John Elliott MBE, manufacturing millionaire and modern manufacturing patriarch talks to Jane Gray about “pie in the sky” policies for manufacturing innovation in the UK and the importance of addressing the national trade deficit.
High Value Manufacturing (HVM) will define the future of British industry, says the Department for Business, Innovation and Skills. Supporting this view, and providing a guide to companies wondering what part they will play in this advanced industrial ideal, the Technology Strategy Board launched its High Value Manufacturing Strategy last month and the HVM Catapult is now attempting to build a supply chain of companies with the capability to be competitive in this futuristic manufacturing landscape.
But while HVM is an exciting concept, is it what the nation really needs for economic sustainability? Is shunning more mundane manufacturing foolhardy?
At the close of the National Manufacturing Debate 2012 Martin Smith, a debate panel member and board member at PA Consulting, contradicted a comment made at the Debate by TM’s Will Stirling that “the UK is in no longer the place to make cheap plastic parts.” And Mr Smith is not alone in believing that there is still a place for mass production of everyday products in the UK.
Stop Gap John Elliott strongly believes that there is a need to renew focus on reducing the UK’s trade deficit as opposed to concentrating on measures like GDP and the reduction of public spending. “GDP is an extremely misleading measurement,” comments Elliott. “GDP measures total national economic activity – whether or not that activity is useful. GDP would go up if we built 100,000 homes, even if they were never occupied. It’s a bit like measuring the performance of a company on what it spends.” Elliott clarifies that he does not advocate mindless monitoring of any one measurement. “You don’t run a business on one performance indicator and we should not try to do so with our country and economy. But if I had to pick one measurement of our economic wellbeing it would be the trade deficit.” To try and raise the profile of the trade deficit among policy drivers, economists and the media, Elliott launched the Stop Gap campaign earlier this year. “We are buying more than we sell and consuming more than we produce,” says Elliott. “Buying cheap goods from China and elsewhere is a short term solution but it is disastrous in the long term.” And according to Elliott, there is no one in government thinking strategically in this way. “It seems to be considered absolutely normal that we should have a long term structural deficit. This is wrong.” To lend your support to this campaign and for more information visit: www.stopgapuk.com 
John Elliott, chairman and founder of the County Durham-based air conditioning units making firm Ebac, is perhaps Britain’s most passionate advocate of home-grown commodity goods manufacturing.
“The government’s focus on innovation is pie in the sky,” states Elliott. “We cannot innovate something which will get rid of a £27 billion trade deficit. We need strong industry first, turning out the mass-produced commodities that people need every day.”
Mr Elliott’s stance is not uninformed. He describes himself as an innovator and the achievements of Ebac – the 40-year-old business he set up from his garden shed – prove that he has every right to do so.
Ebac turns over £30m a year and employs 200 people producing air conditioning units, water coolers and domestic dehumidifiers for everyday use. But it also has more specialist products, like the high performance air conditioning units supplied to the Ministry of Defence for use in desert warfare, the air conditioning system for London Underground’s Jubilee line, and even the complete workings behind a women-only luxury spa which the company recently opened in Leeds as part of an ambitious leap into providing services around its product range.
Ebac Foundation John Elliott is an extremely successful businessman. In 2006 he starred on Channel 4’s television programme Secret Millionaire and he has amassed a personal fortune of £30m since establishing Ebac in 1972. But Elliott is not motivated by wealth for wealth’s sake and has a sincere concern for the interests of the community which has contributed to his business’s 40 year story. It is a relationship he is keen to see continue indefinitely and so in April this year Elliott signed away his fortune, and his ownership of Ebac, to create the Ebac Foundation, a body which will plough all company profits back into the business and the local community, protecting the future of a manufacturing-based economy in the North East. “In the last 40 years I have been well paid doing what I think is the best job in the world,” comments Elliott. “Now is the right time to put an end to my status as a ‘Rich List’ millionaire and create a lasting foundation to secure the future of Ebac’s manufacturing facilities for generations to come.” Elliott’s daughters, who previously stood to inherit their father’s wealth, and the company, are supportive of his actions. Pamela Petty, Elliott’s eldest daughter and also managing director of Ebac, spoke to local press at the launch of the Ebac Foundation and said it will “cement Ebac’s place at the heart of the community as an employer committed to the long term. All of this is more important than family wealth and the approach my father has taken is strongly endorsed by all his children.” The new foundation will be managed by three trustees including John himself. These trustees will oversee the business at a strategic level. An additional trustee to represent the interests of the Newton Aycliffe community will join them on a rolling three year basis. Former trade minister and outspoken manufacturing advocate Lord Digby Jones lent his support to the launch of the Ebac Foundation, calling it “the culmination of an entrepreneurial journey.” He expressed his admiration for the promise Elliott was making to his employees and his community that “when I am six feet under, this company will endure.”
“Innovation is very nice,” says Elliott. “But we cannot continue with a structural deficit. It is unsustainable. To get rid of a structural deficit we don’t need more innovators like me. We need sound industrialists who can make quality consumables for a reasonable price on a mass scale. We need to start producing the things that we consume. TVs, textiles, white goods.”
And so Elliott is putting his money where his mouth is by opening a washing machine manufacturing facility adjacent to his Ebac site. “Britain imports around 30 million washing machines a year – mainly from Europe. But it costs just £15 to build a washing machine here in the UK,” he reveals.
“Now is the right time to put an end to my status as a ‘Rich List’ millionaire and create a lasting foundation to secure the future of Ebac’s manufacturing facilities for generations to come.” – John Elliott MBE
And the cost of the manufacturing facility itself will be extremely reasonable by factory build standards. Elliott is putting £6m into the venture and has applied for a round three grant of £1m from the Regional Growth Fund.
Elliott plans to manufacture the washing machines under the Ebac brand which he believes is well enough established to inspire demand. “We’ve done some market research and found a very positive response to the Ebac brand,” he says. “After all we have been selling domestic dehumidifiers to UK consumers for over 30 years, amounting to well over one million units.” It is also estimated that around half of office water coolers in the UK are Ebac products, manufactured in the company’s home town of Newton Aycliffe.
The impact of the new factory venture on this community is a strong motivator for Elliott, who is committed to creating sustainable jobs in a robust local economy as well as helping to address the macro-economic fortunes of the nation.
“We’ve got over 2 million people unemployed and doing nothing in the UK right now. Just a tenth of them could be employed tomorrow making the things we consume.” – John Elliott MBE
A critical part of Ebac’s RGF bid is its commitment to create a further 200 jobs in Newton Aycliffe as a contribution toward solving national employment challenges. “By my reckoning 200,000 people working in modern factories in the UK would level the trade deficit,” comments Elliott. “We’ve got over 2 million people unemployed and doing nothing in the UK right now. Just a tenth of them could be employed tomorrow making the things we all consume. This is not highly skilled work requiring expensive and time-consuming training.”
The question is how to create these employment opportunities. “The government must intervene in some way,” asserts Elliott. “In the past we have been too willing to bow to what we call ‘free markets’. But there is no such thing. Markets are manipulated by big business, government and banks.”
If action is not taken swiftly and assertively by industry and government, Elliott states with grim confidence, “We will be in Greece’s position within five years.
