Extending the furlough scheme and giving companies more flexibility could save thousands of manufacturing jobs, according to a survey carried out by the Confederation of British Metalforming.
CBM – which represents manufacturers of fasteners, forgings, pressings, cold-rolled and sheet metal products – found that its members were predicting to cut up to 30 per cent of jobs if assistance was taken away at the end of June, resulting in 12,000 job losses.
In a statement, Steve Morley, president of the CBM, said: “Whilst there was some optimism in manufacturing prior to COVID-19, the sector had suffered from lack of investment throughout the insecurity caused by Brexit. So, whilst our members are all hoping for an immediate bounce back in the economy, the reality is that volumes will increase at a much slower rate and industry will need help to protect workers in the meantime.
“Feedback from our members has been built into a new proposal, which highlights an extension to the furlough scheme and additional flexibility that companies can recall staff before the three weeks are over in light of sudden upturns in activity.
“Our members range from SMEs to large companies supplying direct to OEMs and their day-to-day requirements will differ. The smaller firms may need to call employees in daily if they get new orders, whilst the larger companies – working off schedules – may be faced with having to employ short-time working, possibly three-day weeks instead of five. These different scenarios will all need to be covered by the government’s scheme.”
He continued: “If the Chancellor listens to this, our firms would expect the need to make redundancies to drop from 30 per cent to just 10 per cent.”
Trade credit insurance is another major issue for manufacturers, with cover being reduced or removed and negatively impacting cash flows. There is concern also around access to the government’s Coronavirus Business Interruption Loan Scheme (CBILS) and the reluctance of banks to back viable firms.
“This remains one of our biggest challenges – the restrictions placed on banks are not covering those larger SMEs as the Bounce Back loans have done. The liquidity test for CBILS needs to be less restrictive, after all there is an argument that if you’ve survived three years of Brexit uncertainty, you are a viable business,” said Geraldine Bolton, CEO of CBM.