Special Report: Skills gap threatens to derail automotive success story

THE UK automotive sector is experiencing major success with vehicles produced in the country being sold in record numbers around the globe. However, with many firms experiencing aging workforces sustaining this success will depend on attracting a new crop of talent to the industry. Manufacturing Editor Duncan Tift assesses one of the key challenges which threatens to derail the West Midlands’ automotive success story.

“If we want to keep the work we have and maximise new opportunities then we have to ensure we develop our skills base.”

These are the words of Rachel Eade, National Automotive Sector Lead for the Manufacturing Advisory Service and a leading advocate for skills development.

She said that while the UK automotive industry was currently experiencing almost unprecedented growth, with vehicles being sold in record numbers around the globe, there was a cloud on the horizon which threatened to derail that progress within a very short space of time – the skills issue.

In common with firms across the manufacturing spectrum, many automotive suppliers have aging workforces, a legacy of needing to retain skills within the business.

Sadly for the industry, as the recession began to bite deeper firms were forced to trim costs from their businesses if they were to survive and for many this meant to loss of training programmes – always considered a short-sighted decision as when the boom times return then the business is immediately resource-poor and ill equipped to meet the challenges required for growth.

However, this is just one element of the problem. Attracting young people into the manufacturing industry as a career is proving tough, with many teenagers incorrectly identifying the industry as a dirty, smelly unrewarding profession and one unlikely to be much fun.

Many prefer to pursue careers in the service sector, leaving manufacturing vulnerable to an ever widening skills gap.

The pattern has been graphically illustrated within the last few weeks, with the Black Country University Technology College announcing its closure just four years after opening, citing an inability to attract teenagers to pursue its engineering courses.

It was only five years ago that such institutions were being heralded as the saviour of the manufacturing sector.

However, if such a facility cannot attract sufficient pupils from what is, a manufacturing heartland then the situation may be worse than many fear.

“As an industry, we need to improve our communication skills and show youngsters that the manufacturing industry is one that offers a rewarding career,” said Ms Eade (left).

“We all talk about the need to bring in young people and upskill existing workers; we all talk about the need to bring in skilled people from other sectors – but the time for talking is over. We need action…now.

“We are not alone out there in wanting skilled labour – the rail industry, aerospace, oil & gas, the nuclear industry are all looking to recruit and so if we don’t attract the future talent then there are plenty of opportunities elsewhere – and where will that leave us?

“We have to become better at promoting manufacturing in the UK; promoting the career paths that exist within the industry.”

Mike Mychajluk, Supply Chain Development Manager in Government Programmes, Jaguar Land Rover, said even within a business of the size of JLR, skills were a factor that could not be ignored.

“Skills are an issue, there’s no denying that and so we have to adopt the right measures to bridge the gap,” he said.

“For us, being part of the EU is a great benefit because this enables us to pull in a wealth of skilled labour. If you walk across the shopfloor at Jaguar Land Rover then you will hear a variety of different accents – and with a name like mine, I should know.

“An issue we have to be wary of is that the majority of Tier 1 suppliers are foreign-owned and therefore UK skills development isn’t that much of an issue for them.”

With the rapid growth of JLR he said skills development had to be a priority for the business and the good thing so far as the future of the company – and the wider industry – was concerned was that much of its latest expansion had yet to filter through.

Therefore while the company was already taking on record numbers of apprentices and graduates, the phased introduction of new production programmes would mean further job opportunities for some time to come.

“The investment we have pledged we haven’t had the full benefit of yet,” he said.

“The development of new facilities at Solihull with the XE and the F-Pace hasn’t flowed through yet so it hasn’t formed any part of data studies.”

The company celebrated the launch of production of the Jaguar XE at Solihull this month, following a major investment. The cascade effect from this will be a significant boost for the industry and the supply chain but this is just one element of the company’s latest growth.

It has also announced a £600m expansion of production facilities at Castle Bromwich for the new Jaguar XF and is set to double the size of its research and development facilities at its Coventry base.

Mr Mychajluk said the glamorous profile enjoyed by the company meant it had little difficulty attracting apprentices. However, he said it recognised this was not the case for the majority of the industry.

Recognising its unique position to be a force for good, he said that when the company went to skills shows or recruitment fairs then it would often invite some of its key suppliers to accompany them to their stand.

He said if people could be educated that it was often a lot more exciting to work at some of the supply companies rather than at JLR itself, where a lot of the work was just final assembly and project management then the better that would be for the industry as a whole.

