Carmakers slash factory investment to spend on Brexit preparations

Only £90 million of new investment was committed to automotive plants in Britain in the first half of the year as the industry diverted spending of at least £330 million to Brexit preparations.

Figures from the car industry show that commitments of inward investment in factories all but dried up in the six months to the end of June, compared with an average investment of £2.7 billion a year over the past seven years.

There were only a handful of spending commitments on new projects, adding up in aggregate to £90 million, according to the Society of Motor Manufacturers and Traders.

During the period Honda announced the closure of its site in Swindon and Ford of its engine plant in Bridgend. In contrast, the SMMT said that incomplete data from its members on preparation for a March Brexit, which has been postponed until October, identified spending on stockpiling, extra warehousing, insurance and shutdowns of at least £330 million.

However, since June 30 the industry has received a boost, with Jaguar Land Rover announcing plans to invest £1 billion in turning its Castle Bromwich factory in the West Midlands into an electric vehicle manufacturing plant.

The society’s figures also show that factory gate output has fallen by 20 per cent this year, including a 15.2 per cent year-on-year drop in June, and that three in ten vehicles coming off assembly lines have diesel engines, despite the backlash against diesel cars.

Mike Hawes, chief executive of the SMMT, said: “These figures are the result of global instability compounded by fear of no-deal. This fear is causing investment to stall, as hundreds of millions of pounds are diverted to Brexit cliff-edge mitigation, money that would be better spent tackling technological and environmental challenges.”

Factory shutdowns normally scheduled for the summer were brought forward to April by some carmakers in preparation for a Brexit transition. That accounts for some of the 20 per cent slump in production from 834,000 cars to 666,000 cars in the first six months. The 15 per cent fall in output in June represents the underlying decline in production, according to Mr Hawes.

Charting Manchester’s creative industry growth

Research has revealed that the creative industries in Manchester are growing faster than anywhere else in the UK outside of London.

Manchester city region employs 48,515 people in creative industries, spanning film and TV, architecture, publishing and design. Analysis of the data published by Nesta, which compared the periods between 2011-14 and 2015-16, shows that creative jobs have increased by almost 7,500 in just two years, which represents an impressive growth rate of 18 percent. In addition to far out-performing the national average of 11 percent, Manchester’s creative sector has grown at triple the rate of every other industry.

The city is home to 9,183 individual creative industry companies, which has grown by 21 percent in two years and in real terms translates to an additional 1,618 companies. It is thought that the creative sector contributes more than £1.4 billion to the local economy. This represents 3.74 percent of total GVA, which is higher than anywhere in the UK outside of the Greater London area.

Onwards and Upwards for Manchester

At the Be More Manchester event, organised by Creative England, the Mayor of Greater Manchester, Andy Burnham, said that the Manchester city region should be proud of these figures.

Going on to highlight the potential of the creative sector, Mr Burnham said that as creativity can be used to “overcome all challenges”, more should be done to incorporate the creative arts into the school curriculum to encourage children from an early age that success in the creative fields is possible.

Mr Burnham went on to say that it is crucial to continue to bring “businesses in the sector together, to inspire, support and look at ways we can drive it even further forward.”. This point was emphasised by the chief executive of Creative England, Caroline Norbury, who highlighted that “Manchester is brimming with truly groundbreaking and innovative companies” that are contributing significantly to both the local and wider economy.

Employment Figures are Strong Across Creative Industries

Nesta’s research illustrates that publishing is the fastest growing creative industry in the City Region, with the sector creating 800 jobs between 2014 and 2016, a rise of almost 58 percent. The architecture industry saw job growth of just over 43 percent and employment across TV, video, radio, film and photography is sitting at just under twice the national UK average.

Design employment increased by just over 20 percent and the number of businesses across TV, video, photography, radio and film increased by more than 30 percent. IT, software and computer services is the largest creative sector in the city, with more than 4,500 business employing 16,785 workers.

Looking to the Future

It is thought that the UK is currently on track to create a million new jobs in the creative industries between now and 2030. At the Be More Creative event, Caroline Norbury was also quoted as saying, “talent is everywhere but opportunity is not, and it is imperative that opportunity is developed in all parts of the country, to give real, diverse talent a platform to tell their stories”.

Notably, Manchester is featured in the list of ‘Top 10 Travel to Work Areas’, which indicates that the region is an excellent place for creatives to set up both home and business.

This period of growth has resulted in a wealth of opportunities for small businesses in terms of temporary office space in key areas of Manchester, whether it’s individual studios, coworking spaces or fully serviced offices. A sense of community that spans the creative industries is palpable and a general sentiment of cooperation makes the city an ideal place to set up a range of creative businesses.

There are lots of reasons to start a business in Manchester. In addition to being home to more than two million people, the city region has an economy larger than that of Northern Ireland. In addition to the wealth of praise and support from leading business figureheads and politicians, such as Caroline Norbury and Mayor Andy Burnham, a range of investment opportunities and growth hubs are on hand to support new businesses across Manchester. These include MIDAS and the Business Growth Hub.

The future of the creative industries in the Manchester region looks extremely positive going into the future, despite a potentially challenging UK economy in the years ahead.

Vauxhall owner could pull the plug on Astra’s UK production

The chief executive of Vauxhall-owner PSA says it could move all production from its Ellesmere Port factory if Brexit makes it unprofitable.

Carlos Tavares told the Financial Times that the firm has alternatives to the plant which it could use.

The move would probably lead to the closure of the site, the FT said, threatening 1,000 jobs.

That would leave Vauxhall’s Luton-based van plant as its last presence in the UK.

“Frankly I would prefer to put it [the Astra car] in Ellesmere Port but if the conditions are bad and I cannot make it profitable then I have to protect the rest of the company and I will not do it,” Mr Tavares told the paper.”We have an alternative to Ellesmere Port.”

The government is now “working on the assumption” of a no-deal Brexit, said Michael Gove, who has been charged by Prime Minister Boris Johnson to prepare for leaving the EU with no deal.

Mr Gove said his team still aimed to come to an agreement with Brussels but, writing in the Sunday Times, he added: “No deal is now a very real prospect.”

‘Not an option’

The Confederation of British Industry has warned the government that neither the UK or EU is ready for a no-deal Brexit.

And the car industry lobby group, the Society of Motor Manufacturers and Traders warned on Friday that “No deal Brexit is simply not an option.”

Car production has been falling in the UK over the past year, amid increasing pleas from the industry for a Brexit deal.

The UK’s automotive industry has received a series of blows in recent months, with Honda announcing it will close its Swindon plant in 2021.

Ford also said its Bridgend engine plant in south Wales would close in September 2020 with the loss of 1,700 jobs.

Japanese car producers, including Nissan, have said that Brexit uncertainty is not helping them “plan for the future”.

Earlier this year, Nissan opted to build the next X-Trail model in Japan, rather than in Sunderland