George Osborne is expected to trumpet the UK's faster economic growth in comparison with Europe in the autumn statement on Thursday. So what is the picture at auto-industry centres in Britain, Germany and Italy?
SolihullIf the chancellor is looking for signs of progress in Britain's attempt to regain its industrial might, he could do worse than to drive up to Birmingham and take a tour of Lander Automotive.
The 136-year-old company makes pipes for cars including most of Jaguar Land Rover's models. Sales are growing, Lander is investing millions in new machinery and it is hiring from apprentice level up to engineers. According to managing director Roger Whitehouse, there has never been a better time to be in manufacturing. "There ain't any place for arrogance. It's not easy to win the work but the work is there for companies that are efficient," he says.
Whitehouse believes business and government are getting behind the car industry, with Lander receiving support from manufacturers' organisation EEF as well as state grants. "I happen to think the government is doing a pretty good job. They are supporting research and development and investment," he says.
A short drive away at JLR's Solihull plant, business is going from strength to strength, says operations director Alan Volkaerts. The downturn brought pay freezes and saw the plant stop hiring as the car industry around the world suffered from a slump in demand. But the Solihull boss believes longer-term planning during the downturn laid the ground for a quick turnaround.
"We knew the day we started to come out of recession we needed new models. We did a lot of painful things but kept design and development and retained our skill base," says Volkaerts.
His plant produced more than 120,000 cars in the first 10 months of this year and the pick-up has rippled out around the region.
Official statistics show the local population enjoys high employment, higher wages and a higher proportion of managerial jobs than the national average.
Solihull has long had an air of prosperity, a place where successful business owners set up home and office. Its streets and carparks are cluttered with Land Rovers driven by entrepreneurs and managers. Rich professionals from Birmingham move out for Solihull's schools, grand detached houses and the town's 10 surrounding golf courses.
For JLR the attractiveness of the region means good access to nearby suppliers. "It feels great to be in Solihull and have local suppliers around us," says Volkaerts. But the big challenge now is getting skilled workers to support the industry's growth, he adds.
The plant had 20,000 applicants for 1,100 jobs on the shop floor last year but nowhere near the same interest in more skilled jobs. "From an electrical and mechanical craftsman point of view, we were looking for about 300 people and we still haven't filled them all," says Volkaerts. "Like it or not, the UK is not providing the engineers we need to drive the manufacturing growth we want to see."
In huge hangar-like buildings on the nearby Woodlands campus of Solihull College, courses are seeking to address some of the skills shortage that employers like JLR and Lander complain about. The site, set up in the more deprived northern Solihull as part of a regeneration drive, has just unveiled a new £8.5m vehicle and construction centre.
In the Donnington Park workshop, students are working on six different makes of car. In the construction wing, teenagers practise brick-laying, joinery and rendering.
"There's not the opportunity for the young people to go into these jobs at the moment," says Mark King, head of the construction school. "What people in industry are looking for is someone who will come in and be useful to them. That's what we are doing."
The numbers on job creation for the region are encouraging. JLR's recent announcement of 1,700 more jobs in Solihull echoes a wider pick-up for the area, which has benefited not just from car-making but other sectors such as life sciences, banking and technology. Private sector firms in Greater Birmingham and Solihull created nearly 40,000 jobs in 2010-2012, more than any local enterprise partnership area outside London.
But local industry experts see a number of bumps on the road ahead.
David Bailey, professor of industrial strategy at Aston Business School, highlights problems for growing firms in accessing both finance and skilled workers as well as transport challenges. "In terms of rebalancing the economy we are doing it and I'd like to see the government supporting it more," he said.
Katie Allen
MunichEvery now and then, BMW's "four cylinders" headquarters in Munich shakes as if there has been a very distant earthquake. There hasn't been. The shaking is caused by 10,000-tonne presses making chassis for the BMW 3 series in the 97-year-old company's first factory, which sits next door.
"Not many companies have their headquarters right next to the factory," says Ralf Rodepeter, director of the BMW Museum, which sits on the same site near the city centre. "But it creates a special relationship between the blue and white-collar workers."
The shaking rarely stops for long, but it did during the financial crisis. "During the crisis we didn't feel the earth shake from side to side for days."
Like the rest of the industry, BMW suffered in the financial crisis as new cars fell off consumers' shopping lists. Across the industry, global car sales dropped 9% in 2009 – the biggest decline in more than a decade.
BMW's pre-tax profits collapsed from €3.9bn (£3.2bn) in 2007 to less than €500m in 2008 and 2009, and the company cut thousands of jobs. But the carmaker bounced back quicker than most of its rivals, reporting a €4.8bn profit in 2010, and €7.8bn last year, when it sold a record 1.8m cars. It is on track to break that record again this year.
The recovery of BMW, which stands for Bayerische (Bavarian) Motoren Werke, is important for Munich and the whole of Bavaria. Car manufacturing – mostly made up of BMW and Audi 80km to the north in Ingolstadt – is Bavaria's biggest industry, accounting for nearly a third of the state's GDP. More than 280,000 people are employed by car companies, with the number rising to more than 500,000 when associated industries are included. Robert Obermeier, head economist at the Bavarian chamber of commerce, says Munich is not nicknamed "car town" for nothing.
