German machine tool manufacturer Heller has announced it will shift production of a sophisticated new machine tool from Germany to its subsidiary plant at Redditch in the UK.
The move provides a small ray of light amid the persistent gloom surrounding inward investment, as the high pound continues to hit the competitiveness of exporters.
The decision comes in stark contrast to the warnings from many overseas investors that further investment decisions in the UK could be stalled because of strength of the pound.
Heller president Berndt Heller said the production shift to the UK was based on available capacity at Redditch and productivity gains at the plant, which has shown a 45% improvement over the past two years – just enough to outweigh a 40% rise in the value of sterling.
Redditch exports about 95% of its output, but is expecting to expand its domestic business.
A high proportion of the components for its MC26 and MC25 machining centres are imported from Europe, softening the impact of the pound’s strength. `At the moment we can survive,’ Heller said.
But the Heller boss admitted to being seriously concerned about the pound’s continuing strength. `If the high level of sterling persists, it will affect the whole of manufacturing industry, not just the machine tool business. It has to come down, otherwise the whole of the UK’s manufacturing industry will lose competitiveness,’ he told The Engineer at the Mach 2000 machine tool trade fair in Birmingham this week.
Heller, who is also president of the German machine tool makers’ trade body, contrasted the lack of action by the UK government over manufacturing industry’s woes with the situation in Germany, where he said that in previous times of a high deutschmark, policy makers reacted more quickly: `That is because they are aware that they need manufacturing industry for the general welfare of the country,’ he said.