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British jobs, for German workers?

Robert Peston | 07:39 UK time, Thursday, 7 October 2010

For years I’ve been banging on about the “headquarters effect”, or the propensity of multinationals to favour their respective countries of origin when it comes to decisions about where to put new investment or where not to impose draconian job cuts.‬‪

For many, it’s one of the few respectable arguments against the British propensity to sell any company or asset to the highest bidder: the HQ effect implies that when a British plant is owned by a overseas company, it may be more vulnerable to being closed down if the going gets tough and may also be less well funded than operations in the company’s home territory.‬‪

Nice theory. But in the boom years from 1992 to 2008, the headquarters effect didn’t seem to be too serious a problem. The point is that when the UK economy and global economy were growing with only smallish dips and interruptions for 16 years, there were plenty of new opportunities for those made redundant by the corporate pruning and reshaping ordered by executives resident hundreds of miles distant.

Don’t those easy-come, easy-go years feel an era away? Today’s world is uncertain, shrouded and perilous. Which is why cross-border investment has diminished and why some multi-national businesses are putting safety first and staying a bit closer to hearth and home.‬‪

Siemens

 

That said, few have taken the defence of the corporate home – a kind of corporate patriotism – quite as far as Siemens, in its recent agreement with its works council and the IG Metall workers’ union that it will never make any forced redundancies among its 128,000 German workforce.

Siemens’ German employees – not just this generation but all future generations – have been given a guarantee that their jobs are safe.‬‪

Now the traditional British or American critique of Siemens’ protection of German employees would be that it has surrendered a vital ability to respond to unexpected shocks by slashing jobs and thus costs.‬

That may be so. But Siemens employees in the UK tell me they have a different fear – which is that they’re now more exposed than they were to being fired: if Siemens wants to adjust its cost base, it’s the Brits in their hire-and-fire culture who will be volunteered for the boot.

This may be an unfounded fear. But given that Siemens employs just under 17,000 people in the UK, it’s as well to treat it seriously.‬‪

As it happens, I’ve been contacted by employees of Trench UK - a small business that became part of Siemens in 2004 as part of the acquisition of a larger outfit - who are battling against Siemens' decision to close their operation down.‬‪

To be clear, the original threat to shut Trench – which will cease operating in September 2012 – pre-dates the German job protection deal.‬‪

But, on the face of it, there are reasons to be troubled by the planned closure.‬‪

The point is that Trench UK seems to be a highly successful British-based manufacturing exporter – and there aren’t too many of those about.‬‪
It also operates in a part of the UK, Tyne & Wear, where private-sector exporters are a bit too thin on the ground.‬‪

Now Trench isn’t a huge business. It employs just 91 and can't be seen as of major strategic importance to the UK - although its existence probably supports a few hundred other British jobs.

But it is an important supplier to the National Grid as the maker of a specialist electrical product, called a Bushing, which connects transformers to cables.

The managers on Trench UK’s employee consultation committee tell me that turnover and profits have grown strongly over the past five years and that 70 per cent of output is exported.

Profit was more than £5m in 2009, up from almost nothing in 2005 – and the past 12 months have delivered another record performance.

These managers say that they have a highly productive business, which has immensely loyal customers. They believe that Trench UK could be a small but useful contributor to Britain’s industrial revival.‬‪

So why is it on its way out? Well the managers’ conviction is that Siemens main motivation is to channel Trench UK’s orders through a larger but less successful Siemens plant in Cologne, Germany.

Which, if true, may well be a rational commercial decision by Siemens.

But we need to hope that Trench UK isn't some kind of last swallow of an economic summer.

Or to put it another way, the evidence suggests that the famous flexibility and openness of the British economy has helped to bring in investment over the past 25 years.

These putative advantages of investing in the UK persist. But if it’s easier to create and expand productive capacity in the UK than elsewhere in Europe (for example), it's also easier to shut up shop and go home.

Comments

Page 1 of 4

  • Comment number 1.

    As soon as Trench UK allowed themselves to be purchased by the 'larger outfit' their destiny was no longer in their own hands. I suspect that Siemens would not even allow Trench to buy themselves out as they want Trench UK's order book for their existing plant in Cologne.

  • Comment number 2.

    Real Business, Real jobs, Real Exports. This is what we need to be discussing. If those fools in power could stop wittering on for a few minutes about deficit, debt and cuts and focus their minds on the these things, we may just start to pull ourselves out of this mess.

  • Comment number 3.

    I think that you may be on to something here Robert, keep your eyes open. Me smells a trade-war. Something along the lines of trashing the currency to start with aka the US dollar over the last 6 months (Japan this week), closing foreign plants in favour of domestic ones, protectionism by slapping taxes on foreign imports (US has China in its sights at the moment) and finally an all-out beggar thy neighbour trading policy. All beginning to look worryingly 1930's which is a bit odd as the US policymakers are all supposed to be such scholars of the period and the lessons that are there to be learnt.

  • Comment number 4.

    Sadly not the first nor the last time that a successful english company is sacrificed by foreign owners!

    Another disturbing factor that appears to be the latest fashion amongst international companies is to ignore redundancy rules and tell those made redundant to sue if they want to get what they are entitled to, presumably on the basis that many will not bother.

  • Comment number 5.

    In the rush to make your company bigger and look good to the stock market this is the result of the misguided managers following the leaders. If the niche of supply that the company makes is good why not find British cash or a UK partner to keep going here? There must be a manufacturing version of that nice Mr Branson.

    And then again as the area they are based looks like most of the work will disappear with the upcoming cuts, should not the blinkered government have funding to keep work like this going? Sorry, I thought the government was there to support the country not close it down in a fire sale to the friends from Eton.

  • Comment number 6.

    So Robert, are you suggesting that the Siemens management came up with the protection of the German workforce and forced it on the union, or did the union, through the supervisory board force it on the management? In either case it does seem to be a promise which cannot be kept in the real world.

  • Comment number 7.

    If Trench is such a good company as you claim why are not other greedy companies (including the odd British company still going) queuing up to take it over? And then no British workers would need to lose their jobs.

  • Comment number 8.

    How ironic that this country's economic strength is in the financial services sector. We have become hugely reliant on this sector to drive the economy, with manufacturing and other worthwhile sectors falling by the wayside.

    That said, the government is doing all it can to destroy our leading position as the centre for financial services, which without massive investment in other areas, leaves us with little else.

    It will take time, but far more needs to be done to encourage growth in these vital alternative sectors to build a sustainable economy for the future.

  • Comment number 9.

    How interesting that you notice this immediately at the international level, but continue on blissfully unaware that a similar process has occurred at a regional level for decades. All those corporate HQ's in London, treating the rest of the UK as a cash cow to finance their "exciting overseas ventures".

  • Comment number 10.

    I have worked for 2 large US companies, each with an equally large office in London. In one case more revenue was generated via the London operation. In each case, there was massive bias to appointing US hires to the senior roles and/or shedding the UK staff when cuts were to be made. However, also in each case we had a weak local head manager in the UK operation who failed to properly argue the case with the US management. The suspicion of many staff was the said head manager/s obtained such positions largely due to their inherit willignness not to put a strong local case as they were doing fairly well for themselves out of the situation. This was further supported in one case, where the previous senior UK manager who had been robust with the US management was quietly forced out then replaced with a somewhat more placid individual who went along with just about anything. He remained in position for many years and was most popular with the management across the Atlantic. Conclusion: Once a firm is taken over it is only a matter of time before the acquiror dispenses with any 'problem' management and installs those via whom they can do as they please or, worse still, via those who are happy to cover up the reality of what is going on.

