Sectoral Discussions

Aerospace Sector Discussion

Under investment and approvals processes hinder aerospace sector

The aerospace discussion group at the UK Manufacturing Summit offered some lively debate and a range of topics of major concern to the sector.

Chairing the group, Ian Godden, chairman of trade association A|D|S, outlined the strong position of UK aerospace, pointing out that it was the biggest in Europe and the second biggest in the world, with 17% of global market share.

However, concerns were raised as to how this position was to be maintained, given a relative shortfall of Government investment in the sector. It was pointed out that France and Germany had each invested €1.2billion in the new Airbus A350 project, while the UK had invested just £340million. Equally, while the industry had identified a need for an annual investment of £100m in research for a new fixed wing aircraft, it had been allocated just £40m.

Godden made clear the possible consequences of such under investment, saying: “Unless we hang on to the [Airbus] wing design, our market share will shift from 17% to the level of other UK manufacturing industries.”

While it was felt that the industry was less troubled by the skills gap than some –because it was still fairly 'sexy' relative to other sectors – a major bugbear for suppliers was the difficulty of getting into the supply chain in the first place. It was felt that the requirements for compliance were hindering cost saving and actually blocking UK firms from entry.

Andrea Rodney of Hone-All Precision summed up the problem, saying: “We have to pay £3500 to get approval; even then, we don’t get the business because we don’t have the correct company approval.”

Automotive Sector Discussion

Long term commitment needed from Government

The automotive breakout session, moderated by Mark Johnson of Jaguar Land Rover, was quick to agree priorities for the sector and to identify the coherent, common messages it wanted to present to Government.

Top of the list was the need for long term commitment and consistent message from Government – of whatever party; it has to 'walk the talk'. Energy costs were also identified as being in the 'urgent' sector of the agenda – but the need for improved energy efficiency was also recognised. “Competitive energy supply and costs are the priority for today; efficiency for the longer term,” a contributor said.

The need for technical skills and shopfloor abilities was also highlighted, but challenges were recognised and acknowledged. Chief among these is the history of manufacturing over the past 25 to 30 years: many relatives of potential candidates have lost jobs in the sector. However, as the economy is rebalanced, technical and craft skills will be needed in the longer term.

Presenting manufacturing as an attractive career option to schoolchildren and ensuring effective training are different, but complementary. Both Imagineering and Manufacturing Insight have important roles to play in encouraging interest in engineering and marketing it.

The key issues are a single focus, a clear message and coherent presentation.

Defence Sector Discussion

A nervous sector

The UK defence industry, which employs 300,000 people and accounts for 10% of the country’s manufacturing output, is nervous, according to discussion led by Andrew Sleigh, formerly chief technology officer of QinetiQ, but currently an innovation consultant.

Primary concerns were what are expected to be 'big cuts' in R&D money from the Ministry of Defence and the prospect of yet another defence review at a time when China and India are expected to become major defence procurers – and hence competitors – in five years time. One of the contractors present commented 'what the MoD is completely focused on at the moment is cutting. How is the UK defence industry going to cope with the effects of all the cuts?'. Sleigh’s response was: “There is talk of adaptability and flexibility, but I don’t think many people at MoD get this. But maybe we are at a unique moment in history.”

The attendees were unanimous in putting the need for long term, high level government commitment at the top of their list. Other big concerns were: R&D tax credits; the need for direct government grants to undertake developments particularly demonstrator projects to maintain skills which were described as ‘essential’.

Skill shortages, already seen as a problem, were also highlighted .Remarks made included: “Half the problem is that manufacturing industry is not prepared to train engineers. Large companies do so, but smaller ones don’t.” And, because it takes at least five years for an engineer to become skilled, attendees commented they were dependent on recruiting engineers from overseas.

There were also complaints about the Regional Development Agencies 'playing politics', but Sleigh pointed out: “ They do provide a single access to government.” On the subject of protection of intellectual property, there were complaints that UK companies were expected to share their knowledge with the US. “But this was not a two way street,” Sleigh observed.

Electronics Sector Discussion

UK electronics manufacturing calls for a single voice

High on the list of concerns expressed during the electronics industry breakout session was the need for a single voice to express the issues across all sectors.

Other concerns expressed during the discussion, led by Electronics Leadership Council chairman Harry Tee, included encouraging more young people into the industry, skills issues, energy costs and optimising supply chains.

Delegates agreed there is a vital need to add value to UK PLC. Tee warned: “We don’t have a cohesive voice, so manufacturers need to pull together. We must agree our key messages and get them to policy makers.”

David Kynaston, chair of the Electronics Knowledge Transfer Network, added: “To have an effective manufacturing strategy, we must embrace low cost resources, but to sustain electronics manufacturing, we need a high level of efficiencies.” Kynaston noted that without Government investment, innovative products in the UK will 'perish', but conceded that the industry could only expect limited participation.

“Unfortunately, we are dealing with a bankrupt administration,” he continued. “This brings with it a huge restriction. When you need support from the Government you are often tied up by legislation – the regulations are phenomenal and it’s a major impediment for anyone investing in a new plant in the UK.”

Delegates observed that offshoring has now become 'too easy' and investment in skills was crucial if the UK is to create a differentiation in the global market. “We don’t want people with core skills,” noted delegate Colin Guest, manufacturing and engineering manager with Zarlink Semiconductor. “Graduates have a level of expertise in a particular field, but cannot get jobs as the market is not there. There is a growing need to recognise technicians and apprentices, but there is still a matter of influencing Government and getting the message across to create excitement for young people.”

Energy costs were also a major concern, particularly as semiconductor sites in the UK are typically large. Philip Baker, engineering manager at Mekufa, observed: “Compared with the rest of Europe, the UK’s electricity is far more expensive. With the gigawattage manufacturers produce, it’s a significant problem and will affect our infrastructure.”

The delegates concluded the three key issues on which SMEs focus most closely are: innovation, to work the industry out of recession; regulation, to make it easier for companies to survive and move forward; and access to export markets, to make it easier to market abroad.

It was agreed that a single voice was needed to address the industry’s concerns to Government level – a warning to all parties that the manufacturing sector could equate to 3million votes.

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