Organisations quoted below take in:
The Manufacturing Technologies Association
Supply chain group the Midlands Assembly Network
The Institution of Engineering and Technology
Durham University Business School
The High Value Manufacturing Catapult (pre-Brexit vote comment)
The Manufacturing Technologies Association, which represents mostly sellers of manufacturing technology that includes machine tools, CADCAM software, cutting tools and workholding, said this via its CEO James Selka: “Like the rest of country, MTA members will have been engrossed in the referendum over the last few weeks. The MTA took a position, based on the views of our members, of supporting the UK’s remaining within the EU. But now that the decision has been reached, we have to work hard to protect the future of the UK’s manufacturing technologies sector.
“Maintaining access to the single market is of paramount importance, something widely agreed on across the political spectrum. Great care must be taken during the negotiation process to protect manufacturing’s interests and we will be working hard in the UK and in Brussels for that outcome.
“We believe that we can leverage UK manufacturing’s reputation for innovation and flexibility to secure the best possible deal for our members outside the EU.”
The EEF, which goes by the tag line “the voice of UK manufacturing and engineering”, said through CEO Terry Scuoler: “While it is not the result many businesses wanted, it’s the democratic will of our nation. The government must move very quickly to stabilise the economy, reassure the markets and shore up business confidence. The process of leaving the Union will take some time, and the government should not rush to instigate Article 50 and the formal exit process, while there is so much uncertainty. Ministers must think carefully about our negotiating position while setting out a clear roadmap for establishing a new deal with the EU which remains our biggest market and trading partner.
“We need a clear vision for a new relationship between the UK and the EU, but we must also avoid throwing the baby out with the bath water. In the complex task of unpicking the UK from EU regulation and legislation, the government must tread carefully, keeping, if we can, a trading relationship with the single market, avoiding dramatic overnight changes and not becoming bogged down to the detriment of making long-awaited and much-needed decisions on projects vital to our future economic prosperity. We must also ensure that the skilled workers we need are still encouraged and enabledto live and work in the UK.”
He added that manufacturers have a series of priorities for any forthcoming negotiation, including: securing access to key markets for goods and services; ensuring regulatory certainty; addressing the UK skills gap; domestic policy focused on shoring up investment.
Gareth Stace, director of UK Steel, said: “The decision to leave the European Union will send shockwaves across the UK’s steel industry. Our sector is well versed in having challenges thrust upon it, but it’s clear that this is like no other.
“It is now more essential than ever to create the right business conditions in the UK that allow the steel industry to survive, invest and thrive. This will ensure that our vital supply chains, such as defence, automotive and construction, can rely on the production of steel in the UK so we are self-sufficient and can never be left at the mercy of others.
“Government now needs to fully and finally tackle head on the uncompetitive electricity and policy costs that have historically hindered the growth of steel producers and seen thousands of high-skilled jobs lost over the last year. We need to see all major projects, from HS2 to Hinckley Point to airport expansion, all using British Steel instead of procuring from foreign companies that offer no social value to the UK and its communities and economy.
“Government can now match words with actions and take the lead in dealing with subsidised exports, most notably form China, that are slowly destroying steelmaking in the UK. It must come up with clear and concrete actions to ensure that we can still trade with the EU, while at the same time ensuring that trade tariffs have the teeth to guard against dumping of Chinese steel. An exceptionally challenging ask, but one the whole UK steel industry stands ready to support.”
Mike Hawes, SMMT chief executive, said: “The British public has chosen a new future out of Europe. Government must now maintain economic stability and secure a deal with the EU that safeguards UK automotive interests. This includes securing tariff-free access to European and other global markets, ensuring we can recruit talent from the EU and the rest of the world, and making the UK the most competitive place in Europe for automotive investment.”
CBI director-general Carolyn Fairbairn has laid out businesses’ priorities following the outcome of the EU referendum in an article for The Times today.
While the majority of businesses did not want to leave the European Union, she writes that business leaders are determined to work with government to create the right conditions and face the upcoming challenges with confidence and resilience to achieve the best possible outcomes for the country.
The CBI is also writing to the Prime Minister, the Department for Business, Innovation and Skills and the Treasury outlining companies’ top priorities to minimise the uncertainties which could affect the UK’s future economic growth and prosperity.
