Inside UK car-making as it battles Covid-19
What’s really happening in the UK car industry under coronavirus? Here’s a snapshot of Monday 20 April, from the very heart of Bentley, Vauxhall and Jaguar Land Rover. By Phil McNamara
Adrian Hallmark recalls the last time he set foot in Bentley’s Pyms Lane factory; it was on the Tuesday after British industry submitted to the coronavirus pandemic and silenced its plants. ‘It was an eerie feeling. Every car on the line was covered with plastic bags,’ recalls the company’s chairman and CEO. ‘A few people were in the final rework area with maybe eight cars. Everybody I spoke to, they were gutted.
‘For two years we’d been building up to go for a record year, and people had put in enormous effort and energy to get us into that position. Ultimately, it’s “only” business, it’s not like losing somebody to Covid-19. But to have it ripped away, everybody was disappointed, frustrated.’
On a typical day at Bentley’s Crewe headquarters, some 4400 people would be on site. On 20 April 2020, there are fewer than 200, to keep the facility secure and key systems running. Despite the tiny headcount across the site’s 100 acres, each operative has to obey intricate social-distancing and antivirus-transmission measures.
20 April was the day Britain’s vehicle assembly plants had hoped to restart production. Nissan in Sunderland, the UK’s biggest car factory, BMW’s trio of plants around the Chilterns, Jaguar Land Rover’s sprawling assembly network – all had seen their ambitions dashed as Covid-19 deaths continued to rise and the government urged people to lock down.
During February, the last month of uninterrupted production, the UK had assembled 122,171 cars. Throughout April, not a single car was built.
MONDAY 20 APRIL BEGINS and ends in the same way for Adrian Hallmark: with crisis-management meetings. The morning agenda covers the state of the supply chain, the health of the workforce – two Bentley employees have been hospitalised; to Hallmark’s relief, both have recovered – and then it’s into operational matters. ‘We discuss the restart, and what we will do to make the best of 2020 – given we have a hole in it bigger than the profit we planned.’
Forensic focus goes into the plan to restart production on 11 May. The purchasing department has painstakingly compiled a vast timing chart, listing 500 suppliers and their components, and when each will be up and running again. How imperilled is the supply chain? ‘We don’t see a strategic risk but there is massive pressure.’ It’s the smallest 10 per cent of those suppliers that look most vulnerable.
Brexit preparations ensure Bentley can now hold seven days of stock, up from two. Key suppliers expect to be back on stream to start resupplying more components from 11 May. Productivity will build up slowly: initially, half of the line’s car cradles will be left empty, so that one phase of work can be split over two stations to keep operatives apart.
‘I’m not saying the crisis isn’t a real humanitarian, economic and psychological train wreck,’ says Hallmark. ‘It is. But we’ve got to think about getting back into the workplace and life.’
It’s essential: Bentley’s costs are about £20m per week. ‘When you’re getting zero revenue that bloody hurts.’ Instead of looking at the company’s cash position monthly or quarterly, the management team now monitors it daily.
IT’S 8AM. IN HIS LONDON APARTMENT, Steve Norman chairs Monday’s daily meeting of Vauxhall Motors’ management board, convened via Skype.
Vauxhall and Bentley may be poles apart on price and image but they face the same issues: protecting the workforce’s wellbeing, conserving precious cash through measures such as furloughing, planning a safe return to work and trying to do some business when the brand’s 300 retailers are shuttered, as are Luton’s Vivaro van factory and Ellesmere Port, which builds the Astra.
The board has decided to roll out special offers on new cars, and is monitoring a surge to its online car configurator and extra calls to its hotline. Any telephone transaction can conclude with a new car delivered to someone’s home despite lockdown – naturally protected by anti-viral measures.
‘The honest answer is we must try to do business – no company can survive without it,’ says the managing director, a veteran of 44 years in the industry. ‘But it’s such a far cry from normality. While Vauxhall aftersales is ticking over satisfactorily, the new-car business has been down to virtually nothing.’ Two-thirds of the way through the month, Norman shares the projections for the April new-car market. ‘It’s gone from 186,000 units one year ago to an anticipated 10,000 units. Our revenues and profits are related to the market size and our share of it, and the amount we can spend is naturally proportionate to that.’
Vauxhall was set to pick up real momentum in 2020, with new Corsa deliveries just beginning, electrified cars coming through and a first full year of Vivaro van sales. Is Norman frustrated? ‘I’m far more concerned about people’s health and welfare.’
The man responsible for 15,000 employees in Vauxhall manufacturing
‘For two years we’d been building up to go for a record year’ Adrian Hallmark, Bentley CEO
and at its dealerships points out that, as the lockdown eases, these people will be coming back to work – increasing their likelihood of coronavirus exposure as they go about their business. The comparative safety of home-working is not an option.
NOT LONG AFTER 11AM, JAGUAR LAND ROVER chief engineer Mike Cross climbs off his Ducati superbike at the sprawling Gaydon engineering centre. The oces are closed, the vast majority of the 13,000 designers and engineers working from home or on furlough.
