With the EU referendum on the horizon, EEF's flagship National Conference today brings together the ‘who’s who’ of manufacturing and politics to debate the productivity challenge and what's the solution?
Held at the QEII Conference Centre in London, EEF’s National Manufacturing Conference 2016 offers a diverse and engaging range of topics – including panel discussions on the The Productivity Challenge, and The UK’s Future in the EU, and speakers include Rt Hon Sajid Javid MP, and Rt Hon Tom Watson MP, Martin Wolf CBE, chief economics commentor for The Financial Times, and others.
Along with searching Twitter for the hastag #EEF2016, the Editorial team will be providing you with rolling coverage from all of the sessions, so remember to refresh your browser and allow us to keep you up to date.
Panel debates
3) Unlocking the global trade challenge
Chair, Pennine Healthcare – Liz Fothergill CBE:
“Pennine Healthcare makes a massive range of medical disposable products where volume production is absolutely essential for low costs.”
“With competitors entering the marketplace in the 1980s, we knew we had to invest in automation – and the way we could justify that investment was by increasing sales. That’s when we really started to push exports.”
“We now export about 45% to 70 countries around the world; without exports I believe that not only wouldn’t we be a growing company today, we probably wouldn’t survive.”
“We learnt we had to travel the markets to understand global customers – to understand cultural differences and means of doing business.”
“There will be setbacks, but the rewards of exports are absolutely worth it.”
“Exporting makes you professionalise and, importantly, raises your prestige with domestic customers as well.”
CEO, Naylor Industries – Edward Naylor:
“Our export story is really a story of doing what you have to do to survive. We were in a terrible situation and the business was really having off a cliff-edge.”
“So, what did we do? We focused on research and development, innovation, created new products, which took us into exports, and we now export to 65 countries.”
“When it comes to exports, you really need to be persistent, though at the same time you have to be aware of pouring time, money and resource into the wrong environment.”
“In our world, network is key. Go out, have a stand at international trade exhibitions and get your company, brand and products out there.”
Head of Trade & International, Transaction Services Division, RBS – Alan Ainsbury:
“There are lots of manufacturers out there who don’t believe they actually have a product which is exportable – which is really important. Equally, there are a lot of manufacturers who currently export, but don’t believe they have a competitive product for the domestic market.”
2) In or out? The UK’s future in the EU
Chairman, Conservative European Mainstream Group – Damian Green MP:
“It’s is overwhelmingly to manufacturers advantage to stay in. Just over half of our manufacturing exports go to the EU, so it seems risky at best, perverse at worst, to put that in jeopardy.”
“One of the reasons why so many big companies have come and set up in this country, particularly automotive, is to sell into the wider central market of Europe. It would be absurdly destructive to jeopardise one of our most important sectors by pulling out.”
“If Britain pulls out, Europe will be keen to not see others follow a similar path so it’s unlikely it will give us any concessions or make life easy for us.”
“The notion that we can very quickly negotiate several of these trade agreements is a complete fantasy.”
CEO, Business for Britain – Matthew Elliot:
“The right decision for the UK economy in general, and for manufacturing is to leave the EU.”
“There hasn’t been that much change in this renegotiation. The main thing I was looking was the ability for the UK to do trade deals, and that isn’t included here. We need these vital trade deals.”
“People talk about different options such as the Swiss or Norwegian, but I think we’ll have our one. As the EU’s biggest customer, we’ll get a good deal.”
“I think people should be reassured by the fact that Canada, for example, has very good trade deals, and there’s no reason why the UK couldn’t receive a similar agreement.”
“I can understand why bosses of big companies see it as being more convenient for Britain to remain, though several have said should we leave, they would carry on as usual.”
“How long will these trade deals take to make? They are an extremely complex agreement to make. Though I think it will be an easier road for Britain, than some other countries and in the past.”
“The UK imports far more vehicles to the EU, than it exports.”
“We have two big choices in front of us – the status quo or uncertainty. My fear is more money flowing to Brussels should we remain. But if we stay, I also fear that the status quo offers no form of certainty for the future.”
“I don’t believe that Scotland would vote to break-up the UK if Britain were to leave the EU.”
“If we leave, I see Britain going from being a bad flatmate to the opportunity to be a good neighbour.”
1) The productivity challenge – what’s the solution?
