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SMMT scheme to help safeguard UK auto sector jobs

A new scheme intended to secure the auto industry supply chain and save jobs has been launched by the Society of Motor Manufacturers and Traders (SMMT).

At least 14,000 sector jobs have already been lost this year due to the coronavirus crisis

The auto industry body warned the sector was grappling with the “devastating effects of the coronavirus crisis” and said the industry initiative would allow multiple companies to come together to support critical suppliers without falling foul of anti-competition rules.

The scheme will help preserve the UK’s automotive manufacturing capability and capacity and prevent further ‘hollowing out’ – already at least 14,000 sector jobs have been lost this year; including 9,000 jobs across the sector as a whole with an additional 5,000 in the UK supply chain.

But the SMMT said this was just the “tip of the iceberg”.

Car producers are struggling to ramp up operations, with output down 40.2% in the first eight months – equating to a year-on-year loss of 348,821 cars, worth some £9.5 billion to the sector. And commercial vehicle production is also down, 20.0% in the year to date, equivalent to more than 9,000 units worth almost £730m.

The SMMT said these losses were impossible to catch back but added that the scheme, which is supported by the Automotive Council and government, provides a mechanism for automotive businesses to engage with their customers, lenders, creditors and other stakeholders to find ways to minimise the risk of insolvencies.

It also pointed out that the scheme would not just safeguard jobs for the benefit of the companies themselves but also for the economy, society and individual livelihoods.

Mike Hawes, SMMT chief executive, said: “With the UK automotive sector badly hit by the coronavirus crisis, thousands of jobs already lost and barely weeks left until a fundamental change of trading conditions with our largest market, the EU, the pressures on automotive businesses are immense. Inevitably, these pressures are going to take their toll on businesses, so the Safe Harbour Scheme has been created to help any suppliers in trouble. It should provide valuable breathing space as the sector restarts and business and consumer confidence recovers.”

However, he warned that a trade deal with the EU was also vital to the sector’s recovery going forwards.

“Ultimately, however, the industry must maintain its competitiveness to grow and for that we still look to the Government to deliver an ambitious trade deal with the EU,” Hawes continued.

The Safe Harbour Scheme and framework has been developed by SMMT with support from major manufacturers, the Automotive Council and Department for Business, Energy and Industrial Strategy (BEIS), alongside ITP partners Deloitte, Grant Thornton, KPMG and RSM.

It’s available to any company operating in the UK automotive sector. Companies interested in taking part can find out more and enquire in strict confidence at: www.smmt.co.uk/member-services/safe-harbour/

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Natalie Middleton

Natalie has worked as a fleet journalist for 16 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day. As Business Editor, Natalie ensures the group websites and newsletters are updated with the latest news.