jaguar.
Europe’s Car
Challenges
The automotive industry is
critical to European
manufacturing, being one of
Europe’s major industries, it
employs six per cent of the total
workforce within European
manufacturing industries. Its
importance is closely linked to
the growth of the domestic
economy and largely due to the
fact that it accounts for a huge
amount of international export.
According to the European
Union’s Department for
Enterprise and Industry, “The
EU is the largest automotive
production region (34%) in the
world and the industry comprises
2 | energypolicylab | April 2016
7,5 % of the manufacturing sector industry. In addition, the
in the Union” (EC 2008). Direct
employment by the automotive
industry stands at about two
million employees, while the
total employment effect (direct
and indirect) is estimated to be
about ten million.
With thirty different car
companies competing for a
market share, the European car
market is notably the most
difficult and competitive
market in the world. However,
profits have been falling in
recent years and market trends
have also shown an equal
decline in sales. Furthermore,
Europe’s car market suffers
from excess capacity having
between them an estimated
capacity for three to five million
units. These challenges could
be attributed to economic
changes within the industry,
forces of globalisation, open
competition from Japanese
manufacturers and the shift
from institutional decision
making towards the European
Union which has led to the
undermining of the traditional
notion of national production
within the European car
worsening macro-economic
situation where consumer
demand has been falling has
also been credited with the
decline since the late 90’s.
The competitive growth
strategy for most companies in
trying to expand their market
share is by cutting into the
market share of one another
and by implementing cost
cutting measures,
rationalisation, diversification
into new sectors, fully acquire
or acquisition of a stake in
analogous businesses and
shifting from Ford-style mass
production to lean
manufacturing and
modularisation. This
competition and desire for
global dominance has led to an
increase in the number of
mergers and acquisitions
within the industry. Mergers
and acquisitions therefore
allows the company to widen
its focus of core competencies
to cover unchartered territories.

In line with the challenges
facing the European markets, in
the late ‘90s Ford Europe
performed so badly suffering
heavy losses and falling market
share and this was attributed to
poor model development and
failing to keep up with market
trends which had
been dividing with
the emergence of
new segments such
as people carriers,
sports utility
vehicles and
premium brand cars,
etc. Ford reacted by
strategically restructuring the
management of its European
organisation, commissioned the
development of new models,
costs and excess capacity
reduction through plant closure
and redundancies, formation of
strategic alliances to improve
its position in diesel engine
technology and transmissions
and, finally, the development of
its Premier Automotive Group.
Ford has always been aware
that if new models are to be
produced then there has to be a
significant increase in new
investment made towards
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Change management approach deployed at Jaguar Halewood
product and plant instigating any kind of change
development. Hence, recently
huge investments were made
into Halewood, which has been
almost entirely rebuilt at a cost
of £300 million to facilitate
production of the new Jaguar X
Type after the production of the
Culture has a dominant influence on
organisational life therefore to instigate any
form of organisational change, the
organisational culture must be managed
accordingly. Hence, to successfully implement
a permanent organisational change, one would
need to start by changing the attitudes and
values of people.
Ford Escort was stopped in
1998. This diversification is part
of Ford’s new strategic focus of
repositioning its ability to
spread its costs across models,
forge new partnerships with
strategic suppliers and enter
into joint ventures to produce a
range of models that can
compete in every market
segment.
Restructuring Jaguar
Culture
Even though organisational
culture comes in many forms
and the popular view of culture
and its implications for
is clear and simple, according
to Schwartz and Davies (1981,
p.35) “Culture is capable of
blunting or significantly altering
the intended impact of even well
thought out changes in an
organisation,” thus culture can
have either positive
or negative impact
on change. Culture
has a dominant
influence on
organisational life
therefore to instigate
any form of
organisational
change, the organisational
culture must be managed
accordingly. Hence, to
successfully implement a
permanent organisational
change, one would need to start
by changing the attitudes and
values of people.
The key objectives of the
restructuring drive at the
Halewood plant by Ford was to
move the company back into
profitability repositioning it for
sustainable growth. There were
various challenges in the
aftermath of approval for the
production of the X-400 in 1998
 Change management approach deployed at Jaguar Halewood
and one was the transforming
the lack of discipline and poor
staff morale among the
workforce at large. In addition
to this the supply chain
processes of the plant were
obsolete which makes it a more
difficult situation for longer-
term planning. Problems such
as poor build rate stability, high
inventory and a supplier
distribution network that was
too wide compounded the list
of issues. Therefore,
transforming the production
plant had to complement the
culture change strategy,
thereby ensuring that the staff
and processes at Halewood
were prepared for the luxury
vehicle production. In order to
achieve new levels of
dedication and commitment the
company made a lot of
investment into the training of
the workforce to raise staff
morale and ensure that the new
car is built to Jaguar quality.
In transforming the working
culture Jaguar ensured that
employees undertook a two-
and-a-half-year intensive
training concentrating on
increasing skills like numeracy
4 | energypolicylab | April 2016
and information technology, Birmingham and Coventry
developing more effective
processes (improving the
quality and efficiency of each
production area) and also
covered was Jaguar’s heritage
and brand. The worked on
getting rid of obsolete practices
and convincing people to
accept more flexible working
patterns emphasising on
delivering quality. A key part
of the strategy was being able
to win over the employees by
persuasion, overcoming
institutional scepticism from
cynics by reassuring them that
they were serious about
delivering change promised
with the much needed
investment following after.
Jaguar’s engineers worked with
Halewood employees on
generating X-type pre-
production prototypes giving
them operational responsibility
with more of the workforce
having supervisory roles. The
core strategy that was deployed
to enable the employees
achieve the necessary changes
was to concentrate on; (a)
raising the quality standards to
match Jaguars plant in
which are Jaguar’s proven
standards; (b) the gradual
introduction of new working
practices within the plant or
centre of excellence in a
controlled manner; (c) renew
and build fresh working
relationships based on respect
and trust; (d) management of
the plant sought to change the
pessimistic and suspicious
culture of employees to one of
positivity, trust and mutual
respect.
Location Influence
Jaguar’s decision to use the
Halewood plant for the
production of its long awaited
first-volume-model range was
met with a lot of criticism due
to its precedents. Halewood
plant which was home to Ford
Escort had been categorised for
its failings after a steady decline
in performance due to age-long
prior reputation for poor
productivity, quality, tense
management and weak labour
relations made worse by the
falling standard of the British
car industry. However, having
considered several locations
around the world Ford chose