  • Comment number 11.

    Surely an apocryphal story. The metaphor that comes to mind is more to do with vultures making for a winter of depression. Do other countries beckon foreigners to veni, vidi vici (or emere) with their industry?
    Shame on Labour for encouraging the externalisation of ownership of our industries. Cutting back on state capital spending will accelerate the erosion of our industries and specialist services. In the race to the bottom G Osborne is the favourite!

  • Comment number 12.

    Ah, the rush to globalisation; it seemed such a good idea in the boom years, but now coming back to haut us and the America's. Globalisation is inherently not sustainable in environmental terms, i.e. making products abroad, that we could make here, and importing them 1000s of miles. As oil peaks in the next few years we will realise our folly, of outsourcing, and have to return to a policy of self sufficiency, and making things ourselves again.

  • Comment number 13.

    It is only natural that 'head quarters' for any company are going to protect their own interests. If you sell companies to international companies then they are only going to be interested in the profits that that local company can generate.

    I had a distant relation who was a director of a number of companies around the world. He would make decisions about his companies over lunch - to close or not to close?

    In international business it is buy or sell - as simple as that!

  • Comment number 14.

    It is very common in the software industry - where I work - for a company to be bought out and shut down to take them out of the market. Or for a moribund company to be bought to reactivate some patents lawsuits (this also happens with copyright lawsuits in the music industry).

    I live and work in the north east and the supposition is that Siemens bought Trench - the cynical say with regional aid from the UK government (don't know if that is true) - with the express intention of closing down a competitor and acquiring their IP.


    The City will like this sort of deal - grow your revenue by M&A - improve your p/e - whatever, doesn't matter if its all gibberish, just get the deal through and take the fees, pay off any squealing managers (as we saw with the Cadbury board this works perfectly) AND TAKE YOUR FEE UP FRONT. Move on to the next target - much easier than investing isn't it?

    My brother works in Germany in the car industry - he points out that Mercedes spent billions on developing 4X4 technology - BMW got a huge subsidy to acquire Rover on the cheap instead. And we then saw subsequently what manner of person the government (and the auditors) saw as a being fit to run the company when BMW pulled out. How they all escaped jail is a mystery.

    Other countries are involved in a struggle to build up their industrial and wealth generating capacity - the management culture in the UK is smash, burn and pillage - since there isn't that much manufacturing left in UK ownership the banks and financial services sector have moved on to grabbing a chunk of services provided by the state (which then get worse, more subsidised, and more expensive - how surprising) - and as we have seen, they are now realising that they can mount direct smash and grab raids on the UK taxpayer with complete impunity - (£285 billion more will be needed by the banks and you can be certain they will get it)

  • Comment number 15.

    Does it not stand out as obvious to anyone else that the "recent agreement with its works council and the IG Metall workers’ union that it will never make any forced redundancies among its 128,000 GERMAN workforce" is a blatant policy of discrimination?

    Enshrined in Article 21 of the Charter of Fundamental Rights of the European Union is the principle that requires the equal treatment of an individual or group irrespective of their particular characteristics. Moreover Article 12 of the EC Treaty prohibits disrimination in employment on the grounds of nationality. Council Directive 2000/78 prohibits both ‘direct’ discrimination (less favourable treatment) and ‘indirect’ discrimination (where an apparently neutral provision or practice puts persons at a particular disadvantage).

    Quite clearly Siemens have made an agreement to introduce a policy of employment which is discriminatory and favours employees in German over those in other countries. Granted, in a situation where cuts would be required and the company made the decision based on 'economic' rationale to cut jobs in the UK (or any where else other than Germany for that matter) than whilst obviously an example of protectionism it would be hard to prove discrimination. However making a statement which guarantees certain rights to employees, but restricts those to whom they apply to the German work force is nothng short of discrimination.

    Apart from that, the fact that a clearly very profitable business can be shut down to domesticate the productivity and profit is deeply worrying to UK industry. As mentioned by Robert, the business 'probably supports a few hundred jobs'- 'metalgasket' was right in saying the government needs to refocus its attention on business development which is looking to be in a very precarious position.

  • Comment number 16.

    #12 Averagejoe.

    Agreed. But where will the raw materials for home-made goods come from? Some high-tech products (for example) require materials that we simply cannot source within the UK. Plastic goods? We would need to import oil for that.

    Potentially, reducing our military strenght maybe a really big mistake.

  • Comment number 17.

    Labour market flexibility has both upsides and downsides. Trench is an example of the downside - it is simply far more cost effective for Semiens to close Trench than their German plant.

    But the upside is clear to from the example of Spain. Spain has a rigid labour market (which it is changing). It had much higher unemployment in good times because employers were reluctant to take new staff on who would be very expensive to get rid of if times changed.

    Every country has to find its own middle ground between making the labour market too rigid and too arbitrary. However, the more flexibility you build into the labour market the more flexibility you need to build into business investment to encourage high levels of inward investment

  • Comment number 18.

    "For years I’ve been banging on about the “headquarters effect”, or the propensity of multinationals to favour their respective countries of origin when it comes to decisions about where to put new investment or where not to impose draconian job cuts"

    Same applies to recruitment and it the reason behind so much of the complaint about immigration caps. For example, Indian IT companies have a very very very strong preference for Indian software developers (not only in India but for those who are needed in the subsidiary country). They seem to assume that there are no suitably qualifies software engineers already resident and when it looks like they might no be able to use their own nationals they start talking about the disastrous impact on their business (ignoring the disastrous impact on the UK were we to have open and free immigration for everybody).

  • Comment number 19.

    The Uk has been though a considerable number of these economic downturns during my lifetime but I am suprised we have experienced yet anothet.Particularly as this country has so many wonderful intelligent people in the media who appear ready to attack the government when it is attempting to tackle the problem. Yes there will be some errors of judjment by our present leaders and they will have to accept these and deal honestly with the ensuing results. However is'nt it time these so called knowledable media experts offered to help the government in any practicable way possible after all they are quick to attack those who are working towards solutions to the disaster which is theatening ALL our lives and the futures of the next generation. COME ON MEDIA BUDDIES AND SHOW YOUR SOLUTIONS TO THE REST OF US.

  • Comment number 20.

    This is just the beginning Robert and more frightening than you think.

    Most of us who have read a history book know what is coming and it is looking more and more like a depression followed by protectionism, trade wars, (currency wars, commodity wars,) and the end game... WW3. Only this time it is not just the US with the 'red button'. Exagerating? Maybe....

    Maybe I'm wrong. If I am, what is the future of the western developed economies?

    Can we all manufacture and export our way out of this depression?

    Someone needs to lose - hence the protectionist policies creeping in.

    I don't have a crystal ball and am not making wild predictions, just noting we have been here before.

  • Comment number 21.

