Covid-19 disruption, resilience and industrial policy: the automotive sector in the West Midlands

The Covid-19 pandemic and Brexit have focused attention on resilience of key sectors and firms. This paper explores the financial resilience of the 50 largest automotive firms in the West Midlands region, UK, to respond to disruption and economic shocks. The findings demonstrate that 22 firms are at high-risk due to poor current liquidity ratios, with Coventry and Birmingham emerging as locations most susceptible to firm closures. High-risk firms include key flagship Original Equipment Manufacturers operating at the downstream end of supply chains. If these firms were to fail, there would be a significant destructive impact on the industry and local economy. We assert an effective subnational industrial policy is required in order to support economic resilience in regions, like the West Midlands, where few firms account for a disproportionate share of employment and value-added.