Could Energy Crisis Close UK Car Factories?

Thu 8th Sep 2022

The British automotive industry is facing yet another potential challenge with the news that the energy cost crisis is likely close or restrict some of the country’s biggest manufacturers.

Carmakers have ridden the wave of pandemic lockdowns, microchip shortages and Ukraine related supply chain issues over the last three years, and now they face a further hurdle with energy costs becoming increasingly expensive.

A study by Make UK of 200 companies found that more than half had said their energy bills had doubled in the last 12 months, and they expect the prices to rise by the same rate in the next year. Of those companies, one in eight admitted that they had made job cuts as a result and may implement factory shutdowns or worse face wider redundancies.

The chief executive of Make UK said that the government needs to do more to keep British industry competitive in the face of other EU countries which are making concessions for businesses.

“As energy bills spiral out of control, manufacturers are working tirelessly to find ways to reduce consumption, putting in place as much as they can afford in terms of building improvements and installing renewable sources of energy,” said Stephen Phipson, chief executive of Make UK

“Government must step in to help struggling businesses.

“With an increasing number of manufacturers now in survival mode and taking drastic action such as cutting jobs, emergency action is needed by the new government as soon as they are inside No 10.

“We are already lagging behind our global competitors, and the prolonged lack of action by the UK Government making this worse.

“UK manufacturing needs help now if it is to thrive and maintain the millions of well-paid jobs around the whole of the UK and to keep its place as one of the world’s great manufacturing nations.”