It's happening all over the place: From production line to telephone line
By Dan Roberts
Published: June 1 2003 16:34 | Last Updated: June 1 2003 16:34
<<what will be left? I exchange the oil of your car, you bake and deliver me a pizza... I can see here in BKK the old guys who've chosen to retire here when they couldn't find a thing to do in the economy, side by side, with the 20 something year olds whose working capacity are not needed in their country of origin.>>
A few miles from the birthplace of the industrial revolution, the long decline in British manufacturing is picking up speed at a rate that has alarmed planners and decimated the newest of factories. The mystery is that, like the rest of the country, most local inhabitants will barely have noticed.
With its leafy business parks and neat housing estates, Telford is a place that weathers economic downturns better than most. During the 1980s and 1990s, this new town near the historic Ironbridge blast furnace attracted waves of international investment. While nearby cities such as Wolverhampton and Birmingham saw factories close and their engineering heritage decline, Telford was riding high with thousands of jobs in electronics and other high-tech industries.
But today, its experience is typical of a new wave of problems hitting modern manufacturing. A downturn in worldwide demand and relentless price competition has accelerated a shift in production to low-cost locations such as China and eastern Europe. Growth in consumer electronics and computer equipment has been most affected - hitting high-tech towns such as Telford, Swindon and Slough along with Silicon Glen in Scotland and the poorer communities of south Wales.
The impact is easy to see in official statistics. Manufacturing output has shrunk rapidly over the past two years, now accounting for just 17 per cent of economic activity. Yet, despite the doom-mongering of politicians and industrialists, the sector's weakness appears to be having a negligible effect on national prosperity. Unemployment in new manufacturing blackspots such as Telford and Swindon is below the national average at about 2 per cent - too low for some local employers who still complain of labour shortages.
The adjustment process is gradual and difficult to identify, but it is the reliance on the service sector to replace vanishing manufacturing jobs that has alarmed some observers. Michael Davis-Bingham, head of economic development for Telford council, warns that call centres and distribution warehouses are poor substitutes.
"Unemployment levels are disturbing because the official figures are misleading. I am concerned about the quality of jobs not the quantity," says the veteran of urban regeneration schemes in the US and Birmingham.
At an industrial estate just a few roundabouts away from the council offices, this theory is being put to the test by Epson, one of the world's largest manufacturers of computer printers. The Japanese company grew to become one of Telford's largest employers in the 1990s having first been attracted by substantial government grants and protectionist import tariffs. But nearly two-thirds of the 2,400 jobs had been lost by 2001 when production of printers was switched to China.
Today, Epson's workforce in Telford has gradually climbed back up to 1,100, but the jobs that replaced the assembly work are very different. What manufacturing that remains is on a highly automated production line. Most new jobs have been created in a rapidly expanding call centre or in the distribution depot.
Ray Prior, Epson's operational support manager, rejects the argument that such service work is inherently inferior. "That's just prejudice," he says. "These attitudes stem from old engineering elitism and are part of the reason Britain has lost so much manufacturing in the first place."
Certainly, Epson's pay rates are little different from those received previously by its assembly workers, and the jobs on offer seem far less vulnerable to the destabilising cost pressures that have driven most electronics manufacturing to China.
Across town, the biggest source of new employment in Telford provides an even starker illustration of the changing face of industry. Lyreco, a French-owned distributor of office stationery, could be a real-life version of the paper merchants satirised in the BBC comedy The Office. Steve Law, its cheerful managing director, even sounds like his fictional counterpart David Brent as he enthuses about his salesforce needing a "warm- blooded relationship" with the customer.
Nevertheless, finding more efficient ways to sell paperclips and envelopes has brought more than 1,000 jobs to Telford. Lyreco's rapidly growing distribution centre has twice been voted among the top 50 best places to work in competitions organised by The Sunday Times and Financial Times.
Despite its gleaming glass office blocks, Telford's economy is based around a relatively low-skilled workforce and neither the "screwdriver" assembly lines of the 1990s nor the call centres of Lyreco and Epson provide inspiring visions of Britain's economic future.
Further south, in Slough, the location of The Office provides a more upbeat illustration of how the economy is adapting to the decline of manufacturing. Contrary to most people's expectations, more manufacturing is located in both the South East and London than any other region. Few places are more industrious than the Slough Trading Estate, just west of Heathrow airport. With 7,250,000 sq ft of business space, it claims to be largest trading estate in Europe.
The ever-changing list of estate tenants shows just how meaningless it can be to categorise businesses into manufacturing and services. One typical building has changed hands four times in as many years - from paint factory, to Amazon books warehouse, to internet hosting centre, to Centrica data storage facility.
Several manufacturers on the estate have been driven abroad, but the biggest - Mars confectionery - continues to infect the air with the smell of chocolate. Like a microcosm of the UK's economic melting pot, most of the 400 businesses are thriving, employing 20,000 people in almost every conceivable form of economic activity.
Sir Nigel Mobbs, chairman of Slough Estates, sums up this new flexibility with reference to the age-old English discrimination between workers' uniforms: "There has been a decline in traditional engineering which has been replaced by electronics, telecommunications and pharmaceuticals, but much of the work is office based. It's quite difficult to differentiate any more between what is blue collar and what is white collar. What is manufacturing these days?"
Selling modern machine tools for scrap
Nine months after he closed his Telford engineering factory with the loss of 75 employees, Chris Gladwin has the slumped shoulders of a man still in a state of disbelief.
The 51-year-old manager was asked to stay on by the Japanese parent company, Marusawa, to try to recoup some of its £5.5m losses by selling any valuable assets. But a spate of similar closures on the town's industrial estates means a growing number of For Sale signs.
Auctioneers refused to sell Marusawa's expensively acquired machine tools, claiming there was no market for such equipment. "It seems amazing to me that all this modern equipment can only be sold for scrap," says Mr Gladwin.
Some of the equipment was bought with a government grant of about £500,000 in the 1990s when Marusawa was attracted to Telford to supply metal carriage bars for the nearby Epson printer factory. Since Epson shifted production to China, most component suppliers have eventually had to follow suit.
The average length of service among Marusawa's Telford workforce had been more than 10 years, but when the factory was threatened with closure many slipped away while others sought union recognition to fight redundancy.
Most have been absorbed into the local economy or emigrated, and Mr Gladwin believes all but a couple have found jobs. "I bumped into one in the building society, another is doing a milk-round, but there seems little work in manufacturing any more," he says. |
