The Manufacturer’s highlights of 2012

Posted on 19 Dec 2012 by The Manufacturer

As we look to the beginning of the new year, The Manufacturer editorial team has pulled together some of the manufacturing highlights of 2012.

Tom Moore leads a Review of the Year in UK manufacturing for 2012.

From all at The Manufacturer, we hope you enjoy this wrap of 2012 and we wish you a merry Christmas and a very happy New Year.

2012 in review

In 2012, UK manufacturing continued to improve its image. Hacks at the national newspapers tend to follow politicians so it helped that the cabinet’s top brass ventured out of Westminster to factories across the country.

Chancellor George Osborne is hoping to push industry's investment in R&D to support a new wave of growth in the sector.
Chancellor George Osborne is hoping to push industry's investment in R&D to support a new wave of growth in the sector.

Cue images of Chancellor George Osborne gazing at machined parts in what looked like a stare-off from a spaghetti western and Business Secretary Vince Cable hanging out a of Jaguar with the sort of suave and sophistication that James Bond could only dream about.

The Government grew initiatives such as See Inside Manufacturing and established Make it in Great Britain to show off UK-made goods during the Olympic year and industry enjoyed its share of the limelight as gloriously British Minis raced around East London almost as quickly as Jess Ennis. However, Toyota’s cars proved to be industry’s version of Phillips Idowu, with 2.8 million cars recalled worldwide due to injury.

2012 marked the year when Britain was finally bestowed with an industrial strategy – better late than never some might say.

But as the battle to increase the awareness of UK manufacturing waged, there was little positive impact on the macroeconomic indicators. The UK economy dipped for the second time and the automotive sector isn’t a big enough bandage to mend a whole economy.

“The eurozone crisis rumbled on, the UK economy didn’t grow at all, productivity fell, world trade growth slowed, emerging markets wobbled and manufacturing output contracted,” said Lee Hopley of the EEF. Pessimism was on the menu but Miss Hopley did have one thing to cheer about; 2012 was a good year for investment.

New investment and funding

AkzoNobel painted Ashington town red early in the year, commissioning a new £100m paint factory in the Northumberland town.

AkzoNobel work experience day July 2012
AkzoNobel work experience day July 2012

Although it is replacing its Prudhoe site, there was still cause for celebration as a new site doesn’t need to stay in the same region or even country. Building has begun and the mega-factory is on schedule and “more or less” on budget.

Akzo is about to start recruiting both internally and externally for the new site. AkzoNobel’s investment in this new plant is a triumph for UK industry, a strong statement of the UK’s strength as a consumer market and a great model for applying hot new technology to enable leaner, greener and more efficient manufacturing ‘right first time’ inside a factory.

From a new cheese-making factory in Wensleydale to Renishaw’s new 3D printer machine factory in Wales, companies have that have innovated stay ahead of the competition. Those that don’t, die. And they did.

Young’s Seafood cut 380 jobs after acquiring Cumbrian Seafoods, 43 people are being laid off at engine-maker Perkins over Christmas, 156 redundancies have been confirmed at legendary London taxi manufacturer Manganese Bronze, Ford did a getaway job on its Transit and BAE Systems cut 620 jobs, closing its factories as the MOD closed its wallet.

A can of Irn Bru, manufactured by AG Barr
A can of Irn Bru, manufactured by AG Barr

After the fizz of the Barr and Britvic merger died down, the drinks giant finds itself on the list with 500 jobs going the same way as the lids on its Robinsons Fruit Shoot bottles. Just the type of cost-saving merger synergy that delights all shareholders other than those that purchased through a work scheme.

If you prefer to look at the sunnier side of life, JLR is the place to best look with over 6,000 new jobs over the last two years.

Jubilee and the Olympics

The Queen celebrated her Diamond Jubilee with great fanfare in a summer that resembled what other countries call winter, spurring a bunting boom. But the additional bank holidays were blamed for wiping off any improvements to the UK economy.

August brought sporting brilliance to Britain – with venues, medals and the centrepieces of the opening ceremony all manufactured in the UK.

David Willets, Science Minister at the Make it in Great Britain Challenge at the System
David Willets, Science Minister at the Make it in Great Britain Challenge at the System

In timing with the Olympics, the Department for Business, Innovation and Skills delivered its Make it in Great Britain campaign to improve the image of manufacturing among investors and young people. However, teachers and female students told TM reporter Tom Moore that the campaigns came too late for them and need to target female students before they choose their options if we are to level the gender playing field.

Automotive and machinery successes

Figures released by the Society of Motor Manufacturers and Traders showed that Britain is now Europe’s second largest car market, growing 5.4% between January and November 2012. UK, new car registrations rose 11.3% to 149,191 in November with the UK producing close to 1.6 million cars this year

This growth trajectory makes a stark contrast with contracting markets on the continent where falling demand has seen a decline in new vehicle registrations. Even Germany’s normally robust car market is predicted to contract by 3% in 2013 according to financial services company Deloitte.

By comparison, a recent SMMT/KPMG report said that the UK could be producing as many as two million vehicles per year in 2016 when capacity expansion comes on stream.

Colin Larkin and the team from New Holland Agriculture with Lord Digby Jones at The Manufacturer of the Year Awards

Tractor manufacturers New Holland Agriculture won The Manufacturer of the Year 2012 as well as the World Class Manufacturing award.

Jaguar Land Rover enjoyed tremendous success in 2012 with its Range Rover Evoque and invested £370m in its Solihull facility to support production. Nissan has just announced plans to invest £250m equipping its Sunderland factory to make a new premium compact car model, which will create 1,000 jobs across the UK’s automotive sector.