    In reply to sandy winder, Siemens are not willing to sell Trench UK because they want rid of the competition. I am lead to believe that there are numerous companies that would buy Trench UK but Siemens will not sell.

  • Comment number 22.

    Robert,

    If Siemens wants to adjust its cost base, it’s the Brits in their hire-and-fire culture who will be volunteered for the boot.

    This is not an unfounded fear. It is rampant in this particular case. That I can very much assure you. There is a lot more going on than this as well.

    Alas, this is all circumspect of failed British thinking, it hurts me to say, specifically short-termism.

    All countries had their problems with unions, profits, efficiency etc. Siemens is no different. The only difference is we sold /left to irreparably decay our stake in our own equivalent organisations, and allowed "competition" to take over, adhering to a political ideology gone wrong. Collaboration has been overtaken with the notion of competition. Pride and value in all good things British - the sentiment and basis which drives our European cousins - is only considered in UK plc in terms of economical outlay. What this entirely misses is the perceived value of a brand or service or function, and the economical impact this perception carries.

    Selling more silverware (or chocolate manufacturers) will not solve the problem - contrary to what the political elite tell us.

    We have turned into an almighty services nation - and the likes of Siemens are merely taking advantage us. Ironically, as far as services go, I would argue we will struggle to do this well - for exactly the same reason as above. "Cheaper" nations will come along to perform the same role, as the perceived value of our services is difficult to comprehend - and rectify, if the case may be.

    Thus, if the conclusion is that the political dogma is wrong, then how shall this be changed?

    Excellent article by the way.

  • Comment number 23.

    10. At 08:54am on 07 Oct 2010, James wrote:

    -------------------------------------------------------------------------

    This scenario holds true for almost every corporatation.

    I have this saying that sums it up nicely... "The ones least likely to rock the boat, are the ones that are in it"

  • Comment number 24.

    I worked for many years in the British Chemical Industry until the part of the company I was working in taken over by an American company. At the time of the takeover, 2004, we were a small but profitable business (annual profits approximately £ 20 Million) manufacturing in the UK and had significant growth plans. They paid around £200 Million for the business.

    By the time I left, by my own free will and without a redundancy payment, in 2006 the annual profits had slumped to £ 2 Million (possibly through financial engineering), the plans were well in place to outsource manufacturing to China, the remaining staff had shrunk to below 50 and the growth plans were not possible as the organisation had lost key technical skills.

    All this was engineered by one of our "revered" and overpaid investment banking companies and we are told that this is good for the country as a whole as the takeover would bring in better overseas management to the business! I would like to see one an analysis by one of our leading business schools of the real impact of foreign ownership of companies in the UK in terms of profitability, internal investment, overall employment, technical employment, senior management employment and the contribution to the tax base. Only then might I agree that this is a good thing for the UK economy and people.

  • Comment number 25.

    I have personally always argued that those who persist in saying that ownership doesn't matter should substitute "ownership" with "control" and rethink their argument. Robert's Siemen's report reinforces my view.

    However we also need to remind ourselves that the trend to selling off business into overseas ownership was and still is driven the City. In the past few weeks alone we've lost Tomkins the major automotive parts manufacturer to a US/Canadian outfit and the oil/gas explorer Dana Petroleum to the state owned Korean National Oil Company.

    Short term greed has and continues to wreck our economy.

  • Comment number 26.

    15. At 09:26am on 07 Oct 2010, Turbulent_Times wrote:

    -------------------------------------------------------------------------

    It doesn't matter what EU law states. How long do you expect the EU itself to last? The Germans are already angry at footing the bill for their younger European siblings. History has shown us, that no union or co-operation of states can last forever. Every dynasty/empire has come to end. I think the EU is headed the same way, although probably a lot faster than the historical examples.

  • Comment number 27.

    Where is the comment from William 134 going to appeear

  • Comment number 28.

    Several contributors have suggested that there is no problem because, if this is such a good business, the employees and/or somebody else can buy it and carry on where Siemens leave off. But no. When Siemens acquired the business it included (presumably - I admit I don't know this particular case, but I would be most surprised if it were not so) the intellectual property - any patents, trade marks, & technical & commercial know-how - which they can now pack up and take to Germany, or Poland or China or wherever they like, making continuation of the business in the UK impossible. Thus we are in danger of selling our birthright for a mess of pottage.

  • Comment number 29.

    A significant advantage that German workers have is that firms like Siemens are required by law to have a works council.

    The flexibility that is supposed to give British industry such an advantage in world markets is entirely in the hands of senior managers. It is not surprising, therefore, that it is used mainly to facilitate decisions which fulfill the desires of those managers, on matters such as where they will be based, and that even the interests of the shareholders are neglected.

    It is more important for the national economy, that the interests of the whole workforce should be taken into account. Their welfare determines the taxes and other contributions to the economy that they are able to make.

    An enduring criticism of New Labour is that it did not introduce something similar to German works councils into the UK, instead of just talking about empowering all stakeholders, so that all workers would have a say when "flexibility" is to be deployed.

  • Comment number 30.

    #9 dinosaur

    A really good point, it goes on in all spheres.

    When Wembley stadium was re-developed, at about x 3 the original cost. It had to be in London, why?

    Manchester got the Commonwealth games as a consolation prize after bidding for the Olympics, but when London bids- it got all the support it needed.

    I have to work in London on a regular basis and I'm sorry but you've
    reap what you sow. A city that is grinding to a halt.

    #14 FauxGeordie also a good post- If we can see what has happened to our Industry, why can't our clever leaders.We have seen it stripped of assets, or sold off.It's all part of a culture where making a quick profit outweighs all.

  • Comment number 31.

  • Comment number 32.

    In Reality, Siemens are just doing what the Luftwaffe tried so hard to do in WW2, but by stealth instead force. Instead of bombing British industry out of existence, just buy it up and close it down.

  • Comment number 33.

    when i was a young man i was told you are just a number at the time i told him..[ know way], how im 50years old and wiser i how know he was right...........we are going to be a nation of shop KEEPERS.

  • Comment number 34.

    #19 It's not the job of journalists to provide the answers to our problems, that's the job of gov't.

    On the other hand it was our highly qualified irreplacable banking experts who have to be paid millions (to attract and retain the best) that have contributed to the economic minefield we find ourselves in.Maybe some of them should read this blog now and again, I have certainly seen lots of sound advice that they could learn from a number of intelligent and toughtful posts. A bit of commonsense goes a long way.

  • Comment number 35.

    A few years ago I used to work for a metals dealer who used to source metals and alloys for the engineering industry and smaller fabricators. I was always amazed at how well these companies were run. The people on the phone were totally clued up and on the ball the whole time. They had good cash flows and were mostly no nonsense type people. Engineering was probably one of the last few industries that the UK was doing well in and actually exporting out to the rest of the world. The case of Trench, epitomises what is most likely the final nail in the coffin for what was a booming industry.

    The only engineering left in this country is the financial kind. The one that turns printed wood pulp and binary code into items of "value".

  • Comment number 36.

    @24

    I wholeheartedly agree with your comments as i too remain sceptical of the value to this country of business done in this way.
    We must be rueing the day our industrial base was decimated in this way, as only industry can pull us out of the quagmire our beloved banks have left us in.