Said Fairbairn: “The British people have spoken in an explosive referendum result which will define the fortunes of the United Kingdom for generations to come.
“The impact cannot be underestimated and will take time to understand. Many people, including the UK’s thousands of businesses, are asking what this means for them and the people who depend on them. What we need is a plan.
“The government must act with urgency to minimise the uncertainties that affect investment decisions and slow job creation.”
On priorities for business post-EU referendum, she offers: “The first part of the plan must be to get strong, calm and decisive leadership in place as soon as possible. Never has there been a more important time to put the interests of the country ahead of party politics. Businesses welcome the Prime Minister’s announcement of a delay in triggering Article 50 to create breathing space, but need rapid clarity on who is making the decisions.
“Second, we must agree the principles that should underpin our new relationship with Europe and the rest of the world. At the highest level, the government should resolve publicly to preserve the openness of the UK’s economy, one of its greatest strengths.
“This means seeking to protect tariff and barrier-free access to the Single Market, ensuring companies are able to continue to attract the best people to the UK with the skills we need, while recognising public concerns about immigration. And, it means setting out clearly how the UK will agree the right international trade deals with the wider world.
“The third action we must take is to forge close and deep collaboration between business of all sizes across the UK and the government to help shape our future economic relationships. The CBI and business leaders across the UK stand ready to work with the new leaders of our country to help chart the future course, starting as soon as practically possible.”
On working with the government, she says: “Business Secretary Sajid Javid has communicated his intent to start this planning process with business and community leaders across the UK and we welcome this.
“There is one other action that needs to be taken immediately. The government should remove uncertainties over the long term right to stay in the UK for those already working here as soon as possible. We welcome the steps the new Mayor of London, Sadiq Khan, has taken to give this reassurance.
“No one pretends this transition will be easy or that the change will be pain free. But now is the time for businesses across Britain to come together in partnership with government and communities to turn the will of the British people into a new set of world relationships that benefit everyone.
“At the CBI, we will continue to work in the spirit of partnership to lead the voice of business in these vital decisions. We are committed to securing the best possible future for our country for generations to come.”
Tony Hague, chairman of the supply chain group the Midlands Assembly Network, said: “This isn’t the time for knee-jerk reactions and we need to assess how the new political and trading landscape is going to develop.
“There will undoubtedly be levels of uncertainty and, as manufacturers, we have had to deal with this a lot in the last nine months and will continue to be positive in our approach to winning new work with our partners, both in the EU and across the rest of the world.
“MAN is testament to what can be achieved when we work together in collaboration and I think that needs to be the overriding sentiment as we tackle the immediate ‘uncertainty’ and prepare to explore the potential long-term opportunity.”
MAN member Brandauer underlined that, with its CEO, Rowan Crozier, adding: “It’s a disappointing result that will now accentuate a period of political and economic instability. The dreaded ‘uncertainty’ is here to stay and will be something else that UK manufacturers have to overcome, if we are going to continue to execute our growth plans. Nothing will change quickly and it could be some time until we start to see the true effects of leaving the EU.”
(Read the Machinery feature about MAN here)
Exiting the EU is a risk to UK engineering, says leading institution the Institution of Engineering and Technology (IET) , which had published a statement of concern that a vote to leave the EU could result in a number of negative impacts on UK engineering, including exacerbating the UK’s engineering and technology skills shortage by making it more difficult for companies to recruit engineers from other EU countries.
Other issues identified included changes to access to global markets and companies, a decline in funding for engineering and science research, and a weakening of the UK’s influence on global engineering standards.
Naomi Climer, IET president, said: “We thought it hugely important that the role of UK engineering was considered as part of the EU debate.
“It was for that reason that we looked carefully at the issues affecting engineering, including the skills shortage, the global markets that engineering is a part of, research funding and global standards.
“We concluded that, at a time when we have a huge shortage of engineers, limiting the number of professional engineers that could come and contribute to our economy would affect the industry and the nation’s financial wellbeing.
“We were very careful to consider the options as they related to UK engineering, but the result of the referendum is clear and we are calling for an urgent discussion so that any negative impacts can be mitigated for the benefit of UK engineering and our country’s economy.”
