The Society of Motor Manufacturers and Traders (SMMT) has announced a new scheme aimed to help save jobs across the UK automotive industry.

The Safe Harbour Scheme will help businesses in the automotive sector work with customers, lendors and creditors to minimise the risk of any job losses caused by the combined effects of the coronavirus crisis and ongoing market uncertainty over Brexit.

It is being supported by both the Automotive Council and the UK government, and has been designed to allow multiple companies to come together without breaking anti-competition rules.

Recent figures released by the SMMT showed that UK car production had fallen 44% in August, while year-to-date figures show a 348,821 car deficit compared with 2019’s output over a similar period – a loss of around £9.5 billion to the UK motoring industry. To date, around 9000 jobs have been lost across the sector, with an additional 5000 gone from the UK supply chain as a result.

The scheme aims to prevent further losses, and safeguard the entire production supply chain, by offering assistance to the companies that need it.

Set to be made available to any UK company working in the automotive space, the scheme will allow businesses to hold confidential talks with the SMMT to decide whether to proceed, with no obligation to do so. On entering Safe Harbour, an independent third party will then identify measures that can ensure the business is able to continue operating. Steps could include temporarily restructured payment terms, financial support or new partnership and investment opportunities, with agreement from all parties required.



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“With the UK automotive sector badly hit by the coronavirus crisis, thousands of jobs already lost and barely weeks left until a fundamental change of trading conditions with our largest market, the EU, the pressures on automotive businesses are immense,” SMMT chief executive Mike Hawes said. “The Safe Harbour Scheme has been created to help any suppliers in trouble.

“It should provide valuable breathing space as the sector restarts and business and consumer confidence recovers. Ultimately, however, the industry must maintain its competitiveness to grow and for that we still look to the government to deliver an ambitious trade deal with the EU.”

The UK automotive industry generates around £82 billion of annual turnover, with more than 168,000 people employed directly in manufacturing and a further 823,000 across the wider sector. Motoring currently accounts for more than 14% of the UK’s total exports. 

“The nationwide UK automotive supply chain has been built over many years thanks to huge business investment and support from successive governments,” Jaguar Land Rover’s global purchasing director, Judith Richardson, said. “The Safe Harbour Scheme, combined with appropriate government support, will be essential to ensure automotive businesses can continue during these extremely challenging times and help drive a green recovery for Britain.”

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