EU referendum; reshoring; innovation - an industry discussion

22 min read

The Manufacturing Technologies Association’s members and other manufacturers assembled to air their concerns about the EU referendum, as well as on (in this online extended version) reshoring and innovation. Andrew Allcock was there

With no agreed agenda, the topics for discussion selected themselves on the day last October, with the forthcoming (by end 2017) in-out European Union referendum placed on the table by metal finishing expert Rimex’s managing director Tim Childs see box item below more participant background).

“As an exporter – we export 80% of turnover – I have always been pro-Europe, but I don’t know which way to vote. We use chemicals in our processes and the EU red tape on chemical use is enormous [REACH], with the effect that manufacturing is transferred out of Europe to China or South America,” he honestly announced, inviting others to pitch in. But machine tool manufacturer and exporter to Europe Yamazaki Mazak’s European managing director, Marcus Burton, suggested that regulation was a “red herring”, if it was thought that being out of Europe would eliminate that. (Indeed, the REACH web page [http://is.gd/SvhoBn] makes it clear that companies outside the EU may be REACH exempt, but their products are not, with importers to the EU having to comply.)

The roundtable gets going at the Royal Institution, Albermarle Street, London (chairman Guy Mollart, right, leaning in)

But with the EU referendum out on the table, the meeting got going at a pace. Subcontractor and machine tool maker/exporter Mollart Engineering’s managing director, Guy Mollart, also chair of the event, offered his take on the forthcoming vote. “I can’t even think why this country is contemplating leaving the EU, from a business point of view; it is so intrinsic to my business. I don’t like a lot of EU legislation, but to be left on the outside; it’s a no-brainer for me [to stay in].” Electrical parts maker Lea Redway’s Maria Addaway said that the company’s chairman was in favour of coming out of the EU, but that she was “confused” by the arguments.

Machine tool maker and exporter 600 UK’s managing director, Mike Berry, said an ‘out’ vote would mean “economic suicide; unemployment would go through the roof; we are an integral part of Europe and we’d still have to comply with all the technical standards”. He also said that many large companies are located in the UK because we are part of the EU, adding that for the general economy, an out vote would be “terrible”. And while Berry said that his company’s exports to North America would probably not be affected, with Burton agreeing with that, he did see problems with leaving the EU. [Editor: both were speaking ahead of the US’s late October announcement that, regarding the EU-USA trade deal currently under discussion, it doesn’t want a separate agreement with the UK but wants the country to stay in the EU.]

TERMS OF TRADE

Pouncing on the export-to-EU issue, machine tool importer Geo Kingsbury’s managing director, Richard Kingsbury, asked Burton to explain how exports to the EU would be affected by an ‘out’ vote. He responded that they wouldn’t, if we agreed to the terms and met the rules – “just as with any other country, then”, Kingsbury interjected. But Burton added that people just “wouldn’t get the freedoms they imagine”, while the EU itself is “a major global trading block and that the UK should be part of it, influencing”.

Indeed, Kingsbury said he was “completely on your [Burton’s] side”, but that the “binary arguments that the ‘for Europe’ people employ are wrong. We have to engage at a much better level”. And he added: “The argument that ‘if you are not in Europe you suddenly lose lots of jobs’ is nonsense.”

Manufacturing Technologies Association (MTA) CEO James Selka agreed that binary [in-out] arguments were “destructive” and that a third way, reform, should figure, observing that a ‘staying in at all costs’ position undermines the Prime Minister’s current negotiations. [Editor: David Cameron’s various discussions were being reported as we go to press.] He suggested that the timing for reform “is very good”, since “half of the members of the European parliament are Eurosceptic”. Yamazaki Mazak’s Burton agreed, saying there are pressures for reform in other countries, adding “we have very strong allies”. Called to expand on that by Warmup’s CEO, Andrew Stimpson, Burton cited the pressure from the rise of extremism in a number of countries, alluding to a reaction to the migrant crisis. [Editor: the French regional elections’ of December demonstrated a major right-ward shift, for example.]

Jumping back in, Selka said that the issue of a plan B for the MTA following an ‘out’ vote had been raised at a members’ forum. “The reality is that it will take so long to negotiate a trade position of being ‘out’, there is no point in having a plan B; it will take years to disengage, in practice. No one is giving the ‘in, out or reform’ positions in a relatively even-handed way, which needs to be done; scare-mongering will backfire,” he offered.

