Navigating ‘these stormy waters’

Representatives of Unite’s 95,000 auto members gathered for an emergency Brexit conference on Saturday (March 25), just days before Theresa May triggers formal negotiations over the UK’s EU exit.

Around 170 delegates at the Securing a Future for the UK Auto Industry conference in Birmingham were joined by Aston University’s professor of industrial strategy, David Bailey, shadow secretary of state for business, Rebecca Long-Bailey, and Society of Motor Manufacturers and Traders (SMMT) CEO, Mike Hawes.

Opening the conference, where the issues of automation, electrification, investment and the digital revolution in manufacturing were also discussed, Unite general secretary Len McCluskey said the auto industry is being threatened by Brexit.

Recent analysis has found that a hard Brexit could increase car production costs by ÂŁ2,372 per vehicle.

McCluskey said, “That’s why it’s so vital that we meet here today, as representatives of the workforce in this critical industry, to map out a way forward.”

Strategy

McCluskey outlined Unite’s Brexit strategy, including ensuring single market access on terms no less favourable than at present, tackling the barriers to reshoring, better access to financial support, closing the skills gap, pressing for a tougher approach to takeovers with much greater political and union involvement and sustained investment in research and development.

“If, and only if, we follow this strategy then your industry can have a strong future even after Brexit,” said McCluskey.

“That’s what Unite is fighting for now, day-in, day-out, with business and politicians both here and abroad.”

He said that the delegates are vital to achieving success for the industry post-Brexit.

“I can and will kick down doors in Whitehall, Detroit or wherever,” McCluskey said.

“But it’s your work at plant level – getting agreements that work for your members and guarantee a future for the factories and the supply chain – that will make the decisive difference.”

Delegate Nikkita Tailor from Vauxhall Luton

Speaking after the conference, McCluskey was also clear that the issue of automation needed to be tackled at the same time as the UK’s future outside of the EU was being negotiated.

Automation

According to a 2016 World Economic Forum survey, an estimated 1.6m manufacturing and production jobs will be lost globally from automation between 2015 and 2020.

McCluskey said, “If Brexit is the most pressing challenge we face, it’s not the only one. The replacement of workers by robots is an issue facing all parts of manufacturing and many service sectors, but it’s presently focused on the motor industry above all.

“Automation could be a good thing for industry and society, if handled in the right way – which means not seeing it as just another opportunity to cut jobs and costs and make a fatter profit.”

He added, “It should instead be an opportunity for a shorter working week with no loss in pay, or the gateway to a nationwide programme of re-skilling and up-skilling existing workers, while also creating new training and apprenticeship schemes. That won’t happen if a laissez-faire free-market approach is allowed to dominate.

“That is why Unite is calling for the government to take the lead in setting up a Future of Automation Commission, involving unions, employers, researchers and academics to find workable solutions to automation, opportunity and threat as it simultaneously is.”

Rebecca Long-Bailey MP

Shadow secretary of state for business, Rebecca Long-Bailey, said Labour has set out a plan which will provide the UK auto industry, which has a turnover of ÂŁ71.6bn, the security and investment its needs to weather both Brexit and changes in technology.

As well as securing tariff and impediment free access to the EU and retaining workers’s rights and protections unpinned by EU legislation, Long-Bailey said Labour would invest £250bn in capital expenditure projects over a decade, funding that would matched through a National Investment Bank.

‘Consistent and transparent assurances’

For the automotive sector in particular, Long-Bailey was clear investors should be given consistent and transparent assurances and incentives to stay within the UK. She also said that the industry needs “to be at the forefront of new technologies” through research and development investment.

Long-Bailey said, “(Labour’s industrial strategy) seeks growth but growth which equitable, balanced, environmentally sustainable and supports and champions the glimmering gems in our country’s economic landscape, such as the UK automotive sector and its’ brilliant workforce.

“It’s patriotic to have a bold industrial strategy which helps our economy, attracts investment and supports good jobs…It is not patriotic to have a bad Brexit that hurts jobs.”

David Bailey and Mike Hawes

SMMT (society of motor manufacturers and traders) CEO, Mike Hawes, criticised the Tories hard Brexit stance. He said the automotive sector – which directly employs more than 800,000 people and supports thousands more indirectly – is vital to the nation’s economy.

He said, “When the Prime Minister said ‘no deal is better than a bad deal’ it is really hard to see what deal would be worse for us than no deal, which would be WTO rules.”

As an example of the problems that could be thrown up by leaving the single market he cited the alcoholic drink Baileys, which moves between the Republic of Ireland and Northern Ireland 40 times before the product is ready for sale.

“Multiply that by the amount of products that go into a car, around 15,000, and you can see how complicated our future relationship with the EU is going to be,” he said.

Hawes explained that a firm like Jaguar Land Rover would have to swallow an eight percent increase in costs if they wanted to export to Germany under WTO rules. The costs of tariffs for importing cars to the UK would also be huge and be paid for by UK consumers, he said.

“Tariffs are about the biggest redline we have. We also need some kind of customs union arrangement. This industry has probably taken advantage of the single market more than any other,” Hawes said.

“The way that parts move seamlessly, just in time, from one part of Europe to another, back and forth continuously. Any thing that puts a barrier – in terms of paperwork, in terms of logistics – in the way of that will add costs that result in a drop in competitiveness.”

Delegate Theresa Munson asks a question

Despite the very real challenges facing the UK car industry, McCluskey was optimistic about the future.

He told the conference, “The automotive sector is one of the jewels in the UK’s manufacturing crown. We intend to make sure your voice is heard and there are no doubts that these are going to be turbulent years.

“However, I do feel that the type of organisation we have within this sector and the high level of representation that we have, means we will be able to navigate these stormy waters and we’ll do that by remaining united and remaining strong.”

All pics by Mark Thomas