Manufacturing Matters

28 Jul

The decline in manufacturing across the UK but particularly in Scotland has been, and remains, an economic and social catastrophe.   Its erosion over the last 30 years has blighted Scottish communities and plunged generations of families below the breadline.

Scotland is still suffering from Margaret Thatcher’s economic legacy; you can visibly still see the fallout across our country where landscapes lie bare in our towns and cities across Scotland.

Following the election of the ConDem Government at Westminsterits déjà vu as they wreak havoc with a new generation of neo-liberal policies.  However, it cannot be a case of blaming Westminster irrespective of the political colour because the Scottish Parliament has had the opportunity to be strategic about supporting the sector over the last twelve years – and has fallen far short from doing so.

Manufacturing employment in 1997 stood at 343,600 while the latest statics show that in the first quarter of 2011 it totalled 161,900. In just fourteen years it is more than halved. This is an eye-watering statistic. There remains anaemic employment growth projected for the sector.

In the latest Fraser of Allander Economic Commentary (June 2011) Scotland’s manufacturing sector contracted by -0.6% in the fourth quarter while UK manufacturing grew by 1.1%.  In the fourth quarter of last year UK manufacturing had recovered 42% of the output lost while Scottish manufacturing had only recovered 26% of the production lost in recession. Again, another frightening statistic.

Manufacturing still matters to Scotland’s economic revival and there are success stories such as the hybrid technology bus-build in Falkirk, and, new opportunities present themselves with the construction of the 2014 Commonwealth Games in Glasgow and also the 35,000 projected jobs in the renewables industries across the UK.

It is briefly worthwhile re-emphasising the Alexander Dennis case study as it showed how strategically targeted public investment can boost manufacturing growth.  The £4.4 million ‘Green Bus’ Fund resulted in 90% of the orders placed for hybrid buses being confirmed for production at Dennis.  Only 12 short-months ago this company and its workforce was emerging from a 3-day working week.

So how do we ensure more success stories? Well Unite’s proposal for the introduction of sectoral bargaining forums can provide the platform for the creation of more manufacturing success stories.  It is an opportunity to be strategic which should look at a series of issues including supply chains, productivity, skills levels, procurement and wages.

Delivering this is absolutely necessary if we are to truly achieve a balanced and integrated economy rather than the over-used slogans that never deliver any outcomes. An industrial strategy must entail looking at how we fairly award contracts and targeted investment in sectors such as construction, transport, general infrastructure, and, energy.  Such a strategy has to include pressuring financial institutions – particularly where public bodies have large accounts – to ensure that lending is given to small manufacturers in particular so they don’t go under and where jobs and skills are lost for generations.

If Scotland looks at our European competitors this is exactly what happens. Governments ensure that companies are supported and that supply chains are horizontally and vertically integrated and not thrown to the mercy of globalisation. We all know that the collapse of Bombardier in Derby with a loss of 1500 jobs and the knock-on effect on supply chains and local economies just simply would not have been tolerated in France or Germany. So,  Scotland has an opportunity to act – and it must – or we will simply celebrate the ghosts of our manufacturing past rather than celebrate a new future.

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