Carmakers, suppliers and logistics service providers serving the UK market have welcomed the setting up of the Automotive Council by the UK government, which was announced by business secretary Lord Mandelson last week.
The Council, which will bring government and automotive industry representatives together to address the long-term strategic challenges facing the UK car industry, will be jointly chaired by Lord Mandelson and former vice president of product development at Ford, Richard Parry-Jones.
Its aim is to achieve greater coordination between the government and private sector in areas including research and development, inward investment and strengthening the automotive parts supply chain.
“The key to any initiative such as this is to have a joined-up approach to planning and implementing a modernised supply chain, involving the vehicle manufacturers, their tier 1 suppliers, and representatives of the 3PL supplier base,” said Ceva UK’s Automotive Business Sector Director, David Jackman.
“Aligning longer term business plans and objectives, through collaborative meetings on a regular basis also ensures that supply chains are properly planned and synchronised,” he told Automotive Logistics, adding that longer contract terms also encourage such participation and make it easier to justify any capital investment.
Among the carmaker’s invited to participate on the Council is General Motors UK, which has faced uncertainty during its parent company’s vacillation over the future of European operations through Chapter 11 proceedings. It now faces a period of intensive restructuring under the leadership of GM-veteran Nick Reilly following Carl-Peter Foster’s departure and has welcomed the establishment of the Council and the prospect of participating. “We are giving serious thought to who might be the most appropriate person to be involved from GMUK,” company spokesman Dennis Chick told Automotive Logistics.
Talking about supply, Chick said there was a lot of work to do and cost-reduction opportunities needed to be looked at through each link of the chain.
“For tier 1, we need to be looking at ways of helping their cash flow,” he said. “We are also interested in dialogue on the options for more local supply by encouraging, as an industry, more suppliers to set up here, but we await the first meeting before we can make any further comment.”
The first meeting of the Automotive Council is scheduled to take place in December. GM also intends to have its restructuring plan in place by the end of the year according to Reilly, and to implement it over the following six months. But he has also conceded that 2010 is looking to be a very difficult year.
The establishment of the Council comes in response to the wide-ranging recommendations made in a report from the New Automotive Innovation and Growth Team (NAIGT) which was published earlier this year and sets out a 20-year vision for the automotive industry.
“Government support for the NAIGT’s key recommendations signals a fundamental shift in the relationship between industry and government,” said Paul Everitt, chief executive of the Society of Motor Manufacturers and Traders (SMMT). “It is an explicit recognition of the strategic national importance of the UK motor industry and its role in generating jobs and prosperity for the long term.”