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More job losses on the way in automotive, manufacturing and services sectors

Last month it was airlines, this month concerns about employment have flared up in the UK automotive, manufacturing and services sectors, with pubs and retailers also under pressure.

One in six UK car workers’ jobs is at risk of being lost to the coronavirus crisis and Brexit, according to a warning from the motor industry on Tuesday.

This comes after more than 6,000 UK automotive job cuts have been announced this month, including 1,000 from Bentley, the luxury carmaker owned by Volkswagen, and 500 at supercar manufacturer Aston Martin Lagonda ().

One in three UK motor industry workers is currently on furlough due a chartering in global demand for new vehicles since coronavirus lockdowns came into force, UK new car sales in April and May slumped to their lowest levels since the 1940s and 50s.

While many car showrooms are reopening in England and Wales and production lines are restarting, demand remains depressed and car dealer  () said it is axing 1,500 jobs as well as closing 12 sites after a subdued reopening.

In car factories, social distancing is also slowing productivity, said the Society of Motor Manufacturers and Traders (SMMT) as it called for more government protection for the industry and a free trade deal with the EU.

“The prolonged shutdown has squeezed liquidity and the pressures are becoming more acute as expenditure resumes before invoices are paid,” said SMMT chief executive Mike Hawes. 

“A third of our workforce remains furloughed, and we want those staff coming back to work, not into redundancy.”

On top of the auto industry, the preliminary reading of the manufacturing and services purchasing managers index for June showed a continued drop in employment.

The employment balance of the sentiment indicator crept up to 39.5, still well below the 50 reading that separates contraction from growth, and consistent with a 3% drop in employment, said . 

These two flashing signals came from wide-ranging sector surveys but there have also been large job losses confirmed from a number of companies in recent weeks. 

The biggest has been from  (), which said it plans to cut 10,000 jobs, the majority by the end of the year, to cut costs amid the oil sector’s battle with lower oil prices.

Not dissimilarly, British Gas owner  () soon after revealed 5,000 redundancies as part of a wider restructuring.

Last week, builders merchant  PLC () announced plans to cut 2,500 of its workforce, and more cuts in other sectors are certain to be on the way, as the government furlough system winds down. 

The UK job retention scheme, under which more than 8.4mln workers have been furloughed, remains in place until October, although from August companies will be asked to cover about a quarter of the 80% government subsidy.

Measures confirmed by the Prime Minister overnight, allowing pubs, restaurants, hotels, B&Bs to reopen, will hopefully help to support a recovery of the hospitality sectors. 

However, as survey…

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2020-06-23 13:28:00

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