Brexit Impact on JLR

This essay examines the impact of Brexit on Jaguar Land Rover (JLR), a leading British automotive manufacturer. It analyzes the economic challenges faced by JLR due to Brexit, including tariffs, customs delays, and currency fluctuations. The essay then explores the strategic approaches available to the HR department in managing this shift, considering potential resistance to change. It draws on relevant theories of HRM and utilizes McKinsey's 7S model to provide a comprehensive understanding of the challenges and opportunities for JLR in the post-Brexit era.

Executive summary
Introduction
Brexit
This simply means British exit referring to the United Kingdom (UK) leaving the European Union (EU).
The EU is a financial and political association with 28 European nations. The purpose of the EU is to
promote economic, social, and political harmony among the Western European nations. Brexit was
proposed in the 23rd June 2016 referendum with 52% vote to leave EU and 48% vote to stay back. It was
announced formally that country should withdraw in March 2017 but it was delayed by the British
parliament due to election, then later the UK left EU on 31st of January 2020 at 11.00 pm. But a transition
period was set from that day to 31st December 2020 for the UK and EU to negotiate their future
relationship. During this period the UK remains under the laws of the EU, be a part of a single market and
customs union but not part of the EU’s political side or institutions.
Reasons for the declaration of Brexit are:
 EU threatens UK sovereignty
 EU strangling the UK in harder regulations
 EU allows a higher number of immigrants
 UK could have more immigration systems outside the EU.
 UK could keep the money that is being sent to the EU.
Major reason for Brexit are:
 To make stronger trade deals with nations
 To control their national borders
 To maintain a special legal system
 To improve the economy of the British and generate jobs
 To restore the customs and traditions of the British.
It is clear that Brexit does not just mean the UK leaves the EU. It also comes with greater
consequences to various manufacturing sectors including automobile companies that would be
affected, not just in the UK but also it may affect global markets. It is reported by HIS
Automotive that the movement of the UK from EU may cost more than 2.8 million sales for the
vehicle manufacturers in the next few years (How Brexi could affect the Automobile industry, 2020).
Jaguar Land Rover (JLR) Automotive PLC

Jaguar Land Rover (JLR) Automotive PLC, holding company of JLR limited which is an automotive
multinational company and also the subsidiary of the Indian Tata Motors Limited. This was founded in
1922 in the black pool and identified as swallow side Car Company. It is a global premium automotive
business with two iconic car brands of British. JLR globally sells around 375,000 units and works in more
than 170 markets. This is the only car company that researches, manufactures, and designs in UK.
The current economic climate of JLR by the impact of Brexit
The biggest automotive company of the UK, Jaguar Land Rover is exposed to the risk at a greater level
since the Brexit announcement. JLR obtain 40% of their materials from EU and generates more than 80%
of their sales abroad (Peter and Michael, 2017). When the UK departs from EU this would ensure
problems such as customs delay, rules of origin, regulatory diversions, and tariffs which could affect the
production of JLR. Under the rules of trade after Brexit, the car producers can catch tariff about 10% on
the movements of the vehicle between EU and UK and 4.5% through imported parts where it additionally
cost up to £2,372, affecting JLR’s profit per car collapsing their profit margins (SSMT, 2017).
Post-Brexit the JLR is found to be with car shortage around 120,000 due to the cut in the production
leading to a drop in sale and with lower profit at the end. Other major economic issue is the fall of the
pound during this period against the Euro has both boon and threat for cars. It may make UK exports
more competitive and at the same time, it may increase the cost of imported things from the EU which
account for 60% of parts of the cars manufactured in the UK. It is estimated that JLR’s annual income
may be cut by £1bn by the end of 2020 and this would apply if British accept to WTO rules implemented
on trade with Europe which is 10% export tariff and 4% inbound tariff as the sources say (Anon, 2020) so
the current economic state of JLR is lower than the previous years before Brexit as shown below:
Figure 1.0 Shows the slaes growth of JLR after brexit announcement (Sharekhan, 2018)

