♠ Posted by Emmanuel in Europe at 2/09/2009 08:36:00 AMAuto enthusiasts are no doubt familiar with wisecracks about British car brands from the days of yore. There is, of course, the bumper sticker saying "genuine British parts are falling from this motorcar." Instead of Germany's supplier of ever-reliable parts, Robert Bosch, many British makes had to do with Joseph Lucas--AKA "The Prince of Darkness" for its history of electrical failure. Although foreign carmakers now dominate the auto manufacturing scene in the UK, their sales aren't faring too well for obvious reasons. Nevertheless, there is a movement afoot led by no less than Mandy (New Labour stalwart and former EU Trade Minister Peter Mandelson) to reindustralize Britain after years of losing share in terms of UK employment and output--especially to the now-vilified financial services industry. It is a refrain that is being heard the world over: we need to make stuff, not package securitized riffraff. Aversion to the machinations of finance is strong indeed. Maybe they can build innovative products like the hydrogen-powered Morgan LIFECar pictured here, a collaboration between the venerable make, UK government, and academia.
The question that countries need to address though is whether they have a competitive advantage manufacturing goods for export. Moreover, even if they do manufacture such goods, the current time doesn't seem to offer much promise that export demand exists. Perhaps the weak sterling can help in this respect. It will be interesting to watch. After all, why did so much British manufacturing disappear in the first place? Remember, LSUK--the successor of Lucas--shut its doors (probably for good) late last year after holding out for an Indian savior. Here's an excerpt from the Financial Times:
[This] view fits into a debate about whether Britain should attempt to “rebalance” its economy back towards manufacturing. The notion has grown in recent months that the country that gave the world the industrial revolution now suffers from the fact that it “no longer makes things”. According to the resultant stream of rhetoric, “reindustrialisation” is the key to boosting the economy in the aftermath of the financial crisis.
"For the future, Britain needs an economy with less financial engineering and more real engineering,” Lord Mandelson, the business secretary, recently told parliament [now you're telling us, Mandy]. Opposition politicians and leading industrialists have echoed his sentiments – in a debate whose importance reaches beyond the UK. As one of the first developed economies to deindustrialise, Britain’s approach to bolstering the sector is potentially applicable to other countries.
Sir Anthony Bamford, chairman and owner of the JCB excavators group, is keen to highlight some of the difficulties, especially at a time when UK manufacturing has been severely hit by the recession – with its output plummeting in recent months at above the rate for other sectors. “I’d hate to give up on British manufacturing,” he says. “But we’ve lost an awful lot [of manufacturing production] in the UK in recent years and it’s going to be hard to bring it back.”
In 2007 manufacturing accounted for less than 13 per cent of UK value-added output at current prices, compared with nearly 33 per cent in 1970 and a peak of close to 40 per cent in the 1950s. Some 3m people now work in manufacturing, compared with 7m in 1980 and a high of 8m in the 1950s. (By comparison, some 6.5m are employed in financial services, up from 3m in 1980.)