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Coronavirus layoffs threat

Chinese car part shortages amid outbreak to hit UK car manufacturing
Hajera Blagg, Wednesday, March 4th, 2020


The coronavirus outbreak ravaging China has raised fears that a slowdown in car component supplies from the virus-stricken country could affect auto manufacturers in the UK.

 

Unite has sounded the alarm over the fact that a shortage of these essential components from China could force UK car plants to enter periods of short-time working and could potentially lead to layoffs.

 

In a letter to business secretary Alok Sharma, Unite assistant general secretary Steve Turner wrote, “We are of the view that if the situation in China was not to improve over the coming three to four weeks, UK automotive plants will be entering periods of short time working and or enforced production shutdown.

 

“With stocks low and components already in transit accounted for, should we be unable to replenish stocks and/or establish alternate supply lines, an already difficult financial situation following a collapse in Chinese sales, will very quickly transfer to production lay off here in the UK,” Turner added.

 

Last month it was reported that Jaguar Land Rover (JLR) had only two weeks’ supply of parts in its UK plants left, with CEO Ralf Speth saying at an event in Conventry that parts were being flown in from China in suitcases.

 

“We are safe for this week and we are safe for next week and in the third week we have … parts missing,” he said.

 

Guenter Butschek, chief executive of Tata Motors, which owns JLR, also highlighted the increasingly worrying shortage of parts.

 

“We are safe for the month of February and for a good part of March,” he said. “Are we fully covered at this point of time for the full month of March? Unfortunately… not.”

 

Speth also noted that sales in China have “completely stopped”.

 

“It’s zero,” he said. “You don’t know whether the economy will catch up or whether this kind of loss is just a loss.”

 

Turner urged the government to intervene and set up a scheme similar to one in Germany that supports workers during periods of short-time working.

 

“The scheme, in place since 1910, has been adopted by many European countries, and has served to protect manufacturing industry from the pressures of short-time working by providing for wage protection during agreed periods of downtime,” he wrote in his letter to the business secretary.

 

Turner pointed out that with the German state supporting industries and their workers with up to 60 per cent of regular income – or 67 per cent for those with dependent children —  workers are then able to “take up retraining and upskilling during a difficult period – while worked time, paid by the employer, is temporarily reduced”.

 

“We cannot allow workers to be simply laid off or forced to use banked hours in response to a national crisis,” he wrote.

 

Turner told UniteLive that he is now seeking an urgent meeting with Sharma and said Unite’s demands are backed by five of the UK’s largest industry federations.

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