Dealing with Auto Industry Rundown and Closures: a perspective from Birmingham Challenges facing Mono-Sectoral Cities, Open Days 2010

Dealing with Auto Industry Rundown and Closures: A Perspective from Birmingham Challenges facing Mono-Sectoral Cities, Open Days 2010

• David Bailey, Coventry University Business School, UK
• Caroline Chapain, CURS, Birmingham Business School, UK

Outline

• Introduction / background
• The MG Rover research project
• Surveys of workers and the spatial impact of plant closure
• Overview of workers in 2008-2009
• Training and policy support
• Different pathways, different stories
• Conclusions and policy recommendations

• WEST MIDLANDS LOCATION

Birmingham and West Midlands: traditionally the UK’s auto centre...

• One third of jobs in Birmingham in 1960s/1970s estimated to be auto related
• But high profile plant closures through 1970s and 1980s, most recent Jaguar (Coventry), MG Rover (Birmingham), Peugeot (Coventry), LDV (Birmingham), plus in related industries
• Next: another Jaguar Land Rover plant by 2015 ?
• BUT still an important industry in terms of supply chain and R&D

Attempts from 1980s to rebalance / reposition the city

• City Centre redevelopment projects – tourism, finance, law, business services...
• But ongoing net loss of jobs (Centre for Cities, 2010)
• Auto industry: modernise, diversify away from auto and major local manufacturer MG Rover
• First ‘Rover Task Force’ – over 2000-2005: advance action ‘saved’ some 10,000-12,000 jobs

‘Place Renewing’ leadership (Bailey and De Propris, 2010)

• Entering and securing high-value market segments
• Cross-sector fertilisation
• Repositioning within the global value chain

MG Rover case

• Closed in 2005, with the loss of 6300 jobs directly, c 3000 more in supply chain
• Major economic shock in city and region
• MGR: turnover = as much as 1% regional GDP
• £200 million in lost govenment revenue
• Owed £1.4 bn to creditors; £104m to suppliers - received 1p in £
• How was this dealt with, and what were the outcomes?