the Halewood plant as it sought
to benefit from its substantial
experience in the high volume
end of car manufacturing.
Located in the North West of
England, the Halewood plant
which employs a three
thousand strong workforce
received a whooping
£300m investment
from Ford in 2001,
transforming the
plant from mass-
production assembly
plant to a state of the
art manufacturing
plant with the
capacity to produce premium
products such as the Jaguar X-
type. The site long enjoyed an
impeccable reputation
throughout the industry for its
manufacturing excellence.
Leaner and Meaner
The change strategy as part of
the restructuring process was a
leaner and meaner culture,
which led to the establishment
of the centre of excellence for
Lean Manufacturing – a
transformation to low-
inventory, waste-free
5 | energypolicylab | April 2016
Change management approach deployed at Jaguar Halewood
production, supported by just- production. This culminated in
in-time delivery of components
and systems. The
implementation of lean
manufacturing saw an eighteen
per cent increase in plant
productivity and parts
inventory dropped by half with
an improvement in quality.
The change strategy as part of the
restructuring process was a leaner and meaner
culture, which led to the establishment of the
centre of excellence for Lean Manufacturing –
a transformation to low-inventory, waste-free
production, supported by just-in-time delivery
of components and systems.
The old manufacturing facility
used in the Ford Escort
production were virtually
removed and replaced with
new production lines modelled
after the Jaguar plants in
Birmingham and Coventry.
Many of the component
supplier were hugely affected
by the process improvements
and Jaguar also required extra
responsibility from suppliers
hence engineers from supplier
companies were integrated into
the development team to
support the launch phase of
the setting up of a supplier
park next to the Halewood
plant to enable key suppliers
manufacture and assemble at
Jaguar’s close to Jaguar. Once
the build rate is confirmed local
based suppliers and suppliers
within the supplier park begin
sub-assembly, ideally twelve
hours before parts
are required.
This new culture
strongly supports
lean manufacturing
and just-in-time
planning and control
which aim to meet demand
instantaneously by greatly
reducing inventory, with
perfect quality and no waste.
The principle of lean
manufacturing is relatively
simple and easy to understand,
it means a drive towards the
elimination of all waste in order
to develop an operation that is
faster, more dependable,
produces higher quality
products and services at a
lower cost. The principle of
just-in-time planning is quite
similar to lean and sometimes
used interchangeably and it
 Change management approach deployed at Jaguar Halewood
basically means “producing
goods and services exactly when
they are needed” according to
Slack et al (2007, p.466).
The three key elements of lean
manufacturing which
underpins the techniques of JIT
were also implemented as part
of the change strategy at the
Halewood plant and these are;
the elimination of waste, the
involvement of the workforce
in the process and the drive for
continuous improvement
(quality). Elimination of waste
starts by identifying any
activity which does not add
value including over-
production, inventory and
unnecessary process and
enriching the value added
activities. The lean approach
requires employee
involvement, through job
enrichment, team-based
problem solving, job rotation
and multi-skilling. The reason
being that this encourages the
employee to take ownership of
the job, with a high degree of
responsibility and engagement.
Continuous improvement
which require that demand is
6 | energypolicylab | April 2016
met instantaneously with Conclusion
perfect quality and no waste.
The strategy for radically
transforming Halewood would
be making the plant a lot more
customer –centric, through the
implementation of new quality
assurances and a change in
their order of priorities - - a
difference from previous
concerns of cost and
productivity being top
priorities as this would also
become a top priority for
operations managers.
Secondly the establishment of
"Centres of Excellence" to
promote and institutionalise
the newly introduced lean
manufacturing concepts
throughout the plant.
The supply chain architecture
at Halewood was restructured
with the implementation of a
new concept Nirvana, which
require only a single person
employed directly by Jaguar to
manage the entire supply chain.
This involved modularisation
of processes, define and
outlined precisely and then
outsource to an experienced
third party service providers.
Culture as a concept is complex
and the extent to which it
influences organisational
behaviour depends on the
existence of logical, clear and
rational organisational goals.
Evidence has shown that
attempts to change sub-
organisational or organisational
culture could be too risky
sometimes and often run into
difficulties and in such
instances the change strategy
should take into consideration
the culture or manage around
the current culture. However,
the cultural view of
organizations offers the idea
that all organizations have
within them the possibility and
the capacity to change
The core objective of Ford’s
restructuring is to turn around
negative effects of the losses
that it suffered in the late ’90s
via a reconfiguration of its
managerial and organizational
structures, development of new
models, cost reduction
programs and entering into
partnerships/joint ventures
with suppliers to produce a
range of models that can
 Change management approach deployed at Jaguar Halewood
compete in every market
segment. As part of Ford’s
strategic focus it intends to
maintain continuous efforts on
facility and employee
development while also
adopting best working
practices. It also intends to
continue design improvements
through changes in the number
of components and sub-
assemblies and better use of
materials and processing
techniques which will lead a
reduction in production costs.

