Thank you, Lord Mandelson, for joining us tonight and for the effort you have made in recent weeks, championing within Government the cause of the car industry and the manufacturing sector as a whole.

But for all your good works, I know you know already, that we are not out of the woods yet.

So please feel free to leave that large bag of money under your table before you head back to London tonight…

Ladies and gentlemen, it is really my pleasure to speak to you this evening.

I have the privilege to run a major company from here in the West Midlands.

It also happens to be one of the UK’s leading global, high tech and successful companies.

These adjectives may surprise anyone whose knowledge of Jaguar Land Rover, or of the motor industry, has been formed solely by recent – sometimes hysterical – media coverage.

This would have given you the impression that I am in charge of some sort of basket case – a company making outdated and unwanted vehicles, desperate for a state hand-out to delay the inevitable.

This is a view of our company, and indeed the British motor industry, which seems to be written by people who’ve been asleep since the 1970s or who live by an ideology that has yet to grasp the implications of the economic situation we face.

It is certainly not a picture I recognise or that is supported by the facts.

I am very pleased to see that it is not something Lord Mandelson recognises either.

What I do recognise is a company which is the UK’s biggest automotive exporter whose sales grew by 30 percent in the last five years and whose brands are desired from Milan to Moscow, from Birmingham to Beijing.

It is a company, too, which is one of the country’s biggest investors in R&D ensuring our vehicles keep their technological edge on our competitors. In fact we are one of the top 10 R&D investors in the UK and top 150 globally.

A company, as well, which, in the 18 months before this credit crunch, made a pre-tax profit of over £600 million in an industry internationally recognised for its efficiency and quality.

But it is also one of the many world-class manufacturing businesses throughout the UK struggling with the impact of this unprecedented financial crisis.

What we have seen – and what we are suffering from – is the result of a massive collective failure of leadership of those who run our financial systems.

It goes beyond the banks and their boards to include their auditors, the rating agencies, the regulators and Treasury Departments across the globe as well as financial journalists and, yes, ourselves for all failing to take action over a ten year period.

We need to make sure this does not happen again without falling into the trap of Sarbanes-Oxley type over-regulation which will stifle any recovery.

So I am not here in defensive mode. We have been badly let down but I have confidence in our vehicles and our future.

Nor do we seek a bail-out. As Peter said rightly last week, only failed companies seek bail outs.

Rather, like the rest of the UK’s industrial base, what we want from the government is simply what we should be getting from those same banks who caused this crisis in the first place.

Short term loans or loan guarantees to keep the wheels turning during what is a once-in-a-century economic recession fixing problems of credit insurance and stimulating consumer demand.

Somebody needs to put oil back into the engine.

I am pleased to see that in recent weeks the Government has recognised this need – and is prepared to take action, but we need it quickly and urgently to help manufacturing industry over the next few months.

I know the Secretary of State has asked his department to investigate further ways and means of stimulating demand and to move to execute his plan with utmost urgency.

It would now be a tragedy were the aid package not to be delivered in time to avert the industrial consequences of another quarter like this one.

We’ve already seen tens of billions of support provided by the Germans, the French, the Swedes and the Americans for their automotive industry, which some of the car makers in the UK can also benefit from.

In fact, one of our German competitors described this as “creating a level playing field” on the same day as the Germans announced massive subsidies for their domestic industry.

Obviously, something was lost in translation between Munich and Birmingham! It wouldn’t be the first time.

So we need action, too, not just for the short-term task of protecting jobs and skills now but also, as the Business Secretary said last week, to ensure we have the right foundations for investment in the economic success in the future.

For, Ladies and Gentlemen, tonight we are rightly anxious about the future of manufacturing.
Manufacturing matters. It has been the bedrock of Britain’s economy.

It has been our ability to make, allied with our ability to sell, on which the wealth of this country rests.

Over the last quarter of a century, this reliance on manufacturing and trade has been overshadowed.

Too much of our economy has been dominated by the service and financial sectors.

In the last few months, we’ve seen the folly of the over-emphasis on finance.