But it wasn’t all rainbows and unicorns for the car industry. In September production was halted at Vauxhall’s Luton and Ellesmere Port plants for a whole week due to the slump in European demand. In October, car and van manufacturer Ford announced it would cease manufacturer of the Ford Transit Van in the UK and planned to axe over 1,400 jobs.

Catapulted to the front

This year we saw the first of the Catapult centres, modelled on the German Fraunhofer Institutes, get up and running.

Offering a real and well coordinated chance to fortify Britain’s often discussed weak spot in transferring academic ability to competitive commercial strength, there are now seven centres across the UK employing 700 staff. Supervised by the Technology Strategy Board, which had a busy year, and with over £140m of funding already committed up to 2017, industry has been quick to jump aboard with the Manufacturing Technology Centre near Coventry alone tieing up with 40 companies.

The Technology Strategy Board’s competition funds were proliferate, albeit at times modest in size, throughout 2012. Funding is up for grabs in a multitude of fields including offshore wind power, composite materials technology, low carbon vehicles, digital businesses and the power electronics and energy sectors. The TSB, funded by BIS, now needs to report back on the outcomes of these competitions so companies have confidence in their results, which will stimulate greater participation – and perhaps bigger budgets when they’re proven to work – in 2013.

Policy reviews

Vince Cable announces his industrial strategy at Imperial College London
Vince Cable announces his industrial strategy at Imperial College London

In September, Business Secretary Vince Cable released the long anticipated and overdue industrial strategy, identifying five main areas where government action could boost economic growth.

Dr Cable used the automotive and aerospace industries as examples of thriving sectors which had benefited from some government assistance and collaboration.

Released to Government in Feb 2012 by JCB boss Sir Anthony Bamford, the report ‘UK Manufacturing – Time to Make it Count’ , illustrated a nine-point plan grow UK manufacturing and was a clear influence on Cable’s industrial strategy.

The long-awaited Energy Bill was published in November, which should provide the foundations for greater certainty for low-carbon investors and manufacturers. The UK manufacturing PMI also picked up – but not enough to signal outright expansion.

Some better news for the Chancellor as the office for Budget Responsibility confirmed the Government was still on track with deficit reduction plan in December. Government also announced temporary action to boost business investment to kick in from 1 January 2013.

Aerospace experienced elevation and turbulence

Despite delays in production, the Aarospace industry enjoyed a hugely successful year. And deliveries for commercial jetliners is set to leap by a further £5.5bn to £65bn in 2013 according to a forecast by aircraft manufacturer Boeing.

Boeing achieved its highest production rate ever for the 737 aircraft, with 35 planes produced each month at the company’s facility in Washington state.

Airbus, which makes all the wings for the A380 and A350 in Broughton in north Wales, had two early and rather generous Christmas presents.

In early December AirAsia confirmed an order for 100 A320s worth £9 billion – the company said it would safeguard 1,500 jobs in Britain. And this week it signed a £4.5bn deal with Turkey’s Pegasus Airlines for 75 aircraft. Not a bad end to the year for a company with an order book of >4,000 aircraft.

Airbus is ramping up production of these 45m wings at its Broughton factory to deliver three A380s a month

But the aerospace industry wasn’t without its share of controversy in 2012. In early January, Australian aircraft engineers called for the immediate grounding of all Airbus A380s after Singapore Airlines and Qantas found cracks on the wings of the 525-seater passenger planes.

Later in the year, the industry was rocked by news that two of the biggest manufacturers were planning to merge.

In September, news that BAE Systems and EADS, owner of Airbus, were planning to merge upset shareholders of both companies, unions across Europe and Angela Merkel, whose ‘twisted knickers’ were blamed for the collapse of the merger just one month later. British Prime Minister David Cameron didn’t seem bothered either way.

In the last month, allegations have surfaced alleging corrupt behaviour by Rolls-Royce, including bribery, The investigations into this matter are ongoing but expect to see more on this topic in 2013.

Food glorious food

The number of apprenticeships in the food and drink industry has trebled since 2010/2011, beating a target to double by the end of 2012.

Data from the National Apprenticeship Service and sector skills council Improve shows that since August 2011 there have been 5,281 apprenticeship starts in food and drink manufacturing businesses across the country.

Apprenticeships now make up 1.3% of the overall food and drink manufacturing workforce – up from 0.4% in 2010/11.

In further good news for the industry, drinks bottling group Coca-Cola Enterprises were crowned Sustainable Manufacturer of the Year for their intense work on minimising carbon emissions throughout its UK business and for more recent success in recycling plastic with EcoPlastics.

Lean highlights of 2012

Lean has continued to expand in non-manufacturing sectors, from healthcare to public services and the armed forces. Lean Management Journal has successfully moved to 10 issues a year, introduced a new, slicker lay-out and new sections.

But the ‘original’ lean company Toyota suffered at the hands of poor quality and were forced to recall millions of vehicles after defects were reported and concerns over safety were raised.

A survey by Cranfield University and Suiko revealed that only four in 10 UK manufacturers deploy improvement methodologies such as continuous improvement.

Lake Region Medical became the first company in the Republic of Ireland, and the first medical device manufacturer in Europe, to be awarded a Shingo Accreditation Bronze Medallion for Operational Excellence.

Final wrap up

There was never going to be enough space to cover every important story for manufacturing in 2012.

However, these stories provide a good round up of the manufacturing sector this year and they show that although still struggling to generate aggregate growth, the UK manufacturing industry is both diverse and progressive. We look forward to a strong and exciting 2013.

After pointing the spotlight at the manufacturing highlights and lowlights of 2012, from all at The Manufacturer, we would like to wish you a merry Christmas and a happy new year. Make 2013 a good one.