Paul Sheerin: 'If we want our highest-value, net exporters to still be here when demand returns, we need to support them'

If coronavirus statistics are our ‘heads’, then the arriving reality of economic crisis is definitely our ‘tails’ and like every other sector manufacturing is feeling that impact more than ever. In the early days of this month the announcement of over 50% job losses at Rolls Royce Inchinnan was a sharp reminder of the major consequences of a world that is no longer running on the same rules as before, and we should remember that for every OEM (original equipment manufacturer) job lost, that number may multiply by two to three times in its supply chain.

It shows how aerospace has been hit hard and early by the overnight effective grounding of civil aviation, and it makes a good test example to consider recovery routes. Recovery requires demand, and demand means people able to fly again, but if having a holiday entails a two-week quarantine period on return, we should check for the unintended consequences that this could bring. For employers, how should they handle those extra two weeks out that would be required? Surely not the responsibility of already-stretched employers, so should holidays or unpaid leave be used for those that choose to take personal travel abroad? Then let's also be careful that we don’t fall into a scenario where sections of professions which can readily work from home can return to holidays with normal timings, whilst those where working from work is essential to what they do are effectively penalised. A consistent global message from the start of the pandemic has been the importance of test, test and test again, and even with the timing complexities of testing with confidence, there must be a test strategy that reduces 14 days to something that allows a vital industry to safely return?

The example is aerospace, but you could pick automotive, oil and gas, and any other number of manufacturing sectors for the same concern of impact until demand returns. Until then, if we want to retain a place in the world as a serious high-value manufacturer and innovator then we first need to act to preserve sectors that have never been more at risk.

The high levels of public borrowing currently supporting that preservation will make many of us feel nervous, well aware that it all must be paid back, and maybe even questioning if every penny has been wisely spent. Normally in a downturn, recovery would be based on agility and resilience, with some central stimulus to get the economy moving to a point where its own momentum takes over. In a year where old normal is gone, and the new one isn’t fully clear, it’s about survival, simply just being there until demand returns.

So yes we could hold up examples of financial support provided where there is concern that not all of the spend has hit the intended target, but who doubts that these mechanisms have moved quickly to minimise damage? Not always perfect perhaps, but what is needed now and will continue to be in the future, perhaps for longer than we might wish.

In a global economy with reduced demand for the foreseeable future, if we want our highest-value, net exporters to still be here when demand returns, we need to support them, just like every other country around the world is striving to do, many of which will have much deeper pockets. Whilst the concern at the rate and depth of public spending will remain, as ever, there is always balance.

Paul Sheerin is chief executive of Scottish Engineering