City de-regulation was right, and it became an enormous engine for growth and will be again.

But along with the North Sea bonanza, its success added directly to UK industry’s costs by distorting the strength of the pound and boosting interest rates.

Neither sector alone can provide the long-term sustainable growth we need to create the wealth for schools, hospitals, culture and our standard of living. We need a better balance.

As in the past, that will depend upon our ability to design, engineer, develop and make things.

We have a particular genius for this. But you can’t rely on genius alone.
And for decades, we haven’t been spending enough on science, innovation and skills to support our natural creativity.
We have started to put this right – and I welcome the Government’s efforts here – but I worry not fast enough.
Across the world there are those that can produce what we build cheaper, driving down wages and the value of our output.
The reckless indifference of past industrial policy has left a technology and skills gap that we need to continue closing quickly.
But we can’t lay off all the blame for past mistakes on others.
We in industry have to start making our case better and we have to compete by being better.
We must invest in new technologies that will give the UK a competitive advantage in the global economy.
This country gave birth to the world’s first industrial revolution. It wasn’t an accident. In fact, GKN who are here tonight are celebrating 250 years of exceptional engineering this year.

And with the right Government support and if we make the right decisions, I believe we can once again be a global industrial pioneer.

That was the essence of the Manufacturing Strategy which we very much welcomed, and which was launched by the Prime Minister at Jaguar’s Castle Bromwich plant late last year.

The advantage we surrendered to America, Japan, and more recently to China, can be regained where it matters most.

We have, in particular, the opportunity to lead the green low-carbon industrial revolution that is happening just as quickly, and just as decisively, as the first steam-powered high-carbon industrial revolution that began in the late 18th century.

In the car industry, this means unprecedented developments in battery technology, hybrid propulsion systems, electronic management systems, as well as much more efficient petrol and diesel engines and transmissions.

It means more aerodynamic and lighter bodies, new types of safety systems, intelligent telematics and driver aids.

And if you want to see progress, look no further than the UK motor industry to see what is possible.

Three short decades ago our car industry was renowned for dodgy quality and industrial unrest.

We were truly the English Patient. The days of Red Robbo and the Morris Marina.

Now we are the home to one of the world’s most vibrant motor industries.

Team GB in the car world includes the likes of Bentley, Mini, Aston Martin, Land Rover, Range Rover, Jaguar, Morgan, Lotus and McLaren.

We are the world’s second largest builder of premium cars after Germany – ahead of Japan, America and Italy. And we still lead the world in motorsport.

Now THAT is a success story. Not exactly what you read in the Lex column every day is it?

On top of that we are also the primary European home to Japan’s three most successful car makers,

Toyota, Honda and Nissan, attracted by British business and industrial flexibility, the quality of British workers, the excellence of British suppliers and, quite possibly, the superiority of British golf courses.

And we already have some notable automotive low-carbon British successes.

Let me start with my old employer Ford, and their Dagenham diesel engine factory.

A production line powered totally by wind turbines, this state-of-the-art facility produces a range of engines 20-25 % more fuel economical than the petrol engines they replaced. Over a million engines a year.

Those British-built and British-designed diesel engines have done far more to reduce European automotive CO2 emissions than all the imported Japanese hybrid cars sold in Europe.

It is a largely uncelebrated British success story.

Lotus in Norfolk is showing world leadership in the manufacture and development of plug-in electric cars — even if Jeremy Clarkson is not a fan

Now we have to be careful here. There are a lot of myths around about electric cars or so-called zero emission vehicles. In fact there is no such animal.

My own view is that, while electrification will definitely play an increasing role, we should not overstate the imminence of the pure electric car – the internal combustion engine will be around for a long-time yet.

Even with next generation lithium-ion batteries, you’d need over a tonne of batteries today to replace the advantages of the internal combustion engine. And I’ve read that fifty percent of the world’s lithium reserves lie under Bolivian salt flats!

In fact, unless we develop and UK battery supply base, we’ll end up importing all of our batteries with a huge impact on the balance of trade.

