The decline of UK manufacturing is definitely a factor but it is only part of the picture. The rest is down to globalisation. I do contract work for the Diesel division in Delphi, they have factories virtually all over the planet and each one specialised in different items.
Of the two factories I work for in the UK, one makes nothing else other than Diesel fuel pumps, and the other makes Diesel injectors and oil/fuel filters. Delphi have other UK factories, as well as factories in South America, France, Germany, Spain, India, etc, but again each factory specialises in usually just one type of item.
This works out more efficient than having factories in the UK making parts for UK-made cars, then having the same factories in Germany making the same parts but for German made cars, etc.
For example, as we all know the V6 is made in Luton, and nowhere else. This allows the factory to develop a high level of skill, and the engines are then sent all over the world to GM factories including Saab.