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Liverpool Echo
Liverpool Echo
National
Liam Thorp

Cuts and closures: Merseyside's automotive sector is in crisis

A recent spate of job losses in Merseyside's "proud" automotive industry is raising concerns about the whole sector.

Recent months has seen a worrying run of announcements from major players in the automotive supply hub that nestles on the border of south Liverpool and Knowsley.

The biggest of those players, Jaguar Land Rover, was the first to hit the headlines just before Christmas. Dozens of agency workers were called into an office at the Halewood plant and told their contracts would be cut short. Many had believed they would be kept on until at least the Spring.

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One worker, called Lee, recalled: "We were told in October that the agency contract would continue until April so it was a real shock for it to end just four days before Christmas. They told us our job would end the next day but then we had to go back to work and come in the next day in order to be paid in January."

But there was bad news for the permanent staff at JLR as well. Around the same time they were informed that the number of shifts on offer for workers at the Halewood site would be cut back from January. JLR had been operating on a two-shift basis - early and late - but moved to just the one on January 16.

This meant a reduction in income for workers, with the shift premium previously attached to those shifts being removed. One worker explained at the time of the change what it would mean for him, stating: "For the last three months or so we've worked on a 'week on, week off' basis, with us still being split into 2 shifts, A and B. If we were in we got shift premium, if we weren't we got flat rate. From January 16 we'll still be on the same shift pattern but without the shift premium, meaning everyone is paid the same regardless of whether we're in or not.

"It was bad enough losing the shift pay every other week, this pay is around £120 a week on average. Now we're losing it every week. That's nearly £500 a month for some people. Some of us are having to take on gig work to make up the shortfall."

While JLR bosses said at the time of the shift reduction that they hoped it would be a temporary move, it has since been confirmed it will remain in place until at least the end of the year.

In its communications with staff, JLR has repeatedly said that the problems it is facing are down to disruption in the global supply chain of semi-conductors. The chip shortage has been wreaking havoc on the automotive industry since the first quarter of 2021, halting assembly lines around the world - and elsewhere in Merseyside.

Last month a company that supplies JLR - International Automotive Components (IAC) - announced plans to make nearly 90 workers at its Halewood site redundant and to also reduce the shifts and pay of those remaining. A note from company bosses said the move was a direct result of JLR confirming it would be continuing with reduced shifts for the rest of 2023.

The US-owned company supplies parts to Jaguar Land Rover that are used for dashboards in their vehicles. One shift worker at IAC Halewood, who asked to remain anonymous, told the ECHO: "We found out about the changes about three weeks ago, once again they are mostly falling on the shop floor.

"They are taking us down from two shifts to one which means we will lose the shift premium we used to get. That will take us down from £16 to £13 per hour which isn't good when everything is costing more and we have mortgages to pay."

He added: "Everyone is pretty fed up, the atmosphere is not good. That bad atmosphere will now translate into industrial action at IAC, with the Unite union confirming a 100% vote in favour of strikes. The union says this result underlines the major anger felt among the workforce at the company's plans.

Unite general secretary Sharon Graham said: “IAC is being entirely opportunistic. Its finances are more than healthy. It is clear these plans are an unnecessary money-grab against staff, put forward because they mistakenly think the workforce is vulnerable."

Magna Exteriors in Renaissance Way, Halewood (Google)

But there was even worse news still to come.

Later in February the ECHO revealed that another car parts plant in Halewood was planning even more job cuts. International car parts supplier Magna announced it plans to close its entire Merseyside operation - which trades as Merplas - putting around 290 employees at risk of redundancy.

The shock announcement was delivered to staff at the Halewood plant, with Magna citing 'unprecedented' challenges facing the automotive industry as the reason for the decision to shut the whole Merseyside operation.

In a confidential notice issued to employees, bosses from Magna said: "The automotive industry has been changing significantly. It has seen unprecedented recent challenges including the Covid-19 pandemic, semi-conductor shortages and labour shortages. Currently it is an extremely competitive business driven by advanced technologies, changing consumer preferences and legislation."

"The global marketplace challenges continue to negatively impact Merplas. After a careful evaluation of these ongoing challenges and business conditions, we are proposing to close the Merplas division and consolidate into other UK operations."

Unite's regional officer Joey Swift described the announcement as "devastating" and said the union will be scrutinising Magna's plans and "demanding that less damaging options are properly considered."

The repeated bad news coming out of Halewood is a big concern for the area's Member of Parliament, Maria Eagle.

She said: “This is very alarming news. Job losses in the automotive supply chain are an early warning sign for concerns about the entire sector.

"Given the importance of automotive industry in South Liverpool this is very concerning. I hope to be visiting the plants and meeting representatives of the staff involved. I’ll be lobbying with the government to ensure that everything is done to protect our proud automotive industry and as much support as possible is provided”.

Ms Eagle says that the move towards electric vehicles is changing things for the sector and that government is not doing enough to support the industry as this change happens.

She said: “The Government is not doing enough to support the transition to electric vehicles by 2030. They have repeatedly brought forward the date by which no new petrol or diesel cars will be produced but haven’t supported the industry to assist in the transition.

“The ongoing supply chain problems, particularly around semiconductor chips and the uncertainty over Brexit, the disruption caused by the pandemic, as well as businesses worrying about high inflation and energy costs has caused significant issues too”.

The Garston and Halewood MP added: “The Government can and should do more. The people who are going to be affected the most are highly skilled workers. As we see so often with the Government, allowing crises to develop before they react, the Government should be doing more to support our automotive industry in the Liverpool City Region and the transition to net zero”.

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