Engine of Growth Set to Fire on All Cylinders
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Inside William Hall savours the wide range of MANUFACTURING food and drink producers in the region, including the in North-West England makers of the Vimto brand FINANCIAL TIMES SPECIAL REPORT | Tuesday March 2 2010 Page 4 www.ft.com/north-west-manufacturing-2010 Engine of growth set to fire on all cylinders Recession in the region between 2006 and 2009, as trucks were sold to 44 countries as far afield as has been deeper than Mexico and Australia. the national average but Production hit record levels, sharply increasing output to about 24,700 the sector is recovering, units in 2008, from 13,000 units in writes Andrew Bounds 2002, while the workforce grew by a fifth to 1,300. As late as March 2008, the company was taking on 80 staff, anufacturing has become introducing a night shift and expect- Flight plan: final assembly of the Eurofighter Typhoon at BAE's Warton plant, near Preston. The region's aerospace sector is the biggest in the UK fashionable in the UK ing annual production of 25,000 again, but in the north- trucks. By December that year, it was manufacturers had repatriated pro- looking to add a stable income stream has produced a myth-busting bro- handouts when they should be updat- west of England it never announcing 250 job cuts. duction lines over past two years. to smooth out demand. chure and is setting up the UK’s first ing or changing their products to give Mfell out of favour. It is part of the Now, however, aided by the fall in Mr Maier also argues that foreign Tony Wilson, of Klarius, a car com- Fab Lab, where people can design customers what they want.” DNA of a region that invented the sterling, manufacturing is recovering. ownership of British companies Ð ponents maker, has built a big empire their own products. That is what Verna Group in Bolton spinning jenny, produced the first It will be a long, hard road. Mike about 70 per cent of manufacturers quickly. When buying companies he Whereas in many countries, Engi- has done for 50 years. It began by computer and where Mr Rolls met Mr Damms, chief executive of the cham- nationwide Ð is positive. disposes of any parts that do not have neer is a formal title as respected as using waste paper from the Bolton Royce. ber of commerce in East Lancashire, British management, often answera- market-leading capability. Doctor, in the UK it conjures up News to develop single-use pulp prod- In spite of years of decline as Brit- says: “The challenge is that in manu- ble to the City of London, frequently “Our aim is to outdistance the com- images of greasy rags, gloomy mill ucts, such as bedpans and urinals, ain embraced a retail and bank-driven facturing, we have become so produc- chased short-term profit over innova- petition. We don’t want to be top of chimneys and shuttered factories. that would save nurses time. boom from the 1980s onwards, the sec- tive and efficient that we have had tion and sustainability. “There is a our league Ð we want to be in a league “There is no instantly identifiable It makes macerators, which shred tor still comprises 20 per cent of the jobless growth.” different attitude towards invest- of our own,” he says, arguing that too role model for manufacturing, which the waste and neutralise its chemi- region’s gross domestic product, well Take the car industry. The north- ment,” says Mr Maier. “[Foreign own- many companies settle for less. is part of the problem, but when cals. That creates new business in above the national average of 13 per west accounts for 12 per cent of UK ers] are prepared to put the money in One threat to all these companies’ asked what their image of an engineer maintenance and new demand Ð as it cent. car output, with big brands such as and ensure the rewards are achieved growth is a skills shortage. is, many people say: ‘Kevin Webster cuts hospital infection. The machines Since the financial crisis, the gov- Land Rover and Vauxhall leading the over time.” Many engineering graduates are to from Coronation Street’,” says Mr are used in 90 per cent of UK hospital ernment has pledged to rebalance the way. While turnover of its companies Chris Rowlands, head of manufac- be found in the City working for Rowlands. The TV soap opera charac- and 43 countries worldwide. UK economy away from services Ð increased by more than a third turing at the NWDA, says: “We have investment banks designing financial ter is a car mechanic best known for Lesley Webster, an ex-nurse and even designing an industrial strategy. between 2002 and 2007, employment been very good at attracting inward products rather than solid ones. While