Lisa Bingley, operations director at the MIRA Technology Institute, talks about the devastating impact of COVID-19 and how the automotive and transport sector is addressing the challenge.
With large parts of the globe currently experiencing the effects of lockdown as part of the coronavirus crisis, there are few industries that have been impacted as significantly as the automotive and transport sector. Almost all aspects of transportation from car manufacture to public transport, and from airline travel to the logistics supply chain are suffering the effects of the devastating COVID-19 pandemic.
Lisa Bingley said, “Automotive manufacturers were already tackling seismic changes in the way the industry operates with the rapid advance of emerging technologies including AI, automation, and connected and autonomous vehicles.
“The crisis has already been devastating for the industry and it will clearly require significant economic support and stimulus in the post-crisis period in order to fully recover. All car manufacturing in the UK has now been halted with BMW, Toyota, Honda, Nissan and Jaguar Land Rover joining those who have temporarily closed plants. In the US, Ford and General Motors have made the same difficult decision.
“Vehicle manufacturers operate around 230 production and assembly plants across the EU and with a workforce of 2.6 million people. Indirect jobs within the sector take this figure to nearly 14 million. With all car showrooms closed as a result of social distancing measures, the impact has inevitably been felt on new car registrations which dropped by 40 per cent last month.
“The most significant issue for businesses across the automotive supply chain is cash flow. As part of a webinar run by the Society of Motor Manufacturers and Traders (SMMT) this week, poll data from participants indicated that more than two fifths claimed to have less than three months’ liquidity remaining within their business and, for more than 10 per cent, this was as low as one month or less.
“With cash being such a vital aspect of maintaining a successful business in this environment, many businesses are turning to the UK government’s financial support schemes including the Coronavirus Business Interruption Loan Scheme (CBILS). A poll of the same audience indicated that around 75 per cent either have applied, or intend to apply, for financial support from this scheme. So far, only two per cent have received help, and for six per cent, their claim was rejected. At the webinar we heard from Mike Hawes, CEO of the SMMT, that his organisation is keeping a close watch on how the scheme operates and while he welcomed it overall, was clear that he would be challenging the government if there are bottlenecks in the process that means cash doesn’t come through quickly enough.
“For most manufacturers, the period of crisis means that they need to focus on protecting their staff, helping them to stay safe and protect their livelihoods with the support of government schemes such as the Coronavirus Job Retention Scheme.
“Obviously one of the most significant impacts on the industry has come from the epicentre of the crisis. Wuhan, the city where the coronavirus originated, has been dubbed ‘motor city’ and is home to General Motors, Honda, Nissan, Peugeot Group and Renault. The world imports more than thirty billion motor parts from China each year and so the cessation of operations has caused supply chain issues that have added to other adverse impacts including staff absence and social isolation measures.
“The main difficulty is that China is both a vital part of the supply chain and the world’s biggest market for cars with sales of 21 million typical in a year. Eighty per cent of vehicle production is linked in some way to China. There are signs, of course, that China is beginning to recover after its coronavirus crisis and that operations are starting to get underway once more.
“In other areas of transport, the need to keep supermarkets and food outlets open for business is proving challenging and the rules on driving and rest times for delivery drivers have been relaxed to allow maximum capacity for the effort to keep shelves stocked. We have also seen a relaxation in competition law to enable supermarkets to co-operate and share staff, vehicles and stock in the wider public interest. However, despite significant efforts by all supermarkets to increase capacity for home deliveries, Tesco has said that the vast majority of shopping will still need to be done in store.
“The UK has seen a devastating impact on the use of public transport during the lockdown with the government determined to keep services running to enable keyworkers to reach their workplaces in the NHS and the wider care sector, at supermarkets and with communications companies. Transport for London has paused its development projects including Crossrail and the Mayor of London, Sadiq Khan has urged Londoners to avoid using the Tube, especially at busty times, to protect keyworkers from the risks of overcrowding. All congestion charges have been suspended to encourage private vehicle use amongst those who need to commute. Drivers have been told by the RMT union not to work unless they are provided with adequate Personal Protective Equipment (PPE).
“On this hot topic, shortages of PPE are being addressed by the automotive sector with many businesses pivoting their skills capability. Tesla, Ford and General Motors have been making respirators and face masks. Many are now turning towards the manufacture of highly sophisticated medial equipment such as ventilators as part of the government’s Ventilator Challenge UK which is being supported by F1 motor racing teams including McLaren, Mercedes, ROKiT Williams, Renault and Red Bull.
“The British Medical Association has called for same effort on the manufacture of other PPE. Here at the MTI we have been making a contribution using materials donated by North Warwickshire and South Leicestershire College and HORIBA MIRA to manufacture protective face masks for use in care settings across the Midlands. Using an open source specification supplied for free by Czech 3D printing specialists, Prusa Research, the MTI will be making around 200 face masks for distribution to local hospices.”
The MTI is the result of a unique collaboration led by North Warwickshire and South Leicestershire College, and its partners, HORIBA MIRA, Coventry University, the University of Leicester, and Loughborough University. Built with £9.5m investment from the UK Government’s Local Growth Fund via the Leicester and Leicester Enterprise Partnership Limited (LLEP), the MTI is a specialist facility designed specifically to train the next generation of engineers in the latest automotive technology. The MTI is helping to create specialist skills in emerging technology areas including electrification and driverless cars.
Since it first opened its doors in 2018, the MTI has welcomed over 8,000 students and delegates. This includes over 630 studying for accredited qualifications from a Level 1 Institute of the Motor Industry certificate up to Masters’ degrees, and nearly 250 following apprenticeships at all levels.
Lisa added, “There is no doubt that once the crisis is over and the recovery period starts, only the highest level of skills will enable the automotive and transport sector to survive and prosper. There has never been a better time for organisations to take time out and think about their skills gaps, recovery and succession planning and although our building is currently closed, we are available to talk to and advise businesses about some of the issues that they will be facing in the months ahead.”
To talk to Lisa about skills requirements that will help to support the recovery of the automotive sector, please call 024 7693 5680 or email firstname.lastname@example.org