"Bavaria's industry – cars, mechanics and electronics – is helping our state to be the best performing in Germany," he says. Bavaria's GDP grew 18.1% between 2002 and 2012 – the biggest increase of all of Germany's 16 states and 6 percentage points above the national average.
The Bavarian unemployment rate is 3.7% – the lowest in all the German states and significantly below the national average of 6.8%. In the UK unemployment stands at 7.6%. Bavaria's youth unemployment is even lower at 3%, compared with 21% in the UK and more than 50% in Greece and Spain.
Munich's success has not gone unnoticed. Net migration into Bavaria from other German states stood at 326,000 last year – a national high. Immigration from abroad – mostly from Romania and Hungary but with a growing number from Greece, Spain and Italy – stood at 70,000 in 2012 and is expected to be higher in 2013.
There are no dole queues at Munich's job centres. While the Gucci, Jimmy Choo, Hermès and Louis Vuitton stores on Maximilianstraße are thronged with customers, a nearby unemployment office is deserted except for staff.
Rupert Neate
TurinA quarter of a century ago, Nina Leone, a young migrant from the south of Italy, was taken on by Fiat to work on the assembly line for the Lancia Delta 16v Integrale. Mirafiori, the carmaker's biggest and oldest factory, has been her place of work ever since – except that, since June last year, that work has been strictly notional.
Leone, like more than 5,000 of her colleagues at the Turin plant, is on a period of cassa integrazione – temporary leave – due to run until September.
As Fiat attempts to withstand the European market decline without closing any more Italian sites, Leone is trying to get by on a reduced salary of around €900 (£745) a month.
And while forecasts from Rome and Brussels are predicting an imminent end to Italy's longest postwar recession, Leone can't quite believe it. To her, the longed-for recovery feels even further away than the snow-capped Alps visible from Mirafiori. "If there is an air of change," she says, "it's not being breathed. We are not feeling it."
Turin, the elegant Piedmontese city that for decades was known primarily as Italy's car-making capital, has been hit hard by the crippling recession which, in the eurozone's third-largest economy, has been going on for nine straight quarters and is only forecast to end in the last part of this year.
Certainly, unemployment in Turin's surrounding province – below 5% in 2007 and expected to hit 11% this year – is not at the dizzying heights of areas further south.
And the economic diversification that occurred before 2008 has allowed Turin – no longer a one-industry town, with involvement in aerospace, IT and food – to reduce its vulnerability to a Detroit-style implosion.
But the city is hurting nonetheless. If the strategy of Fiat boss Sergio Marchionne succeeds, Mirafiori will, in years to come, be part of that growth. Fiat's Italian-Canadian chief executive announced in September that, rather than shutting up shop, he would be retooling the site to prepare it for production of new models.
From the Torinese point of view, keeping Mirafiori on life support is of course preferable to letting it die. The effects of Fiat's difficulties, however, go beyond those it directly employs.
The province of Turin is home to nearly 900 businesses involved in the automotive and car parts sector and for them the crisis has come as a rude awakening.
Alessandro Barberis, president of Turin's chamber of commerce and an ex-CEO of Fiat, has led a drive to market the local brand abroad and boost exports for the city's small and medium-sized enterprises.
He says the effort has proved particularly important for automotive companies which have been helped to "reduce their dependency" on Fiat.
Barberis says Italy still has a strong brand abroad, even if its politics don't help matters.
"I am very positive about Turin, about its future. Certainly if we were also able to put on a better national image it would be better."
There are plenty of other reasons for the Torinese to feel optimistic about their future. Their city long ago stopped being just about cars, with other local sectors including aerospace, information technology, food, design and tourism. The chamber of commerce is trying to combat its lingering image as a purely industrial hub with the marketing slogan: "Grey Turin? The only thing that's grey about us is our grey matter."
But, from Cristina Romagnoli's office in Turin's biggest job centre, the picture remains bleak. In the first half of this year, more than 30,000 people in the surrounding province signed on to look for work. In 2008, the equivalent figure was just over 20,000.
As is the case all over Italy, young people in the area have been particularly affected by the contraction of the job market. Unemployment among 15-24 year-olds stands at 34% and, like young Italians up and down the country – where the average is 41.2% – many of them are simply leaving.
From January, every Monday afternoon at all Turin's job centres will be devoted to young people looking for work, says Romagnoli. She feels frustrated, she says, "because we could do so much better, if only we had slightly more resources".
So is she optimistic about the recovery that is supposedly on its way? "No. Because I don't see a political coherence. I do not see a serious strategic plan to get this area out of the crisis. And above all I see little investment in development," she says. Running through the numbers of jobseekers in Turin, she adds: "These are very high numbers, but I tell you the truth: I do not think they will decrease. Not around here. Not at this time."
Lizzy Davies
Automotive industryManufacturing sectorGermanyEuropeItalyKatie AllenRupert NeateLizzy Daviestheguardian.com © 2013 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds |
| READ THE ORIGINAL POST AT www.theguardian.com |