From transmission to electric transition, from the UK to the world
Since 1909, Ford of Britain has been at the forefront of UK Automotive manufacturing. As the electrified era dawns, new skills and production capability are required to deliver the next chapter of Ford’s UK history.
Through the leadership of Ford’s “EPRIME” consortium, a broader consortium supported by the Advanced Propulsion Centre, Innovate UK and private partners was assembled in April 2018 to deliver manufacturing and engineering capability in new technologies, tools and equipment, skills and software and ultimately to create a facility for European electric vehicle (EV) component manufacture. At Halewood in North West England, this is now a reality.
Ford are embarking on an ambitious £230 million investment to transition the existing transmission facility to electrified power units to supply the UK and Europe – with the potential to expand further if the right conditions are in place, and sustained, for the UK to compete internationally. Retaking full control of a former joint venture with Getrag, Ford had a modern, well-maintained facility with a passionate and skilled workforce and a golden opportunity. The project will benefit from the Automotive Transformation Fund, creating over 300 jobs and safeguarding more than 350 existing roles, with all the spillover benefits for the supporting supply chain.
New and existing manufacturing processes will serve Ford’s passenger and commercial vehicle supply chains in Germany, Turkey and Romania. Completed power units will be assembled and tested on site and then exported across Europe for assembly into finished vehicles serving UK, European and global markets.
Ford has worked with UK suppliers to source additional new componentry, creating local demand and building new capacity to meet these demands, This is driving forward the requisite domestic ecosystem and knowledge base that can transfer to the benefit of the wider sector. SMMT’s Automotive Supply Finder tool helped identify new connections while Ford also benefitted from strong and timely support across Government and academia. Meanwhile, piloting and prototyping has helped anchor Ford’s Dunton campus as a product design and manufacturing leader, casting benefits beyond the Halewood site. The expertise and learning accrued through these projects is now inspiring and influencing change at a global level as Ford looks to make a global electric transition, showcasing the best of the UK’s innovation and manufacturing capability.
Power unit production in Halewood is slated to begin in mid-2024 with production capacity forecasts of an initial 250,000 units a year. More widely, challenges now include planning for new skills and talent across battery cell production and assembly, power electronics and more, to solidify the skills base for an electric future. Maintaining a competitive business and R&D environment for advanced manufacturers pushing the very boundaries of advanced manufacturing can reinforce the foundations on which to realise future UK growth.
Evolving supply chains beyond electrification, seated in a UK ecosystem
A global Tier 1 supplier, Adient specialises in seat manufacturing and has a UK footprint that directly and indirectly supports major OEMs with plants in Sunderland, Liverpool, Wednesbury and Burton-on-Trent and over 1,000 employees, headquartered in the West Midlands.
The demands and rigours of just-in-time, just-in-sequence manufacturing demands co-location with customers which drives investment choices. Major vehicle production is an integral driver of supply chain positioning and anchors in the wider automotive ecosystem, attracting and encouraging wider supply chain businesses. Within this, Adient must then manage its operations, investment, general manufacturing costs and competitiveness challenges – across energy, business rates and labour for example.
Often with a broadcast window of only hours and an extensive bill of materials with over a thousand inputs, Adient must build components to match customer need in a precision operation to deliver complete seating systems to vehicle assembly lines, and often quickly ramp up production to meet orders in a disrupted marketplace, maintain operational excellence and delivery flows.
Compliance with international standards and regulations for UK and global markets required deep technical engineering, coupled with high quality aesthetic and haptic design, and innovation to deliver market leading products and potential growth opportunities. These include new smaller, integrated sound systems with in-built amplification that improve customer experience and contribute to lightweighting vehicles, the latest air bag systems for improved safety, and new functionality for new modes of travel in automated vehicles. Adient operates within a section of the market less exposed to the megatrends and structural changes needed for zero emission vehicle production and will continue to serve combustion engine, zero emission and automated mobility solutions, but must evolve to meet future interior architectures as vehicles evolve. The industrial transition too is no less challenging, as Adient seeks to pursue critical decarbonisation and sustainability goals.
