Manufacturing in the Midlands

Hour of revival: Many of the UK’s hopes for a vibrant and growing manufacturing sector will rest on activity taking place in the Midlands

When in 1896 the first four-wheel British petrol car hurtled down the streets of Birmingham, local residents couldn’t have known what was to follow. The drive heralded the arrival of the largest concentration of motor manufacturers anywhere in Europe, bringing innovation, wealth and employment to the area.

By this time, the industrial revolution had already cemented the Midlands’ reputation as a hub of engineering excellence and expertise. Beginning in Shropshire and spreading to the rest of the world, manufacturers in the Midlands led the way in producing coal, iron, steel and ceramics.

More than a century later and from the potteries of north Staffordshire to the aerospace clusters in Derby and Wolverhampton, the region remains a prime centre of UK manufacturing expertise.

But this talent has taken a hit in recent times following recessions, company closures and high-profile job losses. In December 1996, 575,500 were employed in manufacturing throughout the region. By December 2010, this figure more than halved to 285,500.

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Between 1997 and 2010, manufacturing output in the Midlands dropped from £15.3bn to £11.8bn – the highest percentage anywhere in the UK. Charles Addison, commercial director of business organisation Made in the Midlands, believes such headline figures were hugely damaging to attitudes in the area.

‘The media were very keen to feature downcast manufacturing bosses on their programmes,’ he said. ‘At the time, we had a high unemployment rate and it was a self-perpetuating mist of depression. The whole point was to remember that this is where the industrial revolution started and this is where the best skills still are despite everything that has happened.’

For Addison, the spirit of the industrial revolution is re-emerging. He notes that manufacturing was the best-performing sector in the UK economy in the first quarter of this year and claims that the majority of Made in Midlands’ members recorded their best-ever trading period last year.

‘We represent around £1.8bn of regional manufacturing turnover and between them our 270 members created 800 new jobs last year,’ he said. ‘We still have our major manufacturing clusters, world-leading technology and a very lean and hungry market.’

The Midlands automotive sector, which accounts for around 30 per cent of UK car production, has been the first to feel the effects of the revival. The region has a strong automotive supply chain and hosts a number of major groups including Jaguar Land Rover (JLR), Aston Martin and MG Rover.

This is where the industrial revolution started and this is where the best skills still are despite everything

Charles Addison

Earlier this month, JLR said it would invest £200m to expand its Castle Bromwich plant, just three years after it was threatened with closure. The news followed an earlier announcement by JLR that it was to build a £355m engine plant in Wolverhampton that will bring a further 750 jobs to the region.

Positive news also appeared from the construction sector. Late last year, Caterpillar announced it would invest £50m in its UK manufacturing facilities and expand production facilities in Leicestershire and Stoke-on-Tees. The group also announced it would create 300 new permanent jobs.

More high profile have been the emerging engineering opportunities in the region’s aerospace cluster. The hub of the cluster is found at Rolls-Royce in Derby, which accounts for one in four of the region’s aerospace jobs. A second cluster is formed around the companies Aero Engine Controls, Goodrich, Moog and Meggitt in Wolverhampton, Birmingham and Coventry.

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In the hub: the Midlands is home to a number of signifi cant engineering clusters

These companies are supported by research centres located in universities throughout the region. One of these, the Warwick Manufacturing Group (WMG), has recently overhauled its International Doctorate programme to give new and existing engineers experience in major manufacturing projects.

‘This is a vibrant area that’s growing, and it’s not showing any signs of letting up,’ said Dr Kerry Kirwan, associate professor at WMG. ‘Our programme bridges the gap between education and industry. We’ve got companies queuing up with projects but the challenge is finding the right people to do them… we just don’t have enough applicants for the number of opportunities available.’

According to Semta, 19 per cent of engineering groups in the region reported skills gaps

According to Semta (the Sector Skills Council for Science, Engineering and Manufacturing Technologies), 19 per cent of engineering groups in the region reported skill gaps in the current workforce, which was slightly less than the proportion within UK engineering. The most frequently cited gaps were in areas such as CNC machine operations, tool setting, fabrication and welding.

‘Our biggest problem is that the typical demography of the shop floor tends to be 50- to 60-year-old men, many of them nearing retirement age,’ said Addison. ‘It will be the skills that these guys have that simply aren’t being taught anymore. They are at risk of being lost, and companies are frantically trying to take on apprentices.’

‘The university technical college model that has worked in Walsall and one in Dudley and Birmingham, is I think the way forward,’ he added. ‘If that works, we could have a workforce of highly focused and highly skilled engineers, as you might find in India or China at the moment – there is no reason why that couldn’t happen.’

Addison’s optimism is reflected in the ambitious plans manufacturers have laid out for the coming years. For a region that accounts for more than a quarter of the country’s engineering employment, the Midlands has a responsibility to help bridge the skills gap. So far the revival has kept up its momentum. Opportunities in the Midlands are flourishing, and if it can attract the right workforce, so too will hopes of a national economic recovery.