Andy Street is the Mayor of the West Midlands and is a former Managing Director of John Lewis.
At the end of both the Labour and Conservative conferences we saw a key element of the future of UK’s automotive industry put forward, but with sharply contrasting approaches.
The term ‘Gigafactory’ has slipped into 21st century language, a buzzword driven by the ambitions of TESLA and Elon Musk, who expects his facility in Nevada to be the ‘biggest building in the world’ when completed.
But while a Gigafactory is about scale, and manufacturing the batteries needed for the next generation of vehicles, it’s also about creating a site that uses cutting-edge technology, employs thousands of highly skilled people and sits at the heart of a complex and inter-dependent sector.
It’s also much more than a buzzword – the Gigafactory concept is a vital ingredient in enabling the switch to electric-powered transport. Both Labour and us Conservatives agree that the UK must adopt the concept and build the Gigafactories that will make us global contenders in the race to electrification, while supporting thousands of jobs, directly and indirectly.
But there, sadly, the consensus ends – because location is everything when making such monumental decisions in industrial investment.
Labour have decided that politicians – Labour politicians – are best placed to decide where the UK’s gigafactories will be built. The areas they have chosen are Stoke, Swindon and South Wales.
It may be laudable for politicians to try to support communities by sticking a pin in a map and saying ‘build it here’, but this approach increases the chance of failure. The temptation to use key investments to win votes must be resisted. We must learn from the history of the UK automotive sector – and we must listen to those within the industry when they speak.
The demise of the British car industry hit the West Midlands hard. As the centre of the nation’s automotive sector, car building’s decline was a huge factor in the post-industrial malaise that impacted on the entire region in the second half of the 20th century.
The recent resurgence of Jaguar Land Rover has shown that there is a real future here for British automotive. We are building confidence as well as cars.
However, as we face investment decisions that will affect generations to come, we must consider how the choices of the past – often made by politicians with the best of intentions – accelerated automotive decline.
In the 1960s there were two clear examples of this. To prop up mass employment in Glasgow, the Government supported the building of a British Leyland factory in the city, at Bathgate. The other option at the time was to develop the existing Leyland factory at Longbridge, in Birmingham, investing in the heartland of car manufacturing.
Then, politicians decided to build a new factory at Linwood, in Scotland for the Rootes Group – whose Midlands plants built famous marques such as Humber, Hillman, Singer and Sunbeam. As a result, half-built Hillman Imps had to be shipped backwards and forwards between Scotland and Coventry to be completed.
None of these factories exist anymore. Perhaps if we had concentrated investment on building up the existing West Midlands factories, benefiting from the expertise and logistical common sense of keeping things close together, outcomes may have been different.
The lesson here, surely, is about politicians allowing their political needs to influence what should be business decisions. For the UK’s first Gigafactory to succeed, it needs to be based on a robust business case. Putting aside local loyalties, as someone who spent 30 years in business, I know this to be simple fact.
Here in the West Midlands we have an automotive cluster, based around the flagship that is Jaguar Land Rover. We have a huge network of supply and support firms that have developed over decades, with a track record of transforming to meet the changing demands of the sector. We also have the foundation industries that make the metals and materials that underpin vehicle manufacture at more than 20 sites.
In terms of battery technology, the Government has already played an important role in helping make the West Midlands competitive in this race, investing £108 million in a state-of-the-art Battery Industrialisation Centre in Coventry, and creating the Centre for Connected and Autonomous Vehicles. In fact, the West Midlands is the UK centre of the driverless car research, with vehicles already being tested on the streets of Coventry and the region’s motorways.
In manufacturing, alongside JLR’s commitment to build electric vehicles at Castle Bromwich, electric drive units are being made in Wolverhampton, with battery assembly at Hams Hall in North Warwickshire. Our brilliant universities in Birmingham and Warwickshire are contributing significant research in partnership with the automotive sector.
So, as the sector moves to electrification, we are reclaiming our place as one of the world’s automotive powerhouses. I would be proud to be known as the Mayor of the UK’s Motor City.
The West Midlands was the first UK region to draw up a Local Industrial Strategy, and the concept of industrial clusters and the benefits they bring in terms of skills, costs and logistics was a formative aspect of its creation. Clearly, the UK’s biggest automotive cluster is taking shape right here – and it is one that is looking ahead to the challenges and innovation of the 21st century, rather than resting on the glories of the past.
We need the UK’s first Gigafactory to be based in the heart of this cluster – minimising transport and disruption costs and maximising the mutual support and expertise that exists here.
Battery manufacture is vital to the success of electric transport, as 40% of a vehicle’s value lies in this crucial component. Batteries are also the heaviest part of the vehicle, meaning their production needs to be near the car’s assembly lines. We must not repeat the mistake of the Rootes factory, and the logistical nightmare of hauling car components around the country, hampering the manufacturing process and driving up costs.
If the batteries are made elsewhere, the laws of economics make it more likely that car manufacturing will eventually be forced to move closer to them – breaking up the successful cluster here in the Midlands, fragmenting the UK sector and fundamentally weakening it.
From an environmental perspective too it is also counterintuitive to build an ‘eco-friendly’ electric car sector that actually increases the need for long-distance haulage, and the accompanying carbon footprint.
That’s why I believe for business reasons the Gigafactory must be in the West Midlands. So, I was delighted that at Conference the Prime Minister spoke of bringing the Gigafactory here, saying our region is seeing ‘a 21st century industrial revolution in battery and low-carbon technology’.
It’s time to remember the lessons of the past. Let’s not repeat the mistake of making this a political decision – least of all one made by the current Labour Shadow Cabinet.
Let’s not let Jeremy Corbyn and co repeat the Hillman Imp experiment and weaken the West Midlands automotive industry for political reasons.
At a recent CBI speech at Conference I set out my vision, as a businessman, of making the West Midlands Motor City again – albeit this time with an electric motor. The business case is there, and business must beat politics.