Keeping the momentum

IF the proverbial man in the street was asked to name a manufacturer in the North-East, a few household names would most likely spring to mind such as Nissan, Thorn Lighting or even Corus, now renamed Tata Steel.

In fact there are scores of companies in the region, from those employing only a few people to others providing hundreds of jobs, making things to world-beating standards.

Phil Kite, regional chairman of manufacturers’ organisation EEF, pointed out that manufacturing accounts for 19 per cent of GVA in the region, compared to 12 per cent as a national average.

Mr Kite, who is also managing director of engineering company Astrum, Weardale’s largest employer, said: “Manufacturing is the foundation on which our economy is based and we are trying to get that message across to the Government at the moment.

“We are looking at all these Government spending reviews and at the same time as seeing you need to make cost savings, we think you can still encourage manufacturing.”

He believes a strong manufacturing base is important to the region, particularly bearing in mind the public sector jobs cuts expected to follow tomorrow’s Government spending review.

The North-East is more dependent than any other region on public sector jobs.

Mr Kite said: “It is our role to get us through the next stage of the recession. Our industry has had its hit in the past two years and the role of the private sector creating jobs will become more important.”

He also pointed out that manufacturing companies did not only employ people on a production line, but created jobs in everything from IT to administration.

He said: “My own company Astrum is a good example. We have a plan for growth where we are recruiting not just on the shop floor. We employ a wide variety of people.”

This view, that manufacturing creates a wide range of jobs across all skill bases, was also backed by Dr Colin Herron, manufacturing and productivity manager at development agency One North East. Dr Herron has previously spoken of the need to encourage youngsters to become interested in careers in manufacturing and engineering by demonstrating to them that “things they find exciting like X-boxes and iPods are all engineered.”

He said: “When I started, the company I worked for took on 12 apprentices a year, a couple at the top went on and did degrees, then you had technicians, then some lads who were always going to be on the tools.

“Nissan do it now – people are in all sorts of jobs.”

Dr Herron has played an integral role in the drive to turn the North-East into a centre of excellence for electric vehicle development.

He believes low-carbon industries, which also include wind turbine development, wave and solar power, offer the North-East an opportunity to put itself on the map for “making things” in the way it did in Stephenson and Armstrong’s day.

Dr Herron said: “Manufacturing is important for the following reasons. One, it creates wealth; two, it creates jobs; and three, manufacturing needs skills.

“In addition the region gets a reputation and we had that reputation.

“We have got to get back to the history we had with people that create wealth and jobs and the low-carbon economy is our chance to do that, our chance to create the new Stephensons and Armstrongs and get people to come through.

“We have to get the yards and factories stuffed with people making things.

“We need to make this the region of first choice when people think ‘where do you go to manufacture something?’.”

The foundations of a strong low-carbon manufacturing sector are already taking shape across the North-East.

Take wind power. Tata Steel, formerly Corus, is planning to create 220 jobs at a £31.5m facility at Redcar producing steel structures to fix wind turbines to the seabed.

The firm’s Special Profiles division, in Skinningrove, east Cleveland, last year secured five European orders for equipment to join sections of wind turbine towers.

Last month, TAG Energy Solutions announced that it would create about 400 jobs at a new factory making offshore wind turbine foundations on the banks of the River Tees at Haverton Hill, Billingham.

In addition, Hartlepool firm JDR Cables is a world leader in producing cables to connect wind turbines, Clipper Windpower is developing the world’s largest turbine blade at a £25m riverside plant near Newcastle, and Europe’s leading wind turbine testing factory is at the New and Renewable Energy Centre (Narec) in Northumberland.

Electric vehicles are also set to be massive for the region.

In March, Nissan’s Sunderland plant secured production of Leaf from 2013, following on from the previous year’s announcement that the Japanese car company had chosen Wearside for what will probably be the most advanced electric car battery manufacturing plant in Europe.

The region is also the UK’s low-carbon economic area for low-carbon vehicles, is building an £8.4m national Skills Academy for Sustainable Manufacturing, is developing an open access test track and is installing more than 1,300 electric vehicle charging points.

The Wearside-based Tanfield Group’s Smith Electric Vehicles division is at the forefront of electric truck production, supplying bluechip companies including Coca-Cola and supermarket chain Sainsbury’s.

Trevor Mann, Nissan’s senior vice-president for manufacturing in Europe, believed that low-carbon industries provide a big opportunity for the region.

He said: “I think we have a lot of things going for us. For example, to be able to make wind turbines in the region and supply work to other companies that support that type of industry is a big opportunity.

“It is an opportunity for everybody, not just the North- East, but we are a good region with something to offer.”

That supply chain element is one of the reasons why when Nissan’s Sunderland plant secures production of a new vehicle, it is not only cause for workers on Wearside to celebrate.

Mr Mann pointed out that the plant provided three jobs in the supply chain for every direct job with the motor manufacturer.

In August, it started production of the Nissan Juke and its impact on an injection moulding firm almost 30 miles away gives a stark example of how it all fits together.

Two months ago, Formula Plastics, based in Newton Aycliffe, took on extra staff after securing work connected to the new model.

It followed a torrid time for the company, which was hit by the motor industry downturn in late 2008 and lost more than half its business in the space of six months, went from 30 employees to 21, moved from a five-day week to four, then three and moved from three shifts to two shifts for four months.

Managing director John Suggate described the situation as “really tight” and added: “It was biting your fingernails time.”

Now the company has taken its workforce up to 33, more than before the downturn and has got back to its prerecession annual turnover figure of £1.5m.

Mr Suggate said: “That is because we are doing work for the Nissan Juke; our main recovery was getting that.”

Nissan had sold 22,500 Juke models before it first rolled off the Sunderland production line in August and expects to produce 100,000 in the next year, based on the strong preorders.

Formula Plastics also supplies tooling and mouldings for Thorn Lighting, which last week announced it was moving its head office to Spennymoor, a good indicator that the future is secure for the plant, which employs 500 people.

Mr Mann said: “Obviously the impact to the region is huge.

“We source products based on a number of factors, quality and cost being two of the major factors, and we look farther afield for many of our parts, but what we have proven is if you work closely with your local suppliers to improve your competitiveness, it improves our ability to attract new vehicles.”

Mr Mann believed that a strong manufacturing base is vital for the region.

He said: “It is very important. Obviously our heritage is in manufacturing, it is where most of our skills base is and it is important we keep a healthy manufacturing sector.”

Mr Mann believes there are a lot of pluses the region can take advantage of.

He said: “We have a willing and skilled workfore in manufacturing. We have a good infrastructure in terms of the road networks, and in particular for those companies based on imports and exports, we have a number of ports in the North-East, which give us quick and easy access to the whole of mainland Europe.

“I think on that basis it is not a bad place at all.”

Dr Herron believes that having existing expertise in the region, as well as a good supply chain, encourages other firms to move here, creating more jobs.

The leading car manufacturers are looking at a number of locations to use as test beds to develop hydrogen-powered vehicles with one expected to make a decision at the end of the year.

Germany is known to be keen to become a centre for hydrogen vehicle development but Dr Herron believes the North-East’s excess capacity for hydrogen, a pipeline grid which is a legacy from ICI on Teesside and a proven track record in low-carbon vehicle development gives it an advantage.

He said: “The reputation spreads and new people come to the region, it starts to grow on itself, it gets some momentum.

“That is what we are trying to do with the low-carbon vehicles, so if anyone is thinking of developing hydrogen vehicles, they will come here first.”

Mr Kite added: “Momentum is everything and we want the North-East to maintain a significant manufacturing economy.”