FINAL THOUGHT
“The truth which makes men free is for most part the truth which men prefer
not to hear” – HEBERT SEBASTIAN AGAR
7 | energypolicylab | April 2016
 Change management approach deployed at Jaguar Halewood

References

BROWN, A., 1998. Organisational Culture, 2nd ed.

London: FT-Pitman Publishing.

BURNES, B., 2004. Managing Change, 4th ed.

Harlow: FT-Prentice Hall

BURKE, W., 2002. Organization Change; Theory and

Practice. London: Sage.
CARNALL, C., 2007. Managing Change in
Organisations, 5th ed. Harlow: FT-Prentice Hall.

DONNELLY, T., and MORRIS, D., 2003.

Restructuring Ford Europe. European Business
Review, 15 (2), pp. 77-86

PROFESSIONAL ENGINEERING, 2001. X Marks

the spot: How Jaguar Transformed Ford Halewood.
2001. Professional Engineering, 14 (3), pp.25

SENIOR, B., and FLEMING, J., 2006. Organisational

Change. London: Prentice Hall Publishing.

SCHWARTZ, H. and DAVIS, S.M., 1981. Matching

Corporate Culture and Business Strategy.
Organizational Dynamics, 10 (1), pp. 30-48.

SLACK. N., CHAMBERS. S., and JOHNSTON. R.,

2007. Operations Management. 5th ed. Harlow: FT-
Prentice Hall.

SALAMA, A., and EASTERBY-SMITH, M., 1994.

Cultural Change and Managerial Careers. Personnel
Review, 23 (3), pp. 21-33.

THE AUTOMOTIVE SECTOR. 2008. European

Commission: Enterprise and Industry [online]
Available from:
http://ec.europa.eu/enterprise/automotive/pagesbac
kground/sectoralanalysis/index.htm [Accessed 16th
January 2008]

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Change management approach deployed at Jaguar Halewood
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