infoly.net

Comment: Government's actions are a useful first step but needs to do more

Apr 9, 2026 By

It was more bad news for UK auto last week when President Donald Trump announced 25 per cent tariffs on all car imports to the US.

This will have a huge impact on the UK and EU auto industry which was already being squeezed by falling sales in China, stagnant demand in Europe and slow electric vehicle (EV) take-up. It's nothing short of a perfect storm for the auto industry.

Cars are the UK's number one goods export to the US, at £8.3 billion in the year to the end of quarter three in 2024, out of around £58 billion in total UK exports to the US.

Firms like JLR, Rolls Royce, Bentley, Aston Martin, Mini, McLaren and Morgan will be most affected. The US is the UK's largest auto export market after the EU.

There will be a particular impact on the West Midlands which is the number one exporting region to the US (think JLR and Aston Martin, for example).

Much of the UK auto industry is already operating well below capacity and the tariffs will be a further hit for a struggling industry. Production cuts and job losses are likely. The Institute For Public Policy Research puts 25,000 jobs at risk.

Email newsletters

BusinessLive is your home for business news from across the West Midlands including Birmingham, the Black Country, Solihull, Coventry and Staffordshire.

Click through here to sign up for our email newsletter and also view the broad range of other bulletins we offer including weekly sector-specific updates.

We will also send out 'Breaking News' emails for any stories which must be seen right away.

LinkedIn

For all the latest stories, views and polls, follow our BusinessLive West Midlands LinkedIn page here.

That is a big underestimate as it fails to account for tipping points if plants fall below minimum viability levels and close completely, with a further impact on the supply chain.

You can double or triple that number in terms of the jobs at risk. The UK is looking to do a quick trade deal with the US to avoid tariffs hitting UK auto too much.

I think that is doable in a narrow sense on cars as the UK has a ten per cent tariff on US imports. Both sides could scrap auto tariffs completely and both would see it as a win. That has to be a key, immediate goal for the Government.

A broader trade deal to avoid Trump's ten per cent tariffs on all UK imports will be much more tricky and will see the US wanting concessions on the digital services tax, more access for US services to the UK in areas like health, and a deal on agriculture.

Think chlorinated chicken and hormone injected beef. The Government has already ruled out the latter.

To help the auto industry, Prime Minister Keir Starmer this week set out changes to the UK's Zero Emission Vehicle (ZEV) mandate.

This was set out as a response to Trump's 25 per cent tariff but was anyway on the cards after a huge outcry from industry last year over policy and a quick-round consultation by the Government.

These changes have rather cleverly been marketed as a response to Trump's Tariffs. Nevertheless, what the Government unveiled is useful as far as it goes.

The ZEV mandate policy had been inherited from the previous government and was a dog's breakfast of a policy which risked fining domestic producers for not hitting overly optimistic mandated targets, with them then likely having to buy credits from the likes of Tesla and Chinese EV producers.

Fining firms making investment in the UK was always a bad idea and giving auto makers more flexibility to hit the targets makes a lot of sense.

Another welcome change is allowing hybrids like the Toyota Prius or Range Rover Evoque hybrid to be sold through to 2035 (after the 20203 ban on pure petrol and diesel cars). Hybrids are a good first step for many people and help in the transition to electrification.

And 2035 as a target for this is fine: the average life of a car is 15 years so that still means we can be on track to get to Net Zero by 2035.

Other good news came in the form of reducing fines for non-compliance and exempting smaller producers like Aston Martin. So far, so good.

But what isn't clear is whether there is any new cash for speeding up the roll out of the charging infrastructure.

The Government ‘reaffirmed' £2.3billion for a range of objectives including infrastructure (in other words just reannounced money that was already committed).

While the government says it is on track to reach its target of 300,000 public chargers by 2030, many of these are in London and the South East.

Elsewhere, the charging network is patchy and a big deterrent to EV take up. There are also some glaring gaps in the new policy stance.

Firstly, there are no incentives to boost demand for EVs. If the Government wants to speed up the market for EVs, whacking the supply side with a big stick in the form of mandates is not enough.

Carrots are also needed for the demand side. Think of temporary VAT cuts to make EVs more attractive and boost demand. Sadly, the Government's self-imposed fiscal straight jacket rules this out.

