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In conversation with Paul Butler, CEO of the North East Automotive Alliance and newly appointed Business Growth Board member at the North East LEP

Paul Butler, CEO of the North East Automotive Alliance, explains how the Business Growth Board at the North East Local Enterprise Partnership – of which he is a member – is backing business to support more and better jobs.

Strong leadership is critical right now. What role will you be playing as a newly appointed Business Growth Board member?

The Business Growth Board has a key role to play in helping support the North East region, and the companies within it, to ensure we’re in a strong position when we come out the other side of the Covid-19 pandemic.

There is a lot of work we need to do, but I believe we have a strong board and we are focused on providing the right support at the right time to speed up recovery.

In my role as CEO of the North East Automotive Alliance, I represent over 270 companies across the automotive sector and associated supply chains. Prior to that I worked in the Chemical and Pharmaceutical sectors with NEPIC and during that time supported the delivery of the regional UKTI services so I have a broad knowledge of the North East business base – particularly across the key manufacturing sectors. I am also a cluster management expert and have knowledge of the business support frameworks deployed in other countries, especially across Europe.

I bring all that experience to my role on the Business Growth Board so I can help the North East LEP bring together the right business support that’s required at this very challenging time.

From my very first meetings with the Business Growth Board I’ve been very impressed with its response. There is a real drive and desire to get the right framework to support businesses. In the longer-term, it’s about continuing that so we can deliver the North East Strategic Economic Plan, the Local Industrial Strategy, and really drive the region forward.

What are the biggest challenges facing the North East manufacturing sector right now?

Given my role I have a bias towards the automotive sector but the challenges we face are common with other manufacturing sectors.

The coronavirus pandemic is a global crisis and as a global sector the impact has been felt hard by automotive companies and their associated supply chains. We are driven by demand so as countries entered strict lockdown measures the markets effectively closed. Thankfully, we have seen dealerships starting to open from the 1st June in the UK and other important markets are also opening, this is an important first step in the recovery for the sector.

As we come out of lockdown and begin the recovery the biggest challenge faced by the sector is managing the recovery – reacting to a very turbulent market and providing safe working environments for our excellent workforce as they return to work. As a cluster we have been doing a lot of work to share best practice around restart planning which has been shared with networks here in the North East, and across the UK.

We will continue to see a technological revolution as we see the introduction of new technologies linked to the global carbon emissions and climate change challenges; and the UK Government’s NetZero 2050 target and subsequent announcement that it was set to ban petrol and diesel cars by 2035. This had an immediate impact on the market and accelerated the move towards electrification.

I also believe the Covid-19 pandemic will hasten the move towards connected and autonomous mobility (CAM) to provide safe transportation for vulnerable people and zero touch logistics.

The region has strengths in both electrification and CAM which I am sure we can capitalise on for the betterment of the region.

Forecasting demand must be hard for the manufacturing industry during the pandemic. What words of advice can you share?

Demand is extremely difficult to forecast and that is a key challenge for manufacturing businesses.

Government support for the industry has been excellent, its Coronavirus Job Retention Scheme has definitely saved a huge number of jobs. But as we begin to return to work, demand is difficult to predict. It’s important we work with government to make sure the Coronavirus Job Retention Scheme, or an equivalent, is put in place that allows more flexibility. We don’t want to be in a position where we bring people out of furlough to find demand is not as expected and we need to take them out the business again.

We need more flexibility to bring back the employees we need at the right time. It’s going to be a very turbulent period. If we see a second spike across Europe and the UK, markets could go into lockdown again.

I’m not from the North East originally but I’ve lived here for 19 years. The manufacturing base in the North East has a very adaptable workforce; one of our key strengths is our people. I have no doubt that the workforce and companies based in the region will be able to adapt quickly to any flux in demand. Our agility is our strength.

How can manufacturers get employees back on site safely as we see a return to the workplace?

There is lots of guidance available that companies need to follow. Government has released up-to-date guidance for a range of different workplaces.

We’ve been taking into account guidance from across the country and abroad, and disseminating strategies through a global network so companies have access to best practice on restart planning. We’ve taken the best ideas from around the world and looked at how we can implement them here in the North East.

I’m a member of a European cluster network and having reviewed what others have done, the North East is right up there with the best. And I think that’s been due to our willingness to share knowledge and experience with others.

All our businesses have been looking to ensure workers return to a safe working environment. We’re really going over and above in the North East.

