In recent years, several vehicle manufacturers have announced major UK investments, with Jaguar Land Rover, Nissan and BMW Mini growing significantly; and despite some concerns over actual or potential plant closures and production slowdowns, Ford, GM, Honda and Toyota remain committed to the UK. As well as increasing vehicle production – and engine production at BMW, Honda and Ford – the OEMs intend to increase UK component purchasing, for both the UK and in some cases for their other European factories. They want to spend more money in the UK, something which represents a significant opportunity to increase employment and generate associated economic benefits.
UK vehicle production could soon reach two million upa, representing significant opportunities for suppliers, through both increased production and OEMs increasing UK sourcing. The latter may be easier said than done: the 1990s and early 2000s saw extensive hollowing out of the UK supply base, leading directly to several supply gaps, for example in the areas of wheels and engine castings. Here, there are either no suitable suppliers or those which remain are too small to meet even current UK demand. Work by BIS and the Automotive Council suggests that at least £3bn (US$4.76bn) of sourcing could be awarded to the UK, if there were suitable suppliers. If Nissan and JLR’s new model programmes are as extensive as press reports suggest, the UK supply base will face severe strain.
[quote align=”center” color=”#999999″]A serious latent threat, the lack of skilled labour, risks undermining the UK automotive component sector’s growth potential
A senior UK purchasing executive told us that he doubted he could meet his UK sourcing targets because Nissan and JLR had already taken “all the available capacity” in the UK supply base. The UK government is making major efforts to attract new suppliers to the UK; this clearly is positive and should be encouraged. However, a serious latent threat, the lack of skilled labour, risks undermining the UK automotive component sector’s growth potential.
It may seem counter-intuitive to talk about labour shortages at a time of high unemployment, but this is the reality which AutoAnalysis has uncovered. While assisting Sunderland City Council develop its strategy to grow its automotive sector, based around the Nissan factory in Sunderland, we undertook a wide-ranging interview programme with UK suppliers, looking for barriers or blockages to their future growth. Alongside concerns about the lack of finance, the overwhelming majority of suppliers reported that it is extremely difficult and unduly time-consuming to recruit experienced, skilled labour.
Our MAKE it Sunderland report, “Right-skilling” the UK labour force for the automotive industry in the 21st century, provides the automotive industry’s authentic voice on this critical issue which UK policy-makers and the automotive industry as a whole need to engage in now: how the UK ensures that its supply base has sufficient and appropriately skilled labour to exploit the opportunities open to is critically important.
[quote align=”center” color=”#999999″]The skilled labour issue has resonance in other countries too: a country’s education system and labour training schemes must be designed with industry’s needs in mind for a country to ensure it has a successful balanced economy
If the labour issue is not addressed, potential investors will likely be put off coming to the UK; if they cannot recruit appropriate labour, they will go elsewhere. Once factories making components for UK car plants have been established abroad, that is where they will stay. UK jobs will not be created and potential economic activity (and tax receipts) will be lost, permanently.
We have identified a UK problem, but the skilled labour issue has resonance in other countries too: a country’s education system and labour training schemes must be designed with industry’s needs in mind for a country to ensure it has a successful balanced economy.
The opinions expressed here are those of the author and do not necessarily reflect the positions of Automotive World Ltd.
Download a free copy of the report here: “Right-skilling” the UK labour force for the automotive industry in the 21st century
Ian Henry is one of the report’s authors, and a director of AutoAnalysis, an independent automotive research and consulting company based in London.
The AutomotiveWorld.com Comment column is open to automotive industry decision makers and influencers. If you would like to contribute a Comment piece, please contact editorial@automotiveworld.com