There is also the fundamental question of how the electricity is generated. Mini’s own figures acknowledge that their experimental new Mini E would generate more CO2 than their diesel Mini if a coal-fired power station were providing the energy.

So there is a large amount to do and tens of billions of pounds of investment to be made on electricity generation and delivery infrastructure before either pure electric vehicles or plug-in hybrids can be a widespread solution

Yet undoubtedly, over the next 10-15 years, electrified cars will become one of the options in an increasingly diverse range of low-carbon automotive solutions.

But we can’t wait that long to cut fuel economy and carbon emissions.

That’s why at Jaguar Land Rover we are investing heavily in environmental innovation, especially in the area of lightweight aluminium bodies, and in our widespread use of fuel-efficient diesel engines.

The Jaguar XJ luxury car and XK sports coupe are amongst the lightest cars in their classes.

In fact, the XJ, thanks to its brilliant British-designed aluminium monocoque, is actually so light that you could weld a British Lotus Elise to its roof and it would still only weigh the same as a prominent high-tech German luxury car.

This advantage means that in turbodiesel guise, using one of those Dagenham-made engines, the XJ, and not the much-vaunted hybrids favoured by some celebrities, has been recognised for two years as the greenest luxury car on sale in Britain. And the new XF diesel can deliver over 40 mpg.

So we are investing massively in new engines and new technology.

We’ve just launched the most efficient V8 petrol engine in the world cutting hydrocarbon emissions by 50%. In the new XFR it delivers more power, more torque, 15% better fuel economy and 100% better styling than the competition and has been clocked at 225mph. Now that’s dynamic efficiency.

Examples of new low-carbon thinking include the intelligent stop-start system fitted to this year’s diesel Freelander model that eliminates tailpipe pollution when the vehicle stops, such as in traffic or while waiting at the lights.

Other innovations, showcased by our LRX concept car, include a pioneering diesel-electric hybrid engine that not only gives pollution free low-speed city driving but also improves off-road performance by supplementing the normal diesel power with electric power.

These projects, and others, are partly funded by the government through its Technology Strategy Board – a great example of intelligent Government support for our industry in partnership with suppliers and universities.

I admit Jaguar Land Rover are never going to build absolutely the most fuel miserly cars in the world.

But we WILL build the most fuel-efficient true all terrain vehicles.

The LRX concept is capable of delivering better than 60 miles per gallon and emitting fewer than 120g/km of CO2.

These are early fruits of our £800 million investment in new green technologies and our commitment to improve our environmental performance by 25 % over the next few years, well beyond mandated levels.

So I hope Government keeps all this in mind next time when making procurement decisions.

Lord Mandelson and the Prime Minister set a good example but plenty of other parts of Government do not.

Putting it bluntly, there is absolutely no excuse for any government agency to use tax payers’ money to buy imported products when we produce such great product in the UK.

As you can see I am passionate about the cars we make and I could, I promise, continue all night. But I won’t!

The point I am trying to hammer home is that our car industry is diverse, technologically- advanced and successful.

We provide the high-value university-educated jobs that any nation that prides itself on its technological expertise would cherish.

Together with our suppliers, Jaguar Land Rover is responsible for the largest part of all the automotive industry research in the UK and spends over £2.5 billion in the supply base.

That’s why I was so baffled by national newspapers claiming that the motor industry is somehow an old-fashioned industry – more rustbelt than truly 21st century – and therefore not essential to a modern technology-driven country.

It is utter nonsense.

We should be immensely proud of our car industry and recognise its importance to our country.

But it is an industry which has its ups and downs.

Few businesses go through more dramatic financial rollercoasters than the car business.

And right now this is the most extreme and frightening rollercoaster I’ve ever been on.

And this is a time of huge risk with the acute pressures on OEMs and the supply chain threatening the future of many viable companies and significant job losses across the industry because of the shrinkage of credit.

But we should not despair. We will continue to invest and the recession will pass.

And despite the recent rollercoaster, I sincerely believe the long-term prospects for our business have never been better.

Tata’s acquisition of Jaguar Land Rover is of huge significance. They are magnificent owners.