    Perhaps while we are at it we as a country should reconsider the implication of having our electricity and gas under foreign ownership i see Ofgem(the peoples champion...not) are putting a levy on customers to pay for investment in these industries so as to keep the profit margins high for the companies involved i suppose.

    IMO our country is being pillaged by these firms we need to Wake up, and quickly....

  • Comment number 37.

    Ja, we do love to hate the germans.
    Deutschland uber Alles.
    Seems a racist decision.

  • Comment number 38.

    Trench illustrates another and equally debilitating effect of the HQ problem. You are cut off from the business decision making, so your management are not exposed to the day-to-day top level cut and thrust of business. As such, they (no reflection on Trench management here) do not learn some of those skills and settle into a "caretaker" management role.

    Deskilling, dumbing down; call it what you want. It means a lot of younger management in the UK can't manage at top levels. They learn how to keep their heads down, but not how to lead a business.

    What your report on Trench does hint at is the mushroom effect. Since UK management do not know the reasoning behind a business decision, how can they effectively manage a workforce's morale?

    Sell the family silver, and a lot of other know-how goes with it.

  • Comment number 39.


    Where will this end? We need to stand up against these Global giants who can quietly buy up our heritage (often with grants to do it!) obtain our expertses and design capability, gather our technical knowlege, then retreat to their homelands and reap the rewards.

    What made this country great is slowly being eroded and will in time be used against us. Rather than being in control of our own infrastructure we will become fully reliant on other countries - this is already the case with our water, our electricity networks, and now our National Grid will be dependant on their support being provided by Germany.....scared? you should be as this could potentially effect each and every one of us...why - well almost every amp of power that arrives in your own home will have gone through a Trench UK Bushing at the power source to reach you.

    Mr Cameron gave a speech in the North of England just after his appointment as PM advocating re-building Britain, nurturing and growing our Manufacturing.... Well here we have a successful manufacturing Company - exceeding all targets, with a good order book and strong customer base which is being closed without opposition... Siemens wont sell as Trench UK are too great a threat of compeition.

    What can be done about this - its criminal.

    Its time to stop this, and we need help to do it... who can help us??

  • Comment number 40.

    The "Headquarters effect" is a new phrase on me but the concept has been around for years.
    And lets be honest. The UK has been up to this as well.
    I work fo an American company and one of the complaints we hear is that they are America-centric!
    Top that for making up phrases!
    Unusually though, they are currently expanding operations in other regions. This is leading to jobs in local markets as they have realised they need local people on the ground if they want to expand. And this in turn is leading to US employees being laid off.
    Siemens appear to have made a decision they may come to regret.

  • Comment number 41.

    This proves that free-market dogma only works if everyone else does the same. Since they are not all that stupid then it is the free-marketeers who get taken to the cleaners.

    This article illustrates one way in which the real UK economy has become hollowed out. The example of a more efficient British producer being purchased by a larger but less efficient competitor keen to corner the market has familiar resonances.

    Furthermore it is not just the loss of the jobs at the UK manufacturing plant which is the problem, it is the loss of this business as a customer to other local companies, the loss of the spending power of the workforce in the local economy and so on.

    It needs to be understood in both Whitehall and The City that this need not be the efficient workings of capitalism but a form of national economic suicide. It is easy to use ideologies dogmatically in order to rationalise a desire to do nothing by vested interests. Belief arises from experience and not the other way round.

    No longer do the British believe in either manufacturing or real work so inevitably we will end up with nothing.

  • Comment number 42.

    30. At 10:08am on 07 Oct 2010, creditunionhero wrote:
    #9 dinosaur

    A really good point, it goes on in all spheres.

    When Wembley stadium was re-developed, at about x 3 the original cost. It had to be in London, why?


    - That's where Wembley is. To move all of Wembley to out of London would be an engineering task too far.

  • Comment number 43.

    Maybe Siemens favour Germany because they think the UK is no longer financially stable.

    If you look at the way things seem to be going, one could be forgiven for seeing at the very least, the potential for instability:

    For example:
    Public and state pension liabilities are around £3900 billion (£3,900,000,000,000.00)
    Current household debt (incl mortages) is around £1457 billion (£1,457,000,000,000.00)
    Government debt (incl bank bailout) is around £1000 billion (£1,000,000,000,000.00)
    Bank of England prints £200 billion in 2009 and looks likely to print more.

    And whilst I’m no economist, those figures do suggest that there is a rather large problem brewing.

  • Comment number 44.

    The most obvious approach here is to completely ignore larger operations and their constant wants and needs.

    If Siemens shuts this operation then the state should be helping these people start up a small business to compete with Siemens.

    Small businesses employ the vast majority of private sector workers, and they are the least likely to take their ball home and move abroad.

    Government policy should be indifferent to larger operations (including headling tax rates - which any sensible accountant ignores anyway) and concentrate instead on smaller businesses.

    Then if larger companies decide to take their ball home, smaller British ones will spring up in their stead.

  • Comment number 45.

    Brave talk from politicians! But Forgemasters ??? If government hasn't got the £80 million, why didn't they lean on a bank (one of the ones we own ?) to come up with a loan ? There's a company in Cambridge UK, forget its name - something like Plastic Display Logic, who successfully developed OLED Display technology (partly supported with government grants, I believe). So - into production. Whoopee! But where was their plant built ? In East Germany, where various incentives made their decision a no-brainer. What is the point of all this R&D support, if, when successful, the resulting jobs are created overseas. I regard both these as "Test Cases". And a Requiem for ICI (remember it was called the "bellwether of British industry"?). Bought by a Dutch outfit. And what about Ineos ? If Jim Ratcliffe is furious because no support was forthcoming when this excellent company hit a rough spot, who can blame him for moving his corporate HQ to Switzerland. Ineos apart, the UK chemical industry is but a shadow of its former self - like so many others!

  • Comment number 46.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 47.

    The 'Wimbledon effect' coming back to haunt us.

    When the establishment, politicians and vested interests are ignorant incompetent cowards with no interest in Britain and British people other than serving their own lazy easy money short termist interests and lining their own pockets ... then having zero strategic national business planning and an obsession about some mythical pedestal position for the UK in terms of its relativity to historical commercial pre-eminence in world trade ... and a predisposed 'weakness' (actually I think its more like some kind of a mental disorder) to exposing Britain to more and more of the damaging kind of globalisation at the direct expense of strategic British interests in the domestic economy ... then this is one of the the results.

    Well done Mr Peston ... you must be the only one at the BBC who takes the time and trouble to properly analyse what is happening to that cruelly and abandoned creature ... the British productive, domestic economy.

    At one time a successful up and coming British entrepreneur would have been attending regular meetings to discuss a project or two with someone like Brunel, Bessemer or Stevenson ... now they go and see their hedge fund manager or other 'broker'.

    BTW - please can someone sack Cable

  • Comment number 48.

    As the bottom line, you could blame Trench-Group for selling out to Siemens in the first place ; thereby allowing them access to this jewel in the UK Manufacturing industry.

    But the fact that a VERY successful UK manufacturing company (year-on-year record profits made since 2006) is being closed, rather than the failing, expensive german counterpart - just to safeguard German jobs - has to be against some of the founding principles of the European Union.

