GKN Automotive Plant: Birmingham — [Dame Angela Eagle in the Chair]

Part of the debate – in Westminster Hall at 10:02 am on 28th April 2021.

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Photo of Rachel Hopkins Rachel Hopkins Labour, Luton South 10:02 am, 28th April 2021

I am very sorry, Dame Angela. Apologies for that.

Since acquiring GKN, Melrose has sought to offshore manufacturing and transfer successfully won contracts for UK work away from Birmingham. We know that it wants to offshore production to Poland and France to maximise profit, showing a total disregard for its loyal workers and the surrounding community. As my hon. Friend the Member for Birmingham, Erdington said, the GKN plant is based in an area where unemployment stands at 12.5%, which is significantly higher than the national average. The loss of 519 skilled jobs at the plant in the middle of a pandemic would devastate the community.

The closure of GKN would also have a hugely damaging impact on our domestic automotive supply chain. As we have seen with other forms of manufacturing during the pandemic, it is important to have a robust domestic supply chain. That is increasingly essential for the automotive sector, due to the new rules of origin requirements with regard to tariffs.

It is economically illiterate of the Government to allow the closure of GKN in Birmingham and the offshoring of production. The loss of GKN—a critically important tier 1 supply chain manufacturer—will have a knock-on impact across our automotive sector. What I and others here find astounding is Melrose’s lack of discussion with the workers’ trade union, Unite. Unite’s two-stage plan for the GKN plant, formed through work with shop stewards and independent experts, outlines how productivity can be improved with additional savings, followed by a plan to produce eDrive components for electric vehicles. Estimates suggest that would save more than Melrose’s proposal to close the plant in Erdington, as independent experts believe Melrose has underestimated the cost of relocation.

We need companies such as GKN with eDrive technology based in the UK to help facilitate the sector’s green transition. Demand is increasing for electric vehicle components, with global electric and plug-in hybrid cells expected to rise to 40 million vehicles annually by 2025. Expansion of the eDrive could secure the site’s long-term future and play a pivotal role in the UK industry’s critical manufacturing capability. The eDrive equates to 15% of electric vehicles, comparable to next generation batteries. By 2030, that is expected to increase and make a significant contribution for exporters to meet new rule-of-origin thresholds. The room for GKN’s expansion is there, ready and waiting, and may not only save jobs, but could create them in the long run.

If Melrose intends to push on with this decision, it poses a critical temperature test of the Government’s industrial strategy, because what is levelling up if it is not protecting, promoting and creating skilled, well-paid jobs that are rooted in communities across the UK? If the Government allow GKN Birmingham to close, it will undermine and further expose the UK automotive industry’s supply chain to risk.

The Government must intervene and work with all parties to prevent the closure of GKN in Birmingham, and preventing the closure must be part of a wide interventionist green strategy to transition the automotive sector, ahead of the 2030 ban on new petrol and diesel vehicles. We need an electric vehicle revolution that backs manufacturers and creates new jobs. The Government must lead this step change by creating new gigafactories, protecting and enhancing the domestic supply chain and making electric vehicle ownership affordable. The UK has the skills and capacity to be a global leader in the electric vehicle market, but the Government must create the foundations for the sector to flourish.