A few young upstarts working in the city are giving Birmingham a real helping hand in the modern global marketplace – pushing vital export sales above the wildest dreams of other regions.
One is a fellow called James Watt – he gave us the steam engine, then there is Matthew Boulton, who progressed the mechanisation of factories, while George Cadbury started a chocolate legacy which made the city a centre of excellence to this day.
This region invented modern manufacturing, and more than 200 years later that continues to be a major strength for the region – with Englishness selling as well as ever.
And it is not only the big boys – among those taking part in Birmingham Day are Firmin & Sons, jewellery makers of more than 250 years, CMA Moldform, which makes prosthetics for Hollywood movies, and Ministry of Defence supplier Englands Safety Equipment.
To this day in sectors like automotive, precision engineering, aerospace and firearms, we still make things at a level of quality that emerging nations simply haven’t been able to replicate.
Most cities have never been world class at anything. Birmingham continues to prosper on the back of those legendary industrialists – both through their methods and expertise and inspiration to modern manufacturers.
And the new breed are certainly making their mark on the world. Backed up by global leaders Jaguar Land Rover and JCB, an army of tier one and two suppliers are increasingly growing in confidence and exporting their wares all over the world.
That means we are reporting export figures other regions can only dream of. In fact, the UK – which is relying on overseas spending for growth – would actually have seen exports fall in the past three years without the West Midlands.
Exports from the West Midlands have increased by more than a third since the first quarter 2011, while the average rise for the whole of England in this period is only two per cent.
Meanwhile, rising wages in places like China and favourable exchange rates are creating fertile ground for Midland manufacturers to start winning back business from all over the world.
The problem, without question, is skills. JLR’s insatiable search for engineers has added to a wider problem of a shortage, and it is a major challenge for the region to get young people into the sector.
The term “reshoring” has gone from theory to reality.
About 1,500 manufacturing jobs which moved offshore to cut production costs have been brought back to the UK since 2011, and more are expected to follow with costs, quality and reducing lead times cited as reasons.
One of them is Birmingham-based Barkley Plastics.
The company has won business back from China, the Czech Republic and Germany in the past year.
Barkley is on course to see its turnover grow to about £6 million this year, up from £5 million last year.
It was hit hard by the recession, which saw its workforce reduce from 200 to 90, but has seen that increase to 100 in recent times and has had to take 10 agency staff on to complete reshored contracts.
Business development engineer Matt Harwood said: “We have had work for Marks & Spender that was originally made in the Far East – earphone and desktop tidies – which we now design and produce.
“We have also had products like an avian bird deflector – which goes on telephone lines – which was supposed to go to the Far East but because of our knowledge and accessibility they are doing it here.
“And we have had a few automotive products – like a light guard for Nissan, which would have been made in Japan but we are doing it here.”
Barkley is not alone. Medium-sized manufacturers benefiting from soaring orders from the likes of Jaguar Land Rover and turned that into exporting success.
Among them is Tipton-based Cab Automotive, which produces interior components including seats, arm rests and dashboard consoles.
It recently invested to buy its 200,000 sq ft factory on the back of new growth, and is investing millions in equipment.
Contracts with BMW and Renault have helped the firm, which was born out of the MG Rover collapse, to its fastest-ever growth.
The firm has now secured £7 million of new contracts to supply parts for the new BMW Mini and the seat foams for the Renault van. These latest successes will help it push turnover towards the £40 million level and create jobs.
Finance director Richard McCulloch said: “We’ve gone from £20 million in 2012 to a predicted £40 million by the end of this year, with plenty of new opportunities in the pipeline.
“Managing this growth was one thing, but at the same time we were told by our landlord that there was a chance our facility could be sold. The only solution was to buy the land, as that would give us the platform and security to plan for the next decade.”
Cab Automotive has spent more than £4 million on capital equipment, a foam production line, new machines for wrapping BMW Mini arm rests and a new water jet cutter.
It already supplies the likes of Jaguar Land Rover, Aston Martin, Nissan, Toyota and McLaren Automotive and another recent contract win will see the company design and manufacture a bespoke rear passenger iPad tray for the Bentley Mulsanne.All this has contributed to the UK’s principle success story.
Put simply, sales from the West Midlands account for the country’s export growth – with major figures coming from Jaguar Land Rover, but small and medium-sized companies also upping their game.
All this means the region is set for a export surplus of something like £2 billion with China this year. That is unheard of.
The Far Eastern superpower accounted for £969 million worth of exports in the second quarter of the year, 14.7 per cent of the total and more than France, Ireland and Russia put together.
That represents a near ten-fold rise compared with the first quarter of 2009, and the region continues to be the only one with a China trade surplus, which is expanding quarter by quarter.
The West Midlands exported £2.7 billion worth of goods to China in 2012, importing £2.2 billion, and is on course to sell more than £3.4 billion worth this year.
Jaguar Land Rover has played a huge part in the success, but West Midlands international trade director at UK Trade and Investment, Paul Noon is keen to point out there are hundreds of exporting success stories.
MrNoon, said: “China will become the most important export market for the UK within five years, so we are ahead of the curve a bit.”
The West Midlands’ export surplus with China grew to £602.8 million in the first half of the year, after the amount of goods imported from the Far East actually dropped slightly.
So the opportunity is there – and is by and large being taken. People who know more than I tell me the West Midlands will double exports between 2011 and 2018, as centuries of engineering experience pay off in emerging markets.
(Thanks again Watt and Boulton).
The main barrier to that opportunity is skills.
The industry is, without question, creating more demand for jobs than we are able to fill..
A particular fear is that JLR would be forced to recruit workers in the existing automotive supply chain across Birmingham, Solihull, the Black Country, Coventry and Warwickshire, leaving smaller engineering businesses with a major staffing gap. It’s not being ignored though. The cornerstone of Greater Birmingham’s bid to the Single Local Growth Fund was to make the most out of engineering.
HS2 and Jaguar Land Rover offer up a once-in-a-lifetime opportunity, and moves are afoot to more closely align the region’s colleges to the skills requirement.
Part of that will be winning the right to host the HS2 Academy, but also working alongside the likes of Birmingham Metropolitan and Bournville College to churn out the industrialists of tomorrow.
Are we doing enough?
You can never do enough. As I say, JLR and HS2 are offering up opportunities that the region would be unwise to ignore.
Funding remains an issue. The Regional Growth Fund is supposed to stimulate growth among companies, but some smaller firms see it as a distant dream.
However, the Advanced Manufacturing Supply Chain Initiative has offered some progress.
That might mean that smaller, growing, manufacturers sometimes complain of being ignored. We can’t afford for that to happen.
This is the place for young people to set up manufacturing operations.
We must give the Boulton and Watts of the future all the encouragement we can.
Graeme Brown, Birmingham Post