What stops us from becoming a net exporter?

[asterix]

1) The govt gives tax incentives and cheap loans to manufacturing companies and start-ups. The govt also gets rid of a lot of stifling bureaucratic red tape around these things.

There has to be red tape in order to stop criminals taking the incentives fraudulently. Such measure have been tried but proved unsuccessful


2) The govt gives incentives to the owners of brownfield sites and derelict areas in suitable locations, to encourage them to lease or sell their land to the manufacturing companies.

No doubt they would love to lease such sites if they could find a manufacturing company in the UK who wanted them.

3) One thing I noticed when I got up this morning is that the UK is an island. We therefore have lots of big ports, so it seems natural to put the manufacturing base near the ports: raw materials in straight off the ships - turn the magic handle - finished goods out straight onto the ships for export. Simples! Also, all the big ports are well connected to the motorway and train network, so the infrastructure is there.

As you say, the infrastructure is there so why doesn't it happen?

(Incidentally, the Chinese happen to own operating company of our biggest port:

The HPH port network handled a total throughput of 75 million twenty-foot equivalent units (TEUs) in 2010. In the United Kingdom, it owns the Port of Felixstowe (the country's largest), Harwich International Port and London Thamesport. HPH also has a substantial interest in ports in Argentina, Australia, the Bahamas, Belgium, Egypt, Germany, Indonesia, Italy, Malaysia, Mexico, Myanmar, the Netherlands, Oman, Pakistan, Panama, Poland, Saudi Arabia, South Korea, Spain, Sweden, Tanzania, Thailand and Vietnam. The Group is also involved in the investment, development and operations of a number of deep-sea and coastal/river ports in Mainland China.

)

They have us by the short and curlies!

 

[Headgardener]

Why do all of our companies belong to johnny foreigner. We seem to give away any British company to anybody that asks without a by your leave and all of any payments go straight into the pockets of very senior executives and lawyers.

 

[mac1]

I think there's all sorts of reasons for mass manufacturing not contributing enough to the exports and it's nothing to do with British workers, especially wrt cars.

Anyhow, things are actually a bit better than they're made out to be: I believe the UK is number one when it comes to marine propulsion and number two on aircraft propulsion. Probably lots of other little factoids, but I can't be bothered to look them up right now.

 

[mac1]

Why do all of our companies belong to johnny foreigner. We seem to give away any British company to anybody that asks without a by your leave and all of any payments go straight into the pockets of very senior executives and lawyers.

Well it could be because they see something in it for themselves that British investors don't - and not to eliminate the competition. They might see greater potential in our manufacturing companies than we do and are willing to invest the considerable funds over the longer term than Brits would be willing to.

Manufacturing is seen as too long term, too expensive = too risky. It seems, only the foreign global players are willing to invest the tens of millions minimum that it requires to make it work.(anybody knows better, correct me).

 

[buddha]

I've a (could be absolute nonsense) theory that the 'real' value is in parts. As in the bits and bobs that we in the UK buy from abroad and assemble.

Many of the UK companies that make these parts are SME's. And many of them are run by people who know little about manufacturing, especially modern manufacturing methods and ideas - in my experience. The shop floor is grubby and unorganised. This attitude rubs off on design staff>supervisors>shop floor staff, and puts unrealistic demands on design and production.
I'd say the above is true of about 50+ percent of the mfg. companies I've worked with or visited in the UK

Now go to Germany,and a few Eastern European companies.
The difference smacks you in the face.
First of all, everything is clean and organised - well, clean for a shop floor. In meetings, even executive managers have an impressive level of technical expertise. Best of all is the 'can-do' attitude, which seems to have vanished in the UK.

So there is a training/awareness issue with management here. But I think it's more to do with attitude.

My other gripe with UK manufacturing is investment. Especially the trend of executives selling-up to 'investors' who shift manufacturing abroad to "save costs". I worked with two specialist companies where this happened, where costs have increased due to the product being produced (and invariably re-designed) in another country. Eventually both companies went in to liquidation.

Then there is that nasty part of engineering - "Value Engineering". You know, the bit where products are designed to fail after a x-cycles last for a few years. This soon puts customers off and they switch to another (usually German or Japanese, and now Chinese/Malaysian etc) supplier. Take note Mr Dyson!

Just a few thoughts.

 

[asterix]

Well it could be because they see something in it for themselves that British investors don't - and not to eliminate the competition. They might see greater potential in our manufacturing companies than we do and are willing to invest the considerable funds over the longer term than Brits would be willing to.

Manufacturing is seen as too long term, too expensive = too risky. It seems, only the foreign global players are willing to invest the tens of millions minimum that it requires to make it work.(anybody knows better, correct me).

So with the economic powerhouse the City of London, the UK cannot drum up the funds to invest in its own industries?

The more likely explanation is that the history of British mismanagement of its industry, the arrgogance, complacency and closed minds of the typical UK industrialist made them reluctant to do so. British goods used to be the best in the world, a belief in the minds of industrialists that lasted far longer than the truth of the matter.

