Page last updated at 09:32 GMT, Saturday, 8 August 2009 10:32 UK

Location seals factories' fates

By Alasdair Glennie
Beyond Westminster

When manufacturing companies collapse, the fallout can devastate whole communities, but what can politicians do to save a sector worth around 15% of the UK economy? Beyond Westminster examined just how different the recession has been for two factories separated by the Welsh-English border.

Andrew Lindsay
I could have been the next victim of the recession
Andrew Lindsay, Imperial Machine Company

Andrew Lindsay and his colleagues at a North Wales factory feared the worst as orders for catering equipment dropped this spring.

He assembles restaurant dishwashing machines at the Imperial Machine Company in Wrexham.

"I could have been the next victim of the recession. Nobody felt safe," he said.

"Four years ago I was laid off from my previous job," he explained.

"I'm 46 now, and though they say ageism isn't an issue, I was lucky to get the job I am in now.

"Rumours of job cuts were going round.

"But then one day we all got called into a meeting and were told that things would be okay after all. It was a massive relief. People have got families to support."

So how did the company manage to avoid making cuts?

Managing director Tim Tindle said the key was a new part-time-working scheme introduced by the Welsh Assembly.

Called ProAct, it allows businesses that face making redundancies to put workers on short-time working without cutting salaries, and to use the extra time to give them additional training.

They've [The Welsh Assembly] acted far faster than Westminster
Tim Tindle, MD Imperial Machine Company

It offers a wage subsidy of up to £2,000 per employee and £2,000 towards the cost of extra training.

"It meant that we didn't have to release anybody," said Mr Tindle.

"To get the ball rolling, it involved me having to fill in one sheet of A4 and sending it off to the Welsh Assembly. They processed it over the weekend.

"They've acted far faster than Westminster. You need to do something as well as talking," he told Beyond Westminster.

And how would his company have coped in England?

Pat Austin (l) and Russell Hathaway (r)
The government could have saved all those jobs and allowed us to carry on but there is no supportiveness towards manufacturing
Russell Hathaway, redundant LDV worker

"We would have survived, but we would have emerged from the recession weaker and slower," he said.

Welsh First Minister Rhodri Morgan said small countries were better able to respond quickly to a crisis.

"The big advantage in Wales is that everybody knows everybody else," he said.

"So long as you use that not for purposes of cosily scratching each others' backs but thinking really seriously about how to get through a recession and how to prepare for an upturn, that is the advantage of being a small country."

Morgan said the ProAct scheme brought a "double bonus". As well as helping manufacturers struggling with the wage bill, it stops workers leaving the industry and helps them upgrade their skills to be ready for the upturn.

English complaint

"We launched the ProAct scheme at a factory right on the Welsh border," he said.

"Their main plant is in Telford (Shropshire), and their Welsh plant is in Welshpool, literally five or six miles from the English border.

"The people at the factory were able to compare what was going on in the Midlands and in Wales, and they said 'we wish we had this available in Telford, we wish we had this personalised attention.'"

More than 50 miles away from the Welsh border, Russell Hathaway looks across the now empty staff car park at LDV's Washwood Heath van-manufacturing plant in Birmingham.

Not normally lost for words, he now struggles to describe his feelings. Weeds sprout between the once-tidy railings and a union jack flaps disconsolately from a pole.

Beyond Westminster is broadcast on BBC Radio 4 on Saturday 8 August 2009 at 1100 BST
Catch up later on the BBC iPlayer
Or download the programme podcast

"It's quite surreal," said Mr Hathaway, revisiting his workplace of 14 years.

"You give yourself a purpose in life by going to work. When it's taken away, you feel like a failure."

Pat Austin, who was with LDV for 33 years, agreed.

"You miss going in, getting up at half five in the morning, getting there for seven o'clock, having a cup of tea with your mates and having a chinwag."

Production was halted at LDV's main assembly plant in December last year after orders for its vans collapsed.

Mr Hathaway said the government should have done much more to help the firm survive.

"This was a viable company. Sure, it had made a loss for a while, but we were investing in new green technology. Isn't that what the government wants?

"All they offered was a £5m loan. We bailed the banks out to the tune of £37bn. That is our money.

"The government could have saved all those jobs and allowed us to carry on but there is no supportiveness towards manufacturing."

Up until the last minute Mr Hathaway believed that LDV would be rescued by "a knight in shining armour". But on 8 June, after a planned management buyout collapsed, the administrators were called in.

Professor David Bailey
The government really needs an industrial policy to support manufacturing
Professor David Bailey, Coventry University

"Within hours they had made 810 staff redundant," he said.

"How can that happen?

"You're basically treated like a battery hen: 'You've done your job, now you're not profitable anymore. Bye, bye.'"

Both Mr Hathaway and Mr Austin were made redundant and have not found work since.

David Bailey, Professor of International Business Strategy and Economics at Coventry University, believes Westminster should be supporting the manufacturing industry.

He said: "The government really needs an industrial policy to support manufacturing, like other governments in most developed countries. We've done far too little far too late.

"The industrial activism that Mandelson spoke about recently was aimed especially at helping the automotive sector.

"To be fair to Lord Mandelson, he has done some things like the scrappage scheme and the auto assistance programme, but none of that money has actually got through yet.

"The government have been really caught on the hop I think by the unfolding crisis and how it has impacted on the manufacturing base."

Beyond Westminster is broadcast on BBC Radio 4 on Saturday 8 August at 1100 BST. Or listen again via the BBC iPlayer. Or download the programme podcast.

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