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Gerry Robinson on the motor industry

Updated Tuesday 9th June 2009

Gerry Robinson explains his thoughts about the car scrappage scheme, government investment and over-capacity in the car industry in an exclusive interview with the Money Programme team.

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I’m Gerry Robinson. I’ve been in business since the 1960s, I’ve been through some good times and some really tough times. I’m interested to find out how the British car industry is going to cope with the current recession, and to see what form it might take for the future.

Why is there over-capacity in the car industry?

There’s over-capacity in the car industry and, incidentally, that over-capacity was there before the current recession because competitors become more efficient in competing with one another. That competition produces capacity which is greater than the demand and, of course, when demand falls off, as it certainly has in this recession, you have an enormous amount of over-capacity in the system.

Why do policy makers and commentators treat manufacturing as a less significant and declining part of the economy?

I think there is a long history of worrying about manufacturing, but I think maybe Thatcher is at the heart of it. There was a sense that she was going to take on the old unionised manufacturing industry and that that, there was a lot of publicity around at that time that left that feeling around that manufacturing was old and staid and difficult. And at the same time, both she and subsequent Labour governments have given greater support to the service industry, in particular the City, and so I think that flavour, despite the fact that manufacturing is enormously important to us, that flavour has hung around that somehow manufacturing isn’t quite as good as services.

What do you think about the car scrappage scheme?

I do think that the money put into the scrappage scheme, which is limited to £300m, is just a bit of window dressing. It would have been far more effective to increase funds available for people to finance car purchases. The reality is that so much government money has gone into really saving the banking system that there just isn’t a lot of money to go around.

Why should the car industry invest in green technology?

Let’s just take a long view. There isn’t any doubt that oil is going to go up in price as supply diminishes and as demand actually increases. Also there is the whole issue of emission control. Legislation is going to have an impact too because, from 2015, the EU are going to be able to fine people who fail to control emissions.

Why doesn't the Government take into account the overall contribution the industry is making when deciding if they should support it?

You know, I don’t think there’s anything more than an issue of what’s in fashion and what isn’t. I don’t think this Government has really engaged with manufacturing in any serious way up until now. Maybe that’s beginning to change, and I certainly hope so. Early in my own career I saw Lesney Products, which was the company that made Matchbox toys, just fail to compete with cheap overseas labour. I’ve also seen though, in making this programme, how we actually can compete and that labour isn’t just the only part, there are other issues that can be taken into account that make us capable of competing, and I think therefore that’s why I’m actually quite optimistic about the future of manufacturing in Britain, but that’s just my opinion. What do you think? Join in the debate with the Open University.

 

 

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