Despite impressive growth in quarter one of 2011, firms in the West Midlands including Jaguar Land Rover are trying to find ways to deal with a growing shortage of skilled labour and could turn to the public sector.
Manufacturing in the West Midlands is growing faster than in all other areas of the UK, according to reports from local engineering firms. Jaguar Land Rover for one, with its sites in Coventry and Warwick, has experienced a jump in sales so far this year. Figures released last month show a 25 per cent increase in Land Rover sales and a seven per cent increase in Jaguar sales year-on-year.
To consolidate this position, its Indian owner Tata has recently pledged to invest £5bn ($8.2bn) into the company in order for it to remain competitive in terms of quality with German car manufacturers Audi, BMW and Mercedes-Benz. The investment will ses 40 new models launched over the next five years.
Richard Halstead, new director at EEF, the manufacturers’ organisation, said: “The (West Midlands manufacturing) sector is in growth mode – pretty much all the businesses that I see are seeing sales growth. They are seeing opportunities and a lot of that is export, which is good news.”
However, Halstead says the skills issue is “probably number one” in the list of challenges that companies face in terms of further growth.
With many former public sector employees now finding themselves without work, plans to retrain them for the manufacturing industry are being championed by the government and UK industry representatives alike. EEF says these workers could be retrained in areas such as shop and factory floor management.
Mr. Halstead said: “We would need to do gap analysis on the skills base but from a programme and project type capability; there are certainly people in the public sector who have some transferable skills”.
However, he made it clear that no plans had been concretely agreed upon as yet.
Other barriers to growth and available skills identified by EEF include a lack of historical investment in apprenticeships as well as limited access to finance. EEF pointed out that in order for firms to carry out contracts, they need investment from banks. This investment is not always so forthcoming, ass recession has shown. However, banks reluctant to release capital say that with no guarantee in the form of saleable assets, they are put in a precarious position.
Ford sold Jaguar Land Rover to Tata, India’s biggest car manufacturer, in a £1.15bn ($2.3bn) deal in 2008. Tata Motors is famous for the design and production of the world’s smallest car, the Nano.