Stephen Cooper, head of Industrial Manufacturing at KPMG UK, said: “The possibility that many manufacturers feared has come true. So what next for manufacturing businesses in dealing with the manifold implications of the exit vote?”
He answers by picking up on three areas: trade with the EU; jobs and availability of talent; and investment decisions.
On trade, he said: “Ensuring a full understanding of the supply chain past Tier 1 suppliers and beyond is vital to assess potential actions required. Our recent report on the sector revealed that just 13% of global respondents have “complete” visibility past their Tier 1 suppliers and into their Tier 2 so this may not be as straightforward as some might hope.”
Moving onto jobs, he observed: “There are very real implications to the access to engineering talent. Manufacturers will need to consider their strategy. Firstly in retaining their non-UK workforce, secondly in attracting non-UK based expertise and thirdly, more long term and one for the government to support, in developing talent on a much greater scale than they do currently.”
Moving to investment, the KPMG man added: “Both FDI and of UK origin, whether put on hold waiting for this vote or in the ‘normal’ course of business, will need to be reappraised. Whether manufacturers will choose to locate or develop their operations in the UK, with the possibility of tariffs in place, remains to be seen and will likely be dependent on the upcoming negotiations with Europe. Once again, government action will be important to help ensure we remain an attractive location to invest both in manufacturing and other key contributors such as science and technology.
“We should not lose sight of the fact that this result can also lead to opportunities for manufacturers; a drop in the value of sterling could make the UK a magnet for trade, and the need to reshape trade policy may result in quicker decision making, and reduced red tape.”
But he was speaking just a day after the result, so added: “The vote and the full implications will only become clearer with the passage of time – a considered approach to the emerging position is required rather any ‘knee jerk reaction’. Organisations will need to consider the tactical, short terms implications, particularly relating to market volatility and the impact on trading. However, the importance of maintaining a focus on the longer-term planning whilst in the midst of a tactical response is paramount.”
(Unbiased information is available on the KPMG EU Referendum web portal here: www.kpmg.com/uk/euref)
Commenting on the repercussions for the UK manufacturing industry following Brexit, Dr Christos Tsinopoulos, senior Lecturer in operations & project management at Durham University Business School, said: “Brexit repercussions for the UK manufacturing industry will be questioned by many over the next few weeks and months. What we do know is that the integration across a supply chain is king. Research conducted by Durham and others demonstrates how a closely integrated supply chain, where there is an easy exchange of ideas and information, is likely to perform better. Supply chains know this and over the years there have been several efforts to bring manufacturers closer together.
“However, the key point here is that to make this happen there needs to be a degree of standardisation in legislation, systems, policies, and even engineering methods. Over the last few years this has largely been facilitated by several European bodies. Many have been guided by the EU whereas others have been industry led. The result has been some highly integrated and efficient supply chains which have benefited many of us.
“The good news here is that, given the high degree of integration of many of them, they are relatively difficult to change in the short term. The bad news however is that in the medium and longer term there would be a higher incentive to do so. In a competitive environment where small changes can have significant impact on performance and relationships, switching between supply chains and countries may become an increasingly popular choice.”
Speaking ahead of the referendum in March on behalf of the High Value Manufacturing Catapult that includes the AMRC with Boeing in Sheffield, Dick Elsy, chief executive of the HVM had this to say: “We can access significantly more innovation capability working within the collaborative community of the EU.
“In advanced manufacturing, we also have recruitment challenges. We’re not producing enough British engineers to fill the vacancies we have, and it’s engineers from across Europe who help us address that.”
Jurgen Maier,CEO of Siemens UK. said: “For Siemens, the UK would not be interesting enough as a country on its own. We are interested in developing R&D and technology. The UK is an attractive market. But after we’ve developed, we want to export the technology around the world, and by developing it just to British standards we would not be able to do that.
“This is not about protecting what we have today. For our 13 factories to be able to thrive in the future they need to be influencing what the future of their industry is going to look like. They need to be involved in R&D across borders and play in role in setting standards.”
Helpfully, for those now wishing to know the detail of withdrawing from the EU, the House of Lords recently published its ‘The process of withdrawing from the European Union’ report.
