Any Government loan to Jaguar Land Rover should come with the proviso that the money cascades down through the West Midland automotive supplier base.
That was the call from the region’s car component suppliers as the sector, already battered by the major downturn in car production, voiced concerns that more jobs would be lost.
Thursday saw 137 positions disappear as Stokes Group, a supplier of components including powertrain, chassis, suspension, axle and door parts, shut its Walsall factory.
Experts have estimated that 60,000 people not employed by JLR will lose their jobs this year if the Government fails to provide financial assistance to the luxury West Midlands-based carmaker.
There were also calls for a third party to administer any loan given by the Government to ensure support effectively reached suppliers to Jaguar Land Rover.
Gerry Dunne, managing director of Birmingham-based pressings, tooling and machining firm Westley Engineering, said a Government refusal of a loan or loan guarantee for Jaguar Land Rover would be “another nail in the coffin” of companies like Westley which are already battling a drastic drop in orders.
But he stressed that any Government support for JLR should explicitly tie the carmaker to a commitment to source parts from a UK supply chain.
“By all means let’s try and get the Government to give them help, but let’s also put restrictions on those companies to start resourcing their supply from locally-based companies.
“By locally-based I’m not referring to the whole of Europe, as some people understand the phrase, I’m referring to the Midlands and the UK.”
Westley, which is a second and third-tier supplier to Jaguar Land Rover, employs 30 staff, 20 of those working on the pressings side which sells to a direct Jaguar Land Rover supplier.
The firm has had to bring in a two-and-a-half-day week for its pressings workers as well as putting the workforce on an extended Christmas break until 12th January.
Mr Dunne painted a bleak picture of the situation facing the firm.
“We have just done an analysis of our orders for the pressing side for the next couple of months - they are 65 per cent down on last year. Any further decrease will make us go into a very serious situation.
“If JLR were to go into difficulties it would put us further in the muck than we are at the moment. It’s another nail in our coffin.”
Mr Dunne’s comments were echoed by John Pembleton, managing director of Textile Assemblies, a second-tier supplier which manufactures interior trim parts for Jaguar Land Rover.
JLR constitutes in the region of 70 per cent of business for the Birmingham-based firm.
Mr Pembleton, who lives in Solihull and worked at Land Rover for 20 years, said: “I support the loan - it’s important we keep Jaguar Land Rover going. If JLR wasn’t around it would be devastating for smaller companies like ourselves.”
But like Mr Dunne, he believed there should be a UK jobs caveat to any Government support with a direct stipulation that the money must filter through to the UK supply chain.
“It’s UK taxpayers’ money and it should be linked to supporting work in the UK.
“JLR should also consider some of the work that isn’t in the UK at the moment. Now that the Euro isn’t so competitive, maybe they should bring some of that work back,” he added.
Rachel Eade, programme manager at Accelerate, a body set up to support West Midland automotive suppliers, said the best way to ensure Government assistance effectively filters down to the West Midland supply chain would be if a third party administered any loan.
She suggested bodies such as Advantage West Midlands could ensure that money was targeted in a way which would best support the industry as a whole.
Ms Eade said a lack of communication from carmakers was a major difficulty for suppliers, whose order books often look healthy enough but who have seen orders pulled or delayed at the last minute.
“They have bought materials, often at premium prices, they have added value, paid the cost of the facilities and staff and they end up with finished goods,” she said.
“But they are not receiving payment for them and they then have to store them.”