In the wider value chain, Adient has a manufacturing plant at Wednesbury, building foam components from raw materials and chemicals, where the advantages of R&D credits and a positive UK culture of innovation can invite compound benefits for UK plc. It is also looking to reduce other costs by locating close to OEMs given the inefficient logistics of moving large, complex, lightweight goods over long distances. However, this is impacted by high energy costs compared to continental Europe for high energy processes.
Adient epitomises the needs and challenges facing the broader supply chain – including those both directly and indirectly impacted by electrification. To continue this success story, a strong, robust vehicle manufacturing base, complemented by a compelling competitive business environment, will create the conditions to capitalise on new opportunities. Regulatory certainty, reduced and reliable energy costs, and ongoing support mechanisms for innovation, R&D and industrial decarbonisation can accelerate the
journey with a firm foundation right here in the UK.
The ‘Britishvolt effect’ powering the UK ahead in the race to zero
Britishvolt (BV) is a British battery technology company and advanced manufacturer building its first full scale Gigaplant in North East England. The company has big ambitions to accelerate the decarbonisation of society producing battery solutions for an electrified automotive industry, and beyond, at home and abroad. BV is already the partner of choice for Aston Martin Lagonda and Lotus Cars with an expanding roster of clients.
BV is pursuing a deliberate strategy of co-location and collaboration to attract the requisite evolving supply chain up and downstream. This can help reduce the overall industry carbon footprint and meet trade and origin obligations via localisation where possible. Also, it enhances resilience, streamlines logistics, and improves supply chain transparency, to create a halo effect that secures the long-term skills
and value chain in this ecosystem of automotive excellence.
The first phase of battery production will commence in 2024, creating up to 3,000 jobs and more in the supply chain by the end of the decade. Through a four-phase expansion BV seeks to build enough cells each year for well over 300,000 electric vehicle battery packs (equivalent to almost a third of current UK vehicle manufacture), securing Global Britain’s position on the sustainable battery production map. The site offers local renewable energy generation, a deep sea port and railhead, as well as the heritage of automotive skills and suppliers the region boasts as a foundation for future success.
BV was enabled through strategic collaboration, leveraging the existing world-class UK battery cell ecosystem developed with the foresight of UK Government. Further fiscal support from the Automotive Transformation Fund kickstarted the venture under the Government’s Transport Decarbonisation Plan. Alongside visible and vocal Government assistance – symbolic in itself – Britishvolt leveraged £1.7billion in mobile capital investment from the private sector, critical to spearhead a British-led project in this nascent sector.
This is matched by strong institutional R&D partnerships, including UK Battery Industrialisation Centre (UKBIC) and The Faraday Institution to pioneer new battery technology and futureproof its operations into the next electric decade.
Attracting wider elements of the critical supply chain will facilitate BV and the wider industry to go further to collectively meet the end of sale of combustion engines, domestic carbon budgets, and increasingly stringent origin rules for EU and global trade to avoid punitive tariffs. Embedded skills in the region and greater visibility of automotive as a lifelong, rewarding, high skilled, high wage career path are crucial, but there remains a growing skills gap in emerging technologies to maintain, re-train and attract new talent to deliver on the UK’s potential.
BV demonstrates what can be achieved when all parties work together through public-private partnership, to foster an internationally competitive offer, matched with UK ingenuity and enterprise. As other major economies pursue parallel electrification strategies, clusters and collaboration can be a catalyst for the UK’s zero emission future. The ‘Britishvolt Effect’ seeks to leave a positive legacy for the UK and power ahead industries of the future.
TMD Friction develops and produces brake friction technologies for cars and commercial vehicles, and is part of Nisshinbo Group, one of the world’s largest friction manufacturers. Their UK manufacturing base in Hartlepool produces 24 million pieces of brake per year, with a capital expenditure of £2.5 million. It employs 650 people, out of 6,500 across the whole company. More than 300 are involved in research and development for original equipment and aftermarket manufacturing worth £30 million per annum in investment. The company maintains a fleet of 100 vehicles conducting thousands of UN approval tests, with evolving regulatory obligations and deep technical understanding paramount to ensuring standards for domestic and overseas markets are met.