But key workshops are open, and development teams are still on site where necessary, though with new shift patterns that avoid any crossover to enforce social distancing. Cross, the head of vehicle integrity who’s responsible for the driving dynamics of every Jaguar and Land Rover, has already met with his team virtually today, and conducted some programme reviews. Now he’s at HQ to assess some prototypes on the proving ground.
‘The biggest difference for me is that I can’t drive with other people,’ says the renowned chassis tuner. ‘I’d typically be driving with someone from my team, or from the engineering team responsible for the attribute we’re assessing, be it powertrain, dynamics or NVH.’ Engineers are on site to prepare prototypes, though the process runs a little slower than normal; each car is meticulously cleaned and everyone’s essential kit includes antiseptic wipes and hand cleanser. Cross is concentrating on vehicles that are closest to launch (perhaps next year’s new Range Rover and electric Jaguar XJ, the engineer won’t say), partly because that was always the schedule and partly because getting critical models to market ‘will get us out of this more quickly’.
It’s time for Cross to get back to work. ‘This afternoon, I’m driving some more cars. The sun is out, and I’ve got a proving ground at my disposal – it’s not too bad really,’ he wryly remarks in his Midlands burr. Will there be any sideways? ‘It’s a possibility in one of them. Sideways on the proving ground is permitted.’ ⊲
‘We must try to do business, but it’s such a far cry from normality’ Steve Norman, Vauxhall MD
‘The new design centre was all about coming together, ironically’
is Jaguar’s new, leading-edge design centre. Nearly 300 team members were finally unified in one area last August; seven months later coronavirus has forced a diaspora.
‘We were just getting into it, putting the last framed prints in place, everyone was loving the open plan… The new design centre was all about coming together – ironically,’ muses Jaguar exterior design director Adam Hatton. Like the interior design chief, Alister Whelan, he’s working flat out – remotely – to prepare for a ‘chairman’s review’ the following week. That’s when the next five to 10 years of proposed Jaguar cars will be digitally presented to JLR CEO Ralf Speth and executives at owners Tata Motors in India.
The design managers have lots of experience with video conferencing. First task for Hatton on Monday 20 April is to lead an exterior design review with colleagues in Jaguar’s Chinese studio. First they see a series of images showing different angles, then the camera turns to an actual painted model, with Hatton directing the camera operator to zoom in on the lamps, or pull back as far as possible to give the complete picture.
In a session to scrutinise materials, Whelan requests control of a design colleague’s laptop mouse to zoom in on a 3D image of a Jaguar cockpit. Colleagues chip in: ‘Could we add a bit more crown on that surface? What about tightening up the radiuses at that joint?’
Car design is a globalised, digitally connected discipline, but Jaguar still puts a big onus on physical clay models, so designers can get a lifesize feeling for their presence and surfaces: the new design studio has room to develop 20 full-size models. But, today, the milling machines are in stasis, the modellers on furlough.
THE FURLOUGHING SCHEME, in which the UK government covers 80 per cent of sidelined employees’ wages, is fundamental to the industry’s survival. Vauxhall’s Steve Norman says the UK would be in ‘dire straits’ without it; Bentley’s Adrian Hallmark credits the scheme with protecting some suppliers.
Furloughing is widespread at Pendragon PLC, the massive retailer which runs the Evans Halshaw and Stratstone dealership chains, as well as leasing and used-car businesses. Some 85 per cent of employees in the UK motor division are at home on the scheme, says CEO Bill Berman.
Monday 20 April sees service departments up and running, fuelled by ‘selfless’ volunteers keeping key workers and delivery vans on the road. ‘And our heads of business are in the stores, walking the lots, handling calls and internet leads,’ says Berman. ‘At a couple of sites where phone tra£c is more than they can handle we’ve brought in a business manager. But stores that might have had 70 people might have 10 today.’
Berman is running the business from Florida. ‘I found the last flight out, got from central London through Heathrow security in 45 minutes, and boarded a plane with 30 people that would normally take 300.’
He’s holed up in the family home creating the ‘Reignition’ strategy with Pendragon colleagues. ‘How do we bring the business back to life? The scuttlebutt is we can open on May 11 – does every store open? Open at full or partial capacity? No one’s ever opened a business that’s been shut for a month.’
Pendragon is undertaking sensitivity modelling, to try to anticipate demand. But Berman fears coronavirus’s economic crunch will have a profound effect on car sales, and is calling for the government to consider a scrappage scheme to prop up registrations.
‘It’s inevitable you’re going to lose a fair amount of retailers. It’s not whether you run a good business or a bad business – go off the projections for up to two years out and you’re down 25 to 40 per cent. My guess is you’ll see fewer configurations of cars, fewer models coming out, a lot less investment in autonomous tech, because manufacturers won’t have the money to do it.
‘I’ve been in the car business since ’88, gone through the
Adam Hatton, Jaguar exterior design director