Following yesterday's announcement by the Chancellor, Rishi Sunak, of a series of unprecedented steps will be taken to shore up the economy and protect businesses and workers during the coming months, Adam Cunningham, Chairman of the Manufacturing Assembly Network and CEO of Muller Holdings, said that he wanted to see more support specifically aimed at manufacturers.
"Broadly speaking, we think it’s a positive start, but more targeted manufacturing support needs to be included in the ongoing package.
"Apart from the obvious business rates and rent issues, most of us have invested significantly in new technology and equipment to make sure we’re globally competitive. This will need to be offset in some way, so that we can continue to manufacture during the testing months ahead.
"Preservation of cash is key in uncertain times. We’d encourage the Chancellor to look at payment holidays, support with debtor controls, maybe delayed corporation tax and NI payments…all of these could make the crucial difference.
"There are also issues for businesses with final salary pension schemes that are paying large amounts of cash out each month to shore up old schemes. It’s manageable while we’re trading normally, but could potentially be the final nail in the coffin for a lot of good companies.
"Finally, support for workers with zero-hour contracts. These predominantly operate in logistics and distribution, a sector that is critically interwoven into the world of engineering and manufacturing."
Graeme Wright, Chief Digital Officer for Manufacturing and Utilities, at Fujitsu UK (pictured), said that the crisis will see manufacturers become increasingly important to the wider economy. “The manufacturing sector, like many others, is facing unprecedented pressures in the face of the COVID-19 situation," he commented. "But manufacturing organisations have a vital role to play in the coming months, which is why it’s more important than ever that they look at how they can continue to innovate and evolve to keep up with the ever-changing landscape.
“Technologies – such as automation and 3D printing – are going to play a significant role in helping manufacturers react quickly and effectively respond to changing customer needs. As the situation continues to develop, technologies like these will open up new opportunities for manufacturers to adapt their business models, enhance their value, and establish new services such as servitisation.
“Manufacturers need to find a balance between embracing digital and being supported by a skilled workforce in order to stay relevant. Ultimately, the most successful manufacturing organisations moving forward will be those that are agile and prepared to utilise the latest and best technological innovations effectively.”
In brief:
Nissan, MINI and Toyota joined the growing list of car plants to have shut down because of the pandemic.
BrewDog has re-purposed its lines to start making hand sanitiser, which it will distribute free of charge to those who need it.
Update: 15.40
UK Steel has warned that government inaction would become 'terminal' for the industry and put tens of thousands out of work. It has outlined three key recommendations for the steel industry in order for it to continue serving the United Kingdom are:
- Introduce a ‘short-time working’ scheme, to financially support workers if companies need to reduce hours and production
- Immediate provision of liquidity to businesses, in the form of loans or grants to cover operational and necessary capital costs. Usual state-aid restrictions must be relaxed here
- Reduction of operational costs for businesses by suspension or deferment of key costs such as PAYE, NI, Business Rates, EU ETS, and other non-safety critical regulatory costs.
UK Steel Director General, Gareth Stace, said: “We welcome the Government’s clear commitment to do whatever it takes to defeat coronavirus, and we, the steel industry, are today joining the Government in that commitment. But in order to do so, we need to be able to pay our workers and keep production lines going, that means cash. In these unprecedented times, we are asking Government to build on the support already announced, help us to ensure that our workers are supported now and crucially still have jobs when this crisis is over.”
Community General Secretary, Roy Rickhuss CBE, said: “Steelworkers are doing all they can to keep production lines running at this difficult time but people are worried for the future. We need Government to be clear that people’s earnings will be protected and jobs and skills can be retained. The Government’s approach to British Steel over the past year was the right one to ensure the continuity of the business. Now we are asking for the Government to step-up again and give confidence to steelworkers across the UK that we can get through this crisis.”
Update: 16.15
JCB has announced that it is to halt production for the next week and a half at all of its UK manufacturing plants as demand for its products has dropped. All shopfloor staff affected by the move will be paid in full during the shutdown.
JCB CEO Graeme Macdonald said: “These measures are unprecedented in the history of JCB but are absolutely necessary to protect the business. As we continue to deal with the health implications of the COVID-19 pandemic, it has become more challenging to maintain business continuity in this volatile economic climate. JCB is a global exporter and worldwide demand for our products has dropped sharply as customers cancel orders and defer deliveries. This is not just a UK issue, it is worldwide and with countries like France, Spain and Italy going into lock-down, those key markets for construction equipment disappear overnight.
“In light of this fast-changing situation, we need to re-plan our production and, as a result, manufacturing at all UK factories will cease for the rest of this week and all of next week. This will allow us to take stock of the situation, re-plan our order book, prioritise products that are definitely required by customers, and ensure parts and components are reassigned to support the production of these products.”