An organization could be changed by a planned approach or an unplanned approach. Planned change
comes from an intentional decision made to change the organization and unplanned change is imposed on
the organization and it is often envisaged. Both planned and unplanned change can be external as well as
internal as shown below.
But in JLR, Changes could be both planned as well as unplanned. Because the Brexit is already known
since 2016 till now, therefore, changes needed in order to overcome this can be planned and at instances,
it can be unplanned approach as there are sudden changes that might occur when there is a change in
government policies, technologies, natural calamities and other competitive moves from opponent
companies. Automotive industries usually plan everything in advance but with this Brexit, it was hard
with the 2016 June referendum to do things unplanned and with high uncertainty as said by MacDuffie
said. The automotive companies slowed their works, learned about Brexit hit and tried to adapt, make
changes accordingly as the years passed and that’s how JLR also should make changes.
Planned change
planned internal change
Changes in service/ product
Change in administrative system
Change in organisational strucrure/size
planned external change
Techological changes
Change in communication, information
processing
unplanned change
unplanned internal change
Change in demographics
Change in performances
unplanned external change
Global economical competitions
Change in government regulations

Planned approaches that may help to go forward through Brexit
 Cost-cutting by arranging new warehouses
Warehouse helps to reduce fluctuations in price by saving goods/ products when there is plenty of
supply of it and then release it when there is a demand for that product rather than producing it
newly. This warehouse also ensures that there is a proper supply of products in the market.
Therefore by having a new warehouse the JLR can maintain the products and sell them when
there is a high demand which could lead them with higher profit.
 Initiate job cuts
When there is a drop in sales it is difficult to pay for a huge number of workers, therefore to
shrink and save a certain percentage of economy, job cuts could be initiated for a certain period
until the sales turn back to normal.
 Join with other companies to develop new models
As they previously joined forces with BMW to develop electric cars (BBC, 2019) if they could
join hands with some other company to innovate a new product or newly design a preexisting
model with deals. This may create a good picture in the customer’s opinion, thereby sales may
increase which would lead to good profit.
 Increase the prices of their products
Since JLR’s vehicles have a good brand image, increasing prices of them will be neglected
Therefore by selling vehicles at higher prices the economic loss due to Brexit could be retrieved.
 Slow down manufacturing or new productions.
As the sales are down, the products would be still available at the store. Therefore by slowing
down or cutting production the manufacturing, production costs could be saved rather than
spending on production and having the products stocked up without sales.
 Invest capital in other companies
By investing in other companies they can earn a return on their investments which could help
them retrieve some amount of the money lost due to Brexit.
 Shutdown plants within the UK
They can close plants for a short time to reduce disruption to their supply chain until everything
settles down to minimize the further unwanted loss in income.

The primary goal of the HR department is to be a bridge between an organization's
strategy and its people.
JLRs' HR handles a range of functions form hiring & firing, facilitating or managing a
workforce, maintaining interoffice or inter-department relationships, as JRL multinational and
multi-location business its HR department are to handle diverse responsibility.
Hiring and Recruiting
The primary function of the JLRs' HR department is overseeing hiring and recruiting. The HR
department is proactively engaging in recruitment and hiring. The JLRs' HR department
develops and maintains employee handbooks which explain JLRs' policies and procedures to
new hires.
Training and Development
JLRs' human resources department handles the training and development of employees to be
competitive. HR departments work with managers and supervisors to determine needful training
and even works with speciality training providers and maintain budgets for it.
Handling Compensation
JLR's human resources department works with multiple parties within and outside the business to
determine various aspects of employee compensation. Making sure that all the employees are
paid accurately on time is that the HR department utmost priority. Managing compensation
programs includes other fringe benefits offered by JLR is also HR departments responsibility.

Employee Relations
JLR's HR department handles employee relations matters within the company. Handling of
employee relations involves making sure employees participate in different aspects of business
activities effectively. JLRs' HR department acts as a mediator or facilitator between employees
and management and makes sure fairness when there are disputes.
Legal Responsibilities
One of the significant responsibility of JLRs' HR department is interpreting and enforcing labour
law such as non-discriminative employment opportunity, fair working environment standard, and
wages benefits, and work hour requirements.

STRATEGY
JLR emphasize it is the strategy as fully electrified vehicles to provide zero-carbon emission,
fully self-driving feature to enable congestion and accident-free safer and secure transport.
Zero Emission
JLR's UK facility certified as carbon neutral for the
last two years; this is two years ahead of schedule achievement. During the last decade, JLR
reduced its CO2 footprint as half.
JLR launched I-PACE premium fully electrified vehicles, as a result of extensive research and
development. JLR will focus on the fully electrified autonomous vehicle for next-generation pe
Zero Accident & Zero Congestion