The company is also investigating whether it may be possible to initiate a database of the apprentices which it does not take on. This could then be shared with the rest of the industry.

“We get asked by many SMEs what happens to the apprentices which we don’t take on,” said Mr Mychjaluk.

“JLR now has two people focussed on supply chain development and helping firms meet their skills needs is an area we are interested in.
 
“We are encouraging our suppliers to visit our plants to show them what goes on and to help them better understand their role in our supply chain and how it benefits our business.”

The willingness to collaborate in such a way is already proving beneficial to suppliers such as Sertec, Automotive Insulations and Rosti McKechnie.

However, not everyone in the supply chain is in a position to do this.

Paul Cadman (left), managing director of Oldbury-based Futura Design, said the approach his company had adopted was to create its own training academy.

“We run an academy teaching people to be modellers, where there is a definite shortage. We set up the academy because we want to bring on young talent. We have about 12 at the moment – 50% of these have design degrees and the remaining 50% we have engaged because of their commitment,” he said.

“The latter can be in work by up to an hour early. The majority have come from backgrounds where they have worked as carpenters or bricklayers and the like and they have a very strong work ethic because of that. Sadly that’s not the case with everyone these days.”

JLR supplier Brose UK is adopting a similar approach but on a larger scale.
The Coventry company, which supplies window regulators and rear seating systems, is investing £3m into a new academy to ensure its future workers have the necessary skills in order to sustain the growth of the business.

This will be important as the company is committed to a £34m expansion scheme which will see the development of a new factory and the creation of 372 new jobs by 2021, with a further 74 generated in the UK supply chain. A number of the recruits to the new factory will be apprentices and graduates.

The expansion is necessary because of increased product demand from the likes of JLR.

However, responsibility for skills development does not rest solely with the industry.

The coalition government implemented a series of measures to try and bridge the skills gap.

One of its last was an initiative in collaboration with the industry.

Working alongside leading automotive manufacturers, it injected £11.3m into a project developed through the Automotive Council’s Business Environment and Skills Group.

The project, supported by £16.4m from the industry, brought together major automotive businesses to ensure future skills needs are met for both vehicle manufacturers and supply chain companies. It followed a successful bid from the group for funding through the government’s Employer Ownership Pilot.

The then Business Secretary Vince Cable said: “This investment puts our automotive sector in the driving seat to design the skills our manufacturing companies need. There is a risk that without adequate investment in skills, the industry will run into serious skills bottlenecks.

“Employment in the automotive industry is set to grow in the coming years, with multi-billion pound investments taking hold and production volumes on course for record levels. With developments such as connectivity and advanced manufacturing taking the sector into exciting new territory, recruitment is a major challenge facing the industry.”

Jo Lopes, chair of the Automotive Industrial Partnership and Head of Technical Excellence, Jaguar Land Rover, said: “The Automotive Industrial Partnership brings together industry employers on an unprecedented scale. By working collaboratively and taking an innovative and sector-wide approach, we are ensuring that the UK’s automotive sector can grow and retain the skills talent that is so vital for the industry’s continued success.”

Besides JLR, the other manufacturers involved in the scheme are Aston Martin, Bentley, BMW, Ford, General Motors, GKN, Honda, Nissan and Toyota. They will work together with the government, SEMTA and the Society of Motor Manufacturers and Traders (SMMT) through the Automotive Council to boost workforce skills, now and for the long term.

The strategy includes creating an industry standard ‘jobs framework’ and identifying potential employment hot spots.

Initiatives include:

•    giving 4,500 nine-year-olds an experience of working in the industry through a one day production simulation
•    taking on 960 11 to 16 year-old as Industrial Cadets, to develop industry-critical skills in team working, communications and problem solving
•    providing a route to work for 225 19-plus year-olds, with a 15-day bootcamp offering vocational training and simulated work activities designed by their potential future employers. Assessing functional and employability skills will lead to further work experience at a host company, helping young people with little or no workplace experience and vocational skills on a route to possible future apprenticeships.

The government hopes existing employees at all levels will also benefit from the industry collaboration, with technical, management and leadership skills all improving.

SMEs will be supported in gaining access to industry standard skills development. While talented, qualified engineers from other professions, such as the Armed Forces, will also be able to train to apply their knowledge and skills in the automotive industry.

The automotive sector will be looking for similar initiatives from the next government, whatever its makeup.