UK manufacturing growing again?

[Kermit power]

http://news.bbc.co.uk/1/hi/business/8434458.stm

According to the above article, the EEF - which represents the UK manufacturing sector - would seem to think so. One in Seven UK manufacturers moving production back to the UK in the past 2 years?

I wonder how much further up the list of leading manufacturing nations (we're currently 6th) we'll have to get before some people actually accept that we still have a manufacturing sector in the UK?

[turbobloke]

If it ever got to the point where Fly Me and his boss bungled on, and carbon-taxed this country back to third world status, maybe manufacturing would relocate here while we open English take-aways in Delhi and Beijing. Not sure about the cross-cultural potential of greasy chips and pork scratchings though.

[Busa_Rush]

I heard the interview with some woman this morning on R4 . . . interviewer said "Do you think manufacturing will be central to rebalancing the economy ?" and she said "Yes, manufacturing will be central to rebalancing the economy . . ." in a very timid way, as if she didn't believe she was being asked to spout such nonsense in such an obviously rehearsed way.

Quoted again in the BBC article . . . "Ms Hopley said manufacturing was "absolutely central" to rebalancing the economy"

What's "rebalancing the economy" ? Leftie dumb speak for getting a sound bite on Radio which makes us look better and doesn't in fact mean anything.

[_James]

Busa_Rush said:

What's "rebalancing the economy" ?

Attempting to address our ridiculous and enduring current account deficit, in light of our recent devaluation.

The Pound's overvaluation for over a decade has inevitably led to a reduction in our ability to export. The significant change in competitiveness we have experienced should go some way to changing that situation.

[Turbo5]

Quite a few companies have been caught out with currency exchange rates, moving product to make on the dollar when it was nearly $2 to the pound and also a lot of companies went to Eastern Europe, (which now they are in the EU it wont be long before their manufacturing costs are similar to the UK.

Some companies are really short sighted when it comes to moving product, people are given short term objectives,and its so easy to jump on the band wagon and move to Poland/India/China etc.
I see time after time buyers or managers just moving things because they think its the right thing to do. Transfers are very difficult to manage and a full business case/ risk assessment/transfer plan must be carried out.

When you look at the total cost of moving, maybe paying redundancy in the UK, Empty factory space in the UK, or unable to rent out or sell your site, Quality issues, transfer of machinery/tooling, installation Cost, having representatives on site for a period of time, increased lead-time, increased transport costs, Travel to the foreign company, translation services, Increased stock costs to create a buffer, The dreaded currency exchange with a weak pound. Import duties etc.
You are mainly saving on the labour content as the materials are pretty much the same. (well they are in my profession aerospace)You also have to consider what technologies you are sharing (perhaps you don't want them to have the same expertise as you) You also need to take into account repatriation of the product and how quickly you could bring it back.

We all know how frustrating it is when a supplier lets you down either through quality or delivery, its bad enough trying to sort things out in the UK or Western Europe, try China or India ? Also if the relationship with your supplier becomes complicated or nasty you will find you aren't covered by the same laws and rules that apply here. Other issues start when your tools break or begin to wear and you only realise its wrong when it arrives on site, By this time there are another three batches in transit and another 3 batches work in progress, Don't worry it will be your fault they wont accept liability. You will then either end up going cap in hand to the UK company that you nearly shut because you removed 70% of their work to send it to China. (if you are lucky and they accept the work back or they haven't closed down) or you will have to pay through the nose to get the work made elsewhere in a short time frame.

I am not saying all transfers are failures I am just saying there are risks associated with them and depending on what your are manufacturing the greater the risk. Aerospace tends to stick in Central Europe and USA but the Chinese and Indians are really trying hard to break into this market and they will eventually. (the barriers of entry are very complex for a good reason)

[limpsfield]

The most recent data suggests ongoing stagnation

http://www.ft.com/cms/s/0/deeb8414-e3dd-11de-b2a9-...

"the Office of National Statistics reported that industrial production in the UK stagnated in October, and a survey of manufacturers pointed to fresh weakness in the sector in coming months.

The official figures showed production was flat in October, against expectations of a 0.5 per cent increase, as manufacturing output stalled and extraction of North Sea oil failed to bounce back from stoppages due to summer maintenance."

Edited by limpsfield on Wednesday 30th December 16:01

[10 Pence Short]

Our manufacturing is going very well. Except we manufacture in Finland and only about 1/6 of our product is sold in the UK.

Absolutely no incentive for us to move to the UK.

[Kermit power]

anonymous said:

[redacted]

The pound has fallen by 20% against the Euro and the dollar over the last 2 years, so any costs we have in those currencies have correspondingly increased by 20% over that period.

If you add in escalating transportation costs and give some credence to the view expressed in the article that manufacturing quality from Eastern Europe and the Far East may not be as good, then I see no reason to assume it's not realistic for companies to be bringing production back here.

As far as I'm aware, the EEF has nothing to do with the government?

[10 Pence Short]

Kermit power said:

anonymous said:

[redacted]

The pound has fallen by 20% against the Euro and the dollar over the last 2 years, so any costs we have in those currencies have correspondingly increased by 20% over that period.

If you add in escalating transportation costs and give some credence to the view expressed in the article that manufacturing quality from Eastern Europe and the Far East may not be as good, then I see no reason to assume it's not realistic for companies to be bringing production back here.

As far as I'm aware, the EEF has nothing to do with the government?

In our business there are manufacturers in the Far East who can manufacture to a higher standard than available in Europe and at a lower landed cost. For true multinational companies the UK still doesn't represent somewhere special to come and manufacture.