But, even if the UK gets a trade deal with the US, Trump's tariffs will hit world trade, growth and demand for UK exports.

There will be indirect effects on UK economic growth anyway which makes hitting Rachel Reeves' eye-wateringly tight fiscal rules even more challenging.

At some point, they will need to be relaxed. Last but not least, the Government's early-awaited yet delayed industrial strategy is needed sooner rather than later.

It has been delayed by the Government while it is being repainted from green to battleship grey as the drive to re-arm gathers pace given Europe's inability to rely on the US for defence under Trump.

Boris Johnson sadly scrapped the last industrial strategy so as to ‘build back better'. Building back badly was perhaps a more apt description of what then unfolded as growth stagnated.

Putting a strategy back in place is vital to help advanced manufacturing - and automotive - on a range of issues like attracting investment into making EVs, rebuilding the supply chain (including on batteries), retraining and reskilling workers and cutting energy costs.

Starmer has said the world has changed and we need to respond. It has, and while the Government's announcements this week are welcome, much more will be needed going forwards if the auto industry is to thrive in the UK.

Highly Recommended

Tekmar Group set for 'growth like never before' after posting strong earnings boost

Bosses at offshore specialist Tekmar say its markets are aligned “for growth like never before” after seeing its earnings rise to the highest level in five years. Based in Newton Aycliffe, Tekmar Group offers technology, services and products to customers around the world, with offices, manufacturing facilities, strategic supply partnerships and representation in 18 locations across Europe, Africa, the Middle East, Asia Pacific and North America. Last December, newly appointed CEO Richard Turner announced a three-year plan to transform Tekmar and realise its potential, after seeing headwinds which have impacted offshore renewables and the conventional energy markets subsiding. Now the firm has issued full year result for the year ended September 2024, highlighting a year of stabilisation. Revenues were £32.8m, down on the previous year’s £35.6m, but adjusted Ebitda (earnings before interest, taxes, depreciation, and amortisation) was £1.7m, up from £600,000. Its operating loss was reduced from £7.9m to £3.8m in the year, a figure it said reflected the successful execution of the group’s profit improvement plan, having worked through a remaining low margin backlog. The group held £4.6m of cash at the year end, with net debt of £1.6m - a figure which excludes the SCF Capital Partners £18m finance facility which its said remains undrawn and is available to drive growth through acquisitions. During the year, the group completed the divestment of its subsidiary, Subsea Innovation Limited for £1.9m, in line with its strategy to drive profitable growth. At the end of January it said its order book stood at £16.4m. In its Stock Market notes to shareholders, Tekmar said: “The board is encouraged that the market environment is improving and supports sustained demand for Tekmar’s technology and engineering services across our markets. Moreover, we believe Tekmar’s differentiated technology positions the group to outperform this improving market. This is supported by the group’s developing sales pipeline, which the board expects will convert to orders and revenue over time.” Richard Turner, CEO, said: “Overall, these results demonstrate we now have a stronger platform from which we can execute our medium-term plan to deliver true scale and diversification. FY24 was a transitionary year for Tekmar, where we focused on the basics - providing high-quality engineering, delivering on time and maintaining consistent commercial discipline. “This supported the group reporting its highest level of adjusted EBITDA since FY20, and a material improvement in gross margin to 32%. Looking ahead, our markets are aligned for growth like never before. Our strategy looks to capitalise on our industry pedigree to drive organic growth across all revenue streams, leverage our operational gearing to enhance our returns on sales, drive value through strategic M&A and generate cash to build our reserves and fuel our growth.”

