The Confederation of British Metalforming (CBM) has recently expressed its support for Jaguar Land Rover’s (JLR) planned resumption of production and the implementation of a supplier funding scheme. While this news is certainly a positive step towards reviving the UK automotive industry, CBM has also highlighted the ongoing challenges faced by smaller manufacturers in the sector, calling for urgent action from banks and the government to provide necessary support.
In response to the COVID-19 pandemic, JLR announced a phased return to production starting in the second week of May. This decision has been met with great enthusiasm by CBM, which represents over 200 companies in the metalforming industry. The resumption of production by a major player in the automotive sector is seen as a much-needed boost for the industry, which has been severely impacted by the pandemic.
CBM CEO, Dr. Peter Hammond, stated, “We are pleased to see JLR take this important step towards getting the UK automotive industry back on track. This will not only have a positive impact on the company itself but also on the wider supply chain and the economy as a whole.” The CBM believes that JLR’s staged approach to restarting production is a responsible and safe way to revive the industry while still adhering to social distancing guidelines.
In addition to the resumption of production, JLR has also announced a funding scheme for its suppliers, which aims to provide financial support to smaller manufacturers. While this is a commendable move by JLR, CBM has raised concerns about the ongoing liquidity pressures faced by smaller suppliers and urges banks and the government to step in and provide further support.
Dr. Hammond explains, “Smaller manufacturers in the automotive supply chain have been hit hard by the pandemic and face real challenges in terms of cash flow management. The supplier funding scheme by JLR is a positive step, but it is essential that banks and the government work together to provide further support to these businesses.” CBM believes that urgent action is required to safeguard the future of these smaller manufacturers, who play a vital role in the UK automotive sector.
The concerns raised by CBM are not unwarranted. The pandemic has had a significant impact on the global economy, and the automotive industry is no exception. The forced shutdown of production plants and the subsequent decline in demand have resulted in severe financial strain for businesses across the supply chain. The impact has been particularly acute for smaller manufacturers who often have limited resources and rely on a few major customers for their survival.
CBM’s call for urgent action is supported by the recent findings of a survey conducted by the Manufacturing Technologies Association (MTA). The survey revealed that 78% of manufacturers in the UK believe that their cash reserves will be depleted within the next six months. This highlights the pressing need for financial support to ensure the continuity of operations for these businesses.
In light of these challenges, CBM is urging banks to provide more accessible and affordable credit to smaller manufacturers. Furthermore, the government is being urged to step in and provide direct financial support to businesses in the form of grants or loans. CBM believes that such measures will not only help businesses weather the current storm but also ensure that they are well-equipped to contribute to the revival of the UK automotive industry in the long run.
In conclusion, the Confederation of British Metalforming welcomes JLR’s announcement of a phased production restart and the implementation of a supplier funding scheme. While this is a positive development for the industry, CBM has also highlighted the urgent need for support for smaller manufacturers who are facing severe liquidity pressures. It is hoped that the government and banks will act quickly to provide the necessary assistance, ensuring the long-term sustainability of the UK automotive supply chain. With the right support, the industry can emerge stronger from this crisis and continue to play a vital role in the country’s economy.
