The last of the metal-bashers; In odd corners of the country British industry clings on

Manufacturing towns

The last of the metal-bashers; In odd corners of the country British industry clings on

Mar 30th 2013 | BARROW-IN-FURNESS, CORBY AND PENDLE |From the print edition


TO WALK into Devonshire Dock Hall, in Barrow-in-Furness, a town of 70,000 in England’s north-west, is to walk into the heart of a community. Some 260 metres long, this cathedral of industry houses three part-built grey and black nuclear submarines. Workers in blue overalls and hard hats are busy assembling the vast machines. Among them are “fourth- or even fifth-generation shipbuilders”, says Alan Dunn, the operations director at the plant. “When people here go to the pub, they talk about submarines. The yard dominates everything we do.”

In most parts of Britain, manufacturing has all but disappeared in the past half-century. In 1997 about 4.4m people worked making things; now, just 2.8m do. North of Birmingham the urban landscape is characterised by redundant factories and the glitzy regeneration schemes intended to replace them. And yet in a few places, such as Barrow-in-Furness in Cumbria, or Pendle in Lancashire by the Yorkshire Dales, manufacturing and engineering continue to thrive. If there ever is a new “march of the makers”, as George Osborne, the chancellor of the exchequer, hopes, these places will be where they head for.In Barrow 33% of male employment is in manufacturing and engineering—mostly at BAE Systems (virtually all the manufacturing employees there are male). In Pendle the figure is 29%, many in small and medium-sized aerospace and high-tech businesses which cluster around a Rolls-Royce factory. In Corby, a former steel town in Northamptonshire, a sprawl of factories processing food and fashioning steel tubes employ a quarter of the population. All three offer lessons about how to succeed in manufacturing in Britain today.

The first condition is to have a long history of making things. Like its neighbour, Burnley, Pendle’s industry has its roots in the 19th-century cotton trade: many of its newer businesses still operate out of revamped historic mills. At the centre of Barrow-in-Furness is a grid of spectacularly grand redbrick Victorian buildings, erected by the entrepreneurs who founded the town to exploit nearby iron-ore and coal reserves to smelt steel and build ships. Corby grew up as a post-war new town around a 1930s steel works.

But a bit of government intervention also helps. Barrow would no doubt have gone the way of Britain’s other shipbuilding towns without Ministry of Defence orders for submarines. Pendle’s aerospace businesses, though now largely independent of government demand, owe their existence to a decision to relocate aircraft manufacturing out of range of the Luftwaffe in the second world war. Corby had the first of the enterprise zones the government created in the 1980s.

Such history provides a pool of skilled labour, as well as lots of suitable sites for industry. The quality of the workforce is especially important in places such as Barrow and Pendle, which are far away from big cities and where the businesses are more high-tech. But it probably helps in Corby too, as even low-tech manufacturing operations tend to need a good number of trained engineers and technicians. Highly skilled workers maintain the competitiveness of local businesses, but they also help new ones set up, both because they attract outside investors and because ex-employees start their own firms.

Unfortunately, this skilled workforce is an extraordinarily fragile resource, which may help explain why Britain has so few manufacturing clusters left. Barrow’s shipyard is still recovering from the late 1990s, when defence cuts led to an exodus of valuable staff. When people leave, it is hard to get them to move back, says John Hudson, the submarines director at BAE Systems. Even if engineers want to return, there is too little in these isolated and monochromatic economies for their wives (or husbands) to do. Dennis Mendoros, the founder of Euravia, a company in Pendle which services aircraft engines, complains bitterly that too many engineering graduates prefer to become bankers or management consultants in London.

Local loyalty is one thing that can overcome the capital’s pull. All three places now have enormous, new, factory-like technical colleges, and in Pendle and Barrow, at least, most talent is home-grown. In Barrow 97% of people identified themselves as “white British” in the 2011 census. In Pendle the taxi drivers wear salwar kameez and speak Urdu but they are almost all British-born. Only Corby, which is far closer to London, has had much immigration in recent years.

Without manufacturing, these places might well have little work at all. Barrow-in-Furness and Pendle in particular are too far from big cities to support the service-sector businesses that Britain does so well. None of the three has a university to attract and retain high-flying professionals. Small-town life does not appeal to many young people—even though in Pendle newly-qualified technicians can buy pretty Victorian terraced houses at the age of 21 and spend their weekends hiking and cycling in the mountains. Secure jobs support local pubs and shops, and entrepreneurs live in the homes of the old mill-owners.

More could be done to boost growth. As he shows off his machines, Ian Weatherill, the co-owner of Hope Technology, a bicycle-parts firm in Pendle, says that he has repeatedly been told to transfer production overseas to cut costs (he has ignored this advice). Barrow-in-Furness will be lost if demand for submarines ever dries up—and yet it lacks basic infrastructure improvements that might attract new businesses. Of the three, Corby’s jobs are probably the most sustainable, but they are also the worst paid and least enjoyable, and increasingly done by immigrants.

It may be too much to hope for a manufacturing renaissance. In Mr Weatherill’s converted old mill, where once hundreds of workers would have sat at their looms, tens of robot lathes now hum under the watchful eyes of barely a dozen supervisors. Most manufacturing has become too mechanised and competitive to employ large numbers of people. But in the past two decades valuable skills were lost through heedlessness: the government let apprenticeship programmes fade into nothingness while companies often pursued short-term profits at the expense of long-term capability. If a little of the damage could be undone, it would at least secure the future of the last industrialised corners of Britain.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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