Pearson Engineering works on robot mine sweeper being trialled by British Army

North East defence specialist Pearson Engineering has helped to develop a robot mine sweeper which is now being trialled by the British Army to clear explosives on the front lines. The Newcastle company, based in the famous Armstrong Works, has worked with the Defence Science and Technology Laboratory (Dstl) to create Weevil, a device which is hoped will replace current mine-clearing methods that included Trojan armoured vehicles, which require a three-person team to operate in hazardous areas. The robot mine sweeper is said to be able to clear minefields quicker and safer than present capabilities, reducing risk to soldiers on the front line and it can be operated via remote control by just one person from several miles away. The prototype – which is fitted with a mine plough to clear a safe path – has been successfully tested on a surrogate minefield in Newcastle, and the technology is now being passed to the British Army for further development and more trials. Ian Bell, CEO at Pearson Engineering, said: “We are proud to contribute to such game-changing capability. It brings together decades of development by Pearson Engineering, delivering the very best of minefield breaching technology proven around the world, and contemporary developments in teleoperation. “Work with UK MOD is an incredibly important part of our business, ensuring our troops get the latest in combat engineering capability and that we can effectively defend our nation and allies.” Luke Pollard, minister for the armed forces, said: “It won’t be a moment too soon when we no longer have to send our people directly into harm’s way to clear minefields. “This kit could tackle the deadly threat of mines in the most challenging environments, while being remotely operated by our soldiers several miles away. “It demonstrates British innovation, by British organisations, to protect British troops.” The robot was developed by the Defence Science and Technology Laboratory (DSTL) and Newcastle-based firm Pearson Engineering. The Ministry of Defence said there are no current plans to provide it to Ukraine. DSTL military adviser Major Andrew Maggs said: “Weevil is the perfect combination of tried and tested technology and modern advancements.

Newcastle College launches £850k advanced manufacturing skills facility

Leaders from some of Tyneside's top manufacturing and engineering companies have attended the launch of Newcastle College's new Advanced Manufacturing Suite. Delegates from firms such as Siemens Energy, Baker Hughes and Shepherd Offshore were shown the newly kitted out facility at the college's Rye Hill Campus, where cutting edge technology including robotics, 3D modelling equipment and CNC machines have been brought in to train students who could go on to careers in advanced manufacturing. About 500 students per year are expected to pass through the facility, which upgraded existing classroom and workshop space at the college, under the direction of an employer advisory board. Newcastle College principal Jon Ridley said the move is in response to consultation with industry about future skills needs, and part of a wider investment strategy across city centre campus, its Aviation Academy at Newcastle International Airport and its Wallsend-based Energy Academy, where students are trained for subsea and renewable energy industries. The new Advanced Manufacturing Suite will also be used to upskill local workers. He said: "At Newcastle College our courses are designed in collaboration - we co-create - with employers. So where employers are talking about the kit and equipment that's needed - we go out and purchase that equipment. "The difference in being a student at Newcastle College and a student at sixth form or a university, is experiential. It's about practicing and honing the skills on the kit." The array of workshop equipment supplied by Mach Machine tools spans different sub-sectors of advanced manufacturing with the college hoping to turn out workforce-ready candidates who can use the type of machinery and systems found on the workshop floor at local employers. Learners will have the opportunity to program robotic arms of the kind found on production lines and get to grips with precision milling machines used by component manufacturers. Overall, the investment in the machinery together with building work and IT required alongside it is worth £3m. Mr Ridley said the suite is intended to blend theory and applied learning - breaking traditional barriers between classrooms and workshop. He added: "It's 100% for the region and that's the thing about Newcastle College, we do have a large number of 16-18 year-olds and there are about 13,000 students here per year. "Only about 6,500 of those are kids and the rest are adults, and of those adults you've got people looking to retrain, re-skill and up-skill to enhance their careers. So to meet the region's ambitions, facilities like this are going to be the engine of that ambition."

Rolls-Royce shares could rocket 50% after stellar two-year rally, analysts claim

Analysts at Bank of America have predicted that shares in engineering behemoth Rolls-Royce could surge by an additional 50% following an already impressive two-year rally. On Friday, analyst Benjamin Heelan raised his price target from 830p to 1,150p, as reported by Bloomberg, which led to a mid-day share price increase of over three per cent, as reported by City AM. This news arrived just one day after the London-listed company reinstated dividend payouts for the first time since the pandemic and announced a £1bn share buyback scheme. The appointment of CEO Tufan Erginbilgic in January 2023 marked the start of a remarkable recovery for a company that was on the brink of bankruptcy during the Covid-19 crisis. A combination of soaring travel demand and escalating military expenditure worldwide has generated significant demand for Rolls' jet engines and defence technology. Heelan noted that the firm had reaped the benefits of robust deliveries, pricing, and an enhancement in the reliability of its engines. Travel demand has remained strong over the past year, with numerous airlines, including British Airways owner IAG, reporting record profits. On Tuesday, Prime Minister Sir Keir Starmer announced the largest increase in defence spending since the Cold War. From April 2027, it is set to rise to 2.5% of GDP, with a goal to reach 3% by the end of the parliament. Rolls-Royce is targeting profits of between £3.6bn and £3.9bn by 2028 and free cash flow of between £4.2bn and £4.5bn. Over the last 12 months, shares have risen by more than 100%.

