News : The lights go out for UK car manufacturing

The MINI factory in Cowley will receive some of BMW's £250m investment into the UK

As the UK’s public battens down the hatches for the ongoing Coronavirus (COVID-19) pandemic, the British car industry prepares to put itself on ice for the upcoming weeks, possibly months. As of yesterday, all major car factories have been closed down, not only to protect their employees, but also to accommodate what promises to be a devastating fall in demand for new cars.

These are scary and unprecedented times, but in an equally unprecedented move, the UK Government has committed to a raft of emergency measures to maintain continuity of wages and employment to businesses. The Chancellor of the Exchequer, Rishi Sunak, promised to establish a Coronavirus Jobs Retention Scheme for all employers, large or small, and will cover 80% of wages, up to £2500 a month. This is in addition to a raft of corporate measures aimed at business – the message being ‘don’t lay off your staff.’

The UK car manufacturing, supply, retail and logistics industry contributes more than £6bn-worth of turnover to the UK economy and employs around 38,500 people. With a combined total of 4500 companies, it’s survival is vital to the economy, and the Government says its committed to making sure the lights go back on – hopefully in 12 weeks time, if it can bring the level of transmission of the virus down to a level that doesn’t overwhelm our NHS. And, as part of this, shutting down our car factories is seen as essential in keeping people as healthy as possible for as long as possible.

The car factories close

The final large carmaker to announce it’s to suspend operations is Jaguar Land Rover. In a statement, JLR said: ‘In light of the ongoing Coronavirus situation, Jaguar Land Rover has confirmed that it will temporarily suspend production at its UK manufacturing facilities over the course of next week.’ The company is aiming to restart operations on 20 April, but admits that whether it does is down to the ongoing situation.

Bentley Motors in Crewe announced it was mothballing operations at the factory until at least 20 April. Adrian Hallmark, Bentley Motors Chairman and CEO, said: ‘This will inevitably have an impact on our deliveries to customers, and we apologise for the inconvenience this causes, however we are working hard to minimise this disruption. Our thoughts continue to go out to all those affected around the world throughout this very sad and difficult time for so many people.’

Bentley and JLR joined Honda, which closed its Swindon factory after Wednesday’s shift on 18 March, because of difficulties in the supply chain and with a view to maintaining staff welfare. Honda is hoping to restart operations on 6 April but has said that this will come down to what the government and medical experts are advised.

The other factories now confirmed as being on temporary shutdown are:

  • BMW (Hams Hall)
  • MINI (Cowley)
  • Nissan (Sunderland)
  • Rolls-Royce (Goodwood)
  • Toyota (Burnaston and Deeside)
  • Vauxhall (Ellesmere Port and Luton)

The global situation

Elsewhere in the world, most major car groups have ceased production, with Volkswagen Group, Renault-Nissan, PSA, Volvo, Ford, GM and Fiat Chrysler Automobiles announcing they’ve suspended production. ‘Given the present significant deterioration in the sales situation and the heightened uncertainty regarding parts supplies to our plants, production is to be suspended in the near future at factories operated by group brands,’ said Volkswagen Group Chief Executive Herbert Diess on Tuesday.

As the pandemic brought the automotive industry grinding to a virtual halt, the Society of Motor Manufacturers and Traders’ (SMMT) Chief Executive, Mike Hawes, warned that the industry, ‘stands on the precipice.’ This is a view echoed by industry analysts. ‘Last year, with the uncertainty over Brexit, the shift away from China and diesel, it was the perfect storm. This is perfect storm part two,’ says Professor David Bailey of Birmingham Business School. ‘As assemblers shut down, it has a cascade effect on the supply chain and some of those firms will have to start shutting down too.’

Hopefully, the Chancellor’s aid package will be enough to convince the car manufacturers to stand by their UK workforces and will have gone some way to reassure those working in industry about the continuity of their employment – because more than now, that’s needed. Initially, most brands are committing to closing production lines for a short period, but the long-term outlook is far from certain as most European countries impose strict limits on the movement of people.

Carmakers could assist with the push for NHS ventilators

In a move that mirrors the shadow factories of WW2, which built military equipement, the UK Government is talking to manufacturers such as Ford and Jaguar Land Rover to see if they can help manufacture ventilators as the National Health Service ramps up preparations for mass sickness among the wider population. The Department for Health and Social Care (DHSC) had begun delivering ventilator blueprints to more than 60 military engineers and car manufacturers. Their mandate is to aim to build 20,000 ventilators in their factories, something that Prime Minister Boris Johnson hopes could begin in as little as two weeks.

