To paraphrase a renowned politician: investment, investment, investment! That’s the general theme of October’s news roundup, with an amazing good news story for Volvo, too, and a change of perception amongst Generation Z that will be a positive signal for a benighted and critically-important sector. So without further ado, let’s crack on and review what’s been going on in our key markets this month!
Ford’s £230 million transformation of Halewood Operations.
Ford is to invest £230 million to transform its vehicle transmission site in Halewood, Merseyside, into its first European centre of production for electronic vehicle components.
The brand will use the site to build electric power units for all-electric passenger and commercial vehicles, with production expected to begin in 2024. The move advances Ford’s commitment to have 100% of passenger vehicle, and two-thirds of commercial vehicle sales as all-electric or plug-in hybrids by 2030.
Ford is one of the biggest UK exporters, shipping engines and transmissions to more than fifteen countries on six continents and generating overseas sales of around £2.5 billion annually.
Volvo motors towards $30bn IPO
What a turnaround! Chinese group Geely has successfully transformed the fortunes of Volvo, which was deemed in poor shape when it was offloaded by Ford in 2010 for $2 billion – less than a third of the price the vehicle giant paid for it.
The Volvo brand suffered under Ford’s watch - with management distracted by the number and variety of brands it owned - and lost $1.5 billion in 2009. But after being sold to Geely Automotive in 2010, the Swedish brand has thrived, and now plans to float on the Stockholm stock exchange, with a mooted value of $30 billion. Among its successes, Volvo sold a record 700,000 units worldwide in 2019, not least because Geely introduced the brand to the Chinese market. Geely also successfully took the brand upmarket, overhauling its line-up of models to credibly compete with premium brands such as Audi, BMW and Mercedes-Benz.
Red Bull and Honda collaboration plans
Red Bull and Honda have revealed how they will work together after the Japanese manufacturer stops its official works involvement in Formula 1 at the end of 2021.
Honda will support the two F1 teams in 2022, and in 2023 will transition to full control of its power unit supply by the new Red Bull Powertrains division, with some Honda Racing Development UK employees transferring over to ensure continuity.
The two companies will also work together on projects outside of F1, under a diversification agreement that will encompass young driver development, marketing and branding initiatives and competitive activity across a range of motorsport disciplines.
Manufacturing & Technologies
JCB spends £100m on hydrogen engine project
JCB has announced that it will spend £100m on a project to produce "super-efficient hydrogen engines", with the first machines available for sale by the end of 2022. A hundred engineers have been collaborating on the project, with an additional fifty or more being recruited now.
Chairman Lord Bamford stated that “we make machines which are powered by diesel so we have to find a solution and we are doing something about it now.” He has said that the company will carry on making engines, but that they will be “super-efficient” with zero CO2 emissions.
Green light for Envision AESC’s £450m battery plant
Planning permission has been granted for a £450 million battery manufacturing plant at the International Advanced Manufacturing Park (IAMP) in Sunderland.
Nissan’s battery partner Envision AESC secured permission for the 9GWh-capacity Gigafactory at a recent meeting of Sunderland City Council’s planning committee. The factory will form part of a £1bn partnership with Nissan to create an electric vehicle hub supporting next generation EV production and accelerating the transition to net zero carbon mobility. It is set to create 750 jobs, as well as safeguarding 300 roles from its existing Sunderland plant.
Meanwhile, West Midlands Gigafactory, a public private joint venture between Coventry City Council and Coventry Airport Ltd, has unveiled further plans to develop the UK’s largest battery Gigafactory as it continues to explore investment opportunities with battery manufacturers from around the world. It will be the result of a £2.5 billion investment and create up to 6,000 new highly skilled jobs directly, as well as thousands more in the wider supply chain within the region.
Executives & Leaders
Nick Fry joins McLaren applied
Former CEO of the Mercedes AM Petronas F1 team Nick Fry has joined McLaren Applied as a non-executive Chairman. He was also Managing Director at Aston Martin and Prodrive and held a number of senior positions at Ford Motor Company.
Fry’s arrival is the first board-level appointment since Greybull Capital acquired McLaren Applied in August 2021.
Cosworth is also hiring elite talent, having appointed digital and transformation specialist Stephen Dyke into its newly-created role of Chief Operations Officer, where he will support the company’s growth within the transportation technology sector.
Dyke was previously Managing Director at Ricardo, and led data and digital transformation within Amey, EY and Network Rail.
Gen Z: key to the manufacturing labour shortage?
The privations of the pandemic and Brexit have foregrounded the rising importance of the manufacturing industry, leading to the renaissance of industrial workers. The sector is beset by problems, from creaking supply chains to onsite skeleton crews, and, perhaps more alarmingly in the long term, a labour shortage as a generation retires.
With Gen Z representing over a billion of the global workforce by 2030, the manufacturing sector needs to persuade more of them that it’s the place to build a career. Up to now, many younger workers perceived the sector as low-paid at the entry level, but the pandemic appears to have altered Gen Z’s perception. A survey by Parsable revealed that 56% of polled Gen Z-ers changed their perception of the industry during the crisis, with 77% of those now viewing manufacturing as more important.