Monday, April 25, 2011

Warning over UK car-making future

23 April 2011 Last updated at 23:50 GMT Vauxhall Astra cars at Ellesmere Port in Cheshire Nick Reilly said the UK lost many of its small component-making firms decades ago The future of car making in the UK could be in danger if the industry fails to develop a British-based supply chain, the boss of Vauxhall has said.

Nick Reilly, chief executive of General Motors in Europe, said a lack of home-based parts manufacturers was the most critical issue facing the industry.

Mr Reilly told the BBC that car makers in the UK such as Nissan and Toyota were finding it difficult to compete.

This was because they had to import so many vehicle components, he said.

Mr Reilly said the situation added to shipping costs and created currency risks as well as a longer supply chain.

'Lack of suppliers'

The current government understood the problem but decisions taken decades ago meant the UK had lost many of its small component-making firms, Mr Reilly added.

"Our biggest issue is lack of suppliers in the UK," he said.

"In the 70s to 90s we gave up a lot of business. What it means is that at Luton [Vauxhall factory] we import a lot of components.

"If we don't have a decent amount of local suppliers it makes this place more difficult to be competitive."

He continued: "Frankly, I think it's the most critical issue facing the automotive industry in the UK.

"It's not enough to have Nissan, Toyota, Vauxhall manufacturing the products because we'll never be able to compete with another country where the suppliers are surrounding the car plants."

General Motors was forced into bankruptcy two years ago during the recession and is now majority controlled by the US and Canadian governments.

Car manufacturing at GM Europe's plants in Luton and Cheshire have since been secured for the medium term.

It was confirmed in March that the Luton plant would build the new Vivaro van, produced jointly with Renault.

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