Evaluation of the West Midlands Regional Task Force

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Evaluation of the West Midlands Regional Task Force Phoenix from the ashes: Can low carbon vehicles ensure the long-term viability of the West Midlands automotive cluster? David Jarvis, Nigel Berkeley & Jason Begley Sustaining Competitiveness: the WM economy in a global context The Belfry, 06th July SURGE Applied Research Centre Sustainable Regeneration Presentation overview 2 • The state of play • The scale of decline • LCVs & the West Midlands region • Conclusions 3 • The car targeted as an accelerator of climate change and, through congestion a cause of respiratory illness • 14% of UK CO2 emissions in 2009 • ‘Low Carbon’ and ‘Alternatively Fuelled’ vehicles in a variety of guises emerging as a partial solution LCVs & the West Midlands The state of play The scale of decline Conclusions region 4 • Stimulated wide ranging academic debate but predominantly from an engineering and scientific perspectives • Little focus to date on potential economic opportunities • Surprising for two reasons: o Current forecasts of LCV penetration o The relative decline of the UK automotive sector LCVs & the West Midlands The state of play The scale of decline Conclusions region 5 • UK no longer a ‘natural’ environment for car production • Contraction in both assembly and supply-chain • Still largest exporter of manufactured goods • Q1 2012 registered first trade surplus since 1976 LCVs & the West Midlands The state of play The scale of decline Conclusions region 6 • West Midlands auto cluster comprises 1,500 companies and employs 115,000 people • Represents 28% of total UK output of automobiles and components • But, limited R&D taking place in the UK, overseas ownership of UK brands and demise of volume manufacturing LCVs & the West Midlands The state of play The scale of decline Conclusions region 7 • Strength in design and performance engineering remains • High profile OEMs still present (and investing) in the West Midlands • Networks of niche vehicle manufacturers provide foundation for transformative shift to low carbon technologies(?) LCVs & the West Midlands The state of play The scale of decline Conclusions region 8 JCB BMW Engines Jaguar Land Rover Westfield Sportscars Tata Motors MG Motor London Taxis Int. Dennis Eagle Morgan Motor Company Aston Martin LCVs & the West Midlands The state of play The scale of decline Conclusions region 9 Region Employment in 2010 % Location quotient North East 11,500 9.2 2.4 North West 16,600 13.3 1.2 Yorkshire and The Humber 8,800 7.0 0.8 East Midlands 9,400 7.5 1.1 West Midlands 36,500 29.3 3.4 East 9,000 7.2 0.8 London 4,700 3.7 0.2 South East 10,800 8.6 0.6 South West 6,400 5.2 0.6 Wales 8,100 6.5 1.5 Scotland 2,800 2.3 0.3 Column Total 124,600 100.0 Automotive employment is defined using the SIC group 29: the manufacture of motor vehicles, trailers and semi-trailers SOURCE: Office for National Statistics, Business Register and Employment Survey LCVs & the West Midlands The state of play The scale of decline Conclusions region 10 • Important to keep in mind the scale of decline of the West Midlands automotive industry over the past 40 years • Design, development and manufacture of LCV will cannot recapture what has been lost • Emphasis on wealth generation and not employment LCVs & the West Midlands The state of play The scale of decline Conclusions region 1896 to 1899 1900 to 1909 1990 to 1996 1896 to 1899 1910 to 1919 1970 to 1996 17 Armstrong Siddeley’s Puma Road Entrance with the 1917 Burlington Works latterly occupied by Rolls Royce Aero Engines on the left LCVs & the West Midlands The state of play The scale of decline Conclusions region 18 • Opportunities recognised – projects in place to explore possibilities: o £38m LCVT programme – collaborative R&D o £14.5m CABLED trial of 100 vehicles o £12.5m lightweight technologies programme o £10.2m intelligent transport systems test facility o £10m vehicles customer interface technologies programme o £4.5m niche vehicle R&D programme • Aim is to create new and to safeguard existing jobs LCVs & the West Midlands The state of play The scale of decline Conclusions region 19 LCV supply chain and technology providers Existing LCV ‘infrastructure in The West Midlands Region CERAM University of Birmingham Zytek ARUP Potenza MIRA Precision Micro Coventry University LCV Manufacturers AVL Ltd. CENEX Microcab Industries Jaguar Land Rover LTI Ltd. WMG Prodrive Microcab Industries Ricardo Morgan Motor Company Westfield Sportscars LCVs & the West Midlands The state of play The scale of decline Conclusions region 20 • Activity of this scale and breadth made possible by co- ordinating role of the former RDA • Transformative shift to an ‘open innovation model’ • Knowledge sharing networks of SMEs LCVs & the West Midlands The state of play The scale of decline Conclusions region 21 Private Low Carbon sector • Added value of regional Vehicle R&D and manufacturers HE research stakeholders working together excellence Policy famework Supply-chain and • Capturing economic benefits and technology collaborative providers requires a holistic approach projects LCVs & the West Midlands The state of play The scale of decline Conclusions region 22 • West Midlands well positioned to exploit new opportunities • But there are risks? o Formation of LEPs – fragmented governance structures o Potential for disinvestment by foreign owned OEMs o Competition from other UK regions (e.g. The North East) o Lack of dominant LCV technology o Lack of a market - Insufficient demand side stimulus LCVs & the West Midlands The state of play The scale of decline Conclusions region 23 • Moreover, can niche firms in the West Midlands compete with the level of investment being made by major overseas OEMS? For example ... o BMW ‘i’ vehicle programme o $560 million invested 2010-2013 o Carbon fibre passenger cells o In house electric motor technology o New plants in Leipzig and N. America o Carbon neutral production LCVs & the West Midlands The state of play The scale of decline Conclusions region .
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