moaning about the world as he downs Verna’s UK director, says: “We have The idea had been buried for 30 years levels remained about the same, at investment.” Only London and the manufacturers hope such people can several pints of beer in the local pub, to innovate constantly and improve after its policy of picking winners around 23,000. south-east have been more successful. be now be wooed, it is hard to com- and lists his dislike as “ambition”. our products. There are plenty of proved disastrous. However, there are grounds for opti- As bank finance remains tough, it is pete with salaries elsewhere. Mr Wilson says some company other companies out there that would The region’s factories help power Ð mism, say business leaders. Jürgen foreign or privately-owned conserva- There is a big push to improve the bosses bring the doom-laden image like to copy them and they have a and safely land Ð aircraft, pump oil Maier, the Manchester-based head of tive companies, of which there are industry’s image. The Manufacturing upon themselves. “Too many of them lower cost base. We are winning on and gas, prevent hospital infection the industrial division for the UK at many in the north-west, that can seize Institute, a Manchester-based charity, whinge. They are looking for help or innovation and quality.” and build nuclear submarines. Its Siemens, says: “The trend towards off- markets from rivals. aerospace sector, which began with shoring is slowing. Labour costs are Michael Oliver, owner of Oliver Avro triplanes and now includes parts rising, shipping costs are rising. There Valves, in Knutsford, Cheshire, says: of Airbuses and Eurofighters, is the is the quality issue also.” “We have little debt and plenty of biggest in the UK, as is its food and An EEF/BDO Stoy Hayward report cash. We concentrate on gross mar- drink sector. Pilkington, the glass last year found that one in seven UK gin.” He commands a market niche Ð maker acquired by Japan’s NSG high quality valves for subsea opera- Group in 2006, still has a big presence tions Ð which makes it hard for rivals in St Helens, Merseyside. Inside this issue to compete and he can sell worldwide Even after the worst recession since Biomedical Pharmaceuticals, born to blue chip clients such as BP and before the second world war, the from the chemicals industry and Petrobras. region’s manufacturing sector including biological medicine, has “We go to our customers and ask employs some 400,000 people and con- an important presence, writes them what they will need in two to tributes £19.6bn to the economy. Andrew Jack Page 2 four years’ time and then try to Annually, each job creates about design it for them. A lot of British £45,000 in gross added value. Chemicals The region's biggest manufacturers suffered because they Steve Broomhead, chief executive of export industry retains a world-class came up with a great product then the Northwest Regional Development reputation, says William Hall Page 2 found no one wanted it,” says Mr Agency (NWDA), the state-funded Oliver. body fostering economic development, Automotive After a tough year, the This trend for customer service is future looks brighter for carmakers says: “Manufacturing is critical to the mirrored by Ener-g. Originally a spin- but suppliers remain under pressure, north-west. The sector is the biggest out from what was then the Univer- writes Andrew Bounds Page 3 of any English region and remains a sity of Manchester Institute of Science major driver for economic growth.” Aerospace Workforces have and Technology (Umist), it was However, for the past 18 months it been trimmed, but the sector is bought by entrepreneur Tim Scott in has been a drag on growth. The reces- defying financial gravity, writes 1997. It builds combined heat and sion in the region has been deeper Andrew Bounds Page 3 power plants and also makes waste-to- than the national average and is energy plants and anaerobic digestion expected to persist until the third Guest column Terry Scuoler facilities that replace landfill for quarter of 2010, according to a recent (pictured), the new chief executive waste. It employs 230 in the north- report from the Commission for the of EEF, the UK west. New Economy, a branch of local manufacturers' Derek Duffill, managing director, government. organisation, says: “Private ownership allows us to The jolt has been huge, as wit- says the plan long-term.” nessed by Leyland Trucks in Lanca- north-west's For example, the company pays the shire. A chronic sufferer from the manufacturers capital cost of new plants and then “British disease” of strikes in the must take allows customers to pay for them 1970s, it fell into receivership in 1993.