CEO Update

Brexit extension is a sticking plaster solution

12 April 2019 #CEO Update

Yet another week of frenzied Brexit discussion might have finished with a six-month delay, but for UK business there’s no end in sight to the instability and uncertainty. On the one hand, it’s positive that we’ve avoided a ‘no deal’ cliff edge today, but on the other it is utterly unacceptable that more than two years since negotiations started we still don’t know what the UK’s relationship with the EU will be in the coming weeks and months.

Uncertainty has already caused serious damage – UK businesses are losing out on investment to safer-bet destinations abroad, many car plants are on enforced shutdown and jobs are under threat. It is crucial that the six-month extension that has been granted by the European Union be used to build consensus around a long-term resolution that delivers frictionless trade and safeguards British industry. Above all, the threat of ‘no deal’ must be urgently and permanently removed so that the automotive sector can rebuild and refocus. Time remains of the essence and must not be wasted.

A glimmer of positive news this week came in the form of the launch of the National Manufacturing Competitiveness Levels (NMCL) programme to boost the UK supply chain. Part of the government’s Industrial Strategy and Automotive Sector Deal, NMCL has been developed, and will be administered, by SMMT and will see manufacturers match-funding the £16 million commitment from the government to develop sustainable and internationally competitive supply chains. It will help manufacturers of all sizes understand how competitive they currently are and develop the specific business capabilities they need to boost performance.

NMCL’s predecessor, the £13 million Long Term Automotive Supply Chain Competitiveness (LTASC) programme, stimulated an additional £41 million from private investment into England’s vehicle manufacturing supply base, driving growth and securing thousands of jobs in the sector.

This announcement is a shot in the arm for the UK’s automotive industry in general and the supply chain in particular. During this time of upheaval, it is important that all manufacturers are alert to technological, market and trading changes and take the right steps to ensure they have the best chance of being not just viable but globally successful in the future.

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