Jaguar Land Rover and the CBI unite to back industrial strategy

Posted on 18 Sep 2012

The intent of the government’s new industrial strategy was applauded last night at the CBI’s Industrial Future Dinner, by speakers including Dr Ralph Speth, CEO of Jaguar Land Rover.

The Government’s industrial strategy, announced by business secretary Vince Cable last week, was the main topic at the CBI’s annual dinner for industry last night

Director-general of the CBI John Cridland warmly welcomed the strategy’s intent.

He said the strategy would help to create and secure jobs by working with industry to provide the skills that business needs, referring to the Employer Ownership Pilot scheme which is employer-led. It was important not to see government intervention as a ‘dirty word’, or to hark back to the misguided interventionism in the 1970s, where companies such as British Leyland received state support while continuing to build cars which no-one wanted to buy.

He said, with such fierce global competition, “it is far better to have an industrial strategy by design than one by default,” a sentiment he may have borrowed from Dr Cable’s speech when launching the strategy last Tuesday.

Dr Ralph Speth, CEO of record-breaking Indian-owned carmaker Jaguar Land Rover, gave a long speech, which at times verged on being straight advertisement for the company, about what it had learned from competing against much larger car companies. JLR manufactures about 300,000 units a year, compared with the millions made per annum by rivals including Toyota and General Motors.

He acknowledged the contribution that heavy investment from JLR’s Indian parent had made to the company’s fortunes. He said that “the UK has excellent design engineers, and now a strategy to help get ideas to market and to help companies grow.” Dr Speth said that British skills and attitudes had contributed to the decision to locate a new engine factory in the West Midlands and that JLR was working with UK suppliers to increase the contribution of locally manufactured of parts to the company.

"The car industry needs this strategy". Dr Ralph Speth, Jaguar Land Rover, at CBI industry dinner 2012

He also made reference to the UK’s Catapult system of technology innovation centres, drawing a comparison with the Fraunhofer Institute model from his native Germany. He said Jaguar Land Rover is working closely on technology development with organisations such as Warwick Manufacturing Group and the Manufacturing Technology Centre, both parts of the High Value Manufacturing Catapult.

He added that the future of car manufacturing in the UK was very bright. Jaguar Land Rover plans to increase production from 300,000 units per year to 500,000 in the next few years.

Business Secretary Vince Cable began his speech by conceding that most mangers of smaller companies would “wonder what the hell an industrial strategy has to do with them”, and would rather government lowered taxes and regulation, and left them alone to run their businesses. This received a murmour of approval.

But he gave three reasons why an industrial strategy is right for the UK.

Others are doing it, he said, and contrary to feeling ashamed at copying them, this must be done. Countries such as Germany, Sweden and Japan have strong plans where government and business together plan which technologies to invest in over a 10 or 20-year cycle.

He said the British should drop the obsession with intervention as being akin to the 1970s of pouring good money after bad, saying the damage from this meant that “we did nothing for the next three decades and now is the time to bring back some judicious intervention.”

Secondly, he said careful government help works, citing a textile company ho told him that after a period in limbo for manufacturing fabric in the UK, “the game had shifted” and they felt they could no make a profit in the UK. Wanting no money from government, they asked for help to produce a pipeline of workers with the appropriate skills.

Finally, on procurement, while working within EU rules, closer dialogue with industry can reveal areas where the UK could create or lose jobs without some government assistance. He cited the rail industry, “which is going through its biggest investment programme for decades,” where industry bosses told him of a lack of UK tunneling capability. A “tunneling task force and academy” has been established to train engineers in specific tunneling disciplines and investigate the technology needs where UK firms can contribute.

One guest pointed out that only about eight per cent of all overground freight in the UK is transported by rail, and that it would be a better idea to sort out Britain’s roads first before its rail infrastructure.

About 230 people attended the annual dinner held at the Honourable Artillery Company in London last night.