Manufacturer Ebac defaults on loan as challenges continue, new accounts show

Challenging times at North East manufacturer Ebac have continued with the firm defaulting on a loan from a retirement fund, new accounts show. The Durham business, which makes washing machines, dehumidifiers, water coolers and heat pumps, has published delayed accounts for 2023 which show the continuation of a “challenging” few years. Recent years have seen Ebac investing heavily on new products, including domestic heat pumps suitable for the average UK home, and while the firm’s work on these products is beginning to bear fruit it has impacted profits, as well as its workforce, which was reduced from 254 to 188 as part of efforts to reduce its costs and boost performance. Accounts for 2023 show turnover of £17.75m down 18% on previous year’s £21.7m, although its operating losses narrowed from £2.7m to £1.53m. The accounts showed administrative expenses were significantly reduced from £8.2m to £5.95m, reflecting its restructuring initiatives. During the year the firm defaulted on a loan to the Trustees of Ebac Limited Retirement Benefit, a pension fund for founder John Elliott and family members, when it couldn’t make repayment on a loan of £1.57m. It said the company is in discussion with the trustees of the scheme to roll over and extend the loan repayment “however no agreement has been reached in relation to the proposal but the trustees have not indicated they will seek repayment of the loan before the end of the term of the loan”. Within the accounts, founder John Elliott said the firm continued with its work on new product development, although the investments weakened its bottom line. He said: “Despite a challenging market environment, the accounts for the year ending 2023 demonstrate an improvement in our financial performance compared to 2022. Although turnover is down our losses have reduced. This decrease was primarily attributable to necessary strategic changes. “During 2023, we continued with product developments that are looking very positive. Our British-designed heat pumps and home ventilation and dehumidification systems have USP’s that are receiving strong interest from landlords, social housing organisations and national builders. These products also have synergy with our technology and market know how. “While these products have not yet translated into revenue growth, we strongly believe they will deliver significant profits and will make Ebac a leader in energy-efficient and sustainable home solutions. We have spent more than £3m on these projects which has meant high borrowings and weakened our balance sheet. “We are currently going through a re-financing process where the directors and some of the related party liabilities are going to be capitalised to stabilise and strengthen the balance sheet.” Following publication of the 2023 accounts a spokesperson warned that results for 2024 will show a worsening if its financial position, but said that the family firm had put in millions of its own money to transform the company - a move which it said was already working in the new financial year. The spokesperson for Ebac said: “Despite a challenging market, the accounts for the year ending 2023 demonstrate an improvement in our financial position compared to 2022. We expect our 2024 year to be our worst in terms of losses, due to huge investments in new products including a new line of heat pumps and loft ventilation systems.

Versarien completes sale of South Korean factory for more than £600k

Gloucestershire-based engineering firm Versarien has completed the sale of its South Korean factory and equipment for more than £600,000. The agreement with MCK Tech was announced last March as part of a strategy to monetise intellectual property (IP) through licensing. The transaction was meant to complete last July, but was delayed after MCK Tech asked for an extension to the deadline. Longhope-based Versarien has now received the final payment of £92,000, plus accrued interest, it announced on Monday (March 3). In total, Versarien has received £611,000 after a £6,000 warranty deduction from MCK Tech for its Korean plant and equipment. Under the terms of the deal, AIM-listed Versarien has granted an exclusive licence to MCK Tech for an initial period of five years, to use five patents owned by the firm in their business in Korea. MCK Tech will pay Versarien an amount equal to 4.5% of the total sales revenue earned from products manufactured using the IP. If the sales revenue derived from the IP is less than £250,000 over the first two years, the licence will terminate and MCK Tech will pay Versarien £40,000 for use of the IP. In June, Versarien said it was “optimistic” about the future after reporting a narrowing of losses. In a set of unaudited interim results, the firm reported pre-tax losses of £1.77m - down from £3.4m the year previously - for the six months ended March 31, 2024. In December, the company revealed its Spanish subsidiary has secured a €804,000 grant. Versarien said at the time that the money would be used by Gnanomat to finance a two-year project relating to a high-tech energy storage devices. Versarien also signed an agreement with infrastructure group Balfour Beatty last year to develop a range of low-carbon, graphene‐infused, 3D‐printable mortars for civil construction.