James Selka, CEO, Manufacturing Technologies Association

Burton agreed that jobs wouldn’t immediately be affected and that there is a danger of overstating it and making that a “scare story”, with which Kingsbury concurred. But Yamazaki Mazak’s man observed that while his firm is not likely to up sticks and leave the UK, his requests for further investment at the UK site would carry less weight, if the UK left the EU, thus presenting the negative business hit as a more slow-burn problem.

And he had support. Tax and accountancy expert Baker Tilly’s David McCulloch added to the general pro-Europe stance, saying that being part of the EU is a “compelling argument” for US firms to use the UK as a stepping stone to the EU. Just such was the case pre-1992 and the Single European Market, Burton reminded the audience, as many Japanese firms set up in the UK prior to that event, with the UK’s automotive industry of today benefiting, he added. Brompton Bikes’ CFO, Lorne Vary, was similarly pro-Europe, citing price instability concerns by the company’s distributors related to the approaching referendum and its aftermath.

COST-BENEFIT REQUIRED

Warmup’s Stimpson suggested that the in-out choice should be informed by a “cost-benefit” approach by putting down on paper “what are the good bits and what are the bad bits”, adding that people are either “getting lost in the macro, or mislead in the macro, and disinterested in the micro”.

He added that, from a business point of view, he has “two or three key things”. Export ( to Turkey, Scandinavia, USA) and import (from India, China) are key to Warmup, but he has no major concerns here either way, in or out. However, on employment, workforce number management and the Working Time directive, he does have concerns. On employment, finding appropriate staff in the UK is difficult: “We find it easier to recruit people out of Portugal and bring them to London”, he underlines, adding also Bulgaria, Spain and Romania. Such people are “more open-minded, better educated”, he says, adding that while he can get employees with ‘softer’ skills in the UK, for example marketing, those with technical skills are harder to come by in the UK; “so I like being able to fish in a bigger pool for talent, rather being told I have to look in Ealing”.

Andrew Stimpson, Warmup founder

That was his pro-Europe stance, but it is balanced, he offered, by social and employment regulation that “we might not have, if we weren’t in Europe”, which puts us at “a huge disadvantage to the Americans and some of the other countries”. Shrinking a workforce in Germany, Holland or France is cited as burdensome, with courts getting involved to pontificate on the quality of the employment contract and able to modify its terms. “I don’t want any of that over here, because that doesn’t suit a small business,” Stimpson underlined.

He returned to his cost-benefit theme, suggesting a totting up of the various micro items and a macro overview of the costs of running the EU, plus the cost of breaking away, concluding with: “I don’t think we’ve got anything like clarity from anybody.” But, while agreeing, Kingsbury says he doesn’t think we’re going to get that, hence we’re stuck with the binary in-out show, citing ‘Britain Stronger in Europe’ front man Sir Stuart Rose’s “fatuous...scare-mongering in the extreme” statement “regurgitating how many jobs depend on Europe, suggesting that they will all go, that’s such a foolish argument and people see through that, and that’s why it’s dangerous”.

Burton offered that a cost-benefit analysis won’t be possible, because people on opposing sides will estimate differently the costs and benefits of various scenarios. “All the politicians will be able to paint the cost-benefit to suit their argument,” he sagely observed, adding: “We will have to judge for ourselves.” As for employment, he said he faces the same issues as Stimpson, but believes we have to have such rules. “As a country, we have to have employment rules; they work extremely well”, he offered, adding that he would rather “argue from within for a more competitive Europe overall and better employment regimes in other countries”.

He observed, too, that the UK’s politicians legislate on social matters, time off and so on, independently of Brussels, under pressure from a younger generation of constituents wanting better work-life balance, which they talk about “like we never did in the past”, with these “trends happening in all countries”. And he suggested to the gathering that “if you think that by being outside the EU our politicians are going to become different, that’s not correct”.

Yamazaki Mazak’s man believes too that a reduction in bureaucracy costs on the EU side could be offset by increasing bureaucracy in the UK necessary to develop rules and regulations; Warmup’s Stimpson offered that that would at least be our bureaucracy.

But Burton suggested that with business and banks exhibiting a pro-European stance, ‘the man in the street’ may choose to take the contrary position to the “conventional suits”.

