SPECIAL REPORT Business Guide to Sunderland Wednesday October 31 2012 www.ft.com/reports | twitter.com/ftreports Manufacturing an economic future Business diversity, skills for the young and a bridge that unites its people are part of the city’s masterplan Page 2 Inside » Driving employment Innovative industries Booming business Premier league faithful Automotive hub is selling its A can-do attitude and new Father and daughters team Sunderland FC stands as a services to the world partnerships offer hope exports to 60 countries beacon during tough times Page 3 Page 4 Page 5 Page 6 Arts thrive by the Wear Old industrial assets Engineering better links Hi-tech transformation Accommodating the artistic Plans to give a city centre Trains, trams and a new Speedy rollout for software to the purely functional the heart it needs to grow bridge offer greater access and digital companies Page 6 Page 7 Page 8 ft.com/reports 2 FINANCIAL TIMES WEDNESDAY OCTOBER 31 2012 FINANCIAL TIMES WEDNESDAY OCTOBER 31 2012 3 Business Guide to Sunderland Business Guide to Sunderland mood in the factory was derland does well,” he says. less buoyant after it lost the Sunderland’s automotive Auto hub helps next-generation Micra small suppliers have had to make car. “It was a pretty bleak tough calculations too as Manufacturing a long-term future time,” says Mr Fitzpatrick. they fight for new business. When Toshiyuki Shiga, The Sunderland plant of drive regional Nissan’s chief operating TRW, a US group that sup- officer, came to the UK plies clients such as for the groundbreaking cer- Volkswagen and General Diversifying the types of businesses the city attracts is key to ensuring growth and prosperity, writes Chris Tighe emony for the new battery Motors, is competing inter- employment plant, a worker asked him nally with a factory in when it would get some lower-priced Slovakia – and nce it was ships; now it is cars. tion, will shortly open in the city centre. new products. “You show externally with companies Physically demanding indus- Despite its success in replacing the 30,000 me your competitiveness, that include South Korea’s tries – shipbuilding, coal mining, jobs the area lost in vanished mines and its popular Qashqai small and I’ll show you the LG group – to make a new glass making – were for centuries shipyards between 1975 and 1989 with new Automotive sport utility vehicle, the work,” Mr Fitzpatrick power steering element. at the core of Sunderland’s econ- activities, including automotives, call cen- new Note small car and a recalls Mr Shiga saying. Piggybacking on Nissan’s Oomy and self-image. tres, logistics and digital businesses, Sun- The Nissan plant forthcoming mid-size hatch- As the plant sought to successful operation, local Today, Sunderland is proud to be linked derland’s unemployment rate still runs at employs 5,800 back people-mover. Nissan secure its future against officials have in recent in the national consciousness with its Nis- 1.5 times the national average. June’s will also build its Leaf elec- Investment: £921m spent on UK-built models Bloomberg intense internal competi- years sought to promote the san plant, feted for manufacturing produc- annual population survey showed unem- people and exports tric car at the plant from tion, it looked for a unique region as a centre for tivity and the source of more than one in ployment in the area at 12.2 per cent when to 90 markets, next year. The factory selling point. Alongside the research and development three UK-made cars. the UK figure was 8.1 per cent. employs 5,800 people and alongside the factory, built sponded to the challenges plant’s own cost-effective- of low-carbon cars. Gates- Commitment to manufacturing – “It’s Prospects for young people are a particu- says John Reed last year made 480,000 cars. by Sunderland-based Van- we faced,” says Kevin Fitz- ness measures, managers head College is organising something we are really good at,” says lar worry. Sunderland has, at 11 per cent, Nissan exports the cars it tec Europe, Nissan’s biggest patrick, Nissan’s vice-presi- looked at new ways of the effort, which includes Dave Smith, Sunderland city council’s chief the sixth highest rate in England of 16-18 makes there via the Port of on-site supplier of logistics. dent of UK manufacturing. standing out competitively, training future workers to executive – puts it at the heart of the gov- year olds not in education, employment or Nissan’s car-making opera- Tyne to more than 90 mar- City officials like to talk To a degree, the operation including by improving make electric cars and bat- ernment’s determination to rebalance the training. Moreover, employers are tending tion in Sunderland – kets, from France to New up their automotive