It has been a ‘black week’ for the UK automotive industry as thousands more job cuts were announced, says the SMMT.
SMMT chief executive Mike Hawes has said the industry might be strong but ‘it is not invincible’ as a series of job cuts were unveiled by car manufacturers and car dealer groups.
Lookers said it would be cutting 20 per cent of its workforce this week – that’s around 12 people per one of its 136 dealers – while Aston Martin said 500 jobs would go and Bentley said 1,000 jobs were on the line.
In an announcement yesterday afternoon, luxury car firm Bentley said it had done everything it could to weather the storm, but the job cuts couldn’t be avoided. The firm didn’t rule out further cuts could follow.
It follows news last week that supercar maker McLaren is planning 1,200 job cuts across its operations as it said it has been ‘severely affected by the current pandemic’.
The devastating news, led Hawes to issue the special statement to express his dismay at the pressure the industry is facing.
He said: ‘It has been a black week for UK Automotive with devastating job cuts across retail and manufacturing coming hard on the heels of earlier losses. Whilst the industry is fundamentally strong and agile, it is not invincible.
‘Global industries are challenged and we need to ensure the UK has in place a comprehensive strategy to support the sector and the highly skilled workforce on whom it depends.
Number of automotive job cuts announced this week
‘As the sector strives to weather the worst storm in a generation, measures to drive cash flow, stimulate demand and, above all, maintain our competitiveness are essential.
‘Governments must double down on efforts to reboot economies, protect jobs and, internationally, work urgently to secure ambitious free trade agreements which avoid tariffs that add onerous cost and stifle global growth.’
It’s unlikely these job cuts will be the last. Most dealer groups Car Dealer Magazine has spoken to recently are planning to cut their workforce by between 10 and 20 per cent.
Many dealers returned to work this week to buoyed enthusiasm for car sales and it looks likely that June new car registrations could actually be UP on last year. But that’s largely because cars sold during the lockdown are finally being delivered and some pent up demand.
‘Whether that lasts is the million dollar question,’ said one dealer group boss. ‘Until we know that we don’t know how many staff we need to get back from furlough, or how many we need to run our business going forward.’
Experts from legal firm Lawgistics told Car Dealer Live yesterday that they have been inundated with requests for help from dealers looking to make job cuts now. They said dealers have returned to work and decided that the new way or working can be more efficient and doesn’t need as many staff.
While car sales may be bouncing now, most dealers are concerned this will soon peter out as job losses across the UK filter down into squeezed consumer confidence.
It was reported this week that the SMMT had written to the government on behalf of the car industry to call for a scrappage scheme to help boost sales by 600,000 units.
The SMMT would like to see the government support £2,500 off the price of a new car in a £1.5bn scheme.
The Guardian reported that the SMMT had told the government in a letter that any scheme should ‘support the entire market, not just disproportionately favouring specific segments or technologies, recognising the diverse nature of UK automotive manufacturing’.
In the letter sent to the chancellor Rishi Sunak and the business secretary Alok Sharma in May the paper said the trade body was pushing for ‘confidential discussions’.
The SMMT pointed out that the scheme ‘could also support wider government ambitions in terms of climate change and improved air quality’, adding the ‘primary benefit would be in jump-starting the market, the sector and the economy without further drain on the public purse’.
The SMMT also tells the government that a government-backed scheme would bring a net benefit to the government of around £3 for every £1 spent through tax and VAT receipts.
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