According to Wired UK, this is a tough task. It reports that Mark Swift, Head of Communications at manufacturing and engineering trade body Make UK, which represents 20,000 companies, says that, because so many components are imported into the UK, it could take longer to set things up than the hoped for couple of weeks. ‘It can be done,’ he emphasises. ‘But clearly, we don’t have time.’

Here’s hoping…

Keith Adams

18 Comments

  1. Carefully of course not mentioning the gas pressure mediated ventilators we chucked out by the wagon load because storing them would have been too expensive, are fit and forget and would have been perfect.
    And isnt it funny that yet again people on benefits for which society “can’t afford a living wage” have been screwed over AGAIN in all this. People on up to £2k a month get supported. Long term seriously ill/disabled and on benefits – get nothing. I have fibromyalgia (undiagnosed for 30 years and on third bout of skin cancer). Some days I need to overdose on painkillers to even move, let alone get out of bed.. And I get sweet fa. I would love to be well enough to work again – instead the NHS tries to give me drugs with the official side effect “may cause suicide”. The medication that may eventually help me I am paying £60 a month for because NICE doesn’t know how to do medical trials correctly..
    This has been an utter debacle, people are going to die because of tight fisted government and people and companies not even paying our relatively low taxes. It boils down to either phase out money completely or make it illegal for EVERYONE in the UK or trading in the UK to pay their taxes in full, so that when this happens we have the resources if money is gone (yes please) or the money to pay for it.

    AND FOR GOD’S SAKE think about other people in shops and in public. And shops like Sainsburys you should be ashamed of yourselves after what I saw at Sainsburys in Stanway. People crowding at terminals, terminals that couldn’t be better designed to help infect users, no distancing and utter disinterest from employees. Elderly people being crowded by others who are potentially infected. It would have been safer for them (the elderly) if I walked into a nursing home with a G33 and opened fire than it was to try and get food at that store.

    I am at risk because of a histamine cascade I had a few years ago and bronchopneumonia last year. I do not want to hear of people spitting at NHS workers FOR FUN. Or even better Americans sueing their own government over bans on large gatherings.

    As for the shadow factories, build the old simple types (like the gas mediated & timed type), the ventilator equivalent to the T34, because the complex ones require a whole crew and diaphragm paralysis to work. It doesn’t have to be perfect, it just has to be there. And ANY company who starts whining about patents and right-to-repair should be listed publicly and closed down once this is over. There is NO place for patent, RTR, or profit whining in the middle of a pandemic.

    Finally – we are supposed to be intelligent creatures – now might be a good time to sit down, calm down, and do what you have been told. Because if we don’t it will cost lives.

    A good app for remaining in touch is the PTT app zello – android & iPhone – walkie talkie functionality over WiFi/Data.

    • “Finally – we are supposed to be intelligent creatures ” For at least two decades I have been questioning the West’s refusal to pay the costs for home-manfactured goods. If China did not exist, then we could not get anything (from cars to CD players) made there. Much of what Europeans/Caucasians buy from China can be classed as unnecessary. Certainly it could be made in the UK, in Western Europe, in North America. Yet, once one British/etc manufacturer decided to get its goods MADE IN CHINA, it has gained a supposed balance sheet benefit; and the rest followed.

      Had it not been for the transfer from Birmingham to Beijing of our heartland of industry – ditto those of other countries, Covid-19 may well have stayed inside China. Certainly its worldwide spread would not have been so virulent. First SARS – now this. What next from China?

      • Don’t forget so much industry has sprung up elsewhere in the Far East since the 1950s, & before Hong Kong was handed back it was the go-to place for so many British companies wanting to keep their costs down by opening a factory there.

        It’s inevitable Coronavirus would have found it’s way here, even with an Albania style police state.

        • @ richardpd, China wasn’t even considered a serious player in manufacturing until the nineties, their products were mostly cheap and nasty,, but Hong Kong was a very big player until it became cheaper to move production to other Far Eastern countries. I’m of a generation where most cheap electrical goods, childrens toys and cheap clothing seemed to come from Hong Kong and have the words Empire Made stamped on them. As it became too expensive to make a transistor radio in Britain, products like this flooded in from Hong Kong where labour was cheaper, same as now China has cornered the market for products like this.

          • Same here, I can remember having many toys with Made In Hong Kong stamped into the botton. Macao & Taiwan were also sources of cheap & cheerful goods before the Chinese government started to tempt investors to move production there.

      • Almost all of what the UK buys from China, either did not exist in 1980 i.e. Smartphones or by 1985 has already ceased to be manufactured in the UK, ie consumer electronics, motorcycles etc.

