NEW analysis from the University of Birmingham has revealed Coventry is at high risk of seeing automotive and manufacturing firms close.
The study looked into the financial resilience of the 50 biggest automotive companies by revenue in the West Midlands following the pandemic.
Each company’s cash flow was examined and it revealed 22 of the 50 in the region were at high risk of downsizing or closure, which could result in a significant knock-on effect on the wider industry.
The type of companies at the highest risk of closure includes original equipment manufacturers.
Dr Amir Qamar, the assistant professor of strategy and international business who led the project, said if some high-risk firms were to close Coventry and Birmingham would be the hardest hit.
The region’s biggest 50 automotive manufacturing firms employ 80,843 people and 76,184 have roles at firms at high and medium risk.
He said: “During the pandemic, there was a huge focus on the resilience of sectors such as automotive, which suffered because of factory closures and increased financial pressures.
“However, this was just one part of a continuous disruption that has been presenting challenges to the sector for years, such as Brexit, skills and component shortages and declining sales in China.
“At a time of extremely difficult economic circumstances, it is so important policy is targeted to boost resilience, which can save jobs and improve regional economies and the sector at a national level.
“Precise government intervention is needed if the West Midlands automotive sector is to improve its resilience.”
The study also calls for subsidies to be allocated to businesses quicker which would reduce the risk of unemployment and reduce the burden on the taxpayer.
Other suggestions include reskilling and redeploying newly unemployed people to improve resilience in the sector.
Visit https://www.tandfonline.com/doi/full/10.1080/00343404.2022.2126449 for the full report.
