Driving for a better future

DESPITE the difficulties seen in the past 18 months, the Northwest's £9bn automotive sector is still at the heart of the region's manufacturing base.

Yes, there has been pain, but even in the depths of the recession there was good news, which gives confidence for a leaner, greener future.

It is a common misconception that this country doesn't make anything any more - the dynamics have changed in the past three decades as the UK shifted from an industrial to a service-based economy.

The Northwest automotive sector still employs around 43,000 people - around half directly employed and half in the supply chain - and is home to some of the most iconic names in the world such as Bentley and Leyland trucks. In terms of size, the sector is second only to the West Midlands.

As well as Bentley and Leyland, there's Vauxhall at Ellesmere Port, Jaguar Land Rover at Halewood, Merseyside, and bus maker Optare in Darwen, Lancashire.

That the automotive industry is a global business should not be overlooked - the region's factories can be affected by issues far beyond their control must not be forgotten.

For example, workers at Vauxhall endured months of uncertainty over the future last year as a result of its parent company, General Motors', financial problems. In a similar vein, Bentley is part of Germany's Volkswagen Group and Land Rover is owned by the Indian conglomerat0e, Tata.

Downward trends

It is unquestionable that demand for new cars was hit by the recession as consumers cut back spending and banks hiked the cost of lending. The past 18 months saw much bad news as jobs and pay were cut and shorter working hours were implemented to meet reduced demand.

Following this global trend the Northwest was affected too.

While not offered the same level of help as the financial services sector, the sector was cushioned from the worst of the down turn by the Government's Scrappage scheme, which offered a cash incentive for consumers to trade-in older cars and then buy newer, more fuel efficient models.

2009 ended on something of a high thanks to that. New registrations in December rose by 38.9%, according to the Society of Motor Manufacturers and Traders, although total new car sales were down 6% on 2008 at 1.9 million. While the scrappage scheme of course grabbed headlines, at a local level, the Northwest Development Agency (NWDA) has been supporting the automotive sector with grants and advice for a number of years.

In 2007/8 Vauxhall received £9m to support its investment in the latest Astra - which launched last autumn to much acclaim - while more than £20m was been made available for Jaguar Land Rover to build its smallest, most fuel-efficient model, the LRX at Halewood, a move that will create 800 jobs.
Last October, key government advisory body the Committee on Climate Change, said Britain needed two million electric cars on the road by 2020 to meet its greenhouse gas reduction targets.

Electric dreams

While there's no question that in the medium and long term the future of the volume market is hybrid or electric-powered cars, in the short term a focus on efficiency is absolutely vital.

Vauxhall is the prime example. It’s Ellesmere Port factory, which employs 2,400 people, is now recognised as one of General Motors' most efficient plants worldwide.

As a result it won the design and production of the new Astra, and crucially last autumn, when new GM boss Nick Reilly was looking at how to restructure the company's European business, he opted to raise production at Ellesmere Port, safeguarding jobs.

The success of the management and workforce at Ellesmere Port in being the best in class now is standing the plant in good stead for the production of Vauxhall's Ampera - the much-talked out electric car, although no guarantees have been made. Hopes are high that the Ampera will come to the Northwest.

General Motors clearly sees that it is the future. Just this month it revealed a $246m investment in to one of its plants in the US to make electric motors for its next-generation hybrids.

Industrial group the CBI is convinced that the low carbon model is the blueprint for the future. Northwest regional director Damian Waters says: "Change is coming in terms of how we power our cars. It may not be in one or two years, but in 10 years time less and less of us will be driving in cars powered by carbon fuels.

"The Northwest stands in good stead to benefit from this change, in terms of manufacturing pedigree, a skilled workforce and education facilities leading the way on research and development."

A green future

He said the region may have a "little catching up to do" on the Northeast - where Nissan is forging ahead with an investment focused on green power - but believes the entire North can be a centre of excellence for the low carbon economy.

Innovation and continued government funding to support the sector will be the key to the future success of the region's automotive manufacturers.

Further evidence of this was seen in January when Optare revealed its first orders for its advanced fully electric city bus the Solo EV. The Lancashire company’s investment in this key new technology is underpinned by £12m from the Government's Green Bus Fund.

Alexandre Rodrigues, a member of the innovation team at the Northwest Automotive Alliance says small firms must also be given help to invest in innovative technologies.
"Of course it is vital for the big companies to receive help from the government, but in this region we have a good number of SMEs investing in research and development for low carbon vehicles, and it is important they receive support too.

"It can often be an expensive process in taking an idea or a concept to market, and with targeted help this can help with job creation, and that is vital."