The UK site is specifically equipped to do short changeovers from one shape of friction to another – up to 750 per week – with its ESPI capability offering a competitive edge for the UK site. With a catalogue of more than 10,000 pad variations, Hartlepool can produce 90% of these to order, to service a wide range of vehicles from short production runs through to larger needs for aftermarket and original equipment manufacturing. This capacity can also support single line production elsewhere in the business if required.
R&D is at the heart of UK operations. Consequently, the UK’s R&D tax credit and capital allowance frameworks are critical enablers and can attract further innovation and investment potential if properly geared to support manufacturers with an internationally competitive offering. TMD Friction is adjusting to zero emission transition. UK businesses can be a beneficiary with electric powered vehicles operating smaller brakes with lower wear (approx. 20% less), and industry seeking to maximise the advantages of lightweighting to support range and sustainability ambitions without compromising performance.
Input materials are also advancing with everything produced for the aftermarket copper-free, and innovation in processes reducing waste, as part of the sustainability and circularity journey. New product lines and new technology and processes will also demand upskilling as production methodology changes. Skills retention remains challenging. TMD Friction relies on apprentice schemes and other
policy levers to ease the challenges.
Other strong headwinds can be seen in rising energy prices, which risks increased costs for customers and consumers, with double digit increases above planned estimates. Solutions, such as a potential hydrogen source in the North East cluster hold promise with the business open to exploring every possible avenue to get involved in green energy and renewables schemes to support overall competitiveness. Rising commodity prices are a further pressure to cost competitiveness, as well as extended logistics lines in reaction to changing trade rules, but TMD Fiction look to the future optimistically amongst the UK supply chain.
West Midlands enabling a just transition
The British Academy’s Enabling a just transition in automotive report, published April 2022, examines the issues facing the supply chain’s electric vehicle transition in the Midlands.
The study showed there were marked gaps in the automotive value chain in the West Midlands, which could hinder the transition, but also represent an opportunity. It highlighted the importance of ‘national strategic assets’, key anchor companies that are the focal point for the supply chain. In the Midlands that is primarily Jaguar Land Rover, but could equally be any of the large vehicle manufacturers to their local regions.
For EVs, the study noted the lack of specialist equipment needed to undertake the production of batteries, the high value battery components and key electric motor components. It also noted issues further down the supply chain, such as materials availability, and the UK’s high energy prices, which would act as a barrier to international competitiveness.
The report included two key policy asks. The first; to enhance the region’s general competitiveness by improving infrastructure and supporting low cost, low carbon energy provision. The second; significant support for EV manufacturing, including supply chains and gigafactory provision. This could make the case for reinstating a Manufacturing Advisory Service and a Skills Strategy to train workers.
Birmingham City University’s Centre for Brexit Studies has noted the importance of interdependency of sectors, with suppliers further down the supply chain often supplying into different sectors. In the Midlands this was largely automotive, aerospace and medical businesses. Therefore, the failure of one could have major consequences for the others.
Industrial heritage, remade for an historic future
Ellesmere Port sits at the heart of Vauxhall’s story, a British brand at the centre of Stellantis’ operations in the UK and strategic plan for an electrified future. Moving to reduce the company’s carbon footprint by 50% by 2025 and 75% by 2030 and produce zero emission vehicles for both the passenger and light commercial segments requires significant business changes. Ellesmere Port’s innovative workforce creates a compelling business case for this new, all-electric vehicle manufacturing plant, which protects and repositions 1,100 jobs as part of a €120 million investment.
In the era of advanced, greener manufacturing, the General Assembly floorplan will shift from 100,000m2 to just 15,000m2. This increases overall efficiencies, reduces running costs, and co-locates battery and vehicle assembly. The introduction of smaller and more efficient cleaner energy systems – with a focus on hydrogen supply, complemented by solar and wind projects – should have a marked effect on competitiveness, providing access to low carbon, more affordable energy. New self-contained HVAC systems will help prevent unnecessary waste.
The EU Trade & Co-operation Agreement remains a critical tool given Ellesmere Port will serve both UK and European markets and face stiff competition from the European mainland within and outside of the Stellantis portfolio. Increasingly stringent Rules of Origin from 2024 onwards enhance the need for attracting the wider electrified supply chain to increase the value chain in favour of UK origin. This will help avoid the risk of future tariffs – especially with exceptionally high prices for critical raw materials such as lithium – as all markets pursue net zero against a backdrop of sustained economic headwinds.
