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NAA Update: The Brexit vote and the election have so far given us uncertainty, and a headline message from last week’s SMMT Open Forum is that we’re entering a ‘decade of disruption’. Read on to find out how the NAA can help you chart your way through all of this…

As Carol has been away on holiday, Steve Williams, NAA Director and Managing Director of Force Technology, attempts to make some sense out of a tumultuous recent period in the UK and the implications for the automotive industry…

What a year it has been. I write this two days after the UK general election, after a surprise, backwards step from a Conservative government that is now rapidly trying to pull together a coalition, in a period where the UK is still reeling from the sickening terrorist attacks in Manchester and London.

Only 12 months ago, on the 23 June 2016, we had the EU referendum and shock result of a vote to leave. After all that time we still know little about the way in which the Brexit negotiations will progress. The only action so far has been the submission of Article 50 to the EU on 29 March 2017, giving us just two years to complete negotiations and exit.

For now, we have the outcome of a significant sterling devaluation, making exporting to Europe more competitive. On the other side, we’ve seen the costs of imported goods increase significantly, resulting in increased prices for UK products. Inflation is back.

Brexit is being seen as irreversible and the effects unavoidable; hence we need to get on with the job in hand to reduce the interim period of uncertainty. The uncertainty caused by delay is not good for business, for UK jobs and ultimately the UK economy. Comments from key leaders in the automotive industry, the day after the election, clearly state the point…

Andy Palmer, Aston Martin CEO, said “Clarity over our relationship with Europe must be established quickly together with the wider reassurance to our key trading partners that Britain remains a dynamic and thriving business environment.”

Mike Hawes, SMMT Chief Executive, added, “It’s important a government is established as quickly as possible to provide political and economic stability. UK Automotive is vitally important to the UK economy and jobs across the country, and now more than ever we need strong engagement by government with the industry, both on the domestic agenda and in European negotiations, to secure future growth and investment in our sector.

Rebuilding the UK manufacturing base is vital for economic stability to help strengthen and build the UK economy for a post-Brexit future. It will take a generation or more to recover to the days of 20% of GDP, however the best time to start is now.

The current governmental focus on Industrial Strategy is clearly one aspect of the right approach. The current 10 pillars from the substantial green paper are major steps in the right direction. It’s good to see pillar 10 “Creating the right institutions to bring together sectors and places”. The realisation that clusters, such as our own NAA, are vital partners in the development of industry, is a major step forward.

The NAA contributed to the region’s input to the green paper in March, with a roundtable discussion. Comprehensive feedback has now been given to the strategic team under the direction of Business Secretary Greg Clark (who still remains in post at the time of our newsletter going to press!). The NAA continues to operate across the M62 corridor of the Northern Powerhouse, with great turnouts at recent events including the Manufactured Yorkshire exhibition in Leeds, Cummins Turbo Technologies in Huddersfield, the Apprenticeship seminar in Blackburn, and by the time you have read this, Force Technology in Blackpool.

The NAA also had a stand at Automechanika, featuring three of our member companies, Plus Point, Servispart and Turbo Precision Components. The SMMT Open Forum took place on the first day of Automechanika, and the first speaker from the industry (from Nissan) opened by saying that we’re entering a ‘decade of disruption’. This will have significant impacts on the UK automotive supply chain. How can you ensure that you will be a winner and not a loser from these changes? Read our review of the Open Forum event in the newsletter below. The NAA is here to provide its members with support with such issues.

Time flies and it will soon be the NAA Annual Awards Dinner, on Thursday 9 November at The Mere, Knutsford. With all the movers and shakers from the region’s automotive industry, it’s the networking event of the year. Don’t forget to start preparing for those award submissions now!

Steve Williams, NAA Director and Managing Director of Force Technology

 

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