Lost generation

Nobody needs to be told that these are hard times across the board for the engineering sectors. This is nothing new, though — engineering is cyclical by nature and you’d expect that companies would have well-established methods for riding out the downswings.

You might expect that, but you’d be wrong.

The annual survey from the Society of British Aerospace Companies (SBAC) shows that the credit crunch is starting to hit aircraft manufacturers and their suppliers. Orders are dropping away and the domestic market is falling. What is worrying is that research and development (R&D) and employment are both falling sharply.

Naturally, in a recession, companies seek to make cuts and efficiency improvements — that well-known euphemism for job losses — are often among the first places they look. R&D departments tend to be hit hard, as they do not contribute to the immediate bottom line and cost a disproportionate amount of money. Aerospace isn’t the only industry to see this trend — the pharmaceuticals industry, among others, is also trimming back its research budgets at the moment.

Ian Godden, SBAC chief executive, sets alarm bells ringing, however. ‘The danger to the future of what is a successful manufacturing and engineering industry to the UK is all too obvious,’ he said. And he is quite right. Cutting back too hard on R&D in the 1980s left many British companies floundering when the economy picked up; expertise had gone elsewhere. Current world-leading research streams on composite wings, engine technologies and avionics should not be allowed to die back — they might cost more money than they generate at the moment, but that situation could soon reverse.

The job losses are also a worry; Godden said that, although there is a good influx of graduates and apprentices into the aerospace sector, there is a dearth of experienced engineers in their mid-30s and -40s and companies are considering recruiting them from other industries. They might have a job, because we’ve heard the same from the other industries — the defence, rail and space sectors have all told The Engineer about the shortage of experienced people in recent months. An indignified scuffle could be in the offing — good news for these engineers who will suddenly find themselves in demand, not so good for the companies competing for their services.

Companies need to think very carefully before they cut. Of course, savings have to be made, but if they come at the expense of potentially profitable technology development, or of stripping their companies of vital skills, they are likely to be a false economy.

Stuart Nathan
Special Projects Editor