        What we have seen is that those industries have transferred to China from mostly Japan etc, not from UK as we had already lost them as a product of consistent poor management and productivity.

        The UK has been behind the curve on this since before the end of the 19th century and 1910 was the last year we can honestly say that UK industry was truly world class. For example HMS dreadnought of 1906, so revolutionary in design that it made all existing large warships obsolete literally overnight had its Armour plate imported from Germany, because British steel mills could not produce steel of the required quality in the necessary quantities.

        • Very true, the early part of the First World War showed how far British claims to be the workshop of the world to be lacking compared to the German’s industrial output.

          In some ways the First World War started the slippery slope for British industry, with the Americans being able to fill in the demands for coal & other production that was impossible for British suppliers to do.

          Also more & more textiles started to be produced in India, which was growing a lot of cotton & had easy access to cheap labour, along with shorter transport distances to many markets in Africa & the Middle East.

        • Just a word for local industry here. The Triumph motorcycle factory in Hinckley (13 minutes from my front door in Sunday traffic) seems to have delivered a revival in UK motorcycle manufacturing, delivering a product with quality far in advance of the Chinese m/bikes I have seen in Asia. They may make some components in Asia, but the UK operation has survived a factory fire, and they export to many countries.

          • Triumph are producing a niche product rather than trying to take any of the mass producing manufacturers, so they can afford to take a bit more care & precision rather than churn things out.

    • Here’s a thing …..if we NEVER made another car again and just made do with all the ones that already exist instead of scrapping them whenever they supposedly become “obsolete” would that not save so much precious resources? Personally I think it’s heartbreaking the amount of cars that go to the crusher necessarily for no other reason than they are “old”, or have a mechanical fault that nobody can be bothered fixing. Look what they’ve had to do in Cuba for the last umpteen decades because they had no replacement cars coming into the country. Personally I am done with the new car fix anymore and all the debt and depreciation I need to endure for the privilege of driving something shiny and new.

      Same goes for other consumer goods like mobile phones, laptops, clothes…..the list is endless.

      If positive thing comes out of the COVID-19 crisis it is that we may begin question our over-consumption and wasteful ways.

  2. Strange times …. Here in France (in between the TV updates on measures to “keep your distance”) they are still running glossy adverts for the (Cowley built) electric Mini – complete with hip twenty-something people kissing and hugging each other …
    Not sure if that’s a good thing or a bad thing just at the moment. It just shows how everyone has been caught off balance ….

  3. Jemma – as always, your comments make for interesting reading!

    The issue of the need to make ventilator equipment filled me with anger as to me it was a further indication of how we as a country have become ever more reliant on buying imported equipment because we no longer make it (as confirmed by a friend of mine who is a senior specialist nurse for the NHS). This is an appalling reflection of how skilled manufacturing in this country has been allowed to ebb away over many decades and there is little commitment to do anything about it until we are faced with a major crisis such as the Coronavirus pandemic.

    In reality the general public in the UK doesn’t care where something is made while a succession of Governments have become too focused on the cheapest price of something rather than caring whether it supports jobs in this country or not. Consider the manufacturing of railway rolling stock, etc. Even Whitehall has issued a succession of foreign secretaries with BMWs which of course aren’t made in the UK. Something needs to change.

    The key thing the people of this country and our Government should wake up to is the fact we now more than ever need to be supporting existing skilled manufacturing jobs in this country. The Coronavirus virus is a costly problem to the motor industry and so many jobs employed in the UK, therefore we should be going out of our way to support these jobs when we are next looking to sign on the purchase/PCP agreement’s dotted line.

    • The Tories need a critical mass of uneducated lumpheads to use as voting fodder so don’t expect any change soon.

      • And yet strangely, the “critical mass of uneduacated lumpheads” have traditionally voted Labour…..I guess you must be an interlectural giant though.

        • Or so they say, but will go Tory if the bread & circuses are better for short term gain, even if it means losing out in the long term.

          Usually they only vote Labour when the Tories have screwed them over & they haven’t forgotten this, which only normally happens once each half generation.

  4. Can we keep politics out of this, I’m sure Jeremy Corbyn would have been confounded by this crisis as much as Boris Johnson and would have had to look to the opposition for support during the coronavirus crsis. Thankfully there has been a consensus built over this and for once, the backbiting and points scoring has stopped, except on internet forums.

  5. Taking your headline very literally, a friend who worked for JLR once visited one of their factories after dark, most of the lighting was off and there was a thunderstorm outside. A very spooky experience..

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