MAN-IN-THE-STREET’S VIEW

And Stimpson, declaring his “on balance” ‘in’ position, suggested why many people might choose ‘out’, introducing the topic of migration, saying that “over the last 15 years, the shift in the population balance of this country, caused by no control of borders by the Labour Party, for whatever reason, has made a significant difference to a number of ordinary people’s lives, and their perception of their well-being; particularly on housing; getting a place for their children at school; getting a hospital bed; getting benefits; on sharing jobs with migrant workers; and on downward pressure on wages via migration”.

He continued: “If you allow disruptive things to happen, people can see it in every walk of their lives. I am absolutely convinced that making the argument to leave based on the impact of taking too many people that take too many benefits into which they pay nothing is going to resonate with huge numbers of people. They will easily be able to quantify the impact on themselves. Middle England too will have their worries, about traffic and over-building, for instance. All this is about ‘can we sustain continued inward immigration?’ And because we have suffered it a lot for 15 years, it’s a really bad backdrop, and that is the backdrop many people will see, not necessarily the one offered by captains of industry, I am afraid.”

Yamazaki Mazak’s Burton concurred with that analysis, adding that business needs to address such fears and analyse whether an exit from the EU would actually make the lives of those people better.

Yamazaki Mazak's Marcus Burton

Extended online article from here

Invited to comment as the opener of the EU in-out the discussion, Rimex’s Tim Childs returned to technical matters, to legislation regarding chemicals - COMAH, REACH, IPPC - saying that, while acknowledging they do some good, some current legislation “will knock out the entire plating industry; I exaggerate a bit, but it is very complex”. And he adds: “I don’t know how well our government, or other governments, understand the impact of the decisions that they made five or six years ago, when suddenly companies are unable to use such and such a chemical. This affects automotive, aerospace, bathroom appliances, electronics and, for me, chromium trioxide use.

“As an SME, I am having to go through consultants and a technical consortium in Brussels alongside companies like Rolls-Royce - small little Rimex - because we don’t know what the answers are. And the conclusion you come to is that a decision has been made about a chemical having a really low risk level, but it’s going through the process and you can’t take it out of the banned list. It affects thousands of companies across Europe, with the consequence that it [plating etc] is going to move out.

“The effect will be that the pollution and risk will be placed somewhere else, whereas you really want to manage it, because you need these chemicals for manufacture; you need to manage it within an advanced economy.” Childs, who is pro-EU but undecided on the in-out question,, concludes by offering a stunning statistic; for his company, having taken two years so far to get a permit to use a chemical, he reckons it will have cost Rimex £200,000; “indirect taxation”, he said. “The ‘one size fits all’ approach really hits SMEs at the bottom of the pile,” he concluded.

BRINGING IT BACK HOME

Meeting chairman Mollart then moved the discussion onto a new topic, that of reshoring, opening thus: “As a manufacturer [of deep hole drilling machines], I took the decision a few years ago that manufacturing in the UK was becoming increasingly expensive and that we had to offshore in developing countries to be able to sustain a high cost plant in Surrey. Like many, I got on a plane to Shanghai and spoke to some of my competitors about supplying us a machine carcass – not an item with key intellectual property, but a large casting, an important bit. I was coming back to surrey with prices that were 30-40% less, so I thought this was a no-brainer [to offshore].

“Like many manufacturers, we started with tremendous euphoria, then we got the first shipment and the first disappointments. We sent people out to guarantee that the product leaving the gates was to a certain quality and the next shipment arrived and was fine. People were smiling again. But fast forward a few more years and China has become increasingly more expensive. We are not in a volume business, so slowly but surely, our prices from our Chinese supplier started to increase, while the quality problems were forever present, so the 30% saving was nowhere near that. It was slightly cheaper, but by the time we added the cost of putting people on planes to guarantee product it was more expensive.

“Now we take a completely different view of our supply chain. We have gone back to our UK suppliers and are re-sourcing parts from them that we were getting from China. And I am so ecstatic now, because I have also invested in modern machines to make my product more competitively, and the cost of getting my product to an assembled machine is getting less and less. And using technology such as 3D printing, we can now make machines very close to the costs of those from developing countries, helped by keeping cost of quality under control.”