The relationship it creates with India will prove a unique opportunity for us and for UK industry as a whole.

This is the kind of foreign investment we need as a country.

It puts us, and British industry in general, in a strong place to help Asia with new low-carbon technology that will be essential to India and China, countries that may well be the world’s two largest car markets within the lifetime of most of us.

Now I am a local boy immensely proud to be running a company here.

There is no better place to live and work – and I have done both all over the world

And one of the factors which makes it so great is the partnership approach which we can see in the collaboration on research with local universities and suppliers supported by Advantage West Midlands and other agencies.

This partnership working is absolutely crucial to our leadership in these new technologies.

This is where I believe Britain can enjoy a meaningful advantage.

You can see I’m a great believer in the vital role of the RDAs and a regional economic strategy.

I would not have spent five years on Advantage West Midlands’ board if I did not believe in this – I have plenty of other things to do with my time!

Just the other day I was told about a small automotive company supported by AWM – Sirus Automotive – that converts vehicles to enable wheelchair users to drive their cars directly from their chairs.

A brilliant and simple innovation. Never mind that they convert Renaults Kangoos…

Or the rebirth of Aynsley China, a traditional manufacturer of china products based in Stoke-on-Trent.

The company goes back to 1775 but in partnership with Staffordshire University and through innovative management, this traditional company has reinvigorated itself through bold new design and clever 21st century marketing.

And AWM supports some of the excellent work in digital technologies, in the new areas of Serious Games and Nano Technologies

But we don’t just need partnerships between public and private sectors, academia, trade unions and local Government.

We need more co-operation and joined-up thinking between our different industries.

Under the umbrella of a new low-carbon industrial policy, British industries – automotive, aerospace, digital manufacturing, electronics, pharmaceutical, defence, chemical, the oil industry, and more – could and should work together more effectively.

Our automotive industry, for example, can provide huge long-term improvements and so can the aerospace business with carbon reductions of up to 20 percent within five years.

By working better together we can all help UK PLC become a low-carbon leader not a follower.

Our success as a country has been based for the past 200 years on innovation and entrepreneurial spirit.

We have not lost these qualities. We just need to invest in them again. The jobs of tomorrow will not come from the technologies of the past.

I would like to see further incentives and funding for companies to invest in these new lower-carbon manufacturing processes as well as the research and development to drive the British economy forward.

We also need to invest more in the skills and workers of the future, expanding NVQ’s apprenticeships and STEM subject degree courses. We must ensure that young people today are acquiring the skills that they will need for the well-paid, high-quality jobs on which our prosperity will rest.
We, like the best businesses across the UK will continue to do our part to train new workers and apprentices in partnership with the government and regional agencies.

Let’s not be afraid of continuing to target climate change and not allow the downturn to weaken our resolve. There is no better opportunity to dig ourselves out of the current economic crisis than by confidently investing in the future.
While they clearly have a role to play in shaping society’s response to climate change, NGOs and politicians won’t themselves provide the technology to solve these problems…

That role and responsibility falls squarely on us — to the brilliance of our scientists, our engineers and our industrialists.
This is where the government and industry have a real opportunity to work together.

Two centuries ago, our predecessors created jobs and prosperity by harnessing ideas and technology to overcome the challenges of the era.

We must show the same leadership and vision today and we have so many more advantages.

Just as they created the high carbon economy, I believe with the right support, we have an ideal opportunity to help lead the world into the low carbon future.

I am determined that Jaguar Land Rover will be in the vanguard of this new industrial revolution.

So manufacturing matters more than ever for our future.

I’m unashamed in putting my head above the parapet. Bottom line we all need help urgently. Until we see confidence return in the economy the business environment will remain very dangerous for thousands of companies and their employees.

We need to and will keep pushing the government for the maximum support for industry over the acute and very serious cash flow and demand issues we face over the next few months. But I’m reassured we clearly have common purpose here and we are getting great support from Richard and the CBI.

Despite the rollercoaster ride I have had, mine is the best job in British industry and I’m convinced Jaguar Land Rover will remain one of the UK’s winners.

ENDS