'Take action now' to support UK auto industry

Unite has called on the government to follow the lead of other countries, such as Spain, France and Germany, which have provided their manufacturing sectors with support to get through the coronavirus crisis.

Today (June 17) new employment indicators – with 1m furloughed workers back at work again — show that Spain is on track to recover in the second half of the year from its economic crisis precipitated by the coronavirus pandemic.

On Monday (June 16), the Spanish government announced a £3.3bn bailout of its automotive sector which will be underpinned by environmental goals.

Commenting, Spanish prime minister Pedro Sánchez said, “The automotive industry is a strategic pillar for our country and this government is not going to leave it behind.”

Sánchez said 70 per cent of the money from the bailout will go to protecting the sector’s value chain while 30 per cent will go to implementing measures such as electrification of public transport and renewing the existing car fleet.

As a condition of the bailout, car companies in Spain must commit to maintaining or bringing back factories domestically and must increase clean vehicle production.

Automakers in Spain in receipt of the government bailout will be tasked with increasing electric vehicle output by at least 700,000 units per year and must also help promote electrical vehicle charging infrastructure with the rollout of new charging points.

Spain has followed Germany and France in providing sector-specific support for its automotive industry. Last month, the French government announced an €8bn rescue package for its car industry, underpinned by many of the same green goals as in Spain.

Meanwhile, UK car firms and the 168,000 they directly employ – with hundreds of thousands more in the wider supply chain – are still anxiously waiting for government support, as are other sectors such as aerospace.

Thousands of job cuts in the UK auto industry have already been announced, including most recently 1,500 at car dealership chain Lookers and 500 at Aston Martin Lagoda.

Many thousands more job losses across sectors are expected in the coming months as the UK furlough scheme is wound down. Both Germany and France plan to continue their job subsidy programmes for at least two years, while the UK government has announced that it will end its furlough scheme in October.

Aerospace giant Airbus warned that UK workers face “more permanent” job cuts than their French and German counterparts because the government here has not planned to extend its furlough scheme long-term.

Commenting on the news of Spain’s auto sector bailout, Unite assistant general secretary Steve Turner warned that UK auto workers risk being left behind.

“Spain has followed France and Germany in providing time critical support to keep their automotive industries on the road and playing their part in meeting the need to switch to low and zero carbon transport,” he said.

“But in the UK, we’re now nearly three months into the government’s lockdown and our world class automotive industry and the thousands of jobs that rely on it are in need of immediate assistance – as the 1,100 JLR jobs that went this week highlight.

“Ministers must stop sitting on their hands and take action now with a package of support for the sector. This must include new vehicle discounts and incentive schemes, infrastructure investment and transition grants to support the manufacture of electric vehicles here in the UK and in line with industry approved proposals by the Society for Motor Manufacturers and Traders,” he added.

“It is imperative that sales to public sector fleet replacements are brought forward, private fleet early renewals encouraged, and individual owners incentivised with discounts on new sales of all vehicles.

“Additional grant support should be targeted at electric and hybrid vehicles, as well as for low emission diesel and petrol engines, ensuring revenue streams are protected to allow for vital investment in future technologies,” Turner went on to say.

“Government must move beyond the soundbite to ‘take back control’ of how we spend taxpayers’ money. Public procurement policy should prioritise the purchase of UK built vehicles, supporting further investment in domestic supply chains and infrastructure. Tens of thousands of good, skilled jobs are at risk.

“With a clear plan of action these jobs can be retained and enhanced, our towns and cities can be cleaned up and the nation’s road transport system made fit for a green future.”

By Hajera Blagg