North East motor manufacturing is edging past UK rivals. But will a looming skills gap be a bump in the road for 2012? Kelley Price finds out.
SOME much-needed good news is starting to befall Teesside’s beleaguered manufacturing supply chain.
The region is bucking the UK downward trend with several bumper contract wins, including the car and locomotive industries.
Eaglescliffe car parts supplier, Nifco UK, announced 127 new jobs last week, after securing £1.65m in Regional Growth Fund money.
And Nissan, one of Nifco UK’s main customers, has reported a 13.5% rise in manufacturing at its Sunderland plant.
Meanwhile, Hitachi will start work on its Newton Aycliffe factory by the end of the year, in a move that could be a first-class ticket to the European super-league of locomotive production.
Elsewhere in the UK, it’s a different story. And now the TUC has urged ministers to look to German industry if they want to rebalance the economy and boost manufacturing.
Mike Matthews, managing director at Nifco UK, agrees wholeheartedly - and despite his company’s current success, he sounds a cautionary note. “We have tremendous opportunities for manufacturing on Teesside and we’ve a fantastic workforce,” he says, “but our biggest challenge is a shortage of skills.
“We have actually got vacancies that we haven’t been able to fill.
“If you look at offshore, there’s zero unemployment, but there are jobs waiting to be filled.
“Across the North-east there are lots of manufacturing and engineering companies that can’t fill positions.”
The problem, he says, is very few companies across the science, engineering, manufacturing and technology sectors in the region have an eye on the long game.
“Only 15% across these sectors actually recruit and train people,” says Mike, who is involved with Semta (Sector Skills Council for Science, Engineering and Manufacturing Technologies).
“We see companies operating that aren’t currently doing any training and development. There are serious risks in terms of skills shortages.”
The car industry is among those left most exposed by a lack-lustre skills and development programme, after it haemorrhaged skilled workers when the recession hit hard in 2008.
“During the downturn, a lot of people left our industry,” said Mr Matthews. “But now, we’re competitive again.
“We need good quality and delivery, but if you can’t get people to run the business, it will undermine our growth.
“I was an apprentice, so I realise the value of coming into a business via apprenticeship schemes.
“We are taking on apprentices from Egglescliffe school, and we have people going through degrees, HNDs and adult apprentices.
“Training and development is behind a lot of our success.”
Applauding Nifco UK’s success, Stockton South MP James Wharton believes Teesside should play to its strengths.
“Nifco UK is a highly efficient business, it shows the region is competitive. If we can tap into skills that already exist in the North-east and deliver that growth long-term, we can be successful.”
According to the TUC, which produced a report highlighting different approaches between the UK and Germany, the UK needs to give more support to medium-sized companies, like Germany, which recognises it’s this sector that is the “backbone” of its economy.
The emphasis in the UK, the report claimed, was on large firms and on the very smallest organisations, with “little thought” given to those in between.
The Government has promised to give neglected UK manufacturing some TLC in the form of the Regional Growth Fund, the Green Investment Bank, the new Catapult Technology and Innovation Centres and support for apprenticeships and skills.
“If you look at manufacturing in the UK, it’s like an upside down triangle,” said Mr Matthews.
“There aren’t enough medium sized businesses to support the large companies. We’re bringing in a lot from abroad.
“Companies like Nissan have said they would spend millions more in the UK. I’ve got a lot of admiration for German manufacturers.”
Hitachi also has big plans for the region.
MP for Sedgefield, Phil Wilson, who campaigned to bring the company to the region, said: “The Hitachi project is a massive investment and the initial contract is for the Intercity Express Programme, but they are also looking for contracts across Europe and has been shortlisted for the Crossrail project.
“Newton Aycliffe will be one of the centres for train-building in Europe.
“It just goes to prove what can be achieved when the North-east stands together to fight for jobs and for manufacturing.
“We need more high-paid private sector jobs for our region.”