Is this another nail in the coffin for UK manufacturing? 2

[chris9]

Sheffield Forgemasters was declined a government loan of £80 million to build nuclear reactors parts. This would have created a couple of hundred jobs plus many more in the supply chain. The reasons given by the UK government are lack of funds. If ever there was a case to give UK manufacturing a leg up then this was it!

Is there an anti nuclear agenda here?

http://www.yorkshireeveningpost.co.uk/news/Labour-urges-rethink-on-Sheffield.6440193.jp

Chris

http://www.value-design-consulting.co.uk

 

[KENAT]

It's not working in the US though. US has enough accumulated wealth that it can let it trickle out quite a while before being bankrupt, doesn't mean it's working.

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[SnTMan]

KENAT, I was just being facetious, that's what the "At least for now..." meant.

I think the idea of a mainly service based economy is crap, and in fact many services are now being off-shored. After all, if some one else can do it cheaper...
But, as a call center worker, what do you do next?

I admit I don't understand what's called the economy these days well at all. Except maybe as an insiders' game.

Regards,

Mike

 

[corus]

DrillerNic identifies a probelm that jmw has picked up on, ie. that teh workforce with teh knowledge abd experience is gettnig older, is not being replaced, and can hardly see teh keyboard never mind the screen. The UK governemnts attempt to rectify this probelm by raisign the retirement age to 106, or whatever, to keep these aged and half blind workers on won;t solve the problem in my view. Braille computer screens mayeb?

Tata

 

[DrillerNic]

jmw- ha ha ha... I guess I just can't type!

The work that I do as a Drilling Enigneer is a service- my last employer, Schlumberger, was an oil service company who make it very clear that they sell a service and not things: they won't sell an oil company a drilling tool, but they'll rent it and an engineer to them instead.

 

[DrillerNic]

Kenat- the "service" type economies that I've mentioned tend to work better in smaller countries (ie those with smaller populations). Within the EU, the countries with the highest contribution from the "service" sector (however defined) are Denmark, Belgium, Luxembourg and Holland.

One thing that is interesting is that as the age of industrial societies with mass production used to be seen as bad: things like the dehumanising effect of mass production, with workers having no scope to influence working practices and the physical arduousness of manual work meant that the move to the service economy was seen as good thing in the 50's (the last thing many parents wanted for their children was to follow them into the mines or onto the shop floor). But now the mass production industrial age is seen as a sort of golden age with full employment for life....

One difficulty is that the working class used to be able to sell their physical strength (as soon as a working class person was educated enough to sell their knowledge they became middle class!), and that's no longer possible in a service economy and it's getting much harder to do in a high technology manufacturing economy too. Can a role can be found for the part of the population that used to sell their strength in the new high tech manufacturing and service economy that the UK is/ has become? Educating them all to a higher degree so that everyone can take their place in the bright new high tech future of the UK will be expensive, and in the UK, where a technical education has always been the poor relation to a academic education, difficult (for example, the low status of engineers compared to say, doctors in the UK is due to this disdain for anything that might be a bit "hands on" or technical). Or we can take the low road: with the loss of mass employment, mass production the lower skilled part of the population may be condemned to working in the low tech service economy: call centres, care homes and the like, with the same low status, low pay, low prospect for advancement as before but without the protection of low unemployment and large scale employers with fairly fixed employment relationships and large unions, in an increasingly unequal society.

Right now, it looks like the UK is headed down the low road....

 

[KENAT]

I guess my concern is that even if you had infinite university places etc, I'm not convinced all folks are naturally suited/have the aptitude to take advantage of it.

Some people just seem better at 'crafts' rather than at more 'intellectual' pursuits.

I'm certainly not saying the intellectual are fundamentally better than crafts either.

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[jmw]

Hi DrllerNic,
I too once worked for Schlumberger - in the days they made things to sell.... Schlumberger Instruments.