Director of global manufacturing, Rolls-Royce – Dr Hamid Mughal OBE:
“The world of manufacturing is an intense, globally competitive environment. Output is not the best metric to measure productivity, offering customers a real value-proposition through your products is a far more effective measurement.”
“There are three hallmarks I have seen common in successful, highly productive companies. Absolute clarity of purpose, understanding what your customers value and appreciate more than anything else, whatever it is, once that clarity is identified, it is absolutely vital that it is communicated across every level of the organisation.”
“The second factor is the culture of the organisation, ensuring that the value created is constantly bettered through both standardisation and innovation. The third is behaviour, not settling for second best and promoting team work, leaders rather than managers who challenge their people; building self-efficacy in the organisation, with people not only being able to do their jobs to an incredibly high level, but improving how they actually perform their roles.”
“To raise your productivity, these three factors should be firmly embedded in not only your own business, but replicated throughout your value chain.”
“If you do not become ambitious with technology, you will be left behind. Tomorrow’s advantage will become measured by how fast you can transform ideas and concepts into fully-realised technological solutions.”
“Why would you want to sweat your assets that were built 20 years ago, if there is no customer at the end able to take your products in the timescale you can supply them?”
IT technical manager, Wrightbus Ltd. – Brian McCulloch:
“Being a traditional manufacturer, we are still measuring productivity predominately as output on the shop floor. But we have looked at back room productivity as well to make staff productivity better, through the use of ERP solutions, for example.”
“Just getting those fundamental things right has been a real step forward for us. It allows us to make better decisions, quicker, at the right time.”
Chief economist, EEF – Lee Hopley:
“The EFF productivity report attempts to answer the question whether or not the UK has a productivity challenge. Manufacturing is one of the most productivity sectors in the UK economy. The statistics so often regaled in the media don’t adequately reflect the true situation happening in industry, and there is a real drive towards improving productivity and the performance efficiencies of businesses.”
“There is a real recognition in industry that investing in technology can offer a real step-change, but economic uncertainty has perhaps delayed those investments.”
“Government can be an enabler, The Catapult centres are really important institutions in driving the innovation agenda, for example. However, that doesn’t seemed to be a fully joined-up strategy. There needs to be more consistency, such as investing around our science base for example.”
SVP global strategy and sales – Infor, Lisa Pope:
“Many of our customers tend to focus on the plant and equipment. The companies leading with best practice are doing two things really well, first – they consider ‘information’ technology, not just technology; and second, they don’t just see their business as four walls, but outside that, they see the whole value-chain.”
“The other key area businesses need to consider is how to better leverage their existing equipment and assets.”
“We hear a lot about the Internet of Things and what it means, but it is really about people, processes and machines working seamlessly without human input, and embedding data sensors and touch-points can fundamentally raise productivity.”
“Cloud computing and running your systems as a service really helps manufacturers focus on production and let someone else take responsibility for IT services; it’s a real opportunity that companies are leveraging today.”
Keynote speakers
Secretary of State for Business, Innovation and Skills, Sajid Javid MP:
“What does the future of manufacturing in the UK hold? We are British, which means we make things – we always have, and we always will.
“We can be proud of our manufacturing heritage, and we can be equally proud of our manufacturing future. Though that doesn’t seem to be fashion these days.”
“In this hall, I don’t see malaise. I see people making things, creating jobs, investing and exporting.”
“UK manufacturing creates work for millions of people. Foreign direct investment in the sector is up almost 60% by 2010.
“You represent the most innovative and R&D-focused sector in the UK. Over the past decade, manufacturing productivity has increased more than three-times faster than the economy as a whole”
“As we have repeatedly shown, when challenges occur – this Government will do everything it can to support those affected, their communities and their families.”
“The challenge is to maintain that success in a period of rapid technological change. Whether you call it the fourth industrial revolution or Industry 4.0, the way we work and live is gong to be fundamentally transformed.”
“Again and again, through the history of manufacturing, we have seen that embracing new technologies and processes actively leads to creating jobs and opportunities, rather than the opposite.”
“Manufacturing matters to Britain, it matters to this Government and it matters to me personally.”
“There’s no doubt that manufacturing is moving forwards, but for too long the way we measure what you do has been stuck in the past. Looking at output and stating that manufacturing represents 10% of the economy needs to change. We have to look at and include the whole value chain of what manufacturing supports, both upstream and downstream.”
“When we underestimate the contribution of manufacturers to the wider economy, we do you all – and your efforts – a huge disservice.”
