Gates close at Raleigh

Blue skies but a grey outlook for Raleigh workers

Just a day after the Chancellor confidently predicted a manufacturing revival, another famous part of British industry closed for good.

The Raleigh Bicycle company shut down its production line at Nottingham last Thursday.

It will now have its bikes made in the far east and imported ready-made into the UK.

It means 280 jobs will go at the factory.

New site

The Raleigh name will continue. The firm is moving to a new site at Eastwood, just outside Nottingham.

Here around 200 people will be employed in design, sales and administration.

The company will also still make bicycle wheels.

But from today, the most famous bicycle maker in the world no longer makes bikes.

The new site will make wheels but not bikes

It's been a long time coming, but as the workers left the factory for the final time, clutching a commemorative mug, many admitted it still hadn't sunk in.

Cheap imports

Raleigh began in 1887 but the the company has been fighting a rearguard action against cheap imports for decades.

As a result very few staff have been taken on.

Most of the workers are in their 40s and 50s and have worked at the factory for more than 30 years.

The ferocious competition is something we witnessed first hand on Working Lunch when we visited China.

In Shanghai a bicycle factory worker is paid only a quarter of the wages of a worker in Nottingham.

In countries like Vietnam and Sri Lanka, where Raleigh bikes will now be made, it's even less.

Future

What makes the future even more difficult is that, at the moment, the UK is protected from cheap Chinese bikes by European anti-dumping laws.

But that's due to be lifted in 2005, opening the doors to a fresh wave of cut price competition.

That made the long term future bleak, but it was a more recent decision by Raleigh's previous owners which sounded the death knell for its bike making operations.

The American based company, the Derby Cycle Corporation, sold the land to the rapidly expanding Nottingham University which wanted to build student flats.

It said it had plans to move the firm to a new purpose built site, but then filed for Chapter 11 bankruptcy in the US.

Raleigh was taken over by a management buyout.

But given the current state of manufacturing in the UK there was little hope that anyone would invest enough to build a new manufacturing plant.

British manufacturing

So more bad news for British manufacturing and more bad news for the Chancellor?

Martin: wants to see the government act

The GMB union is in no doubt.

"It's another sad day," says Martin Allen from the GMB's Nottingham office.

"The government needs to do something to help British manufacturing because it just can't compete."

"This decision doesn't just mean that 280 jobs are lost today, it means they've gone for good.

"They've disappeared from the city's economy and that means less opportunity for young people coming out of school and looking for work."

But Philip Darnton from Raleigh takes a different view.

"It's definitely the end of a chapter for Raleigh, but it's not the end of the story.

Philip: "It's not the end of the story"

"Although we have lost 280 jobs, we have been able to save 200 and make sure that the Raleigh name carries on."

Revival?

It's a common model for British firms - having the manufacturing carried out overseas, but keeping the design and administration in the UK.

Like much of our manufacturing industry, there's little doubt Raleigh has hit rock bottom.

But there's also little doubt it would never have survived at all without radical changes.

Perhaps from here it can go on to grow once more.

And with more and more companies following the same route, maybe the Chancellor's forecast for a manufacturing revival - albeit from a much diminished base - won't look quite so hopelessly optimistic.