The Impact of the MG Rover Closure upon the Supply Chain in Wales

Last week, I promised Members an update on the situation regarding MG Rover; I am delighted to be able to give that update today.

In 2001, following previous difficulties experienced by the MG Rover Group Ltd, the Welsh Assembly Government and the Welsh Development Agency established the Accelerate Wales programme, which was developed by the Welsh automotive taskforce. The taskforce has been successful in helping automotive suppliers in Wales to diversify their customer base over the last five years. The extent of this diversification has been significant in limiting the impact of the recent situation at MG Rover on individual suppliers. Indeed, a recent survey conducted by the Welsh automotive taskforce shows that only three suppliers in Wales have a business turnover associated with MG Rover that is greater than 15 per cent, which is a significant reduction from the position five years ago.

The Welsh Assembly Government will draw upon the substantial support network available within Team Wales to provide an effective response for any supplier and individual in Wales adversely affected by the situation at MG Rover, and this response is well under way. As at the end of last week, we were aware that around 120 job losses had been declared at three plants in Wales, and we should all recognise that the situation remains uncertain. The companies affected were Thyssen Krupp Camford Pressings Ltd and Calsonic Kansei UK Ltd in Llanelli, and CU Tech. The geographic proximity of these companies means that it is vital that we do everything possible to limit further job losses, and to provide those already affected with the support and the training needed to find new employment opportunities.

The Welsh automotive taskforce has set up a Wales helpline and, together with my officials, has already met with representatives of some of the companies affected. Arrangements have been established to enable support under the UK package of measures to be delivered locally through the Welsh automotive forum and the WDA.

The UK Government has made £40 million available to provide support for supply chain companies, and I am delighted to say that companies in Wales will be able to apply for that. This aid will focus primarily on helping companies to analyse any impact on their business, and includes an intensive business review programme to help companies to identify new market opportunities, with support for employee retraining where required. Suppliers with a turnover with MG Rover that is in excess of 15 per cent are also eligible for access to a wage subsidy for employees available for training.

The 19 MG Rover dealerships in Wales are also affected by the situation, as many Members have brought to my attention. While the UK support package does not currently extend to the dealership network, we understand that the UK Government is looking into the potential to provide European Union-compliant aid to this group. The automotive taskforce has asked Automotive Skills, the sector-specific skills council for the retail motor industry, to investigate the needs of this sector and to report back.

We remain committed to supporting the evolution of the automotive sector in Wales, and a follow-up programme to the Accelerate Wales programme, called Accelerate Clusters, is already under way. That is why I am pleased to announce today that the UK’s first centre of excellence in product lifecycle management is to be established at Technium Auto at Dafen in Llanelli, which will provide small and medium-sized enterprises in the Welsh automotive sector with access to some of the most sophisticated software products in the world.

The multi-million-pound investment follows an agreement between the Welsh Assembly Government, IBM and the University of Wales Swansea, following the establishment of the Institute of Life Science at the university. The new centre will provide small and medium-sized Welsh businesses with an unparalleled opportunity to gain a competitive edge by drawing on IBM’s expertise in terms of accelerated and improved product development and lifecycle management. IBM’s solutions are used by some of the world’s leading companies to bring products to market faster, to produce higher quality products and components, and to minimise the cost of product modifications. This latest collaboration with IBM demonstrates our clear commitment as a Government to support the automotive industry in Wales, to provide practical support to develop the industry, and to enable Welsh companies to continue to compete in the highly competitive global market.