World Health Organization reports 1.35 million deaths all around the world due to traffic-related
accidents. The drive's error causes the majority of these accidents. JLR's ADAS functionality which
including Clear Sight Ground View and Rear View mirror technologies and some advanced safety
features, enables drivers to keep them and others on the road safe.
JRL heavily invest in future technologies to enable fully autonomous driving to lead to zero
accidents.
Project Vector is the JLR has a clear vision for an integrated and collaborative mobility system.
Adaption of Project Vector like the system will enable seamless traffic flow, and thus zero
congestion can be achieved in the nearer future.
Culture
Jaguar Land Rover considers its employees are centre of everything JLR dose. JLRs' mission is
to give people the life they want, whether they go above and beyond with Land Rover or
creatively with Jaguar.
JRL's promotes its employees to bring up new ideas. JLR believes that creating safer respectful
and inclusive working environment will boost up creativity and enthusiasm. By doing so, JLR
will be able to provide innovative solutions faster.

External Factors
Political Factor
 Political stability in the majority of markets
 Increasing governmental support for automation
 Government policies ( a change in approach towards business, corporation tax)
 Environmental Law & Laws that regulate environment pollution competition regulation
& fair-trade practice regulation practice regulation
 Tariffs: Tax policy & tariffs changes ( tax rates and incentives)
 Employment law: Government involvement in trade unions & agreements, Labor Wages,
Health & Safety law
 Trade control: import restrictions on the quality & quantity of product intellectual
property law (copyright, patents) consumer protection & e-commerce, Data protection
law
Economic Factors
 A high rate of growth in developing countries
 Growing middle-class disposable income
 Economic recovery ( growth of luxury car markets)
 Interest rates set by a financial body such as treasury similar government department
 Interest rate dramatically influences the borrowing power of any individuals or business.
 Foreign exchange rates affect the local market price of cost of imported international
products.
 Recession, Taxes & inflation influences the general purchasing power of the customer.
 Demand supply profoundly influences competition & profit of products sold.

Social Factors
 A lifestyle of the customer such as education, environmental awareness, emphasis on
safety, religion &belief about social issues is some of the influencing factors of
customers.
 The high net worth customer expects high-quality customer after-sales service &product
quality.
 Small segment consumer wishes to own high quality, dependable branded products to
show their achievement in life, thus willing to spend more on showing off their financial
states.
Technological Factors
 The existence of 3D technology increased the accessibility of highly customizable
automobile spare and new parts.
 Low cost of high computing power has reduced rendering and lab pre-production testing
& evaluation. calculation speed/power
 Engine efficiency has improved over the years, and high precision electronic control
ignition system significantly reduced the emission of greenhouse gases.
 High computing power combined with cameras, radar, laser, lidar and broadband cellular
connectivity improve autonomous driving day by day.
 Wireless charging and High capacity charging stations gong to speed up the adoption of
fully electrified vehicles as a mainstream mode of transportation.
 Automation & Using high throughput AI-enabled robots will reduce the cost of the
finished product while virtually 24/7/365 days assembly lines.
 Cryptography & Blockchains technologies will increase the confidence of the consumer
and will profoundly influence buying habits.

Environmental Factors
 Carbon footprint
 The company is seeking to become carbon neutral by 2020 through revised production
processes and offset programs
 Climate & Climate change is a significant influencing factor.
 UK's Weather highly varies from primary EU market; thus, the production of exportable
vehicle needs to be specifically designed.
 Pollution control regulations vary by countries and are to take into consideration.
 Usability of rare earth mineral and non-renewable resources are to be taken into account
as most of the raw materials are imported from outside.
Legal Factors
 Emission’s Regulation EU directive
 Handling of Intellectual Property, Copyright and Patent related law related matters are to
be revised as the company leaves EU.
 Health and Safety guide should be reviewed to comply with UK & EU law.
 As the EU becomes a foreign economic territory, UK based JLR needs to work with
applicable Import/Export law.

