Ian Duncan Smith has been taking extra lessons at The Boris Johnson School of Business Management whose motto is (slightly cleaned up) "screw business". The former army officer actually did some day release courses at The Dunchurch College of Management plus a language course in Perugia (didn't sit the exam apparently) and claimed to be a director of GEC-Marconi (although he wasn't) has been expounding on the UK car industry.
IDS, writing on Brexit Central, has an article (HERE) with the title: "The car industry's prophecies of doom must not be allowed to stop Brexit":
"Despite all these prophecies of doom emanating from some in the car industry, we need to put this industry in perspective. Employment levels across the UK are at the highest they have been for decades with over 75% of the working age population in work today. Auto manufacturing has also been a great success, rejuvenated by the arrival of the Japanese under Lady Thatcher and it is now competing successfully with the rest of the world.
"However, despite that success, employment in the industry constitutes some 0.57% of total UK employment. Also, in interview after interview, the issue of the just-in-time supply chain has been raised, with politicians and suppliers issuing dire warnings that as their supply chain is so harmonised with EU suppliers, leaving the Customs Union would be a disaster, leaving them unable to get supplies from the EU ‘just in time,’ leading to job losses. Yet a recent Boston Consulting report hows that some 64% of the Auto Industries suppliers are from the UK or the rest of the world, outstripping the 36% from the EU. So right now their supply chain relies on many items from around the world and, strangely, despite the customs procedures, they manage to get to the factory, ‘just in time.’
Nothing must be allowed to stand in the way of Brexit, even if we have to eat grass and pound our washing with stones at the side of rivers for the next few hundred years. The 0.57% figure he uses are those in direct employment (186,000) and doesn't include supply chains. In truth the jobs of about 856,000 people (2.6%) are at risk (HERE) plus 12% of our export trade value. He can't even get simple stuff right.
Note the 64% figure lumps together UK and RoW suppliers and seems designed to obfuscate. Parts from UK can be JIT but from the rest of the world they would need to be stocked, not being compatible with just in time manufacturing. But if they only account for a small part of the vehicles, warehousing is viable. I think stocking a few specialised parts is fine, but if it extended to most of the parts, JIT manufacturing is impossible and the car manufacturers would not even be here. However, IDS does not split the 64% figure, probably because the RoW is actually very small and it ruins his argument.
The Society of Motor Manufacturers and Traders Chief Executive, Mike Hawes has a slightly different take on Brexit, along with all of the major Japanese, German and Indian owners of our car factories who are desperately worried about the impact of it. Mr Hawes says (HERE):
The Society of Motor Manufacturers and Traders Chief Executive, Mike Hawes has a slightly different take on Brexit, along with all of the major Japanese, German and Indian owners of our car factories who are desperately worried about the impact of it. Mr Hawes says (HERE):
"There is no escaping the fact that being out of the customs union and single market will inevitably add barriers to trade, increase red tape and cost. Settling for “good” access to each other’s markets is not enough as it will only damage the UK’s competitiveness and reduce our ability to attract investment and the high quality jobs that go with it".
To put these contradictory views into perspective here is a short extract from Sir Ivan Rogers' speech at Trinity College Cambridge (HERE) a few days ago:
"We live, and have lived for some time, in a comprehensive regulatory union, but despite wanting to leave it, we struggle at political level to understand what that means.
"This is all written off as the preoccupations of ghastly incumbent multinational CEOs, who themselves, we are told regularly, do not understand their own businesses’ business models as well as the gurus of the revolution. And therefore need, like their trade federations, to be ignored and / or replaced, presumably by corporate titans who spontaneously align with the revolution".
The car industry, in the IDS world view, doesn't understand it's own business model as well as he does, even though he knows about as much about car manufacturing as an orangutang knows about blockchain.
If a little knowledge is a dangerous thing, IDS is pure semtex. I look forward to him visiting Sunderland and the West Midlands in the next few years.