    How can Siemens (& the german unions) can get away with an agreement for "no German redundancies" whilst closing factories in other EU countries? Surely this must be classed as Racist, Discriminatory, Jingoistic even and against the principles of the EU ????

  • Comment number 49.

    Hi Robert,

    Quite frankly I’m appalled that a profitable British company like Trench UK are going to be lost from our manufacturing net because of the failings of factory based in Germany! Are we as UK citizens supposed to just sit here and do nothing whilst we continue to lose jobs in a country where jobs are becoming harder and harder to come bye? No; I’ve read about this company already and they have a good, strong order book and have made year on year profits for the last three years.

    Not only am I outraged by such an act of industrial terrorism; but from an EU law stand point then surely this is illegal? For Siemens to release a statement protecting 128,000 of their German employees has to be seen as discriminatory and must open up a vast amount of legal action for many Siemens employees worldwide who are under the threat of redundancy or are currently going through the redundancy process!

    Our new Prime Minister has promised to save and invest in British manufacturing; surely this is an ideal opportunity for him to do so! The need is great for the manufacturing industry in the UK; the time for action is now; Mr. Cameron step up and do your duty and show your country why we appointed you to lead us from the darkness and back into the light!

    Thank You

  • Comment number 50.

    Reading the comments, it is clear that not many people are surprised by this. What is laughable is the assumption that the 'government' has not recognised the contradictory nature of its policies i.e. countries with open door policies will always be victims of those countries who operate closed door policies. The 'government' has always pursued open door because it gives a quick short-term financial boost but the long-term cost, whether its Trench, Corus, Cadbury is always a loss of jobs, IPR and skills etc.
    The 'government' needs to adjust the playing field to keep it level with other countries e.g. set a higher threshold for takeovers, ensure that the government keeps a long term 'golden' share in products invented or encouraged in any way with government funding, make it mandatory for staff conditions to be comparable across borders, set up a sovereign fund to be able to have a say.
    Its not enough to simply encourage new SMEs which get taken over by other countries, have all the skills and knowledge sucked out of them and then quietly closed down.
    Come on, Vince, this is your territory. Get on with it.

  • Comment number 51.

    Trench UK is a highly profitable company, which is being closed to give out work and customer to an underperforming german company. Siemens will not sell Trench,even though their are buyers, interested, because they want to get rid of any competion, if i was applying for a job with Siemens i would think long and hard about it, because if a german job is at stake no matter how well your doing, it will be you in the UK who will loose your job.

  • Comment number 52.

    Part of the problem is UK companies fail to grow themselves to global businesses; at moment UK companies need to be focussing on high growth areas like Asia and Brazil, rather than being in their comfort zones of UK, Europe and America. They need support from politicians, councils and Unions to build links into Asia and promote the UK brand. This is the advantage Siemens has; German means high quality, high technology engineering, UK brand?

  • Comment number 53.

    "So why is it on its way out? Well the managers’ conviction is that Siemens main motivation is to channel Trench UK’s orders through a larger but less successful Siemens plant in Cologne, Germany."

    Robert - it's protectionism - deal with it. It happened in 1930 and it's happening again now - I told you this months ago - weren't you paying attention?
    Of course this is going to happen - it's obvious. We have gone back to the old days of currency manipulation (and no, I don't just mean China, they're all at it), import tarrifs / delays (because not all import restrictions are illegal or financially based), encouraging consumers to buy in the national interest (buy British etc) and offering subsidies to comapanies to remain and boost flagging unemployment.

    Stop worrying about what's happening now - worry about what's going to happen.
    The commodity wars are underway as asset prices continue to fall. With the attack on wages by both public and private sector bosses - the food bill is going to start taking up more and more of people's budgets. With the addition of a devaluing currency (which is possibly going to be worsened with further QE) all imported goods will also rise. The country's purchasing power is going to collapse and low interest rates mean that those who live off a fixed income are going to find themselves trapped in poverty - and all this to bail out some risky lenders and some careless borrowers.

    We may yet get hyperinflation as rising prices force people to dump their sterling for more valuable currencies - or we may simply see a long drawn out depression - where wages and asset prices fall, but essentials rise to ridiculous levels (because those capitalists have to 'make a buck' somehwere - and morals are not their strong point)

    This is what you shoudld be warning the public about - this protectionism story is old news.....I mean you haven't even mentioned the French port strike which is going to further encourage speculation in the oil markets driving prices up to exasperate the situation.

    As a journalist you need to be ahead of the curve- not reporting what's already passed.

  • Comment number 54.

    Varying forms of old pals act / croneyism happen in both the public and private sectors. The good old slogan of protecting NHS funding is a bit of a myth - protecting resources does not necessarily translate into more or better care or patient services, it can go into keeping the 'same old suspects' in jobs along with their mates and cronies.

    In both public and private sector this is one really BAD idea for one of the most ancient of management reasons. Your mates and pals won't tell you when you're ****ing up. Of course they won't, 'cos you're a mate who keeps them in a job! But then you can't manage what you don't know. If no-one tells you about the problem(s)happening within your unit, company, department, then you won't make any "management" interventions (timely or otherwise) to put the problem right.

    So, if you're talking about jobs for the best people for the jobs, then fine. It's a dangerously slippery slope if it's "jobs on the old pals' act".

    Basically, both private and public sector organisations need the best people in post for the buck they can afford. Croneyism prevents that happening. (Oh and the NHS habit of "slipping people into posts" as opposed to competitively interviewing and selecting peoperly is just a variation of the same process).

  • Comment number 55.

    48. At 11:17am on 07 Oct 2010, GarrySmith68 wrote:

    "How can Siemens (& the german unions) can get away with an agreement for "no German redundancies" whilst closing factories in other EU countries? Surely this must be classed as Racist, Discriminatory, Jingoistic even and against the principles of the EU ????"


    ...like an immigration cap? - which could easily be seen as a similar policy.

  • Comment number 56.

    Trench UK a Highly profitable company, its the best perfoming company in its group at siemens, the only reason they are closing it down is to give our jobs the german workers, its so unfair this can be done.

  • Comment number 57.

    I am sorry but I do not buy this gullible belief that a company like Siemens will closed down Trench just to get rid of the competition and in so doing lose many millions of pounds in the process.

    For one thing what is to stop another company (probably Asian) starting up and competing against Siemens? There is probably another good reason why they want to close Trench down. Maybe it is not as profitable or productive as some people are led to believe. This could be because it is receiving heavy subsidies either from government of even Siemens itself.

    Why do people always fall hook, line and sinker for the words of a few people who don't really know what they are talking about?

  • Comment number 58.

    This is no surprise, it all happened previously at Rover. Slightly different acquisition circumstances but the end result was the same, no Rover plant - Mini's now built by Germans.

  • Comment number 59.

    As I know this company well and are fully aware of how much business they are putting through (they're also my sole supplier), I'm rather appalled that they're closing the UK operation when there are several sites on the continent in relatively close proximity to each other.

    The closure of the UK won't necessarily mean that I will be putting orders through Germany. It's more likely that it will be less viable to offer our particular component to our own customers, therefore impacting on the profitability of our own business.