Drawing on relevant theory, explain the main challenges for the Human Resource Department.
Advise HR management of the strategic approaches available to them in handling this shift,
Taking special consideration for any possible resistance to change.
Management of human resources (HRM) is a feature intended to optimize employee efficiency in an
enterprise following corporate purposes (Torrington et al 2007). The human resource team is typically
responsible for such tasks as staff recruiting, preparing, promoting and success improvement as well. The
department is also responsible for ensuring that the organization's activities are in line with the
government’s standards, regulations and laws (Abdullah et al 2009). The HRM department needs multiple
strategic points before hiring new employees for the company, in order to hire personnel with the
expertise and ability to better meet the staffing targets set. Some of these factors include the quality of the
required workforce, the cost of unfilled jobs, labor availability, highly skilled applicants attracted by
proper job advertising, job 'branding' and image, internet recruitment, among others.
To look more deeply into JLR's HRM process, Mckinsey's 7S model was used to better understand each
component of the company. According to Straker (2009), when a company is looking to manage or
improve itself, the 7S model can be used to highlight how problematic it is to change one area of the
model, instead multiple areas have to be changed to maintain a balance. The company should assign
responsibilities to its employees, believing that issuing work-related duties that exit to the employees can
greatly enhance their creativity and innovative workplace skills.
The primary goal of an organization's HRM department would be to impact a workforce’s productivity in
a positive way as well as to identify the causes that affect a team's person or success as a whole. These
factors include determining the company's productivity fundamentals, the company's direction and
purpose, support factors, communication, information factors, resourcing and other diverse factors. This
ensures they would recruit, promote and retain high quality staff, learners and even innovators because
the HRM collaborated with the management. We will also train their staff on an ongoing basis to ensure
that everyone in the company performs consistently to success as is commonly done in JLR. Employees
whose own interests are compatible with the corporate priorities continue to be more successful.
Therefore, when designing a business plan, the HRM should not ignore this fact in order to ensure
absolute dedication. To insure that they are inspired, the workers who do well will be highly compensated
and there is always pressure from within the company (Huselid 1995).
The HRM will also ensure that all team members have the same interests when building a squad, and
provide shared confidence and support. Teamwork shortages will hamper productivity. To insure that
they are inspired, the workers who do well will be highly compensated and there is always pressure from
within the company (Huselid 1995). The HRM will also ensure that all team members have the same
interests when building a squad, and provide shared confidence and support. Teamwork shortages will
hamper productivity. The human resources department should learn to always say the right thing. At the
grand stage, what the workers are told will correspond exactly what the company believes in. And, when
it comes to pay and compensation specifics, they will explain specifically to everyone what was done and
the reasoning why it was done. To order for top executives to take the HR seriously, they have to show
the influence they have on the operation of the company (Huselid 1995). In do that, the people who join
HR who don't have practical abilities will be cut off. People working in the HR should be competitive and
sophisticated about the strategy and customers of the company (Mondy & Gowan 2005). Many staff see
HR workers as stooges for administration, and they are perceived by the administration as irritating do
gooders serving the workforce.

The greatest workplace supporters are the ones who are most concerned with improving individual and
corporate success. We will represent the management with fairness and dignity, while at the same time
helping the workers with a view to enhancing the quality of the company. We will need to promote
competence and loyalty among staff, improve skills that allow managers to implement policies, help
establish customer relationships and generate confidence among stakeholders about the company's future
value. It is necessary to redefine the roles of management in the department to align its objectives with
those of the organization as a whole. For any HR professional to continue adding to the success of the
company, they will identify themselves as strategic partners. They must take responsibilities in this
position and contribute to the achievement of the organizational objectives. The HR’s goals will then be
set in such a way that they help achieve the main business goals. The department's representatives are also
aware of the kind of work system designs the people will contribute to and also succeed in. Becoming a
strategic partner may influence HR resources such as recruiting, role creation, promotion, recognition,
and advancement of staff, succession planning and strategic compensation (Mathis and Jackson 2003;
Torrington et al. 2007; Mullins and Christy 2013).
Professionals participating in these strategic roles in JLR's HR department are thus seen as strategic
contributors to the company's success. They must therefore act on the part and assume the responsibilities
that come with being a successful business partner. The department manager can also assume the position
of employee representative according to Youndt et al. (1996). Being an employee representative would
allow him to build a working environment which will inspire the workers and make them gladly
contribute to the company's growth. The manager should also promote effective methods of setting goals,
empowerment and communication that will give the employees a sense of belonging in the company.
Building a environment that will give the workforce an efficient and productive atmosphere that will
guarantee client loyalty will be one of the functions of HR practitioners. The employees also need to
accept and embrace organizational change. The frequent personnel evaluations conducted by the HR
department should help identify the sections where change is needed. Owing to their ability to incorporate
positive and efficient transition initiatives, HR practitioners are incredibly relevant. If the employees
understand change and link it to the organization's strategies there will be minimal cases of employee
dissatisfaction and resistance when the change is applied.

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industry”, Financial Times, July 30, 2017
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Anon. 2020. [Online] Available at: <https://www.theguardian.com/business/2016/jun/21/brexit-could-
cause-1bn-drop-jaguar-land-rover-profit-sources-say)> [Accessed 19 June 2020].