COMMENT: Jaguar Land Rover – driving ahead West Midlands’ economic expansion

THE past few days have been as dynamic a period in the development of the West Midlands economy as many can remember for some time.

One thousand new jobs promised to Birmingham by the relocation of HSBC’s personal and business banking services, more speculation about the fate of the £50bn HS2 high speed rail line and a £600m expansion of production and research facilities by Jaguar Land Rover have generated quite a buzz.

‘May we live in interesting times’ – to paraphrase the old Chinese saying.

Factor in zero inflation and a General Election, then however the events have conspired to converge, one thing is for certain – it isn’t dull living or doing business in the West Midlands at the moment.

Let’s just look at Jaguar Land Rover for a second.

We have become so used to the growth of this dynamic business over the past few years that even investments on the scale of the one announced today are becoming almost routine. But that should not be the case.

In the past five years, Jaguar Land Rover has tripled its turnover – and more than doubled its sales and its workforce. It has gone from strength to strength, to become a leading example of British manufacturing success.

It is one of the UK’s largest exporters and generates in the region of 85% of its revenue from exports.

Turnover has almost trebled to £19.4bn in its financial year ending March 31, 2014, compared with £6.6bn in the fiscal year ending March 31, 2010. Just 12 months earlier it had gone cap-in-hand to the Government to ask for a bailout.
How times have changed.

The company’s headcount has more than doubled over the past five years to almost 34,000 globally, of which 32,300 are in the UK and the majority in the West Midlands.

Jaguar Land Rover supports around 210,000 additional jobs through its dealerships, suppliers and local businesses.

Maybe we should re-christen the region ‘Tata—shire’ in honour of its achievements.

The latest investment announced today highlights a remarkable turnaround in the fortunes of the company’s West Midlands manufacturing operations, many of  which were earmarked for consolidation during the height of the global economic downturn.

Today, sales of Jaguar cars built at the Castle Bromwich plant are almost double that of five years ago thanks to a refreshed model range which also includes the XJ and F-Type. These models together have seen the iconic motoring marque rank as the highest achieving automotive luxury brand in the United States for customer satisfaction and second amongst all automotive brands in the influential J.D. Power survey.

Looking at things further, Jaguar Land Rover has more than doubled its workforce in the last five years, creating 18,000 new jobs.  Some 8,000 engineers and technologists are based at its two UK engineering and design centres at Gaydon and Whitley and an advanced research centre at the University of Warwick.
 
It is investing more than ever before in new technologies and facilities.  In the financial year to the end of March 2016 the business will spend over £3bn on product creation and capital expenditure, launching 12 major new products.

The company’s strategy will see 50 major new and current model upgrades over the next five years.  Recent examples of low emission technologies developed by JLR include the company’s industry-leading expertise in aluminium and lightweight technologies; and its Ingenium engine family of high technology ultra-low emission 4-cylinder petrol and diesel engines, which will power a new generation of Jaguar Land Rover products and are built at the company’s £500m manufacturing centre near Wolverhampton.

The company, in recognition of its responsibilities to its workforce and the wider region is also investing in its own people, including its award-winning and well-established apprenticeship and graduate programmes, which have attracted some 2,000 people over the past four years.  

Almost 7,000 employees are currently undertaking academic and vocational qualifications ranging from NVQ2s to PhDs.  Of those, over half are following undergraduate or postgraduate level studies.  This approach also extends to the wider automotive supply chain, with Jaguar Land Rover leading a number of initiatives on wider skills development.   

I am frequently being criticised for the amount of stories we include on TheBusinessDesk.com involving Jaguar Land Rover but the simple fact is that the success of the company is vital to the future of this region’s economy and the manufacturing sector in general.

Therefore I make no apology for the volume of stories we produce which involve the company and I further pledge that this approach will continue for as long as the company continues down the path it has laid out.

However, less you think it is just me that feels this way here are just a couple of examples of what the investment means to the automotive industry and the manufacturing sector in general.

•    Rachel Eade, National Automotive Lead, Manufacturing Advisory Service (part of the Business Growth Service)

“I doubt the UK automotive sector and, specifically the West Midlands, could have asked for two better days when it comes to new announcements.

“The investment in Castle Bromwich to manufacture the new XF provides an immediate boost to our growing reputation as a global force and will no doubt be welcomed by the domestic supply chain, who will provide a significant number of components and services.

“It will give them the additional confidence to take decisions on investment and workforce levels, although many tier 1s, 2s and 3s will have already been working on developing parts for these new platforms.

“The significant expansion of JLR’s R&D Centre at Whitley is a clear indication of a long-term commitment by the company and their faith in the engineering minds and collaborative strengths of the region’s Universities.  

“There is no doubt having the likes of WMG, MTC, AME and the National Automotive Innovation Campus on your doorstep would have helped influence decisions on location.

“These announcements have the potential to create thousands of jobs in the supply base, but they also throw up questions about recruiting the right staff, managing growth and ensuring firms continue to supply world class quality and just in time-delivery performance.

“Only last week we saw the Automotive Council’s latest report upgrade the annual opportunity for UK automotive suppliers to £4bn. There is still plenty for our firms to go after.”

•    Michael Collins, Sales and Marketing Director, Penso – a leading supplier to JLR.

“It has been a fantastic two days for the West Midlands, with the new XF announcement and the promise of JLR bringing mass car manufacture back to Coventry.

“As a company that is committed to pushing the boundaries of new automotive technology – in both materials and design – we were especially pleased with the decision to (invest) in a new R&D Centre at Whitley.

“This is a clear indication that the car maker views the region as the brains of its company, with all future prototype vehicles set to be built here.”

“Coventry City Council and the other regional investment bodies should be applauded for their determination to once again make the West Midlands a global automotive powerhouse.”