Jason Begley

The West Midlands automotive industry: the road downhill

Abstract This article examines how the structure of the automotive industry in the West Midlands has changed since the 1970s. In the early 1970s the region accounted for about 60% of total car production in the UK. By 2008, this had dwindled to 18%. The discussion here will focus particularly on the most likely reasons for the decline in volume production and the area’s increasing reliance on relatively small scale luxury car production. The automotive industry was caught up in the general de-industrialisation that took place in the region since the mid-1960s prior to the economic crisis of the early 1980s, as well as suffering from the effects of increasing globalisation in the car industry itself. By 2008 the context for the sector had become the global financial crisis. Due to a lack of economies of scale and investment domestic firms such as British Leyland (BL) and Rootes became increasingly unable to compete in the market place despite restructuring and government intervention. Similarly, foreign direct investment (FDI) by firms such as Chrysler, Peugeot, BMW and Ford through a series of takeovers failed to restore prosperity and eventually all of them withdrew from the region. The outcomes have led to factory closures and a hollowing out of both the assembly and component sides of the industry, leaving the region heavily dependent on Jaguar and Land Rover (JLR) which was acquired in 2008 by the Indian conglomerate, Tata. This article assesses the reasons for the decline of the automotive sector in the West Midlands region by contextualising its growth and decline against that of the UK auto sector as a whole. Considerable emphasis is placed on the fates of a number of key firms in the region – the British Leyland Motor Corporation (BLMC), MG Rover, Rootes and Jaguar – with explanations offered for their respective failures.

UK policy and the low carbon vehicle sector

This article analyses and critiques attempts by UK policymakers, driven by environmental and economic concerns, to promote the low carbon vehicle sector. In particular the efforts of government departments such as Business, Innovation and Skills; Transport; Energy and Climate Change; and the Office of Low Emission Vehicles are considered. Key schemes to promote the design, development and purchase of low carbon vehicles and alternatively fuelled vehicles amongst consumers are analysed, most notably from the perspective of sales. The impact of the sector on automotive producers operating in the UK is also assessed. The analysis finds that despite considerable policy attention, consumer demand for low carbon vehicles remains sluggish at best and that policy focus needs to be reconsidered with greater emphasis placed on demand stimulus measures.

The DaimlerChrysler Mitsubishi merger: a study in failure

This article focuses on the DaimlerChrysler/Mitsubishi merger of 2000 and discusses the failed attempt by a European-American multinational firm to break into the Asian market, a region where previously it had an extremely limited presence. Having completed its 1998 merger with the US-based Chrysler Corporation, the newly formed DaimlerChrysler group turned its attention to the Asian market in 2000 in an attempt to become a truly global competitor. Partnership with the Japanese motor firm offered the possibility of economies of scale and scope, in particular in the sub-compact car market to enable DaimlerChrysler to become a full-scale producer. However, within four years the dream of large scale trans-national production was over. The failure to integrate with the Japanese company and the subsequent decision to cut Mitsubishi Motors adrift led to the dismissal of the DaimlerChrysler CEO Jurgen Schrempp. This paper will focus on outlining the motives behind the merger, why it failed, and why the Board of Daimler-Benz decided to end the relationship and extricate itself from Mitsubishis problems.

Priorities and practises for developing low carbon vehicle networks in small open economies

The opportunities presented by the emerging green economy offer a variety of solutions to pressing, social, economic, technological and environmental questions. The exploitation of renewable, clean energy sources would offer not just a solution to environmental and health concerns but also the potential for business growth that could help reprieve stricken economies. One of the key sectors of the green economy is that of transport and significant efforts have been made by national and supranational actors to promote the emerging low carbon vehicle. While emission reduction remains the over-riding priority driving the move toward carbon-free motoring, other factors also influence the decision of national actors to develop electric vehicle (EV) networks in particular. This article examines the priorities for small open, economies (SOEs) in developing these networks using the examples of Israel, Denmark and in particular that of Ireland.

National policy-making and the promotion of electric vehicles

This paper considers factors underpinning technology forcing by national policy makers in the low carbon vehicle sector. It focuses on five countries - France, Germany, Italy, Spain and the UK - and examines the driving imperatives for promoting alternative fuel vehicle and, in particular, electric vehicle uptake. It does so by looking at four overarching concerns for decision makers; energy security, sustainable development, impact on the existing automotive sector and the pressure from sub-national actors. The paper seeks to show that national policy in the five selected countries is heterogeneous in nature making consistent, standardised approaches to policy implementation a challenge, despite the similarity in ambition to advance instances of electromobility and to transition from conventional transport technology to alternative fuel vehicles.

Skills shortages: A brake on the British car industry?:

In 2012, KPMG published a report outlining the successes in the growth and development of the UK automotive industry. All augured well for the future. Tucked away at the back of the report was a warning that the industry’s progress could be hindered due to a serious lack of skilled labour at both the graduate and non-graduate levels. This paper seeks to explore the various reasons why this deficiency in skills has arisen. The seriousness of the problem has been recognised for many years, but it is only recently that it has been afforded the attention deserved. The discussion will focus on and evaluate government, employers and the education system’s roles in this and also their attempts to alleviate the problem.