 

[Theseus]

So with the economic powerhouse the City of London, the UK cannot drum up the funds to invest in its own industries?

The economic powerhouse of London is only interested in

1) short term profit over long term growth/stability
2) financing people with the ideas, not providing the ideas, let along bringing them to fruition.

 

[asterix]

The economic powerhouse of London is only interested in

1) short term profit over long term growth/stability
2) financing people with the ideas, not providing the ideas, let along bringing them to fruition.

A classic complaint in the UK years ago was that inventors had the ideas in the UK but could not get anyone to invest or interest existing companies to take them up. No dragons den those days FWIW.

We had some excellent industries once, usually they flourished before the 2nd half of last century then went into a slow decline. Why?

 

[Angelfishsolo]

We had some excellent industries once, usually they flourished before the 2nd half of last century then went into a slow decline. Why?

Because other countries undercut us on price and matched quality.

 

[Red Light]

We had some excellent industries once, usually they flourished before the 2nd half of last century then went into a slow decline. Why?

Most companies on the FTSE100 are less than 50 years old and that's nothing new. Same with the Dow in the US.

 

[XmisterIS]

The economic powerhouse of London is only interested in

1) short term profit over long term growth/stability
2) financing people with the ideas, not providing the ideas, let along bringing them to fruition.

That's a good point.

I actually left industry, disillusioned, because we would have a new set of executives every three years and each time it seemed that actually all they were interested in was that the company would generate enough profit to allow them to buy a new swimming pool and another Jaguar at the end of the year. The execs weren't even engineers, didn't understand engineering and by all accounts didn't much care. All they saw were figures on a bit of paper.

The result? I worked on one particular project - a radar and aircraft sit-in simulator - for two years, I designed and wrote all the code for the radar part of simulation itself, plus all the graphics for the front end. After the company had spent £2,000,000 on it and it was about 95% of the way there, the plug was pulled and the project was "mothballed". Why? Because the people in charge were more interested in seeing immediate profits for that financial year, so it would look good on their CV before they left the company. That meant stopping all work on anything that wouldn't produce immediate profit.

Guess who left the company first and took all his knowledge with him ...

 

[Archie_tect]

Britain ruled the waves when it had the Empire- we had monopoly on sea trade backed by the Navy, all the bulk raw materials were available to British manufacturing because we forced the Colonies to work for peanuts [not literally... well, maybe literally]. British industry mechanised every labour intensive procedure so that farm labourers were underemployed and moved to cities as cheap labour, keeping overheads low. Manufacturing owners made high value goods which other countries needed so we were in control. British foreign policy kept competing countries tied up in treaties or wars... the rest were tied to British world patents. Britain had a monopoly until the Colonies started to revolt and took control. The Commonwealth is no longer tied to Britain so we don't have a commercial advantage. Labour and overheads are prohibitively expensive in Britain, we no longer have control of merchant shipping so raw materials have become even more expensive. Made in Britain no longer has the cache it had. Made in Japan took on that role but they had to import all their raw materials too so production costs went up and Japan has fallen away as a world power. Made in China is no longer the poor quality production it used to be and they have access to all the raw materials they need- unfettered by bureaucratic red-tape- the Chinese work ethic, the lack of interest in controlling pollution and their labour laws means they will continue to run roughshod over the rest of the world for the foreseeable future.

 

[mac1]

So with the economic powerhouse the City of London, the UK cannot drum up the funds to invest in its own industries?

The more likely explanation is that the history of British mismanagement of its industry, the arrgogance, complacency and closed minds of the typical UK industrialist made them reluctant to do so. British goods used to be the best in the world, a belief in the minds of industrialists that lasted far longer than the truth of the matter.

Yeah, I did say UK investors were unwilling as opposed to unable to invest in manufacturing. As a result, manufacturing cannot raise the funding which would enable them to be competitive, and with large scale manufacturing, capital investment is king - you can have fantastic workers working 24/7 for free, but if management are telling them to make dull, unimaginative, underdeveloped, threshold products on 50 year old scrap value machinery, the company won't last long.

 

[mac1]

and assemble.

Many of the UK companies that make these parts are SME's. And many of them are run by people who know little about manufacturing, especially modern manufacturing methods and ideas - in my experience. The shop floor is grubby and unorganised. This attitude rubs off on design staff>supervisors>shop floor staff, and puts unrealistic demands on design and production.
I'd say the above is true of about 50+ percent of the mfg. companies I've worked with or visited in the UK

Maybe the most valuable part of a British manufacturing company (if they own it) is the land when they sell it to Wimpey's or Barrett's after the company ceases to be economically viable, because they've run the half century old equipment into the ground without reinvesting...

 

[Orange]

Last yearthe UK was ranked third in the world for the amount of foreign direct investment received, after the USA and France, so plenty of countries see the UK as a good bet for investment.