OPEN OR CLOSED? BUSINESSES REACT TO LOCKDOWN

The message from Prime Minister Boris Johnson was nothing if not clear: stay indoors and only commute if you have absolutely no appropriate means of working from home.

It’s a stark warning, and one that will have been anticipated by many SMEs in the automotive sector that were unsure how long they could remain open. Most, in fact, have now shut down, save for garages and some suppliers that operate on a primarily contact-free basis anyway. The UK aftermarket is in a state of suspended animation, and many owners will be considering how best to sustain their businesses without any money coming through the till for several weeks.

READ: CORONAVIRUS: MORE THAN 60 PERCENT OF GARAGES HAVE SHUT

Despite the clarity of the Government’s position, there is an element of doubt about just what constitutes an ‘essential’ business – one that is allowed to continue operating. Lee Jones, Operations Director at York Motor Factors, thinks components suppliers fall under the ‘Transport’ banner, and should remain open. “One of our buying group members contacted their local MP who agreed and stated that they will also be tabling a parliamentary question for further clarity on this point,” he said, noting that those companies “working on transport systems through which supply chains pass” have been included in the Government’s list of essential firms. The parliamentary question may have to wait however, as MPs have taken the decision to bring the Easter recess forward, and at time of writing it is uncertain as to when they will return.

STILL OPEN

It’s a popular school of thought; larger chains including ECP and Parts Alliance remain open at time of writing, with both reporting no significant disruption to their supply chains. The Parts Alliance’s dedicated Covid-19 web page says: “We have strengthened our hygiene practices in every site, communicating best practice to all team members and providing them with the products and equipment they need to remain hygienic.” This is key; the government’s decision to shut down non-essential businesses was primarily driven by the risk of interpersonal contamination, so it’s essential that those still in operation make every possible concession to cleanliness. Similarly, ECP has made its click-and-collect service available only to key workers including roadside recovery workers and NHS staff, and an email from CEO Andy Hamilton asks customers firmly not to visit a branch “unless you have received a telephone call to let you know that your item is ready for collection”.

READ: LKQ PLOTS GROWTH AFTER CORONAVIRUS PANDEMIC

From comments on social media and on catmag.co.uk, it seems that professionals in the aftermarket are divided as to whether factors staying open is a wise decision. “All remain open because all are frightened over losing a pound to the competitor,” said Jerry Stenning, posting on the website, adding that factors should consider the health and mental wellbeing of their ‘scared’ employees.

Not all factor chains are staying open though. Melksham Motor Spares has shut for three weeks, with a joint statement from the directors that read: “The government was very clear in its message last night about the importance of staying at home and we want all our employees to follow this advice as their welfare is of paramount importance to us.”

Glasgow-based chains Autoparts-UK and rival Pentland Component Parts have also closed. “We understand that this is a concerning time for everyone,” Craig McCracken, Group Factor Manager at Autoparts UK said. “As we enter into this unchartered territory, we want to ensure that our suppliers are provided with as much information as possible and that any questions you may have are answered.” A similar short statement from Pentland Component Parts thanked customers for their patience, but said the decision followed from the announcement from the Prime Minister and Scotland’s First Minister.

YMF’s Jones thinks that offering a contactless service is ‘reasonably feasible’. He explained: “For retail or counter customers the only issue is payment and the collection of the items ordered. This can be done online via our retail website, or payment can be made by contactless or by card with the items being left on the counter for the customer to collect as long as suitable distance is maintained between staff and customer.” Small or large, factors and accessory shops can clearly maintain operation with minimal disruption by adhering to the measures outlined by the Government’s newly imposed ‘social distancing’ policy.

READ: CORONAVIRUS: FACTORS TO REMAIN OPEN

GARAGES ESSENTIAL

The news that factor chains will continue to operate, albeit with these limitations in place, will be welcomed by Britain’s network of independent garage operators. “We were waiting for confirmation from ECP and Andrew Page before we decided whether to open or not,” said Kamran Saleem, Managing Director of Solihull’s Motorserv garage and dealership, which has imposed a ‘two-prong protection system’ to avoid any of its team members or customers falling ill. “We’ve said if customers aren’t comfortable coming in, we’ll pick up their car,” he explained, adding that “three times a day, we’re conducting a full sweep of the workshop, cleaning every contact point”. The garage has channelled efforts into crucial repairs for essential vehicles and the office is closed -keys are handed though a window while staff are regularly checked and PPE is worn.

The measures put into place at MotorServ match the guidance issued to workshops by component supplier First Line, which advised garages to “consider every possible contact point with their customers and ensure that, where possible, this can be replaced with zerocontact alternative solutions”. Realistically, the workshop floor should be out of bounds to customers, and PPE must be worn while moving vehicles.

While nobody wants their business to suffer as a result of a global pandemic that’s out of their control, Saleem notes that, if it was going to happen, “this is the best month for it to hit”. March is traditionally a busy month for garages anyway, seeing the largest number of post-winter checks and MOT tests carried out, so the 20% drop in revenue recorded by Motorserv is not enough to make it feel like a ghost town.

READ: SUPERCHIPS IN ADMINISTRATION FOLLOWING COVID-19 CLOSURE

This won’t be the case for everybody, however: now that UK drivers have been granted six months of MOT exemption, smaller test centres will really start to feel the pinch. Saleem said he has already had to start turning away vulnerable customers and non-essential workers – “we tell them to come back when all this has died down” – but there will be many businesses across the country that depend on such custom.

Aside from health and safety, one burning issue for employers and employees alike is that of pay in the event of a closure. Chancellor Rishi Sunak has pledged to cover 80% of contracted hours for employees who are categorically unable to work. Jones said: “This will give businesses a huge confidence boost to hold on to their staff and to fight to keep their businesses afloat. Hopefully with this backing the majority of businesses will survive.” But, as Saleem noted, these costs still need to be initially covered by the employer, who can then claim to be reimbursed at a later date – potentially leading to huge cashflow problems.

“I haven’t heard of anyone getting the actual fund through yet,” he said, adding: “Solihull council knows as much as we do,” in terms of any arrangement concerning business rate postponement.

It’s still early days, and there are innumerable mechanisms to be constructed between the Exchequer and businesses, but two things remain clear: many firms will be forced to close – at least temporarily – during this pandemic, and those that remain open cannot adopt a ‘business as usual’ approach.

This post was written by:

- who has written 46 posts on CAT Magazine.


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