Brompton Bikes’ Vary said that as the company was going through an expansion, it had initially looked overseas. “For us, the uniqueness of Brompton is around the jigs that we use. You’d be amazed at how labour-intensive the process is, how many jigs there are, all unique to us. Our bikes have 1,200 parts and most of those are unique to us, too.

“When we looked overseas, we saw that we could save 20-30% on labour and occupancy space. But then we looked at it differently by asking what is important to us, and that’s controlling our intellectual property. If we manufactured in Taiwan, we could bring a guy in to run a plant, but he could move next door with all of our knowledge, start a company, without moving house. A little bit of our uniqueness is that there isn’t anyone else manufacturing bicycles in the UK.

“Second, our USP, is to be able say we make bikes by hand, in London; not just design and a final part of the assembly – the whole manufacture is in London. That really helps our brand strength, enabling us to be ‘barrel chested’ in the market, saying there is something behind our product; there is integrity, it’s not superficial.”

COMPETITIVE IN THE UK

As to the cost savings of overseas manufacture, Vary explains that it has highly skilled staff – many are brazers that take 18 months to train in skills that it cannot obtain externally; that the company is driving up skills, having linked wages to skill levels not output; and that the bike specialist is applying lean manufacturing and continuously improving processes. “You wouldn’t be able to do that in a plant in Taiwan; you’ve got much better control [in the UK]. And we have seen in China in the last five years that labour rates have gone up by 5-7% a year; over the last five years, our direct labour costs have gone down 5%, even with such things as automatic pension enrolment and with bonuses paid when profits increase. The net effect is that we have still taken cost out of the business, because we are focused and have a team that works together to take cost and waste out.”

And as a final word on reshoring, Brompton Bikes’ man highlights that the company is reshoring titanium production for its bikes from Russia, having established a joint venture operation in the UK. Reliable supply is cited as the benefit. “If we end up cost neutral but with supply consistency, and it’s on shore, that is a huge step forward for us.”

600 UK’s Berry offered up his company’s experience, where 10 years ago China was a major supplier, with just 35% of cost in the UK. Quality issues were a major problem, he said, and today, with reshored manufacture - over 70% of cost is now in the UK – quality is up, inventory is down and ability to react to customer demand is immediate, with total design flexibility. “And it is a USP to say we make our machines in the UK,” he concludes. (see the 600 UK feature about its recent strategy changes here.)

The MTA’s Selka added that near-shoring was also a trend, with manufacture brought from Asia to Europe - East or West. But that’s not without its problems, he reported, as a “significant OEM” importing technical product from Austria is experiencing supply disruption via the Channel Tunnel and is considering setting up a UK facility.

Grant Thornton’s Mallows, who works with Reshore UK (www.gov.uk/reshore-uk) and UKTI in attracting companies to the UK, observes that UK supplier infrastructure has diminished quite dramatically over the past 20-30 years: “Finding suppliers back in the UK can be quite difficult.”

Underscoring that, Selka highlights that JLR cars are 30% UK content, while the equivalent German auto industry figure is 60%, so the UK supply chain is massively decimated. But Mollart suggests that with companies investing in modern equipment and again citing 3D printing, “the UK is making up some of what it lost”.

Yamazaki Mazak’s Burton observed that the differences between manufacturing costs between countries is reducing: “So, on a global basis, you just need to choose the correct manufacturing process for what you are making”. And he said that for a machine made in China or here in the UK, the total costs difference is about 5%. “The biggest difference is just recovering overheads, where your break-even point is,” he explained. And he suggested “there is a huge opportunity now for UK and European manufacturers to bring work back, investing in the right automation technologies”.

[Editor: At last year’s EMO exhibition in Italy, DMG Mori’s president, Dr Masakiko Mori, offered a similar argument highlighted the narrowing of manufacturing costs between various countries. He said that, taking USA as 100, Germany was 120, Japan 110, Italy 115, China 97 and Indonesia 85.]

TAKING A RISK WITH CAPITAL

On reshoring, Stimpson suggests that attitude to use of capital and risk are a consideration, too. Warmup does some manufacturing in the UK, but there’s a problem. He explained: “If you are expanding your business and you need to invest in fixed costs, getting a new building and putting down a [manufacturing] footprint, that’s not a problem, if you have secure growth on the horizon. But if you haven’t, then it’s a big commitment when somebody else out there has scalability, expansion room and it’s their capital base.

