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The U.K. manufacturing industry has warned of a “jobs bloodbath” unless the government extends its job retention program by six months, to avoid highly skilled job losses in the sector on a scale “not seen since the 1980s.”
Trade body Make U.K. made the urgent plea after a survey of 170 firms showed that the number of companies planning to make workers in automotive, aerospace and other strategic industries redundant in the second half of the year has risen to 53%.
The latest Manufacturing Monitor survey, published on Monday, continues the sharp rise seen in its last three surveys over an eight-week period, rising from 25% to 42%, and comes despite a gradual improvement in sales and orders.
Almost a third of companies are planning to make between 11% and 25% of employees redundant, with just under 8% of companies planning to make between a quarter and half their workforce redundant.
“Industry cannot afford to lose these high value skills which will be essential to rebuilding our economy and investing in the industries of the future,” said Stephen Phipson, Make U.K. Chief Executive.
“At present, the prospect of a V-shaped recovery for industry seems remote. Therefore, if we are to mitigate the worst impact of potential job losses Government must extend the furlough scheme for key strategic sectors to provide them with vital breathing space,” he added.
Tens of thousands of highly skilled jobs in manufacturing have been wiped out in recent weeks, on a scale not seen since the 1980s.
These include more than 6,000 U.K. automotive job cuts in June alone, according to the Society of Motor Manufacturers and Traders, as a result of global lockdowns, closed markets and closed plants.
Automotive companies include Jaguar Land Rover, which is owned by India’s Tata Motors TTM, +0.57% and borrowed 5 billion yuan (£560 million) from Chinese banks after not being able to access the Bank of England’s loan guarantee program because of its poor credit rating.
In early July, the U.K. government set out a £30 billion ($37.8 billion) plan to protect jobs and prevent mass unemployment as a result of the coronavirus pandemic. But the U.K.’s job retention program, which sees the government pay up to 80% of wages of staff forced into temporary leave, will come to an end in October.
The call from Make U.K. for specific measures for sectors would only be equivalent to those taken by major European competitors in Germany, France and Italy, Phipson stressed.
Read: Airbus’ 15,000 Job Cuts Show Limits of Government Bailouts
The French Government in June unveiled a €15 billion ($17.2 billion) support package, including loans to the aerospace sector and €8 billion ($9.1billion) to the automotive sectors, while speculation suggests Italy will shortly announce a car scrappage program worth €1 billion and a further €10 billion ($9.1 billion) to support ongoing furlough programs across the economy, Phipson noted.
European aircraft maker Airbus AIR, +0.10% said recently it is planning to cut around 15,000 jobs worldwide, 11 percent of its total workforce, in response to the “gravest crisis” the industry has ever seen, caused by the coronavirus pandemic.
Germany has a €3,000 subsidy program to buy a new electric car, while a €50 billion ($57.3 billion) package has been announced for research and innovation in new technologies such as fuel cells and hydrogen.