Even at the scale of Ellesmere Port, one plant alone cannot sustain the volumes and economies of scale to support cost competitive supply chains across all requirements. Government must focus on creating desirable business conditions and incentives to attract new suppliers that can meet the collective requirements of other British-based manufacturers. Smooth border and customs procedures must complement domestic efforts and avoid entrenching competitive disadvantages in UK manufacturing.
UK teams are already learning to build these new vehicles and processes from production lines in Portugal and Spain benefiting from shared knowledge across Europe. By going straight to full electric, Ellesmere Port leaps straight to the next generation to its long-term advantage, but this is the only the beginning and maintaining a competitive position is not guaranteed. Policies must be regeared to overcome these hurdles and sustain businesses in the long term.
Stellantis is committed to exporting to the EU and rest of the globe from a world class, UK-anchored manufacturing facility. Ellesmere Port’s blueprint for success can work for other UK sites to seize on the net zero transition opportunity.
McLaren Composites Technology Centre
In 2018, McLaren opened its McLaren Composites Technology Centre (MCTC) in the Sheffield region. More than simply a manufacturing location, it is an innovation centre and a place where new technology is developed to further understanding of composite material, including carbon fibre. What has been achieved at the MCTC is world-first cutting-edge innovation. McLaren took an innovative idea and scaled up to full manufacturing, which demonstrates the capability of the UK automotive supply chain. Innovation funding is a welcome priority in the UK, however, often support is also needed to bridge the gap to industrialisation due to the initial capital equipment and set-up cost.
All aboard for engineering excellence to achieve net zero
Alexander Dennis is a global leader in the design and manufacture of buses and coaches, spanning custom traditional, electric and hydrogen, and as of the latter part of this year, a fully autonomous bus service. Alexander Dennis operates major facilities in Falkirk, Scotland, and Scarborough in northeast England – both non-traditional heavy manufacturing regions, providing great jobs and supporting local economies – and has eight UK sites in total, producing more than 2,000 vehicles in a typical year. With more than 31,000 vehicles in service in the UK, Europe, Hong Kong, Singapore, New Zealand, Mexico, Canada, and the USA, there is global appeal and opportunity for these marquee British vehicles.
Producing Battery Electric Vehicles (BEVs) since the early 2010s, and with hydrogen fuel cell orders ready for deployment in the UK, Alexander Dennis makes high quality, bespoke vehicles which are clean, comfortable, quiet, and safe. Buses and coaches are visible every day in our town centres and across the transport network offering greater mobility solutions, innovative technology, alternatives to private transport, and delivering satisfaction for passengers – all whilst playing a crucial role in decarbonising transport.
Several factors can enable a successful transition to net zero across the whole UK value chain level. For buses, this includes the swift deployment of the Zero Emission Buses Regional Area (ZEBRA) funding, with added mechanisms to support all applicants. This could better enable smaller fleet operators to benefit from greater accessibility and help achieve price parity.
On innovation and skills, Alexander Dennis employs more than 300 dedicated clean tech engineers – but skills shortages make workforce development, talent attraction and retention challenging, particularly in more remote regions. However, one multi-million-pound, multiyear project to develop hydrogen technologies involved up to 40 engineers across multiple disciplines, who undertook on-the-job learning and research. Team members involved in the project worked with and learned from suppliers and vice versa, supported developing the young workforce through taking on six graduates and created new partnerships and business relationships.
There is appetite to invest in new UK facilities to futureproof production, combat soaring energy prices and use new technologies to upgrade processes, but support is rarely geared towards manufacturing business models, or is simply impractical for SMEs.
Infrastructure to support commercial use is fundamental, with unique challenges such as rural routes, and charge points for electric coaches – often underappreciated in the long-distance movement of people.
Finally, Alexander Dennis is developing more local and sustainable supply chains. It asks suppliers to demonstrate their value chain to support carbon reduction and ethical sourcing, while building in greater resilience and community benefit.
Global fleet renewal is opening new markets for zero emission buses and coaches. Thus with the right support, the sector can maintain its leading role as an iconic, technology capable industry to seize new opportunities in the net zero era, with Alexander Dennis as a leading actor.
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