“I set my stall out 21 years ago, I wouldn’t try to hit every target in the value chain; more than everything else I need to use every piece of my capital to sell the stuff. So, for me, it’s more of a risk decision. Cost per unit is important, but it’s actually best use of capital. We definitely want to retain engineers, we definitely want control over innovation, we definitely want to try and protect our IP, and I agree that has risks when you are sharing manufacturing facilities with some of your competitors. We do have licensing arrangements with our factories, which I am very happy about in India; less happy in China. So it’s not just a cost comparison, it’s use of capital and the risk that if you expand into a [manufacturing] facility and you’ve misread the market, or somebody else comes into the market from China or India to take that, that’s a ‘bet the farm’ decision for a family-owned company such as mine with a narrow capital base.”

Apart from that, he said that, even with costs rising in China, it is highly unlikely that China, even less India, costs could be matched in a Western wage economy. And, in his firm’s case, the manufacturers have a highly skilled workforce for the labour-intensive process that would similarly be difficult to replicate, he added.

Taking up the issue of IP leakage and counterfeiting via suppliers, Baker Tilly’s McCulloch said he has seen a business sale derailed by a company’s supplier selling product out the back door in competition with the customer. Grant Thornton’s Mallows highlighted counterfeiting of photocopier ink cartridges, again via a leaky supply chain. Mollart said he safeguards against IP loss by releasing drawings to a China factory that are probably five years out of date with current technology produced in the UK. “As long as I can maintain a technology gap between what I release to the wider world and what I am driving my company forward with, I can sleep reasonably well at night,” Mollart confided.

The assembled group turned, finally, to innovation, with Warmup’s Stimpson opening: “If you want to have a secure future, you have to stay ahead of all competition, regardless of where it is from.” He praised government incentives, added that his company has benefited from a decent gross margin that allows funding of R&D, but offered that it is tough to allocate money when there are other business calls on available cash. “It’s difficult to know what proportion should be put into R&D,” he adds, while he returns to an earlier theme by saying it’s difficult to find people in the UK with the capability and skills to drive innovation.

“It does worry me that there is not the appreciation of invention and innovation through schooling, university, even in our cultural system, with the brightest doing the same old schooling, the same old top degrees at Oxford and Cambridge. Some of those people should go and write some code, do some other stuff. The Americans and other countries do it way better than we do it. I have tried to nab some top talent via the classic ‘Milk Round’ route, but I can’t compete with larger companies.

“We need some kind of cultural change to make invention, engineering, manufacturing and sciences sexy in this country. There are initiatives, but it is not getting any better from my point of view, so that’s why we have to go to Europe and other countries to get young, smart people. One of our most recent programmers is from the Middle East. Maybe I’m not looking in the right places, who knows, but it’s a struggle to get smart, trained British boys and girls.”

AN IMAGE PROBLEM

Geo Kingsbury’s Richard Kingsbury said he believed manufacturing’s image problem stems from the 1970s and ‘80s. “Every single snippet in the media portrays British manufacturing as a dirty, nasty business, with a bloke with a welding torch, wearing a welding mask; would you, as a young person, select to go into British manufacturing at the moment? I think there are a lot of things that dissuade them at the moment. People opt for softer degrees, for example, and machine tools are a turn-off even for my own son. That’s the problem.

“In Germany it’s different. They seem to value automotive and aerospace engineering, all of those things are highly valued. We have some fantastic companies in the UK, but we don’t talk about them. Supported by the various organisations we represent here, we need to highlight that manufacturing has a massive part to play and offers a great career, with real innovative stuff going on; then you would attract more of those bright people that the country has but who choose to do something else into it manufacturing.”

Secantor’s Gordon Wright said that during his manufacturing career at Bison Manufacturing, the company engaged with college students to try and get them excited about a career in manufacturing. Kingsbury said that his company had sponsored employees to obtain degrees, but getting degree-educated people to choose manufacturing is the problem. “You need to get to them earlier,” Wright agreed.

But Yamazaki Mazak’s Burton highlighted a hurdle to be cleared in getting manufacturing-related course content into schools, referring to a meeting with secondary school heads in Worcestershire at which he offered to produce engineering and science-related curriculum materials. Although teachers expressed keen interest, they pointed to a prescriptive curriculum that leaves no space to allow so.

