Friday, 6 August 2010

Address to The House of Lords

The previous post applauds the informed reaction of Lord Brown and Mr Dennis in appreciating the macro and micro-level challenges the UK faces in generating a new era of industrial & economic value creation.

The following re-presents a letter from investment-auto-motives addressed to pertinant independent Cross-bench Peers of the House of Lords, with the aim of highlighting the level of challenge and providing a contextual background, the combine of which calls for a new 'UK Auto Industry Manifesto'.

The letter is provided here for the interests of my web-blog readers from investment, governmental and industry spheres.


The House of Lords
Palace of Westminster

14th April 2010

Re: Fiscal Consolidation & the Need for a 'UK Automotive Industry Manifesto'

My Lords & Lady,

Perhaps as never before in Britain's modern history has the need for truly independent judgment been greater to set the country back on course, domestically and internationally.

This letter and its enclosures are intended for yourselves and ideally copied to other wholly independent Cross-Bench Peers as well as members of the Science & Technology Committee; thus those who have non-partisan associative interest and baring – formal or otherwise - on the future of '21st century Industrial Britain'.

The list of published reports from the House indicates that scant legal & associative policy regard has been given to the indigenous automotive sector over the last two decades. This is unsurprising, a consequence of the decline of British owned mass-manufacture in a notional post-industrial age; with instead primary attention directed at the Kyoto ambition of curbing vehicle emissions as part of the bigger global CO2 reduction ambition.

Yet the two – industry & the eco-challenge - are undoubtedly concomitant.

Presently attention is drawn to the future by way of Bills attendant to: digital communications, genomic medicine, nano-tech, the electronic micro-chip etc; such disciplines now set against the very real regard of “Setting Priorities for Publicly Funded Research” given the sizable retraction of near-mid term public expenditure.

For the UK, and indeed much of the West, a concerning 'activity chasm' has emerged as a consequence of prolific macro-economic headwinds and the level of ecological challenge. That chasm will only be bridged by the effective and efficient use of the country's public and private resources - from availability of capital, to the promotion of the enterprise base, to the nourishment of the inherent human intellect.

The bursting of the credit-bubble demonstrates just how fragile the UK economy has become, portions of our population now economically disconnected; the 'credit-pull' for (often nefarious) personal consumption has exhausted, and instead, today, there is a new requirement for 'productivity-push'.

Just as the 19th century gave rise to mass industry and the 20th to mass consumption, so the 21st demands a re-formation of both sides of the equation, to meet this new era's demands.

As such, the full cross-section of UK industry, services & commerce requires re-examination and where necessary re-orientation to become: aligned, harmonious, productive and create meaningful value in the economic sense, the rational utility sense and even the emotional reward sense at both national and personal levels.

To this end, the full value chain of the British automotive sector, along with its incumbent foreign-owned manufacturers, and potential inter-regional co-operation, must be considered in-depth as an 'economic re-generator' given the ever present need for personal & public mobility, which in itself is historically proven as a cornerstone in promoting increasing economic activity.

All too often 'automotive' is seen as yesteryear because the conventional 20th century mass-manufacture 'Budd-system' business model is now typically better served by the socio-economic dynamics of the developing world. That perception whilst valid is not the whole story, discounting the reality and increasing relevance of alternative business models that focus upon advanced technologies and niche manufacture. Yet the UK's historical, formative, connection to these 'old' and 'new' sectors means that it operates higher-up the value-curve, with concomitant IPR leadership and effective operational know-how.

Whilst the recent rehabilitation of coal-mining is applauded as in the national interest, the automotive industry - although mis-perceived as 'old' - can be viewed in a similar vain, since the sector is so diverse and multi-faceted as to be more comparable to a reformable Rubik's cube - ie with the ability to re-shape itself both throughout the value-chain: from component supplier to assembler to retailer to maintenance & thru' life services provider; and indeed in time as a whole.

Thus it is my sincere belief that through insightful guidance at government, investor and enterprise level, that the UK automotive industry has a compelling role to play in both the wealth generation and well-being of the nation.

The enclosed items present the sole originally intended 3-page web-log item titled 'Fiscal Consolidation & the Need for a UK Auto Manifesto'. (The accompanying diagram illustrating the global 'trickle-down' achievable).

Yet to give this 'call to action' improved context, a compendium of selected web-log essays has been compiled providing various inputs for 'big-picture' food for thought. Hence a cross-section of items seeks to paint a portrait of the prime issues and trends facing the sector, including:

- The required 'economy drive' to dig the UK out of national indebtedness
- The danger of over-ideological personal transport initiatives such as TfL's bicycle scheme.
- The need to generate tangible added-value across the UK, US & Europe (Parts 1,2 & 3)The investor prompted need for continued western auto-industry restructuring.
- The importance of R&D: direct applications and technology transfer, with Dyson example
- The increasing importance of the small car, with Aston-Martin-Lagonda City-Car example
- The recognition that pure EVs have a near-term limited role, with Daimler-Renault example
- The need to consider vehicle manufacture & usage patterns relative to metro-mobility and metro-rehabilitation needs, using Las Vegas as hypothetical model.
- The 'dis-joint' of near-mid term currency markets as prompter for auto-sector value-seeking.

From a truly independent voice, this call to consider the role and shape of 'UK Auto plc' has no political bias or stance and prohibits its use as such. Instead it simply promotes the idea of improved industrial thinking & policy-setting that must be addressed from 'top-down', seeking to increase the momentum of the recent UK Motor Industry Inquiry, and critically poses the question as to how the country can best utilise its high & mid-value capabilities on global & national stages: the latter with overt reliance on auto-retail.

Napoleon's disparaging adage that 'Britain is a country of shop-keepers' may be all too true today given the realities of manufacturing efficiencies elsewhere and the necessary need for free-trade to lift all nations. Yet the high national cost of the Automotive Assistance Plan that generated the sale of foreign made and owned vehicles only serves to highlight that the UK should recapture that lost wealth. Extolling its world-leading development capabilities via the production of its own (exported) low-CO2, high-value vehicles. In short part of a re-aligned national business model which delivers economic consistency – an automotive whole far beyond the sum of its parts

Yours sincerely

Mr Turan Ahmed MA