I hate to say I told you so, but given that the Welsh Assembly Government's economic department lives in a sort of cotton wool world where they seem to be totally divorced from the reality of the real world, I thought I would repost an article I wrote nearly three years ago.It says a lot about the arrogance and complacency of those leading our economy that, even before the recession, they were in complete denial over the declining state of the manufacturing sector in Wales.
When a good number of us were warning that we needed to improve the offer to the manufacturing sector, our concerns fell on the usual stony ground.
Even now, when David Melding repeats his regular call for a manufacturing strategy for Wales, it is ignored by those who think they know best.
Read the article and weep.
Wednesday, February 28, 2007
Shutting the gate after the horse has bolted
Last week, the news broke that yet another manufacturer in Wales was shedding jobs as a result of the changing nature of the marketplace.Aykroyd’s of Bala, which makes children’s nightwear, announced the loss of 66 jobs in a rural area which can ill afford to have increased unemployment.
Indeed, one could argue that the proportional impact of such an announcement in South Gwynedd is as high, if not higher, than the job losses that will come as a result of the Burberry closure in Treorchy.
Could such an announcement have been avoided? Well, it is been an open secret here in North Wales that the company has been struggling of late and, earlier this year, was forced to cut its production by almost half due to a drop in demand.
The question from the point of view of Assembly intervention is whether they had any discussions with the business when such problems were becoming apparent. Certainly, there is the impression that the Assembly only steps in after the ‘horse has bolted’ and an Assembly spokesman responded to the closures at Aykroyd by stating that "We will be seeking a meeting with the company at the earliest opportunity to discuss this announcement.
Perhaps I am being naïve here, but surely the time to seek a meeting with a company in difficulty is before they announce jobs cuts not after? Indeed, if you look at all the recent closures that have happened in Wales, which have amounted to thousands of manufacturing jobs lost in the last twelve months, the Assembly always moves in only after a restructuring or redundancy situation.
Yet, I would agree with the Wales TUC that many Welsh manufacturers, if given the right investment and training support, can survive and prosper, although it would seem that such support is only available after they have made a strategic decision to downgrade or close their operations.Clearly, there is a lack of intelligence within the Assembly Government on the current business situation of many of these businesses in Wales.
I would find it hard to believe that there is no ongoing dialogue with major employers in Wales but it would seem that every time an job loss announcement is made, our politicians seem to be caught like the proverbial rabbit in headlights with the usual reaction that ‘Team Wales’ will move in to clear up the mess.
Wouldn’t it be more sensible to set up a system where civil servants are in regular contact with the largest employers in Wales and are monitoring their current position? For example, if an American-owned medium-sized manufacturer is looking to move its operations and close down a plant in Wales, then there could be options to closure, such as a management buy out, which the business could consider.
Certainly, putting a Team Wales approach in place then, with money from Finance Wales, support from business development specialist such as GAMBIT, training grants from DELLS, grant support from the Department of Enterprise, and manufacturing advice from private sector organisations such as SA Partners, could secure jobs for the future.
At the very least, it is about time that a better relationship was built with the major employers in Wales and that an open door policy was enacted between the managing directors of these firms and senior politicians and civil servants.
Read the article and weep.
Wednesday, February 28, 2007
Shutting the gate after the horse has bolted
Last week, the news broke that yet another manufacturer in Wales was shedding jobs as a result of the changing nature of the marketplace.Aykroyd’s of Bala, which makes children’s nightwear, announced the loss of 66 jobs in a rural area which can ill afford to have increased unemployment.
Indeed, one could argue that the proportional impact of such an announcement in South Gwynedd is as high, if not higher, than the job losses that will come as a result of the Burberry closure in Treorchy.
Could such an announcement have been avoided? Well, it is been an open secret here in North Wales that the company has been struggling of late and, earlier this year, was forced to cut its production by almost half due to a drop in demand.
The question from the point of view of Assembly intervention is whether they had any discussions with the business when such problems were becoming apparent. Certainly, there is the impression that the Assembly only steps in after the ‘horse has bolted’ and an Assembly spokesman responded to the closures at Aykroyd by stating that "We will be seeking a meeting with the company at the earliest opportunity to discuss this announcement.
Perhaps I am being naïve here, but surely the time to seek a meeting with a company in difficulty is before they announce jobs cuts not after? Indeed, if you look at all the recent closures that have happened in Wales, which have amounted to thousands of manufacturing jobs lost in the last twelve months, the Assembly always moves in only after a restructuring or redundancy situation.
Yet, I would agree with the Wales TUC that many Welsh manufacturers, if given the right investment and training support, can survive and prosper, although it would seem that such support is only available after they have made a strategic decision to downgrade or close their operations.Clearly, there is a lack of intelligence within the Assembly Government on the current business situation of many of these businesses in Wales.
I would find it hard to believe that there is no ongoing dialogue with major employers in Wales but it would seem that every time an job loss announcement is made, our politicians seem to be caught like the proverbial rabbit in headlights with the usual reaction that ‘Team Wales’ will move in to clear up the mess.
Wouldn’t it be more sensible to set up a system where civil servants are in regular contact with the largest employers in Wales and are monitoring their current position? For example, if an American-owned medium-sized manufacturer is looking to move its operations and close down a plant in Wales, then there could be options to closure, such as a management buy out, which the business could consider.