Lea Redway’s Maria Addaway introduced the subject of apprenticeships, citing the Manufacturing Technology Centre in Coventry’s training initiative, but saying that there were far more people that applied, so who were interested in manufacturing, than could be taken on. There isn’t the opportunity for people to enter an engineering apprenticeship, she suggested. And she additionally highlighted that such efforts as the MTC’s attracted the very brightest that would, ultimately, not be those staying on factory floors, “doing the job at grass roots level”, and it is people for those jobs that are being missed by these ‘super apprenticeships’.

Kingsbury pointed to increasing apprenticeship availability by instancing Yorkshire’s Advanced Manufacturing Park-based AMRC’s efforts that are seeing almost 400 apprentices a year go through its college now. Selka said the MTA is involved with that effort alongside Close Brothers, which is sponsoring apprentices employed in SMEs where taking on an apprentice might have been deemed too risky without such support. But Addaway offered there was much ground to make up: “We have had 20 years of nothing,” she said, alluding to the long-term drop-off in apprenticeship training.

Kingsbury returned to the matter of image: “We need to portray what we do in a better light; media interviews with steelworkers that have just been made redundant and a dirty working environment sends a message to anybody that is watching of ‘that is not the kind of job I want’. That’s the problem.”

Selka pointed to a recent IMechE report – Five Tribes (http://is.gd/W1PzIk). He said: “We are all spending our resources on the converted. There is a second group, or tribe, that is fascinated by science but not by scientists, and it’s about retention. So, out of the 24% of males that take a STEM subject at secondary school, only 3.5% end up using it. The language we use is wrong; if you ask a young person ‘do you want a career in engineering?’ they say no, that’s commitment. They want to see opportunities and a bit of fun.”

GETTING THE MESSAGE ACROSS, WITH HELP

Kingsbury said that if programmes were broadcast in the media about companies such as McLaren and Rolls-Royce “the world would change”. But Mollart strongly said he believed that each company just had to “sell itself and compete”. His company in Surrey draws apprentices from Brooklands College, which is close to McLaren - a big draw. “The pull we get from them for apprentices to go to McLaren rather than Mollart Engineering is colossal. I just have to sell my company to young kids coming through the door, getting them interested in what we are doing. I think it is about interest. The problem is getting to them young enough. By time they are 18 or 19, it’s too late; they already have the smartphone in the hand.”

Brompton Bikes’ Vary said his company engages with schools, opening up to all ages. They can choose what subjects to take, engineering mostly but which could also include finance or marketing. “Primarily, it’s about getting them into the factory, letting them see we’ve got a 3D printer, something they can relate to. We’re trying to get to them much earlier.”

But Lea Redway’s Addaway expressed her opinion that health and safety rules were a bar to engaging with young people, in terms of bringing them into factories or onto building sites. Their enthusiasm to do something at 12 or 13 has gone by 16, she offered.

Selka concluded by saying that the other issue related to children not choosing a manufacturing path is parents and teachers who are a “massive brake”, due to their lack of information and knowledge about manufacturing, because most have not come from industry, due to its decimation since the ‘70s. “There has been resurgence in manufacturing in the UK, but it has been relatively quiet,” Selka emphasised, adding: “Nissan [in Sunderland] makes more cars than the whole of Italy. I’m not sure very many people know that.”

Yamazak Machinery’s Burton highlighted that his company has long engaged with primary and secondary schools and parents, and runs an ‘industrial cadets’ programme, but joined with Kingsbury and Mollart in trying to bring business more broadly in on something tangible that helps companies sell themselves. “We all talk amongst ourselves. I agree with Guy that we need to sell ourselves, but I agree with Richard that if we can get other sectors, perhaps banks, who are also interested in the growth of manufacturing to help us get the message across to young people as well, it would be great, rather than it just coming from the industry itself.”

Returning to innovation, Warmup’s Stimpson stated that it is about getting people who “can see the link between boring chemistry or physics lessons and inventing something” that may see them become the next James Dyson. “Somehow, you’ve got to try and create that link, if people are on that aspirational path, which some are, certainly they are in the US, where they have had huge success driving people out of Harvard into Silicon Valley.

