Bentley to cut 1,000 jobs, delay EV

LONDON -- Bentley will cut 1,000 jobs – almost a quarter of its work force – as the automaker tries to compensate for revenue lost during the shutdown of its plant in the U.K. and subsequent reduced production rate.

Bentley said it would initially reduce staffing levels through voluntary layoffs but added that it could not rule out compulsory departures.

"Losing colleagues is not something we are treating lightly but this is a necessary step that we have to take to safeguard the jobs of the vast majority who will remain," Bentley CEO Adrian  Hallmark said in a statement on Friday.

Bentley is the latest British automaker to reduce employee headcount after Aston Martin announced on Thursday it would cut 500 jobs and McLaren Group said in May it would ax 1,200 positions across its applied technology, automotive and racing businesses.

Bentley, which is owned by Volkswagen Group, had returned to profit in 2019 and delivered a record-breaking first quarter after it overcame production delays to its new Continental GT coupe and convertible, and its Flying Spur sedan.

It was the only VW Group brand whose vehicle sales increased in the first three months, rising to 3,302 units from 2,584 in the first quarter of 2019. The automaker also made an operating profit of 56 million euros ($63.5 million) for the quarter.

Bentley restarted production on May 11 at its factory in Crewe, England, after coronavirus restrictions were eased. The shutdown will reduce revenue by 25 percent to 30 percent for the year, Hallmark said in an interview with Automotive News Europe on Wednesday.

"It has embedded a loss into this year that whatever we do in the next five months you cannot then repay," he said.

Bentley was losing 88 million pounds ($111 million) a month for almost two months while the plant was shut down, Hallmark said.

The Crewe factory is running at 50 percent capacity to comply with social distancing measures.

Bentley had also stopped employing "several hundred" contractors working at the plant when the lockdown first started, Hallmark said.

The company used 1,000 contractors last year and the less fixed nature of their employment gives the company flexibility to reduce or add staff easily.

"We always plan to have that buffer because you never know," Hallmark said.

Bentley currently employs 4,200 full-time workers. About 2,200 are working at the Crewe factory, 1,500 are working from home and 500 are still furloughed with salaries being paid by the British government.

Hallmark declined to give a figure for the cost of the voluntary layoff package but said it was "expensive."

EV 'may slip'

Bentley also announced it would likely delay its planned battery-electric vehicle to 2026. The company previously said it would be launched by 2025.

"The ambition to have the first BEV by 2025 does not change but with the COVID-19 crisis there could be some slippage," Hallmark said. "The short-term shock does not help because we planned to generate more cash to be able to pre-invest in the next generation [of models]."