By J.P.M Sandie
As much as those at MG Motor UK will deny it, the biggest story to come from them last year was the decision to end final assembly at Longbridge. Many words have been scribbled on the rights and wrongs of the decision so I’m not going to dwell on that here. My question for today is what is the point of their lingering presence at Longbridge?
The end of “production” meant MG no longer needed some of the buildings and consequently another parcel of the site has been returned to developer and landlord St. Modwen for redevelopment. However, MG will continue to inhabit a corner of the site which is subject to a 33 year lease (with a 6 month break clause), signed in 2006.
Although, as last year’s news shows, more of the site can easily be returned following negotiation. Still based there are the company owned Sales Centre, offices for MG Motor UK personnel and the SAIC Motor UK Technical Centre (SMTC).
SMTC is perhaps the most significant part of the lingering presence so we shall start there.
In some quarters SMTC is hyped up in terms of both involvement and size. The number of engineers is frequently exaggerated with 500 being an oft-quoted figure. However, the most recent set of accounts states the average headcount (including administrative support) for 2015 was actually 263. This number is inclusive of short-term contractors and in another part of the accounts average monthly staff numbers were stated as 153 (excluding contractors?). The 263 total was a drop of 24 from the 2014 accounts with SMTC citing difficulty in recruiting new engineers with the right skills as an explanation. One might suggest that falling staff numbers also indicates staff retention issues.
Since March 2009 SMTC has been based in one of the old admin blocks at Longbridge. As part of this they (SMTC is a separate entity to MG Motor UK) make a payment to MG to cover half the site costs. In the 2015 accounts this payment was £8million. Due to the size of even the remaining site Longbridge proves quite expensive in terms of costs. Moreover, St Modwen aren’t a charity and have no sentimental interest in automotive business being continued on the site so one can assume that the lease is at least at market value. Better value may be found with a new home.
The present base of the studio/engineering building is less than optimal in a number of ways. First of all, the building is fairly old and has merely been re-purposed rather than something tailored to the needs of the engineering and design teams. Secondly, the Midlands location sees SMTC having to compete with the success story that is Jaguar Land-Rover for staff. Tatuar have large facilities for design and engineering near Coventry at Gaydon and Whitley. This is probably a huge factor in the issues SMTC have had in recruiting and retaining staff. Suggestions have floated around that engineers have gone to SMTC to build experience before getting a job with Jaguar.
Moving to a new site holds advantages. First of all a new building could be tailored to the needs of the team more directly and have room for expansion as necessary. It would also allow SAIC to make a statement about their involvement in Britain. As things stand, their site is only subject to a lease which can be terminated at any time. In contrast, developing their own site would have a greater degree of permanence and be a vote of confidence in Britain. In turn, this will create more of a feel good factor about the business and that might just make recruiting easier. What investment there has been at SMTC is mostly on equipment that can easily move to new facilities.
Whilst moving to a new area may be too deep an uprooting for current staff there are plenty of new developments of business parks across the West Midlands. Indeed, due to the pollution on the site, the greatest likelihood is that the latest part of Longbridge to be handed over to the developers will probably become one itself. As an example, leading Chinese firm Changan have a small R&D facility at a recently built business park in Solihull.
As for MG Motor UK, there isn’t a strong case for them staying at Longbridge either. Management staff could be housed in office space elsewhere. Indeed, SAIC’s £30million investment on a building on Piccadilly bought six floors of it.
Currently the Piccadilly showroom is another part of the MG empire that, on the surface, makes little rational sense. It houses a showroom which doesn’t actually operate as a dealership. The real purpose seems to be advertising MG to passing Chinese tourists and make them believe the firm is big business in Britain. An idea no doubt dispelled by the lack of SAIC MGs on the roads within the M25 due to the non-existent dealer network in the area.
If this office space isn’t suitable or relocation is an issue for existing MG Motor UK staff there is no shortage of office space around Birmingham. Any economies MG Motor could make would generate a surplus that could be better spent bringing in new professionals to add fresh impetus or add to the pot for marketing important new products.
The Sales Centre may present fat worth trimming. Back in the early days of the MG re-launch the Elephant House could be seen as a pilgrimage for prospective customers as purchasing a car from the factory was attractive to the most enthusiastic enthusiasts. Now that there isn’t a factory and MG have one of their strongest geographic concentration of dealers in the Midlands region is there really a point? The location has also never been conducive to passing trade whilst there’s been a move towards “Motor Miles” where franchise sites cluster together and punters can easily kick tyres on a number of marques.
One now has to ponder the point of MG Motor UK still renting parts of the Longbridge site. At numerous times, MG UK has sought to distance itself from the products of ancestors who once occupied the site making any sentimental talk of a “historic home” seem hollow. Meanwhile, recent announcements have seen enthusiasts of legacy products become ever more hostile towards the new firm and their occupation of the site. Maybe a clean break and the chance to move on is required? Right now we have an engineering facility that could and perhaps better – considering facilities and staffing issues – be accommodated elsewhere. Any investment and move to owning rather than leasing land and premises could also be seen and spun as a vote of faith in and a strong link to the UK which might just improve the shaky view many have of the brand. That is of course assuming the almost temporary nature of the status quo doesn’t suit SAIC.