Thursday, 14 January 2010

British Manufacturing -pretty kick ass (we are even better than the French)

Having studied all day, I could not see anything but red when looking at my books which is why I decided to do some random procrastination on the internet. It turns out that we are actually pretty good (still) at this manufacturing business. You might wonder why I am having a go at the French? I shall oblige, because their beloved leader, midget-boy, described Britain as a place “with no industry at all.”

What was Sarkozy going on about?

When the president said that the "English have no industry", he was doubtless referring to our dearth of national champions and the heavy involvement of foreign manufacturers in the UK. Thus, where the British car industry is dominated by Honda, Toyota, Nissan and GM, France still has Renault, Peugeot and Citro├źn. Yet despite Sarkozy's disparaging tone, international investment has been of huge benefit to British industry. In recent years, it has received more foreign direct investment in manufacturing than any other EU country. In 2006 it got £26bn; Germany just £3bn. Since Mercozy couldn't organise a piss-up in a brewery do not expect anything good to come from this revelation either.

1. USA
2. Japan
3. China
4. Germany
5. United Kingdom
6. Brazil
7. Italy
8. France
9. Mexico
10. Canada

Why is this not given more prominence you might wonder? Well we have outlets such as the Daily Scarygraph which keep on whinging about the decline in our manufacturing base and yes it is shrinking but relatively speaking it is growing. First of all note, we will never be able to compete with the East is just is not possible with their almost unlimited pool of cheap labour and the fact that they are emerging consumer economies. Britain is a leading producer of chemicals, green technologies, and electrical and optical equipment, and home to two of the world's largest pharmaceutical groups, GlaxoSmithKline and Astra-Zeneca. The UK aerospace industry is the largest in the world outside the US, employing 125,000 people. But since most firms are hi-tech and relatively few British companies make globally branded consumer goods, we tend to overlook this. The sector is now a tapestry of foreign companies, some huge, with UK plants; British firms that often assemble their products overseas; and thousands of smaller firms making unglamorous, technically-advanced goods like fuel cells and plastic electronics.

As you can see from the above list We are the 5th largest manufacturing nation in the world, behind Italy, but ahead of France (bonjour, M. Sarkozy). True, manufacturing makes up a much larger chunk of the economy in Japan and Germany (about 20 per cent) but that is unusual; at 13 per cent, the share of the economy devoted to manufacturing in the UK is actually higher than in France or the US (both 12 per cent). As for its relative efficiency, the productivity of British manufacturing has improved 280 per cent between 1980-2007, compared to 240 per cent in France over the same period and 190 per cent in Germany.

This is rather important because it leaves and awfully bad taste in the mouth when national icons like the Queen Marry II are built in France and not by Harland & Wolff in Belfast. When things like that pass you might think that, yes, perhaps, our industry certainly is going to the dogs but only because projects like ships, are in essence pissing-contest show-off pieces whose soul function is to gain public attention. Naturally when it is lost to a foreign bidder one cannot help but feeling let down by Cunnard - a supposedly British company. Of course this completely goes against the principle competition and so on. My point being that even though most show-off pieces are lost to competitors from overseas, we still do make a lot of things. I for one would like it if we made more and replace the 75% service based industry (77% for France). I cannot see that happening under the Tories but perhaps the next government. Why is this unlikely under the Tories you ask? Name one engineer in the shadow cabinet. The ruling echelon of China, the Politburo, consists of 8 people all of whom are engineers. There might be a correlation in there somewhere...

Now of course it should be heavily emphasised regarding the automotive industry for example, that all major brands that are being globally traded including; Vauxhall, Bentley, Mini, Rolls-Royce, Daimler, Jaguar, Land Rover, MG, Lotus, Leyland - are all foreign owned. The situation would probably be very different if not the communist/socialist demagogues hadn't privatised the entire automotive industry. Anyway the brands are owned by foreign companies, because they were acquired since they were doing their jobs very well i.e. by selling a lot of cars. Now the fact that they are all owned by foreign companies has more to do with extremely lax British competition laws which make it possible for pretty much anyone to come in and take over anything. With that dull news however there is light in the tunnel. There is something known as minor automotive manufacturing groups and the UK has hell of a lot of those. No less than 17 minor car manufacturers spread out across the UK, of which we can expect that at least one will grow big. France by comparison does not have any companies filed under that category (well it probably does in reality but Wikipedia told me otherwise).


GoodnightVienna said...

Hi 13th, re your point about British manufacturing being owned by foreign companies: what has made British manufacturing so uncompetitive and companies so unwilling to permanently invest in the skills of the people? The Conservatives had 18 yrs to undo the damage caused to nationalised industries by Unions but, imo, they went too far and instead they privatised everything. Apart from the smaller, niche car companies you cite, everything seems to be on contracts these days. When the contract ends, so does your job and you're on JSA again. Where's the dignity of the working man in that?

Off on a tangent here but I don't think energy companies, water companies, should have been sold off to foreign companies either. It's all very well for 'World Leaders' to acclaim globalisation but from where I'm sitting globalisation has caused many of the problems we now face.

I haven't even mentioned defence procurement & contracts :-)

13th Spitfire said...

No I completely agree with you Vienna. Privatisation went too far and certainly more damage has been done as result. I also agree that key industries, inimical, to national security should be kept in the hands of the nation itself. I think however that under the next administration, after Cameron, we will begin to see some common sense in the face of manufacturing and industry. I still wholeheartedly support my long standing theory that Cameron and the Tories will be kicked out in 2015 but Labour will not win either.

The thing with British industry though is that we make all the really high tech stuff - the things you do not really see in everyday life. Certainly the view is enforced if your local fire brigade has British made trucks, but, the stuff made here is rather the GPS software used by the fire brigade rather than the actual trucks themselves. And I hope that we one day revert back to also making the 'frontline' stuff like boats, trains, aeroplanes etcetera the stuff one can actually be proud of having been made in this country - at least as far as national (not nationalised) industries go.