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Tuesday, 19 March, 2002, 07:58 GMT
Manufacturing in the West goes hi-tech
BBC Points West Business Correspondent Malcolm Frith
The West Country faces a varied business future
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By Malcolm Frith
BBC Points West's business correspondent

Part of a series of special reports on the state of British manufacturing

Economic prospects in the West of England are far from clear in a world that is moving increasingly away from the old established industries towards speculative hi-tech businesses.

Growth prospects for 2002 have been downgraded around the world, particularly in the US and Japan, in the wake of the 11 September attacks.

The impact is being felt in the West, which has already seen a significant number of job losses throughout the region.

During the last 12 months, nearly 10,000 people have been made redundant in the engineering and manufacturing sector and the Trades Union Congress is predicting that, over the next year, another 10,000 will go.

Hi-tech jobs

Heavy industry has almost disappeared from a region once famed for making trains and ships.

During the 1980s these were replaced by hi-tech manufacturing jobs. Swindon in Wiltshire led the way with Motorola, Lucent Technologies and EMI.

However, in recent months companies like these have laid off hundreds of workers as the global recession spreads.

Many technology firms have thrived in the region

Tourism, travel companies, insurance businesses and the all-important aerospace industry felt the effect as more jobs disappeared following the events of 11 September.

Westland Helicopters announced it was reducing its workforce by 1,000.

However, business in the region can take some comfort from the fact that unemployment and interest rates are at historic lows.

So, has manufacturing a future in the region? The answer has to be an equivocal yes - and no.

Sadly, traditional manufacturing has almost disappeared.

Shoemaking once employed 50,000 people in Bristol and Somerset, and now only some 300 remain in this industry.

Yet the shoemaking firm C&J Clark is still a global concern, selling 38 million pairs of shoes annually, nearly all made abroad.

But the region is still a major player on the world's stage for its manufacturing industry.

Space satellites

Leading the way is the aerospace sector, boasting such global giants as Airbus, Rolls-Royce and BAe Systems, and Westland Helicopters among its industrial powerhouse.

Each of these has been hit by the economic downturn in recent months, but all are ready to surge forward in the 21st Century.

Whole planes may no longer be made in the region, but thousands of workers are employed on the research and future development of the next generation of military and civil aircraft, along with satellites for space exploration.

In the next 10 years, Airbus will bring on the world's biggest Jumbo airliner, capable of carrying more than 800 passengers.

Airbus will also develop and make Europe's biggest transport plane - the A400M, with the wings being developed and produced in Bristol.

The world's current biggest military project is the Joint Strike Fighter, a joint venture between the leading American plane makers, Lockheed Martin, BAe Systems and Rolls-Royce.

Advanced plants

It is estimated this will create 10,000 jobs in the aerospace industry, but equally importantly, it will give security and work to hundreds of small engineering companies.

Aerospace may currently monopolise the West's manufacturing sector, but the region also has a thriving automotive industry.

Modern engineering has not been entirely left out and the West boasts a number of world-class firms

Malcolm Frith

This is dominated by global giant Honda, which operates one of the world's most advanced car manufacturing plants at Swindon, while the town is also home to a BMW body panel plant.

Technology firms have found the region fertile ground and its roll call of global hi-tech players includes Intel, Hewlett-Packard, Toshiba, STMicroelectronics and JDS Uniphase.

Now, many more hi-tech companies are heading West.

The West also boasts a number of world-class engineering firms - Rotork of Bath, which makes valves for the oil and gas pipeline industry, Renishaw the world's leading maker of industrial measuring equipment and the vacuum cleaner manufacturer, Dyson.

Cheap labour

However, there is a fundamental problem facing manufacturing in the region - goods can still be made cheaper abroad.

Inventor James Dyson recently announced he was transferring all production of his vacuum cleaners to Malaysia where labour costs are substantially cheaper.

As a result, 1,000 employees at his Malmesbury-based factory will lose their jobs later this year.

To survive in the future, manufacturing companies will have to concentrate on spending millions on research and development of world-beating products.

The days of shop-floor manufacturing may be numbered as other firms look towards Eastern Europe and Asia where they can find a cheap skilled workforce to make their products.

It will, for the future, be the only way for many of the West's firms to compete on the world's drastically shrinking manufacturing stage.

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