  • Comment number 60.

    unfortunately I fear Trench UK's fait could have been sealed years ago when large british industries felt that high profits could be made buying up local business groups, taking the technology and as much cash out as possible before then selling out to foriegn business groups, contributing to the decline of the manufacturing base of this country the emphasis being placed on financial and service industries
    As the british electricity supply industry limps along I believe a company of this kind could and should be a major support to improving an highly strained national electricity supply system
    The loss of this profitable business (the last british bushing manufacturer) will be yet another long establish british business disappearing

  • Comment number 61.

    Ref Comment 55 :
    ...like an immigration cap? - which could easily be seen as a similar policy.

    Not really. The comparison to an immigration cap would be Siemens closing a UK company in Germany. They are affeting jobs in another country to protect their own.

  • Comment number 62.

    Just a minute and think ! would the German/French dominance of the Electrical generating and distribution sector in the UK not prefer suppliers of their equipment to come from their own National companies. Perhaps Trench's increased trade derives from this prefernce and an independant company would not get a look in! This story is just starting as the rabid Nationalism of France and Germany is well hidden to date.

  • Comment number 63.

    53. At 11:23am on 07 Oct 2010, writingsonthewall wrote:
    'With the addition of a devaluing currency (which is possibly going to be worsened with further QE)'

    Can I take the above as being sufficient for you to owe me £10.00

  • Comment number 64.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 65.

    GarrySmith68 has a valid point.
    If the german plant is failing what confidence is there that they will not fail with the work & customers tranfered from Trench.
    The issue is a fundimental one of good management & strategy.
    What when wrong in Germany & what other than taking the work from Trench are they doing about it?

  • Comment number 66.

    I've just read some more about this company.
    Apparently, every amp of power that goes through the UK National Grid passes through a piece of Trench(UK) equipment (a Bushing - whatever that is).
    Losing this manufacturer must put us at some sort of risk? Surely response times to failures wont be as good from Germany.
    Could we all be at risk of an outage when 3million people put the kettle on after the Olympic 100metres in 2012 ?? !!
    The Govt need to step up to the mark in protecting British manufacturing.

  • Comment number 67.

    The head of Kraft is meeting Cadbury workers in Birmingham today (so I heard on the Today programme this morning).

    I expect this will be highly stage managed but if there is any negative news, such as that being discussed here, I hope we see a lynching so that the world knows we still have fire in our bellies.

  • Comment number 68.

    #52. At 11:22am on 07 Oct 2010, lixxie wrote:
    "Part of the problem is UK companies fail to grow themselves to global businesses;.........."

    For this holy grail you need three things - Product - Market - Price. Enough said really, no need to bang on about how capitalist greed has priced us out of the market destroying our product base by relying on service and banking industries to magic profit out of the only thing we still manufacture - asset bubbles. Damn, just did.

  • Comment number 69.

    42. At 10:57am on 07 Oct 2010, Lindsay_from_Hendon wrote:

    "- That's where Wembley is. To move all of Wembley to out of London would be an engineering task too far."

    ...not for a centrally planned Economy it seems....

    http://news.bbc.co.uk/1/hi/world/americas/7460364.stm

    Of course it could never happen here - because unless there was a profit in it - nobody would be interested. You'll notice that this chinese 'company' is proposing to rewire China with the extracted copper - a 'wealth creation' task which probably doesn't produce a 'paper profit' - but does provide a social gain.

    If you're going to be irksome with your responses - at least be factually accurate!

  • Comment number 70.

    56. At 11:26am on 07 Oct 2010, thesalmon wrote:

    "Trench UK a Highly profitable company, its the best perfoming company in its group at siemens, the only reason they are closing it down is to give our jobs the german workers, its so unfair this can be done. "


    ....like an immigration cap perhaps?

  • Comment number 71.

    Couple of comments / questions:

    1) Why do people seem to think its the Government's role to decide whether a multi-national company headquartered in a foreign jurisdiction should close a factory or not? I know they do this in France, but is that what we really want - most people in the French private sector that I know seem to abhor the economic culture there. Lorry burners love it there of course.

    2) Why do the same people keep harking back to the "picking champions" era of the Wilson Government? That was an unmitigated failure as are most commercial endeavours promoted by Governments. Do you honestly, deep down think that 100 ministers and 1000 civil servants are going to figure out the best micro decisions in private commerce e.g. whether or not plant x or y should stay open or not. Its nonsense and fortunately its been tried before and proven to be thus - study British Leyland for those under 30.

    3) Ford, GM and Chrysler came to similar agreements with powerful unions in the 70's and 80s and it ended up very badly for all (apart from the workers lucky enough to work there in the 80s and early 90s) - since then everyone has got a raw deal, workers and consumers alike - has anyone else seen the quality of a US car manufactured by Ford or GM recently? Protectionism of any form is never a good idea in the long run, even though it creates sad individual stories from time to time like the one Robert highlights.

    Summary - story is sad, Siemens will regret their deal with German unions, Governments are not the best people to decide on the merits or otherwise of individual commercial decisions by private businesses. End of story. Oh and yes bankers are probably at fault somewhere or other in the story, but afraid, even though I loathe what the Labour Party has done to the fiscal and cultural position of the country, I can't pin this on Gordon either.

  • Comment number 72.

    66. At 11:46am on 07 Oct 2010, GarrySmith68 wrote:

    -------------------------------------------------------------------------

    That would be something.

    Past governments have been hellbent on selling off key assets. Doesn't seem like this one is any different.

  • Comment number 73.

    57. At 11:28am on 07 Oct 2010, sandy winder wrote:

    "I am sorry but I do not buy this gullible belief that a company like Siemens will closed down Trench just to get rid of the competition and in so doing lose many millions of pounds in the process."

    ...of course you don't - that's because the move is illogical. However the move is politcally beneficial - and who's tune do the politicians dance to?

    ....that's right, big business. I expect Siemens are returning a favour for German politicans who want re-election and job losses never encourage people to vote for you.

    The UK are doing the same (closing foreign branches in favour of home industry - regardless of competitiveness) - but the media don't bother to report it very often as we need to 'keep up appearances'.

    ...of course this has to be weighed up with the Capitalists diminishing profit margin which ensures he / she has to take advantage of the cheapest labour (usually abroad) - but this can always be reversed with a nice juciy Government subsidy.

    It's all a pack of cards...

  • Comment number 74.

    By coincidence, the chief honcho of Kraft is visiting Cadbury's in Birmingham for the first time later today (9 months after Kraft bought Cadburys)...

    I wonder what she's come over to tell them?

    http://www.yorkshirewired.co.uk/news.php/96639-Kraft-boss-due-at-Birmingham-Cadbury-factory

  • Comment number 75.

    Am absolute disgrace. Manufacturing in this country is now finished.
    More skilled workers destined for a future stacking shelves. Both the coalition and labour governments should be ashamed of themselves that they have allowed this to happen over the years.

  • Comment number 76.

    72 ... Its Dave C that said he wanted to help & sustain British manufacturing. I'm just calling on him to stick with what he said !

  • Comment number 77.

    Comment64 has been in moderation for ages.. it must be a good-un

  • Comment number 78.