A key part of our success is communication with employees; companies are constantly engaging with their workforce. Businesses are communicating all the measures they are introducing to keep people safe, for example, conducting risk assessments, adopting PPE, introducing COVID-19 champions to help implement changes, and amending working practices to mitigate risk by adding protective screens and having staff members face the same direction at work. Businesses are taking every measure they can.

Other measures include temperature testing on arrival at work, increased cleaning regimes, and one way systems to avoid cross over points in the workplace. Induction days have been introduced to take employees around sites so they can see the changes and return to work knowing every precaution has been taken to keep them safe.

In fact, since going back to work, many people have said they feel safer at work that other environments outside the home.

The North East Automotive Alliance is a partner of Supply Chain North East. What advice and support can this give business owners as they navigate this turbulence

Many businesses are predicting it’s going to take 12 months to two years to recover from the coronavirus pandemic and get back to normal market conditions. As it’s going to be a long recovery period it’s important, we engage and support as many SMEs across the North East.

Supply Chain North East is a key programme for the region and the North East Automotive Alliance is one of four partners involved in the programme alongside RTC North, Generator and NEPIC.

The premise of Supply Chain North East is to either help companies strengthen their business base in the sectors they work in – for example, an automotive businesses looking to expand and grow in its sector – or the other side is to help companies diversify and use their skills to work in different sectors of industry.

Across the programme we have a lot of skill sets to support businesses. The coronavirus pandemic has had a significant impact on the economy and Supply Chain North East can help businesses to either grow their existing business base or help them to move into new markets.

In addition, our capital grants programme has been updated. SMEs can access up to 60% in grants (increased from a cap of 40%) towards stalled pipeline projects due to COVID-19 or activities aimed at developing the supply chain; and payments can be made at the start of a project. Critically, grants up to 80% are available for companies which can potentially support supply chain needs relating to the health and social care sectors.

We’re currently talking to businesses, discussing the challenges they are facing, and working with them to put together an action plan to help them come through the other side of this crisis.

More information is available at www.supplychainnortheast.co.uk.

Home / Supply Chain North East

£500m contract opportunity attracts over 100 businesses

More than 150 businesses attended an event at the Stadium of Light in Sunderland today (8 October) to find out how they can be part of the supply chain to deliver a contract worth £500m that will see a new fleet of trains for the Tyne and Wear Metro designed, built and maintained.

Organised by the North East Growth Hub in conjunction with Transport Executive Nexus, businesses had the chance to meet the five bidders shortlisted for the contract and the other companies who could form part of the supply chain. Businesses were able to pitch to each of the five bidders and showcase how they would make a valuable contribution to the contract.

The five bidders are Bombardier Transportation UK Ltd; Construcciones y Auxiliar de Ferrocarriles, S.A. (CAF); Downer EDI Rail Pty Ltd – a joint venture between Downer EDI Rail and CRRC Changchun Railway Vehicles Co. Ltd; Hitachi Rail Europe Ltd; and Stadler Bussnang AG

A whole host of opportunities are potentially up for grabs as the fleet replacement programme moves forward, from the manufacture and supply of 42 news trains to the construction of a new maintenance facility. There will also be contracts available for the decommissioning and removal of railway assets and the disposal of the current fleet.

The contracts are due to be awarded by Nexus, which owns and operates Metro, by the end of 2019.

Colin Bell, Business Growth Director at the North East LEP, opened the event by talking about the North East Growth Hub and wider business support on offer.

He said: “This is an important contract for the North East, which has a well-established transport sector served by a thriving supply chain. Bringing these companies together with the bidders is a fantastic way to raise awareness of the opportunity; helping organisations build their networks and find new ways to partner on lucrative contracts.”

Neil Blagburn, Metro Development Director at Nexus, said: “Our investment in new trains will transform passengers’ experience of the Tyne and Wear Metro. We have issued an Invitation to Negotiate to five bidders who, between them, are building trains for many of the world’s biggest cities and rail networks.

“This event, organised by the North East LEP, has been an opportunity for our short-listed bidders to meet supply chain companies they could work with in the construction and maintenance of both trains and depot in the next few years, but also their ongoing maintenance for decades to come.”

Invest North East England (INEE), the first point of contact for companies looking to invest in our region, also attended on the day to discuss inward investment opportunities with the bidders.

Guy Currey, INEE Director, said: “We have a comprehensive package of free support available to organisations seeking development opportunities in the North East of England. This event showcased the talent and supply chain infrastructure in the region, demonstrating exactly why this is a good place to live, work and grow a business.”