hub’s has been lucky in the mod- logistics routes, transfer- teries. Nissan has lent the UK economy. to choose slightly older apprenticeship already Britain’s biggest – Zealand. Around the clock, importance, but in this case els it produces, notably the ring more activity to on-site venture a track alongside Success in car manufacturing, an indus- applicants. To try to improve its young is about to become even supply trucks rumble in it is no exaggeration to say Qashqai – a blockbuster suppliers, and working with its plant to serve as an try that did not exist there 30 years ago, people’s life chances, the city has been driv- bigger. and out of the factory, that Sunderland is selling early entrant to the globally them to help bring their open-access testing facility. gives Sunderland a head start in proving to ing up educational standards. And, if it The Japanese group has, alongside which sits a test its services to the world. popular small SUV seg- own costs down. “We can’t compete on potential investors, and to its residents, wins powers in round two of the govern- over the past year, commit- track for low-carbon cars Nissan’s UK managers ment. However, the indus- “The internal process conventional technology what it can achieve. Manufacturing, says ment’s City Deal initiative, it plans to cre- ted several new models to and whirling turbines that are proud of having won try has also worked hard to looks at quality, efficiency, [such as engines] because Paul Watson, the city council’s Labour ate a manufacturing and advanced engi- the plant in a move that mark the location of a power the new models. However, keep new investments flow- and, what we internally the west Midlands is doing leader, is “in the DNA of the people”. neering Academy, to raise skills levels. will create 3,000 new jobs, plant. A cluster of suppliers they are not smug, but vigi- ing. Nissan makes cars in call, total delivered cost – that,” says Colin Herron, “We have this propensity for it.” Sunderland’s city centre is a weakness including at suppliers, and has followed Nissan to the lant about the need to keep 20 countries, and Sunder- the cost of getting the managing director of Zero However, rapid technological change and too. This is partly the consequence of suc- ensure the plant remains site, including Faurécia, the operation cost-effective land had to bid against a car to the dealer,” explains Carbon Futures, a subsidi- immense global pressures mean present cess in developing office and business space busy well into the 2020s. Valeo, TI Auto and Sanoh. and industrially relevant in plant in India to make the Andy Palmer, Nissan’s ary of the college. “What successes in manufacturing are no on the city fringes and in Washington, the Nissan is investing £921m A vast shed, nearly half a a globally competitive busi- new Note, and against Mex- global head of product we’re doing is looking at guarantee for the longer-term future. former new town within its area. in its new UK-built models, million square feet in size, ness. “We’re in a good posi- ico for the hatchback. planning. “In that overall the advanced technology – Sunderland, like other manufacturing- The Economic Masterplan bluntly including a replacement for is rising in a business park tion because we’ve re- Just two years ago, the scheme of things, Sun- hydrogen and electric.” orientated areas of the north, faces big observed that the city’s heart “lacks the challenges. It needs to increase the local scale, quality, vibrancy and variety of uses” supply of people with engineering-related normally found in a regional city centre. skills and aptitudes suitable for existing Centre for Cities, the think-tank, warned employers. It must also respond to the ris- recently that this may drag on future eco- ing skills needs of increasingly knowledge- nomic performance and may well be at the intensive industry. root of existing weaknesses – a narrow It must encourage more indigenous, industrial base and lack of career progres- smaller companies to dare to export and sion. The city council hopes its proposed find new ways to tackle youth unemploy- Local Asset Backed Vehicle, a public-pri- ment. And it must continue efforts to vate development partnership, will boost increase its rate of business formation, the central area. which is running at only half the UK level. The council, now seeking a joint venture Sunderland’s leaders – private and public strategic investment partner, will contrib- sector – are very aware of these challenges. ute an investment portfolio of about 400 They are using the tools at their disposal, property assets. The private sector partner and lobbying government for more, to will need to provide evidence of robust tackle them.