Certainly, putting a Team Wales approach in place then, with money from Finance Wales, support from business development specialist such as GAMBIT, training grants from DELLS, grant support from the Department of Enterprise, and manufacturing advice from private sector organisations such as SA Partners, could secure jobs for the future.
At the very least, it is about time that a better relationship was built with the major employers in Wales and that an open door policy was enacted between the managing directors of these firms and senior politicians and civil servants.
For example, statistics suggest that there are around 1200 firms in Wales employing more than 50 people, with a total turnover of £29 billion pounds and overall employment of 275,000 people.
Now, if I was working in the Assembly, I would certainly be monitoring the health of such major employers and wealth creators in Wales and ensuring, through regular meetings, that they could get access to the support they require for their further development.
Perhaps the place to start is to undertake a baseline audit of all these businesses to determine their current situation and ensure that there will be no more job shocks in the near future. Certainly we have enough civil servants within the Assembly to undertake such an important task.
Building up a business to become a significant local employer takes many years but announcing redundancies takes less than minute, a situation that could easily be avoided if the business had alternative scenarios for its future supported proactively by business support agencies.
I certainly hope that the Assembly Government can find the resources to ensure that there are individuals that such businesses can approach immediately if major redundancies or closures are being considered, especially if routes such as succession planning or management buyouts could be utilised through greater co-operation with the private sector.
Perhaps the place to start is to undertake a baseline audit of all these businesses to determine their current situation and ensure that there will be no more job shocks in the near future. Certainly we have enough civil servants within the Assembly to undertake such an important task.
Building up a business to become a significant local employer takes many years but announcing redundancies takes less than minute, a situation that could easily be avoided if the business had alternative scenarios for its future supported proactively by business support agencies.
I certainly hope that the Assembly Government can find the resources to ensure that there are individuals that such businesses can approach immediately if major redundancies or closures are being considered, especially if routes such as succession planning or management buyouts could be utilised through greater co-operation with the private sector.
Comments
WAG has recently supported this strategy and have funded a co-ordinator with resources. Manufactures are happy with this progress as they are following the strategy they wanted.
I know that the Conservatives have attacked the strategy as they seem to think that WAG wrote the strategy. They couldn't be more wrong. The Manufacturing Strategy was written by manufacturers, for manufacturers and is supported by WAG.
If you don't agree with this, then I can invite you to the next Manufacturing Forum and you can explain to the manufacturers how their strategy is wrong....
I appreciate that there is a need to keep the government in check, but please Dylan, stop trying to pull the wool over peoples eyes to make political points.....you are much better than that.
Does it exist yet as it would seem that very few people have seen a copy? Certainly, Assembly members have yet to discuss it which is why Conservative AMs have been asking WAG for its publication.
If it is still in draft form, could you explain why it has taken two and a half years to release the strategy, as I believe the Manufacturing Forum was set up in late 2006/early 2007.
If it hasn't been published anywhere, how can I comment on it, which of course, I didn't in this article. Indeed, I would be interested where you disagree with the article from 2007. Are you happy with how WAG deals with major employers in Wales and if so, why?
In terms of the strategy, if you could send us a link, then everyone could look at it and examine it further. Once I have read it in detail, I would be happy to discuss it with anyone.
The simple fact of the matter is that we have seen manufacturing firm after manufacturing firm close down in Wales over the last decade.
Why?
It is because manufacturing has not been taken seriously enough by those in power and which is why we have seen the sector decline by almost 10 per cent over this period in its importance to the welsh economy.
Rather than being an apologist for WAG, why don't you look at their record in supporting the sector.
It is pitiful.
Finally, why don't you enlighten the rest of us whom you assume to be ignorant of such matters on how this 'strategy' has supported the manufacturing sector in Wales during the last twelve months?
I am sure there thousands of now redundant manufacturing workers across the country who would be very interested in your answer.
The simple fact of the matter is that we were not happy that WAG took so long to support the strategy. We argued that in this economic decline, the strategy was more important than ever. However, we were happy with the actual strategy.
WAG have finally listened. Although belated, they are supporting the strategy.
I recall conservative AMs questioning evidence givers at committee last year. Asking if WAG had taken action on the manufacturing strategy. If this helped in pushing WAG to act, then I'm grateful. But, now WAG are actually acting upon the strategy lets see how this develops.
There's no point in calling for a new strategy when there's one already there. It was written by the manufacturing sector and the sector is happy with it. I would rather this approach than WAG writing one for us!
The main problem was the time WAG took to support the strategy. Now they have, lets support it - at the end of the day, it was written by manufacturers as a way to support the sector.
If other people had the same passion about their sector, then this country would be in a far better state than it is today.
My frustration is not with the manufacturing forum - far from it - but with WAG's continuing prevarication and delays over this issue.
You say that there is already a manufacturing strategy and that WAG is supporting it.
However, according to senior WAG officials, this is having to be rewritten to take into account of "credit conditions" and won't be ready for publication until March 2010 and will only be implemented as part of the economic renewal programme.
If that is the case, then can I urge you to send a copy not only to me but to all the members of the Enterprise and Learning Committee.
I believe they would be fascinated to know exactly what the Forum has planned for the manufacturing sector in Wales as, to date, they have had no real information whatsoever. Indeed, it would be good to know why WAG refused to implement the original draft strategy - the recession seems to be a convenient excuse more than anything else.
Only then will ordinary AMs be able to press the Government to make sure that your strategy, which has been written by manufacturers for manufacturers, will be implemented.