During 2015, the UK car industry turned over £71.6bn, contributed £15.5bn to the economy. It also saw the number of people dependent on the general automotive sector for a job increase by 17,000 to 814,000, with 169,000 of those directly employed in vehicle manufacturing(1). It is, clearly, an important sector but how will it be affected by Brexit?
“Although it will take around two years after Article 50 is triggered until the UK actually formally detaches from the EU, various automotive organisations have been quick to express concerns over the impact it will have on the sector’s skillset”, comments Alan Locke of AYCEN Group in Manchester.
Immediately following the Leave vote’s marginal triumph in the UK’s EU referendum, the Society of Motor Manufacturers and Traders’ (SMMT) Chief Executive Mike Hawes stated unambiguously: “The government must now secure a deal with the EU which safeguards UK automotive interests. This includes ensuring we can recruit talent from the EU”(2).
Alan explains, “Mr Hawes partly attributes the success of the UK’s car industry to ‘unrestricted access to the single market, input to EU legislation to safeguard the interests of UK Automotive, and the ability to recruit talent from abroad’. With all of the uncertainty surrounding Brexit, how will these be affected?”
Brexit and the International Talent Pool
In a report (3) entitled ‘The UK Automotive Industry and the EU’, dated April 2014, KPMG reported that there is “a shortage of qualified scientists, engineers and technologists” in the UK car industry. According to UKCES data, almost 20% of such roles are hard-to-fill, leading the report to state that “having an EU-wide talent pool is important in filling these business-critical vacancies.”
Approximately 10% of the BMW Group’s UK managers are deployed on international assignments at any one time and in the recent past its MINI operation seconded nearly 150 European employees to work at its Oxford plant to facilitate production of a new model. UK car manufacturer Vauxhall actively augments its Luton workforce with employees from Poland.
“An obvious post-Brexit possibility is that the UK automotive industry could eventually lose the highly talented Eastern European, German, French and other workers it currently employs in roles ranging from mechanical engineers and plant managers to R&D and administration,” suggests Alan.
A Tier 1 supplier cited in KPMG’s report highlights another potential challenge, though. Their EU staff can currently travel at short notice, much more flexibly than non-EU employees, but this could eventually become harder.
“With Article 50 not yet having been triggered, only time will tell as to how the automotive industry will be affected by Brexit from an HR perspective,” concludes Alan. “But it’s clear that this thriving sector will face challenges along the way.”
Business Aspects Magazine appreciates Alan Locke’s contribution and expertise in this article.