Aerospace manufacturing is a huge contributor to the economic make up of Burnley, a town steeped in manufacturing tradition. International aerospace manufacturers Aircelle are at the forefront of high tech manufacturing for the aerospace industry and are a great provider of jobs and wealth to the local and national economy.
Burnley has benefited well from all three rounds of the Regional Growth Fund (RGF). The government has awarded £1.8m to the redevelopment of the old Michelin site into a brand new state of the art Aerospace Supply Chain Park. The bid was put forward by a consortium headed up by Aircelle with the aim of creating a cluster of high tech aerospace companies in the Burnley area.
The Department for Business, Innovation and Skills have been very positive about the plans to acquire and develop the unused Michelin site. The area will encompass numerous high skilled, high tech engineering companies which will deliver product to the aerospace industry through the supply chain.
The supply chain park will be a major boost for Burnley worth nearly 1000 jobs and the fantastic thing is that companies won’t be closing down operations anywhere else to move here, this will be an extra base.
Most of the companies that will move to the site are part of Aircelle’s supply chain already and will be expanding their operations to open an extra manufacturing base in Burnley. These companies are currently based in various places around the UK and France and are major suppliers to Aircelle. Having them all on the same site next to the customer will dramatically improve the supply chain both in terms of logistics and costs, as well as make the process much more environmentally friendly as there will be less transporting.
It is hoped that manufacturers will be encouraged to fill some of the current gaps in the supply chain by opening a base in the supply chain park. The supply chain at present is very fractured, particularly in the aerospace industry and this could help to create a free flowing supply chain which will in turn create extra jobs in the UK. With this development Aircelle aim to encourage UK firms in their supply chain to manufacture products on site, helping to improve quality as well as being cost effective for all involved.
It really is an innovative idea to have such clusters not only for aerospace, but for many industries working closely together to create jobs and wealth in a particular area. Although it is a relatively small investment by the government, it is attracting major investment from the private sector and will create a large number of well paid high skilled jobs. This could easily be repeated in other areas across the country in a wide range of sectors including automotive and chemicals.
* Gordon Birtwistle is Member of Parliament for Burnley, Chair of Lib Dem Parliamentary Committee on Business, Innovation and Skills, co-founder of the Lib Dem Campaign for Manufacturing and and Chair of the All Party Parliamentary Group on Apprenticeships.
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3 Comments
Great news for Safran the French firm which owns Aircelle. They made profits of €1.2bn last year and since 2007 their shareholders have had a 12.7% annual return.
http://www.safran-group.com/IMG/pdf/Roadshow-November-2012.pdf
Any particular reason why the UK taxpayers should subsidise them ?
While I’m sure this is good for Burley, I wonder if some of the supply chain rehetoric might be a bit of a con? I’m certainly rather skeptical of the claim that Burnley will be an addition to, rather than a replacement for a factory that currently exists elsewhere, and therefore that there will be net job creation, rather than job re-location.
There’s really not much transportation saving. Suppose company X buys nuts from Essex, bolts from Middlesex, and brackets from Norwich, and sells the combined but-and-bolted-bracket in Brimingham. The nuts still come from Essex, independently of whether X is in Watford or Waterloo or Birmingham.
A supply chain exists when company A produces something which it sells to company B, which includes it with other things that it sells to company C, etc to the “final” company in the chain. In a normal chain, A will also be selling products elsewhere, to different chains. For instance a ball bearing manufacturer sells ball bearings to car makers, bicycle makers, wind turbine makers, etc. And it competes against others to do so. In this kind of chain, there need by no advantage in co-locating with one customer.
But co-locating can make sense when A sells only to B, and B only to C, etc, because then there’s a need for coordination that can be helped by physical proximity. But it means that the entities in the chain aren’t competing, and aren’t free – the whole chain is dependent on the final user, in this case Safran, who have all the power. That might actually end up as being a disadvantage for Burnley and for the workers there.
So I wish Burnley well, and I hope Burnley sees that it is moving from one position that is hazardous to another which is also hazardous! And I hope too that it will involve job creation for the UK as a whole, not job re-location..
All power to Gordon Birtwistle (and BIS) in the use of both the RGF and in maintaining the visibility and neccessity of the manufacturing strategy and dialogue. It’s easy to get criticise ownership but this is what happens in a complex, global environment and UK firms look for and get investment friendly conditions in their overseas growth and planning.
While there may be an element of job relocation there undoubtedly will be job creation but above all there will be a surge of local confidence. Confidence that will extend across a business community that seeks support and opportunity, domestic and foreign, across education as it prepares young people with skills, apprenticeships and confidence that a well-regarded Liberal Democrat MP goes that extra mile to secure opportunity for his community.
I think this is great news and would love to see more of it.