Q and A with Paul Butler of the North East Automotive Alliance (NEAA)

Industry Insights

Q and A with Paul Butler of the North East Automotive Alliance (NEAA)

6th December 2022

A well-known figure in North East England and across the UK’s automotive landscape, Paul Butler is CEO of the North East Automotive Alliance (NEAA), an industry-led automotive cluster which supports the economic sustainable growth and competitiveness of the automotive sector in the North East of England.

Paul spoke to Horizon Works about the NEAA’s work in supporting the automotive industry, the challenges facing it… and what the future holds.

What have been the key achievements for the NEAA in 2022?

Firstly, seeing the membership grow from around 290 companies to 371 during the year – we are continuing to grow as a network and a cluster organisation.

We’ve expanded our cluster activity and cluster services, increased the support we offer members and delivered more public funded projects. For instance, we have been designated as the Employee Representative Body for the North East Local Skills Improvement Plans (LSIP) region, which is a great accolade for us.

2022 also marked the success of the 5G Connected and Automated Logistics (5G CAL) pilot, which aimed to prove the delivery of zero emission automated logistics (ZEAL). We were part of a consortium that included Sunderland City Council, Newcastle University, Coventry University, Connected Places Catapult, StreetDrone and Perform Green, and was supported by Nissan, Vantec Europe, Terberg DTS UK and Fergusons Transport. The vehicle’s teleoperations system uses next generation technology connected to a private 5G network and the pilot project proved that an EV truck could drive between Vantec and Nissan in both fully autonomous and teleoperated modes. It was a UK first for ZEAL and has the potential to bring about unprecedented change in last mile logistics!

Another key achievement has been the reinvigoration of the NEAA’s working group activities following the UK’s emergence from the Coronavirus pandemic. Our working groups include Business Resilience, Energy, Health & Safety, Injection Moulding, Skills, HR Forum, Trade and Digitalisation and they tackle some of the major challenges faced by the sector in electrification, digitalisation, energy costs, material costs and availability, employee engagement and sector attractiveness, to name just a few.

We’ve also grown our team and brought in more resource, with Joe Routledge joining as membership manager and Mark David as skills project manager.

We exhibited at and were a sponsor of the North East Automotive Expo in September, which was a fantastic event. What are your reflections on this year’s expo at the Beacon of Light?

The North East Automotive Expo continues to be the flagship event for the region’s automotive industry. Year on year, we set new records. It continues to grow and develop, and the feedback we get is absolutely fantastic.

We know a lot of business is done at that event and there are some really great success stories that come out of the expo. We’re looking forward to another successful expo next year!

How does 2023 look for the NEAA?

We will continue to strive to deliver a value-adding cluster network, identifying and reacting to new challenges whilst continuing to focus on those areas where companies see maximum benefit from collaboration: these are our five thematic areas of Network & Connectivity, Business Resilience, Innovation & Technology, Skills and Trade & Investment.

We will continue to represent the automotive industry on key regional, national and international groups, and will continue to provide a voice for the region next year.

We are also looking forward to delivering a successful and impactful NE LSIP report and creating an ecosystem which is more responsive to the skills needs of employers and the local economy, whilst also striving to increase the level of R&D and innovation in the region which will support our strategic aims of transforming the North East region into a true automotive powerhouse.

One of the key focuses will be our work to increase the attractiveness of the automotive sector as a career choice. We are home to a globally significant automotive sector, which can offer many varied and exciting career paths – from improving our productivity levels through the application of digital technologies to making a significant contribution to our environment through the development and manufacture of green, zero emission vehicles. From the opportunity to travel to opportunities to develop and progress, there has never been a better time to join the sector.

What have been the key developments and achievements across the North East’s automotive industry in 2022?

Undoubtedly one of the key achievements has been the resilience the sector has shown in the face of adversity. Whilst COVID had a significant impact on the sector, the ongoing shortage of semiconductors has continued to impact production levels to record lows. At the same time we’ve seen material, logistics and energy costs increase… and a lot more competition for talent too.

Indeed, despite all the pressures, we remain a globally significant automotive region and we are positioned in the UK as a leading location for vehicle electrification… and potentially as Europe’s leading location for vehicle electrification.

We have a remarkable sector that is impacting significantly on the UK’s drive to Net Zero, producing electric vehicles and driving down energy usage.

The region is home to Europe’s most successful battery electric vehicle, the Nissan’s Leaf, Europe’s first ever gigafactory, and we have significant Power Electronics, Machines and Drives (PEMD) capabilities. More recently, we have seen significant investments announced totalling over £3.85 billion. Two new gigafactories have been announced in Cambois, Northumberland and in Sunderland, there will be a new electric vehicle for the Nissan plant, a new green microgrid, plus investments in PEMD, which all put the North East at the forefront of electrification.