Cardboard packaging firm DiamondPak in job creating £2m investment

Cardboard packaging specialist DiamondPak is investing £2m in new machinery to cement its position as the UK’s leading supplier to the e-commerce market in an expansion that will increase its headcount by 20%. The Pontypool-based business manufactures more than 50 million corrugated cardboard packages a year, much of which it supplies to leading global e-commerce businesses. DiamondPak is investing in new technology, including purchasing a new double-sided printing machine to help fulfill even more orders. The investment will help the business to grow further and allow it to employ up to 20 additional members of staff over the next couple of years. DiamondPak was founded in 2008 and is based in Skewfields, near Pontypool in Torfaen. It now employs more than 100 people and has an annual turnover of £15m. It designs, manufactures, assembles, and delivers a range of corrugated packaging from cardboard shipping boxes to promotional and protective packaging. The growth of online shopping in recent years, especially since the pandemic, has driven the e-commerce market to new heights. Figures show the UK is now the most lucrative e-commerce market in Europe, with an estimated 50 million users in 2024. The market is expected to grow by 7% over the next four years. DiamondPak chief executive, Russell Davies, said: “The UK e-commerce market is huge, and growing. DiamondPak is already the leading independent full line supplier of corrugated packaging to the e-commerce market in the UK, and this significant £2 million investment will help consolidate our position. It will also give us the enhanced capacity and flexibility we need to serve the evolving demands of the market in the coming years. “As a proud local employer in a region known for its manufacturing history, we’re especially pleased that this investment will help us grow our workforce even more, and allow us to create up to 20 skilled jobs in Pontypool.”

Spirax Group reports fall in full-year profits amid restructure

Cheltenham-headquartered engineering firm Spirax Group has reported a fall in profits for the financial year. The FTSE-100 company posted a 1% fall in reported revenue to £1.6bn for the 12 months to December 31, 2024. Adjusted profit before tax fell to £288.2m from £309.2m the year previously. The company said global industrial production growth for the full year was lower than had been forecast and second half recovery did not materialise with industrial production falling in key markets such as the US, Germany, France, Italy and the UK, representing around 50% of group sales. However, Sprirax added that all three of its business divisions delivered organic sales growth during the year with adjusted operating profit margins in line with expectations. According to the group, its restructuring strategy will realise annual savings of around £35m to fund investment in future organic growth. The cash costs to deliver the programme will be mostly incurred in 2025, Spirax said, and are expected to be around £35m, with an additional non-cash cost of £5m. The board declared a final dividend of 117.5p per ordinary share - up from 114p in 2023 - bringing the total dividend for the year to 165p. “The global macroeconomic environment remains highly uncertain,” the company said in a statement on Tuesday (March 11). “We remain cautious on industrial production in 2025 and have adopted more conservative assumptions in our planning. “We expect trading conditions in China to remain challenging as customers continue to reduce investments in the expansion of manufacturing capacity.” Looking to 2025, Spirax said it expected organic growth in group revenues consistent with that achieved in 2024 and “modestly higher” growth in the second half. It added that corporate costs for the year would be around £40m, reflecting higher levels of investment in growth. Nimesh Patel, group chief executive, said: "All three of our businesses delivered organic sales growth with margins in line with our expectations, despite weaker than expected industrial production in the second half. I am particularly pleased with progress in electric thermal solutions, where improvements to manufacturing throughput supported higher sales and improved margin." Mr Patel said the company was “well underway” with actions to simplify the organisation and better leverage resources to support future growth. He added: "Mindful of the outlook for industrial production, I remain confident in the execution of our strategy and in the strength of our business model.”

