COVID-19: One in six jobs under threat without post-furlough support

Published:  23 June, 2020

 One in six jobs in the overall UK automotive sector is at risk of redundancy, a new survey from the SMMT has revealed, and the organisation is calling for a dedicated restart support package to safeguard jobs when the Coronavirus Job Retention Scheme winds up at the end of October.

Speaking today (Tuesday 23 June) at the SMMT International Automotive Summit 2020, SMMT Chief Executive Mike Hawes said: “UK Automotive is fundamentally strong. However, the prolonged shutdown has squeezed liquidity and the pressures are becoming more acute as expenditure resumes before invoices are paid. A third of our workforce remains furloughed, and we want those staff coming back to work, not into redundancy.

Across the industry, more than 6,000 UK automotive job cuts have been announced just in June, a result of global lockdowns, closed markets and shuttered plants. Showrooms in England and Wales are now re-opening and production lines restarting, but reduced demand and social distancing are slowing productivity. SMMT is calling on government to address this with a support package, with measures including access to emergency funding, permanent short-time working, business rate holidays, VAT cuts and policies that boost consumer confidence.

Mike continued: “Government’s intervention has been unprecedented. But the job isn’t done yet. Just as we have seen in other countries, we need a package of support to restart; to build demand, volumes and growth, and keep the UK at the forefront of the global automotive industry to drive long-term investment, innovation and economic growth. Support delivered now is an investment in the future of one of Britain’s most valuable assets, investment that we will repay many times over.”

The impact of COVID-19 is also affecting Brexit planning. Mike observed, “COVID-19 has consumed every inch of capability and capacity and the industry has not the resource, the time nor the clarity to prepare for a further shock of a hard Brexit. That’s why we do need to turbocharge the negotiations to secure a comprehensive Free Trade Agreement with the EU that maintains tariff and quota free trade. With such a deal, a strong recovery is possible, we can safeguard the industry and our reputation as an attractive destination for foreign investment and a major trade player.”

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