    Mr. Peston is right: if a company is sold, the new owner makes the rules. I think, that you don't have to be Einstein to recognize this.

    But doesn't it happen in any country, anytime?

    I remember one of germans biggest traditional steel companies, Mannesmann, changing their prefered business in the 80ies to the new communication market, building-up a large cell-phone services company and then overtaken unfriendly by vodafone and plainly elimated by them.

    Or the biggest german household machines company, world famous AEG, once as big as Siemens, bought out by swedish Electrolux, all factories closed, leaving AEG only as one of Electroluxe's trademarks for washing machines and ice boxes build somewhere in Asia.

    Or the Siemens department for cell phones in Bochum, sold to BenQ when Siemens wanted to leave these businnes, bought by Nokia when BenQ went bankrupt and closed by them. While it was working high profitable, but Nokia found another few percents of profit by moving the factory to Romania.

    So, this is as bad, imho, as it is nothing new.

    To put it in a relation to the job guarantee of Siemens in Germany is therefore rather obvious neo-lib populism.

    What is the core of Peston's Pick?

    Only if you organize your economy a bit unfairer and less social, if you prefer "hire and fire" instead of safe jobs, and let only your elite owners make all your decisions, without asking the workforce, you are allowed to buy and close foreign companies?

    Seems populistic to me, and, indeed, a little bit germanophob, if this word exists in the english language.

    I'm from Germany, pleae excuse my lousy english.

  • Comment number 79.

    The short-termism (and the investment bankers that promote it) that results in situations like this has got to stop for all our sakes. Investment bankers are like locusts and, much like locusts, difficult to control. The people that excel in such a career are genetically programmed not to stop until an area is stripped utterly bare, even if it means their own destruction - they don’t have much intelligence you see, not appreciating that money and derivatives are not edible. This is therefore becoming a national security issue, beyond the importance of the current argument that we need their tax contributions - that is only possible while they are here because they have something on which to feed.

    We need to do what we can. Time to fumigate the entire City with DDT methinks. Workers in the insurance sectors could be pre-issued with gas masks to be selective At least it might buy us 7 years or so of relative prosperity until they re-establish themselves.

  • Comment number 80.

    The Siemens decision - mandated by IG Metall - arguably directly contravenes the Single Market EU treaties and obligations of all EU member-countries.

    The question is what should be done about it?

    In the first place the EU Commission ought to take decisive action, by testing the legality of the Siemens agreement with its works council before the European Court.

    If the Commission fails to do this it will itself be breaking laws and regulations which are binding upon it.

    In the second place, what stops the UK government from blowing the whistle, regardless of whether Brussels acts or not? Surely any member-state potentially adversely affected by such an agreement has that right? The British government ought anyway to make strong representations to the Commission if the Commission fails to act.

    Thirdly, where is the TUC in all this? Their union brothers in Germany are flagrantly transgressing against all the demands of upholding union solidarity across borders, by entering into an indirectly discriminatory no-redundancy agreement with this company. Why do we hear nothing from them? They also have a voice in Brussels.

    The conclusion might well be as RiskAnalyst wrote at #26 that the EU itself is headed for breakup, but I don't see why that possibility should guide the UK government's actions. We're in the EU at present for good or ill and we should make use of whatever weapons it provides, not just throw in the towel when faced with unacceptable behaviour by a German firm.

    None of which would help Trench UK of course: they've already been stitched-up. But perhaps to fire a shot across Germany's bows could go some way to preventing repetitions. It's not the first time the Germans have been guilty of protectionism and it sure as hell won't be the last if they're allowed to go on getting away with it.

  • Comment number 81.

    If the UK owners saw fit to sell Trench to Siemens because they could find better returns elsewhere. Why must we begrudge Siemens exercising its property rights? Siemens now own all the patent rights, plant equipment, customer list, employee contracts, etc and deserves the prerogatives to do what it likes.

    UK has a poor history of cultivating and maintaining its brands, do we not recall British Leyland and its portfolio of brands. What about Swan Hunter? Which only proves that Indians are better learners and practitioners of the industrial evolution than the British. The Japanese IHI Corporation was a contemporary of Swan Hunter as far back as the 1880s, is still in the shipbuilding business but has expanded into jet engines. If UK firms cannot think 'big', does it matter that they go out of style while still small.

  • Comment number 82.

    69. At 11:51am on 07 Oct 2010, writingsonthewall wrote:
    42. At 10:57am on 07 Oct 2010, Lindsay_from_Hendon wrote:

    "- That's where Wembley is. To move all of Wembley to out of London would be an engineering task too far."

    ...not for a centrally planned Economy it seems....

    http://news.bbc.co.uk/1/hi/world/americas/7460364.stm

    Of course it could never happen here - because unless there was a profit in it - nobody would be interested. You'll notice that this chinese 'company' is proposing to rewire China with the extracted copper - a 'wealth creation' task which probably doesn't produce a 'paper profit' - but does provide a social gain.

    If you're going to be irksome with your responses - at least be factually accurate!


    - I assume the last sentence is direct at yourself. They are doing it for profit! It's cheaper to dig it out of the ground using their own poorly paid workforce than to buy it. You seem to love China (it is a capitalist country now and in fact their fate has largely improved since they embraced it) why don't you go live there? You'll love the human rights record.

  • Comment number 83.

    sandy winder, you end your post with ‘Why do people always fall hook, line and sinker for the words of a few people who don't really know what they are talking about?’ How ironic when you clearly don’t know what you are talking about. How do you think you know what is really going in, unless you work for Siemens or Trench? The thing is, in the short term Siemens can afford to lose these millions of pounds in a bid to save its German operation, which it will hope to claw back later. Are you saying the claims of record profits at Trench Uk are false, because I can assure you they are not. In fact in July of this year the company achieved its biggest ever monthly order intake. Trench UK receive no subsides from Siemens and have infact suffered from a lack of investment, unlike the German operation who have a brand new (unfull) factory. Siemens have taken the profits year after year and put none of it back into the company. The reason that Trench UK succeeds is down to the employees engineering skills, who produce the products without the cutting edge technology of their German counterparts.

  • Comment number 84.

    82. At 12:13pm on 07 Oct 2010, Lindsay_from_Hendon wrote:
    .....why don't you go live there? You'll love the human rights record.
    ----------------------------------------------

    There are occasional pieces of language that make me more and more convinced that you are not, and never have been, from Hendon but in fact you are from the USA.

  • Comment number 85.

    Lindsay_From_Hendon:

    How's your property portfolio holding out? Still getting the same a decent income in CHF terms?

    Back into your hole ol dear. Its too early in the day for rubbish.

  • Comment number 86.

    58. At 11:28am on 07 Oct 2010, NorthSeaHalibut wrote:
    This is no surprise, it all happened previously at Rover. Slightly different acquisition circumstances but the end result was the same, no Rover plant - Mini's now built by Germans

    So are the Mini factories in Oxford and Swindon just empty shells or do the workers come over from Germany? I expect that there are a few German engineers and managers there and I believe that a few cars are or are going to be made abroad.

  • Comment number 87.

    Moderator, whats happening with comment 64? It says Jedi not Sith... cant be that bad !

  • Comment number 88.

    It is normal for nationalist businesses to support their home workers - except in the UK and USA.