JLR to 'pause' shipments to US after Trump tariffs

Car giant JLR has announced a pause in shipments to the United States to tackle "address the new trading terms" imposed by Donald Trump's tariffs. Thursday saw the imposition of a 25% tax on all foreign-made vehicles entering the US, followed by the introduction of a 10% "baseline" tariff on global imports on Saturday morning. JLR, formerly Jaguar Land Rover, is one of many firms worldwide contending with the repercussions of the new trade rules and the resulting market instability. In a statement issued on Saturday, a JLR spokesperson confirmed: "The USA is an important market for JLR's luxury brands. They added, "As we work to address the new trading terms with our business partners, we are taking some short-term actions including a shipment pause in April, as we develop our mid- to longer-term plans." Global trade has been significantly impacted following President Trump's declaration of the tariffs at the White House this past Wednesday. The fallout was significant, with the FTSE 100 enduring its worst trading session since the pandemic began on Friday, and comparable downturns affected Wall Street as well. The FTSE 100 saw all but one stock fall, with Rolls-Royce, the banking sector, and mining companies witnessing substantial losses. Prime Minister Sir Keir Starmer has pledged to “do everything necessary” to protect the UK’s national interest after the tariffs were imposed, saying ministers are “ready to use industrial policy” to support businesses. Writing in the Sunday Telegraph, he said “the immediate priority is to keep calm and fight for the best deal”. He said that in the coming days “we will turbocharge plans that will improve our domestic competitiveness”, and added: “We stand ready to use industrial policy to help shelter British business from the storm.” London's leading stock market index, the FTSE 100, dropped 419.75 points, or 4.95%, to close at 8,054.98 on Friday, marking the largest single-day fall since March 2020 when the index lost more than 600 points in one day. The Dow Jones also took a hit, falling 5.5% on Friday as China matched Mr Trump's tariff rate. Beijing announced it would retaliate with its own 34% tariff on imports of all US products from April 10. Ministers are still striving to secure a deal with the US, hoping that it could provide some exemption from the tariffs. Rachel Reeves stated on Friday that the Government is "determined to get the best deal we can" with Washington.

Eyewear firm monitoring Donald Trump's tariffs 'closely' as revenues fall

West Country-headquartered eyewear firm Inspecs says Donald Trump's tariffs are not expected to impact consumer demand and it is monitoring the situation "closely". The Bath-based company said its non-US-based businesses were not currently affected by the recent changes announced by the US President and that selective pass-through of cost increases would "largely mitigate" the situation. It also said it was focused on delivering operational efficiencies. Inspecs designs and manufacturers eyewear, frames and lenses, with many produced in countries such as China, which have been slapped with high tariffs by President Trump. The company only opened a new factory in Vietnam last year. "Notwithstanding the recently announced tariffs and caution in relation to market conditions, compelling new projects in the pipeline give us confidence in delivering on market expectations for 2025," said chief executive Richard Peck. In a set of unaudited preliminary results for the year ended December 31, 2024, Inspecs reported a group revenue decrease of 2% to £198.3m. Total operating expenses were reduced by 0.3% despite inflationary pressures, the firm said on Thursday, while underlying EBITDA - a measure of performance - reduced by 2.2% to £17.6m. Inspecs said it expected a "significant drop" in net finance costs in 2025 amounting to around £700,000 and that trading was in line with market expectations. "Inspecs demonstrated resilience in 2024 despite challenging macroeconomic conditions," said Mr Peck. "However, our continued focus throughout the year on the integration and simplification of our business has been significant. "We successfully got our new factory in Vietnam up and running, which has significantly improved our capacity. We also strengthened our brand portfolio by introducing several new brands and expanding our existing ones, all the while working on our supply chain and efficiencies. "Additionally, we have focused on growing our customer base in key markets. These strategic initiatives allowed us to improve our margins, maintain our administrative costs in an inflationary environment, and reduce our net debt, setting us up well for the future." Mr Peck said the first quarter of 2025 had "laid the groundwork" for a "pivotal" year for the company. He added: "As we move forward, the focus remains on sharpening efficiency, streamlining operations, and advancing key initiatives."