The past few years have been tough times economically for both companies and governments. From the beginning of the financial difficulties in 2008, which led to a very poor performance for the industry in 2009, Ford and the SMMT worked closely with the Labour government to help the sector to weather the storm. For example, Peter Mandelson worked with the automotive companies to produce the scrappage scheme which provided the government incentive for people to replace old cars with new. This initiative alone saved jobs and helped to stem the decline of the domestic markets. Since then, we have worked closely with the coalition on a range of initiatives to support the industry, notably the Automotive Council, also introduced by Mandelson.
Governments and politicians rightly recognise the importance of the motor industry to the economy. The automotive industry employs over 730,000 people across manufacturing, retail and after-sales. On average the UK produces 1.5 million cars and commercial vehicles and over 2.5 million engines – with 80 per cent of vehicles and 70 per cent of engines sold overseas.
But all those companies throughout the world are struggling to meet the demands of changing economic and political circumstances. There is still considerable overcapacity in the European industry which is leading to some very difficult decisions, including Ford’s recent announcements of the closure of the plant in Southampton and stamping and tooling facility in Dagenham. But we have to face up to these difficult decisions together if we are to continue as a leading country in the global automotive market.
I welcome the commitments to manufacturing that have been made by Labour’s shadow minister, Chuka Umunna. He has talked enthusiastically about manufacturing companies working with government to promote innovation and to help stimulate small- and medium-sized enterprises.
That is the right approach. Ford has been in this country for over a century and during that time we have worked with governments of all political parties. What we have learned is that the best governments are clear in their economic and industrial strategies; understand the need for a highly skilled workforce – and are willing to deliver the resources to achieve it; and support those companies that invest in innovative technologies.
As we move further to decarbonise our society innovation is increasingly important. The UK automotive sector is at the forefront of the low carbon agenda, investing in R&D and new technologies that deliver cleaner, safer and more fuel-efficient cars. I am therefore pleased that former science minister, Paul Drayson, is joining the Progress discussion tomorrow. Since leaving government, Paul has been at the forefront of developing new greener technologies in Britain’s globally successful motor racing industry with his zero-emissions racing car.
If we get the partnership with government right, it won’t only be big companies such as Ford who will benefit. We support tens of thousands of British jobs in the supply chain, many working for SMEs. The most successful industrial policies are those that recognise the interdependence of big and smaller companies. Having established the technology and supply chain workstreams on the Automotive Council we are now focusing, at Vince Cable’s request, on the development of a distinct automotive industrial strategy. As part of that work we are focusing too on competitiveness, innovation and skills capability and capacity within the sector.
I welcome this initiative by Progress to stimulate a debate about Labour’s future policies towards business. We need better and deeper understanding of each other’s priorities and approaches.
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Joe Greenwell CBE is chairman, Ford of Britain
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This article is part of a series we are running on Labour’s relationship with business and how we create growth, to coincide with our event on Tuesday: ‘Going for growth: How can Britain pay its way in the coming decade?’ with Chuka Umunna MP, Paul Drayson and Joe Greenwell. Follow the series here.
If you would like to attend the event, please email [email protected]
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