“In this country, we don’t seem to have too many willing, successful, innovative entrepreneurs to go into school to change curriculums, to change peoples’ attitudes, to making science relevant by applying it and linking to success after making 5,000 prototypes. You want people coming out of science lessons dreaming about being a Dyson, just like when a boy comes off the football pitch he wants to be Messi. At the moment, they come out of a science lesson wanting to do law at Cambridge. They don’t think about maintaining a science-based, engineering, electronic-type mindset, going off and inventing something and owning their own company.” There is a lack of role models for them to follow, he concluded.

Kingsbury finished by saying that he feels there is a gap in the market for a bank that wants to show it is more visibly supportive of manufacturing, above what it is doing already on providing finance for companies. “Banks investing in manufacturing industry is a noble thing in Germany,” he ended.

The participants

Industrial

Guy Mollart - managing director of Mollart Engineering (http://mollart.com), a precision subcontractor and manufacturer of deep hole boring machinery, drawing the majority of its £20 million turnover from exports. Guy Mollart is also the president of the Manufacturing Technologies Association (MTA), which represents manufacturers and suppliers of manufacturing technology, such as machine tools, software, tooling and workholding, as well as subcontract machinists. The MTA organises the biennial MACH manufacturing technology exhibition in Birmingham.

James Selka – CEO of the MTA (www.mta.org.uk) since mid-2014, but with an industrial background, including 13 years as managing director of a specialist high precision supplier of turnkey instrument sub-systems.

Marcus Burton – European managing director of Worcester-based Yamazaki Mazak (www.mazakeu.com), a subsidiary of Japan’s Yamazaki Mazak, one of the world’s largest manufacturers of metalcutting machine tools and laser profiling machines.

Richard Kingsbury – managing director, Geo Kingsbury (www.geokingsbury.com), representing seven German machine tool brands – Burhhardt + Weber, Hermle, Index, SHW Werkzeugmaschinen, Traub, Waldrich Coburg and Zimmerman. Part of a £60 million turnover group employing 250, the engineering side turns over around £20 million. The company was previously a manufacturer and exporter of automotive assembly test systems.

Mike Berry – Managing director of machine tool manufacturer 600 UK (www.600uk.com) - part of £44 million turnover 600 Group plc), home to the Colchester and Harrison lathe brands, of which one million have been sold (conventional and CNC). Exports represent the vast majority of 600 UK’s turnover, while over half of group turnover is won in the USA. Machine tools and precision engineered components (bearings and workholding) represent almost £35 million of group turnover.

Andrew Stimpson - CEO of Warmup plc (www.warmup.co.uk), a specialist in the design, manufacture and supply of underfloor heating solutions (electric, hydronic and hybrid - a mixture of both). It has sold more than 2.1 million systems in over 60 countries in 20-plus years of trading. The £20 million, 170-employee company has subsidiary operations in 11 countries and licensed trading partners in all others, innovation is centred in London with the company owning substantial amounts of intellectual property.

Lorne Vary – CFO of Brompton Bikes (www.brompton.com), a UK company specialising in high quality fold-up bicycles, all of which are hand-made in London. The company makes over 45,000 bikes per year and is the UK’s largest bike manufacturer, selling to 45 countries world-wide. It turns over £30 million with 240 employees, exporting 75% of all of its bikes.

Tim Childs – Managing director, specialists in metal finishing and architectural metals firm Rimex Metals Group (http://rimexmetals.com), a £20 million turnover operation with subsidiaries in the USA, South Africa and Australia, a warehouse in Germany and agents elsewhere; 80% export. Childs is currently president of the British Stainless Steel Association.

Maria Addaway – Director, Lea Redway, owner of Albright International (www.albrightinternational.com), a £30 million turnover manufacturer of electrical and electronic products, employing 200 in the UK and 500 world-wide, having factories in the UK, China and Romania. R&D is concentrated in the UK, but 80% of its turnover is derived from export.

Finance

Gordon Wright – Financial director, Secantor (http://secantor.com), which provides financial advice and business support services to businesses. £100 million turnover and 750 employees

David McCulloch – Baker Tilly (www.bakertillyinternational.com), tax and accountancy expert

Jeff Mallows – Business growth manager at consultants Grant Thornton (www.grantthornton.co.uk), involved with government-funded programmes.

Discussions continue after the official proceedings

This article was originally published in abbreviated form in the January 2016 issue of Machinery magazine.