North East England is also perfectly placed to be a beacon of industrial digitalisation: we’re highly automated, we have highly efficient processes, we have a world class workforce and we’re well positioned to benefit from digital technologies. I’d like to see the sector really embrace that and take advantage of the efficiencies that digital technologies provide.

What do you feel will be the main challenges for the automotive sector in 2023?

The semiconductor shortage will continue to have an impact on production levels, though the level of impact is expected to ease throughout 2023. We will also see continued pressure from rising energy costs, materials availability and costs, and increased logistics costs, at a time when our employees are facing a cost of living crisis.

In addition, we’re witnessing more competition for talent. This is because of the growth of other industry sectors in the North East and because many employees are making different lifestyle choices as a result of the Coronavirus pandemic – for instance, some experienced people are retiring earlier than they’d originally intended. Companies are therefore having to adapt their job offers and we’re seeing a lot more hybrid working within the network.

The pace of change within the automotive sector is like nothing we’ve ever seen before: it brings challenges but those challenges provide opportunities and the automotive sector is well versed in adapting to change.

How can the NEAA support businesses in meeting these challenges?

As Aristotle stated, “the whole is greater than the sum of its parts”. Bringing the network together and getting companies to share advice, knowledge and experience of how they’re handling these different challenges is a key aspect of what we do. Many of the businesses we engage with are global organisations and within their corporate structure they share best practices. By bringing all of that together, we’re bringing global best practice into North East England… and companies can really benefit from that.

Representing the sector on so many groups and board provides us with an unparalleled understanding of the business support available in the UK. As such we are well placed to advice, influence and bring to bear regional, national and international initiatives and programmes that can support businesses. There’s lots of support available from general business support to support to drive innovation and R&D. We’ve had success in helping companies access funding for new technologies which can drive down energy usage, and in developing new, globally significant technologies like Connected and Automated Logistics.

The North East Automotive Alliance Awards will be returning in 2023 – what makes these awards special, and why should businesses enter them?

The awards are an ideal opportunity to showcase the outstanding talent and world leading businesses we have in the region. Our awards will recognise exceptional apprentices and graduates from across the sector and celebrate the outstanding contribution of an individual who has had a long and distinguished career in the sector. In addition, we will showcase some of the sector’s leading companies including SME Company of the Year, Employer of the Year, the leading Innovator and the company that puts sustainability at the heart of its operation.

Each winning apprentice and graduate will receive £1000, whilst the two runners up from each category will receive £500. Our winning companies (two from each category) and the Outstanding Contribution winner will donate their winnings (£2000 from each award category) to a local school to support STEM projects.

Through the three previous North East Automotive Alliance Awards, £47,500 has been awarded in support of our future talent and sector attractiveness – a fantastic accolade for a remarkable sector.

You have been spearheading the NEAA since 2015. Looking back to the start, did you ever think it would be as successful and widely regarded as it has become?

I am immensely proud of what we’ve achieved over the seven years. I truly believe we’ve created an unparalleled collaborative network where companies really do find benefit from leadership and in the coordination of activities that benefit all parties.

I always believed the NEAA would be a success. Key to this is in following the cluster management excellence practices developed by the European Secretariat for Cluster Analysis (ESCA), which has benchmarked well over 1500 clusters across the globe, and for which I remain the only UK Cluster Benchmarking Expert. Central to this theory is industry leadership and a cluster management team with the right levels of skills and experience. The NEAA has benefited from industry leadership through our Exec and Advisory Board, and the working groups which has seen hundreds of people contribute to cluster activities, whilst the NEAA team has proven to be exceptional and highly valued by the membership.

What I did not expect is that the sector operates at a pace that I’ve not seen elsewhere, especially here in the North East where we are a beacon of automotive productivity. Pre-Covid our region produced 80% more passenger vehicles than the UK average per employee and 123% more than the European average. In terms of the NEAA, that drive is reflected by the fact in just three years from launch we were delivering activities that other clusters usually take 10 years to get to.

That drive and passion is very felt across the entire sector and makes this an extremely interesting job. I’m really looking forward to working with member companies, the board and the NEAA team and seeing what we can achieve over the next seven years!

What have been your personal highlights of your career with the NEAA so far?

Quite simply, creating the environment, team and network which brings together companies and a creates a cohesive and value adding network with a shared passion for the sector, and being able to positively impact businesses and the individuals working there.

We all share common goals: to make the North East the location of choice for automotive investment in Europe; and for the region to be recognised as a true automotive powerhouse with a very dynamic, forward looking and competitive supply chain that incorporates strengths research, development and innovation in new automotive technologies and manufacturing processes.

The North East is a great place to live, work and play!

For more information on the NEAA, click here.