You raise an interesting point though. I have despaired of the various "manufacturing" companies I have worked for. They wanted to sell standard off-the-shelf products.
Customers wanted to buy solutions.
Of course there is always a wide gap between what the sales force kept selling or trying to sell and what the companies made. The size of the gap was always proportional to the missed opportunity.
By selling solutions you add value and you have a more saleable solution and you exploit your in-house skills base to its larger potential. Much is simple profit on factoring in the necessary valves, pumps etc. manufactured by others and most can be done on sub-contract so most of the necessary engineering and drafting skills can be outsourced to the fabricator.
This ought to be money for old rope but a surprising number of companies I have worked for where resistant to any form of innovation.
In the longer term these are the companies that got bought out by others and asset stripped.



JMW

http://www.ViscoAnalyser.com

 

[TJOrlowski]

After reading this thread, I can't see distinct differences between British perceptions of their economy, and the direction in which I believe the US is headed (we just may be lagging behind slightly).

With respect to favor for nuclear power in the EU: doesn't France produce almost all of their energy via Nukes? With a 75% debt-to-GDP ratio, they're by no means economic wizards, but I'm pretty sure French citizens enjoy cheap, abundant energy.

-TJ Orlowski

 

[jmw]

They do and they sell the surplus to the UK.
The only trouble is in hot weather. Most of France's reactors are on rivers and shut down when the river flow is too low. In the UK they are on the coast.
So when the UK energy deficit finally catches up with it, which won't be long, and discovers all those wind turbines to be useless, it won't be so able to call on French surplus.

JMW

http://www.ViscoAnalyser.com

 

[DrillerNic]

jmw- I think Schlumberger Instruments still makes stuff, but it's a very small part of SLB compared to the Oilfield Services division.

TJOrlowski- indeed France generates a lot of its electricty via nuclear power stations. In terms of their economic policy, they've chosen a particular version of free market capitalism: quite highly regulated, with good legal protection and good standard of living for those in employment, but with the price of quite high unemployment. But it's pretty sucessful (several world leading companies such as Total, Lafarge, Thompson, LVMH, EADS) and so far they haven't had any problem servicing their debt. And their expereince of teh recent recesion wasn't as bad as the US.

Yer pays yer moeny and yer makes yer choice!

 

[DrillerNic]

Article in today's Gaurdian about the lack of a recovery in UK manufacturing which has some interesting points (what exactly is manufacturing? Should the UK government have an export finance and insurance arm? Why doesn't the current UK goverenment even have a trade minister?)

http://www.guardian.co.uk/business/2010/aug/09/why-uk-exports-not-recovering

 

[jmw]

Driller Nic
The bit I worked for was flow and process analysers. Neptune and Solartron. Neptune also made domestic water meters so Schlumberger also bought a domestic gas meter company (Thorn EMI) at the wrong time and a domestic electricity meter manufacturer to complete the set and then set about remote reading systems etc..

All gone their separate ways now.

They had some link to oil and gas, but very little to do with exploration.

Essentially I was there at the end of the diversification phase of the cycle and the beginning of the divestment and core activity focus phase - these are said to be 20-25 years cycles most major companies go through.

JMW

http://www.ViscoAnalyser.com

 

[TJOrlowski]

DrillerNic- 88% debt to GDP ratio here in the states, I wasn't knocking down the French energy policies as that would be silly compared to the policies adopted by our elected officials over the last two decades. I'm not saying you were refuting my point, just wanted to make the clarification.

-TJ Orlowski

 

[moltenmetal]

Perpetual economic growth is ultimately a pyramid scam anyway, regardless of whether you underpin it with manufacturing or services. The only way we can pretend to maintain it in the developed world even now is by deflating our currencies.

I too don't see how you can expect a society to survive solely on selling insurance and video games and cellphone service to itself. I also see many of the services, including our own profession of engineering, being increasingly outsourced to lower-cost labour markets. Nobody is immune- apparently, even the Japanese are out-sourcing call centres, despite their unique language. Apparently, many of the people who work in these call centres are young Japanese who can't find work at home, and settle for lower wages offset by a lower cost of living in countries like Thailand etc.

As far as the fundamental value proposition, we've found in our own business that it is far easier to be paid properly for engineering if you sell an engineered product rather than man-hours (selling "solutions" as one poster put it).