The SMMT has launched a Safe Harbour Scheme to prevent insolvencies and save jobs across the auto sector as it grapples with devastating effects of the coronavirus crisis.
The industry initiative allows multiple companies to come together support critical suppliers without falling foul of anti-competition rules. The Scheme aims to help preserve UK’s automotive manufacturing capability and capacity and prevent further ‘hollowing out’ with at least 14,000 sector jobs already lost this year.
The Safe Harbour process begins with a confidential conversation between a company experiencing difficulties and SMMT to determine if they want to proceed, and there is no obligation to do so. For businesses deciding to enter Safe Harbour, SMMT facilitates engagement with all relevant stakeholders and an Independent Third Party (ITP) to identify and implement measures to ensure business continuity. These need agreement from all parties and could include steps such as temporary improved payment terms and/or financial support or a new partnership or investment opportunities.
The Safe Harbour Scheme and framework has been developed by SMMT with support from major manufacturers, the Automotive Council and Department for Business, Energy and Industrial Strategy (BEIS), alongside ITP partners Deloitte, Grant Thornton, KPMG and RSM. The scheme operates within competition compliance requirements set out in UK and EU regulations. It is available to any company operating in the UK automotive sector.