What is the story about?
What's Happening?
The Confederation of British Metalforming (CBM) has expressed support for Jaguar Land Rover's (JLR) staged return to production, alongside the release of funding to support suppliers. Despite this positive development, CBM members continue to face liquidity issues, threatening the successful restart of supply chains. Stephen Morley, President of CBM, praised JLR's efforts but noted challenges remain for tier 2, 3, and 4 suppliers. The organization is urging suppliers to engage with banks for immediate support, while working with HM Treasury on long-term solutions.
Why It's Important?
JLR's return to production is crucial for the automotive industry, particularly for suppliers who rely on the carmaker's operations. The liquidity issues faced by suppliers could impact their ability to resume production, affecting the broader supply chain and potentially leading to delays in manufacturing. The situation underscores the importance of financial support and collaboration between industry stakeholders and government bodies to ensure the stability and growth of the automotive sector. Addressing these challenges is vital for maintaining the competitiveness of UK manufacturing.
What's Next?
CBM is advocating for the Growth Guarantee Scheme to be modified to provide interest-free support to suppliers, helping them bridge the gap in sales and finance the restart of production. The organization is also encouraging suppliers to explore all available avenues for financial assistance, including discussions with banks. The long-term impact on cash flow, liquidity, and profits remains a concern, and CBM is focused on finding solutions to support the automotive supply chain's recovery and growth.
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