Manufacturing fades under Labour

ChiefGrasscutter

nearlynew wrote: »

It's OK saying we can do all the technical stuff and they can do the manufacturing.

But what happens when they start doing the technical stuff as well?

Indeed....... having worked in what one might be described as the service side of a large UK engineering manufacturer, that is already happening.

Moving the pure manufacturing operation only overseas is actually quite a difficult thing to do, logistically, technically.... what with suppliers,buyers, design & production interface issues etc...
Moving the technical side overseas is a lot easier. Take a man and a laptop and put him on a plane. After all the technical & commercial sides are knowledge based operations, and knowledge can be based anywhere in the world as the outputs from these areas are design and commercial specifications which can be emailed anywhere.

Meanwhile the overeas technical quality is getting better all the time - mostly thanks to our UK universities who just love the fees they get from overseas students.

We were moving some of our technical sides out to the near and far East.

Note that Rolls Royce, that bastion of UK manufacturing, has its entire marine operations based in Singapore where it has an advanced technology centre and is opening an engine test cell plant in Hyderabad, India. It also has centres in China, Shanghai........

dopester

donaldtramp wrote: »

Question is how on Earth do we re-build our manufacturing base that has been destroyed?

I'm not anti-manufacturing. Specialist, niche, advanced or premium stuff... with real demand from the world to go with it, willing to pay the price - cool.

Now the credit-fuelled economies are collapsing under the weight of their own debt, aren't we seeing massive global surplus and overcapacity in some areas of manufacturing?

I'm not convinced yet that Germany for instance, hasn't got more suffering in the manufacturing sector to come - well for cars and some other stuff (not everything).

This world is very different from when Serpico was starting out, with well-paid UK manufacturing jobs aplenty in the late 1950s through the1960s.... the ships arriving once a month and everyone working full-out to fill orders from the outside world. The Japanese and Chinese and Vietnamese would have got heavily into manufacturing at lower costs that we can compete with regardless.

Instead of focusing on re-building manufacturing to compete with something else imo (generally - as there will always be some worthwhile manufacturing opportunities).

There are many experts, of course, who will say that the key to prosperity is to revive manufacturing. Their prescription to do this is to focus incentives in ways that encourage longterm, fixed investment. It sounds plausible when viewed from a conventional perspective. But it is backward-looking and probably won't work.

The reason fixed investment is lagging is that its productivity has fallen. Most of all the industries that figured in the post-World War II boom now face saturated markets with worldwide overcapacity. Force-feeding additional capital into fixed investment in the manufacturing side will only aggravate the long-term problem by increasing the overcapacity. It also takes resources away from the small business sector which creates new jobs.

Saturated or slowly growing replacement markets with overcapacity require companies to compete by increasing productivity. This is a good thing in itself. But higher productivity with flat markets means fewer jobs. Short of buying the products directly and giving them away, which is obviously ruinous, there is little that can be done to rescue oldline manufacturing in aggregate.

The hope for the future lies in incubating new products and services, in other words, in entrepreneurship. To do that, flexibility and adaptability must be the hallmarks of the economy and government policy. Legions of small businesses should be encouraged to form. Many ideas need to be tested in the market place in order to come up with the 20 to 30 major innovations that will create vigorous economic growth.

Unfortunately, that is not likely to be the path that policy takes.

Cleaver

nearlynew wrote: »

It's OK saying we can do all the technical stuff and they can do the manufacturing.

But what happens when they start doing the technical stuff as well?

Well what if anyone starts doing anything that we do? I guess that any company, industry or sector faced with competition tries to be the most cost effective, the very best or a combination of the two.

kabayiri

Cleaver wrote: »

Well what if anyone starts doing anything that we do? I guess that any company, industry or sector faced with competition tries to be the most cost effective, the very best or a combination of the two.

We have to expect change nowadays.

In the mid 90s, I was responsible for 3 Indian IT workers sent here. They were very fixed in skillset,developers basically.

Move on 10 years, onto a different client site, and the change was dramatic. The Indian contractors were doing development, analysis and design, testing, help desk, and project management.

I should have realised this was bound to happen. Once you get your foot in the door, you will leverage every opportunity to gain more work.

But...I still believe we have great people in the UK. Great engineers, designers, software specialists. We have to believe in our skills.

We can't put all our faith in a small set of investment bankers, or can we?

An open question. If we lose bulk employment manufacturing, where are the other growth employment areas? It's entirely possible I don't see what is happening elsewhere in the country.

Cleaver

kabayiri wrote: »

We can't put all our faith in a small set of investment bankers, or can we?

An open question. If we lose bulk employment manufacturing, where are the other growth employment areas? It's entirely possible I don't see what is happening elsewhere in the country.

In answer to your first question: no, not in my opinion.

I'm not expert on this subject, just lobbing forward my two penneth. I would have thought a healthy manufacturing sector is very important in any country, but aren't we still 6th in the world for manufacturing? That's a common posted stat on here.

I just think that we live in a very, very different world in the 21st century. You can set up a website that does nothing useful whatsoever and it can be worth billions.

Arcaine

The problem is we are becoming more and more specialised and skilled, no disprespect to anyone but a lot of peope are not skilled people. Heavy industry used to be a "job for life", requiring minimal skills. I am convinced some of the social problems we are suffering from is that the loss of traditional manufacturing based low skill industries are being replaced by more specialist industries such as software, or specialist engineering and we are leaving more and more people behind. Or am I just barking up completely the wrong tree?

kabayiri

Cleaver wrote: »

I just think that we live in a very, very different world in the 21st century. You can set up a website that does nothing useful whatsoever and it can be worth billions.

I agree with this Cleaver. The next Google/Amazon/Ebay could be worth a fortune.

But....you know what? Once the cash started to flow in, the firm would be advised by any number of financially savvy accountants about a 'range of options' to minimise their tax bill.....including shifting the company overseas.

kabayiri

Arcaine wrote: »

The problem is we are becoming more and more specialised and skilled, no disprespect to anyone but a lot of peope are not skilled people. Heavy industry used to be a "job for life", requiring minimal skills. I am convinced some of the social problems we are suffering from is that the loss of traditional manufacturing based low skill industries are being replaced by more specialist industries such as software, or specialist engineering and we are leaving more and more people behind. Or am I just barking up completely the wrong tree?

There is a lot in this.

Also, add into the mix, that today's skillset can be out of date within a decade or less. I have had to change what I do at least 3 times in my career. Not everyone will like or be able to cope with change.

Somehow, more basic substance work has to be generated in the local economy. Think of all the electrical repair shops which have disappeared, for example.

HAMISH_MCTAVISH

Arcaine wrote: »

I am convinced some of the social problems we are suffering from is that the loss of traditional manufacturing based low skill industries are being replaced by more specialist industries such as software, or specialist engineering and we are leaving more and more people behind. Or am I just barking up completely the wrong tree?

Good post... I had to think about it.

And what I thought of, was all the poor wagon wheel makers.... And steam train engineers..... And fountain pen nib craftsmen.

This has always been the case. Old industries and their skills die out, new industries and skills evolve.

And every time, there are a lot of people left behind, particularly older workers that can't retrain into a radically different industry.

It's tragic, but it's also progress, and it's the way it's always been.

dave4545454

yeah guess who completed a first class degree in manufacturing engineering in 1992 just as the last recession hit and manufacturing was killed off in this country. never been able to find any job in manufacturing, it really is dead forever now.