Developing a broader base

On the positive side, JLR's £355 million investment is for a facility to manufacture low-emission engines on a 120-hectare site at a business park near the M54. JLR chief executive Dr Ralf Speth said: "As we invest £1.5 billion a year for the next five years in new product developments, expanding our engine range will help us realise the full global potential of both our Jaguar and Land Rover brands." So JLR's exports are expected to increase and the local content of those cars looks set to rise, too. But while global private consumers are expected to buy more JLR cars, many of the world's government's are having to curb spending, with military budgets being hit. In fact, commentators suggest that a golden age of defence spending has come to an end, after 10 years of wars following 9/11. This decline will hurt the UK more than most others, as it is the third largest spender on military wherewithal, according to Stockholm International Peace Research Institute's 2010 yearbook; and this represented 2.7% of UK GDP for that year, says the same source. Prominent defence firm BAE Systems is the UK's largest manufacturer, so, when it sneezes, its supply chain partners can expect a nasty chill, as can the manufacturing sector as a whole. But BAE Systems is also one of the large companies that, prior to the 3,000 job loss announcement, had joined a scheme that sets out to help smaller companies grow, in emulation, said Chancellor George Osborne, of the German Mittlestand group of medium-sized companies. These large companies have agreed to provide "support, advice and practical help" to smaller companies in their supply chains. These larger firms would help their smaller counterparts open up new export opportunities by assisting them to access new markets around the world where the big name is already established. The smaller companies would also be able to share expertise through work-shadowing top executives, and take part in training courses, share research and development facilities and collaborate on new technology, it is said. It would certainly be refreshing to see and hear more of smaller firms' successes, rather than always the usual-suspect large firms of Nissan, BMW (Mini), JLR, Toyota, Rolls-Royce, GKN, BAE Systems and Airbus, but growing a substantial Germany-like Mittelstand will require sustained effort over many years. Best get cracking. First published in Machinery, October 2011