    However, this is not a big issue if jobs are being created. The problem for the UK is who would you rather employ in your UK business - an experienced but expensive ex Siemens employee or a similarly skilled Pole who comes to the UK to work at minimum wage? Easy isnt it - the Pole!

    Now translate the experienced ex Siemens employee into a former long term unemployed person. The issue becomes even starker.

    In reality the UK is faced with serious employment issues both in terms of creating new private sector jobs at a higher rate than government sacks public sector employees. At the same time any jobs that are created will be taken by, "keen as mustard" Eastern Europeans.

    In such circumstances Cameron needs to lower the minimum wage and seek a moratorium on EU citizens from Poland, Romania and Bulgaria - at least the plumbers and builders maybe happy to see their rates rise.

  • Comment number 89.

    British politicians must like giving a lot of what is important to the average Joe, away.

    Here, i.e Trench UK, as in the recent case of Cadbury, we are giving away our ability to look after ourselves and instead rely on foreigners to somehow do that for us. In the "good times" they come here. In the bad, they're gone in a puff of smoke. This is BUSINESS!

    Not actually that great, is it? It's no wonder, when our politicians used to hail the arrival of new jobs like this, most of us thought, big deal! Here we go again.

    Britain and The Brits are used, then dumped, (usually by tax-dodgers.) It might be business but it isn't progress. The short-termist mentality isn't clever, it's clearly pretty stupid.

    Yes, Britain needs jobs. But if we're going to go through this pain, then surely the time from 1992-2008 would have been better spent by job creation that was lasting, even if that meant less job creation? This here today, gone tomorrow, approach to job creation has failed us. (Been great for the bankers though.)

    Where we have not been good in Britain, is on the management front. Flash a few pound signs at some business owners and in the blink of an eye they're off. Which shows how little faith they had in themselves and their businesses. Yet we point blank totally refuse to even acknowledge it, let alone deal with it. "We're all in this together?" Oh dear, Oh dear!

  • Comment number 90.

    All this may seem small potatoes if the following article is correct about the next financial crisis.
    http://www.prisonplanet.com/norcini-sinclair-financial-hurricane-to-collapse-the-system.html

  • Comment number 91.

    35. At 10:27am on 07 Oct 2010, RiskAnalyst wrote: The only engineering left in this country is the financial kind.
    75. At 12:01pm on 07 Oct 2010, Skytrain wrote: An absolute disgrace. Manufacturing in this country is now finished.

    These are two common misconceptions. I think that many people, like me, would be surprised that we do no real engineering in this country. If you look here http://www.feani.org/webfeani/ the European Association of National Engineering Institutions (FEANI in French; based in Brussels) you can see how many qualified engineers there are in each country: UK – 220,000; France (approx same population) – 160,000; Germany (much bigger population) – 250,000. The numbers for holders of the European Engineer (Eur Ing) qualification are UK – 14755, France- 2599 and Germany 2636. There are many very successful engineering consultancies doing work in this country and abroad e.g. Atkins, Ricardo, Lotus, Arup …… ARM designed and receive royalties on the chips used in almost all mobile phones in the world.
    As for manufacturing, just a few major examples: Rolls Royce supply approx half of all civil aircraft engines in the world with spares for decades after the original sale. Large numbers of cars are produced by Jaguar, Land Rover, Rolls Royce, Bentley, many small specialists, Grand Prix racing cars, Honda, Toyota, Nissan. BAE Systems produce aircraft, ships and other defence equipment, all Airbus wings are designed and manufactured in UK. Of course all of these companies have a large number of suppliers.

  • Comment number 92.

    Can I put in a plea for fewer barriers to the setting up and development of UK businesses?

    Areas that need addressing are ;

    Business rates
    Employment Law
    Employers Mational Insurance
    Non spiv finance

    I'm sure there are more but get these right and things will improve

  • Comment number 93.

    #82. At 12:13pm on 07 Oct 2010, Lindsay_from_Hendon wrote

    "You seem to love China (it is a capitalist country now and in fact their fate has largely improved since they embraced it) why don't you go live there? You'll love the human rights record......"

    China, capitalist?

    Hmmmm, more research into their system and history needed methinks, they've been building up to world economic domination for about 100 years, they haven't JUST turned capitalist. And yes their human rights record is awful before I'm accused of being a China Hugger.

  • Comment number 94.

    #86. At 12:27pm on 07 Oct 2010, AnotherEngineer wrote:

    You know what I mean.

  • Comment number 95.

    @84. At 12:26pm on 07 Oct 2010, Kit Green wrote:
    "There are occasional pieces of language that make me more and more convinced that you are not, and never have been, from Hendon but in fact you are from the USA."
    I think you'll find there is a Hendon in Bledsoe County, Tennessee.

  • Comment number 96.

    #84. Kit Green wrote:

    "There are occasional pieces of language that make me more and more convinced that you {Lindsay or is it Sam} are not, and never have been, from Hendon"

    Wake up and smell the cordite. Both of my stalkers mysteriously appeared when the banks became the focus of criticism a while back. If you recall first there was a direct fake poster calling him/herself WOTW - then a couple of days later both of my stalkers appeared. Am I being paranoid in strongly suspecting that neither has even been near either of the Hendons (London or Sunderland in the UK and there are many others around the planet Queensland for example)- but make up your own mind. Judge poster by their ideas, their grasp of the facts and understanding of the real world.

    I see it as rather pathetic and possibly the result of a simple minded corporate publicity machine's failure to understand that the truth cannot be obscured by such silly and obvious fakes! 'Is there any mountain high enough to poor ones scorn on these people'? (To misquote Kenneth Williams in Carry on up the Khyber) They both represent farcical light relief and an escape from the reality of the economic facts.

  • Comment number 97.

    Come on moderator are you out to lunch?

  • Comment number 98.

    #45, it was Plastic Logic, a Cambridge company set up by Prof Sir Richard Friend and Prof Henning Sirrinbghaus, both of Cambridge University, using results of their years of research funded by the UK taxpayer to set up a manufacturing facility in Dresden.

    It seems pointless that UK university research is funded so generously when the results just go to create jobs overseas. The old argument that without fundamental research the UK will become uncompetitive is clearly a load of nonsense.

  • Comment number 99.

    #55. writingsonthewall wrote:

    "...like an immigration cap? - which could easily be seen as a similar policy".

    Logic?

    The no redundancy agreement is aimed at preventing "German" jobs from being exported to other EU member-states (supposedly part of one and the same internal market), or forcing re-patriation of jobs to Germany, even when the work being done could be/is being done more cheaply in that other member-state.

    Immigration caps are aimed at preventing a greater influx of immigrants than the host-society's culture is deemed (rightly or wrongly) to be capable of absorbing without unacceptable social tensions.

    There's no resemblance.

  • Comment number 100.

    Now thet've tried just about everything else the last resort will be protectionism.

    The UK had to become open to investment after the closure of our uncompetitve industries in the 1970's and 80's. Unfortunately like everything else because it seemed to work it was allowed to be left uncontrolled and many of our small profitable companies were swallowed up by larger companies in the name of acquired expansion.

    That leaves us even more vulnarible now with very little left to be protective about.

 

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