UK's Component Industry Could Disapear by 2016

Members of the Welsh Automotive Forum (WAF) were cautioned that UK's automotive component industry reached a critical moment and could vanish by the middle of the decade unless immediate action is taken.

Garel Rhys, chairman of WAF, suggested that the industry wouldn't disappear gradually, but rather suddenly pass out of sight, with the global automotive industry's shifting towards new technology.

"In 2008 the automotive manufacturing sector employed more than 163,000 people but two years later it was down to 116,000 - that's a 28% cut and an absolute blood letting," he said speaking at WAF's winter networking dinner.

"I am concerned it is getting to the point of no return and once the supplier base goes it will not be long before we see the manufacturing base going as well," said Rhys.

"It is a fallacy that the UK cannot compete with other parts of the world. The fact is our unit cost per head is among the best in Europe, our productivity is very high, but the industry needs support from the vehicle makers and the government if it is to survive and prosper. We can put up a very strong case to build any new vehicles in Britain," added the WAF chairman, in an effort to boost morale.

Earlier, guest speaker Bill Parfitt, chairman and CEO of GM UK, had warned that the UK's automotive supply chain "won't be here by 2016 if we carry on as we are" but that there were reasons for optimism. Parfitt, who is also head of the Automotive Council's supply chain council, said that the council is close to publishing a 'road map' showing what carmakers demand and what component manufacturers can supply.

"We know there are big gaps in that road map," he said, adding that GBP 1.5 billion worth of business has been identified and could return to the UK through GM, rising to GBP 6 billion in the next few years.

"GM doesn't buy enough in the UK but we have to improve the supply base before we can; every pound I spend here makes a big difference to my exposure to foreign exchange fluctuations. We need to dispel the myth that the UK is expensive and start to shift production back from eastern Europe to the UK - the mood is ready to reverse that trend."

He advised suppliers to collaborate on research, development and products and to work closer with carmakers.

"There is not a lot of research and development here and many UK suppliers don't have the expertise to talk to our German R&D teams, for example, so we're going to address that."
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