“The future of manufacturing is not a race to the bottom, it lies in quality and innovation.”
Deputy leader of the Labour Party, Tom Watson MP:
“I think we need to come up with ideas as to how our engineering businesses can better engage with teachers and students to foster a greater desire in young people to pursue careers in industry.”
“Many EEF members shared with me their frustration over the amount of time and effort spent on debating a decision on whether or not to extend Heathrow airport or elsewhere.”
“I really want to talk today about change. After talking to young apprentices in Birmingham about what future faces them, helped me to understand what government could do to help.”
“We cannot halt the fundamental change affecting manufacturing, but we can deal with and leverage it. As a society, we have to decide whether or not to see technological change as a challenge or an opportunity.”
“The manufacturers in this room know and understand the real impact robotics and automation are having on your business. Today, robots aren’t just making cars, they’re driving them. By 2020, nearly every car manufacturer will be making driverless cars.”
“I want to challenge the current government orthodoxy. Slavish devotion to the creation of money for money’s sake will lead to a dislocated society where automated systems do much of the work. The opportunities for leisure and cultural activities will be huge with the time saved through automation, but is at risk of being lost. Just as the late capitalists understood that they had to build homes and provide healthcare for their workers, so to, do we today.”
“We need a new industrial strategy fit for the new machine age, addressing head-on the hour-glass economy; the need to spread prosperity not keep it in the hands of the few; the skills gap, and the future of professions.”
Chief economic commentator for The Financial Times, Martin Wolf CBE:
“It does seem that the problem of the strong pound is being swiftly addressed by the news of the EU referendum deal.”
“We are living in a time of extreme uncertainty and slowing global growth.”
“First, the global context. The most important point in regards to the world’s economy is that it is in a progressive slowdown, and has been for the past six years.
“Each of the last five years, the IMF’s five years ahead forecast was lower than the previous year, and almost by exactly the same amount.”
“What’s behind that progressive slowdown? Advanced economies – and also true of emerging economies – the force of labour growth is slowing dramatically. Baby boomer generation is retiring and in emerging companies, birth rates have dropped.”
“In advanced economies, labour productivity has fallen dramatically. Last year’s o.3% growth in UK labour productivity is probably among the lowest in 100 years.”
“In China, recent data on productivity growth is grim. Past growth is based on a completely unsustainable rate of investment. The only emerging economy likely to sustain past and current rates of growth is India, a real bright spot.”
“In addition to the supply problems, there are very significant demand problems. There is a long-term savings glut, there are massive debt overhangs covering much of the world, and I really think there is a none-zero risk of a China crash.”
“Developed countries’ central banks are pursuing increasingly unorthodox policies because of this fundamental, structural savings glut.”
“UK has had huge losses in output versus trend, unfortunately the output of manufacturing has still not recovered to pre-crisis levels. Though our employment performance has been outstanding, a record high.”
“Everything depends on the recovery of the UK’s productivity growth.”
“It really matters that we get rid of the current account deficit, but it seem unlikely to me that that goal will be achieved over the coming few years.”
“No-one knows now what leaving the EU will mean, we probably do know what staying will mean. We have to regard a vote to leave as a vote to enter a highly unknown environment.”
“The EU referendum seems to me, to be an astonishingly foolish gamble.”
Welcome speeches
Chief executive of the EEF, Terry Scuoler:
“Our sector not only remain critical to the economy, but also as to the way we view ourselves as a nation. Though it is a sector which faces headwinds, including a strong pound, a slowdown in China, uncertain global politics; but these are challenges that affect all of the world’s manufacturers.”
“But we must rise to these challenges. We have the most productive sector in the nation, and some of the world’s best technical Universities.”
“In this time of challenges and change, it is even more important that government and industry work together and form an even stronger partnership to deliver our common goals of increased productivity and greater exports.”
“Our survey shows that 61% of EEF members wish to remain in EU, and just 5% who wish to leave. I do believe that leaving the EU would put is in uncharted and potentially stormy waters.”
Head of Lombard, Ian Isaac:
“We want to get behind creating a new industrial ecosystem, both regionally and nationally.”
“There is so much to do here, but today we start that journey by launching a bridge-over loan.”
“Lombard has just published the latest findings our business attitude report, 73% of manufacturers polled are planning to invest during 2016 – up from 68% last year.”
“This points to the positive attitude of manufacturers.”
