UK aerospace sector welcomes manufacturing strategy

While no sector can be totally immune from the current global economic downturn, UK aerospace is well placed to weather the storm over the next 12 – 18 months. Many aerospace companies have long running contracts unaffected by economic turbulence, and the UK government has the right policies in place to help aerospace companies continue their long term development plans and attract inward investment, according to industry bodies such as the Society of British Aerospace Companies (SBAC).

The SBAC has welcomed the government’s manufacturing strategy announced in September (2008), to provide direction and support for investment across all sectors. The strategy includes almost £150 million of medium term support for UK manufacturing, while setting out the government’s long term vision of a low carbon, high skills, economy, exploiting overseas opportunities, improving public perceptions of aerospace in particular, and attracting inward investment.

Our investment in the UK has been positively influenced by the government’s approach to open competition

Alex Dorrian

CEO

Thales UK

This strategy was spot on, according to SBAC chairman Ian Godden. "In particular we welcome the focus on low carbon technologies, skills and the global market. Aerospace and defence has a turnover that tops £20 billion and brings in over £2 billion net per year to the UK due to its success in exports, as well as employing over a quarter of a million highly-skilled people. The UK industry will need more of such skilled people in the future to maintain its global position.”

Godden cited the decision announced September 2008 by GKN to acquire the wing component making factory of airbus in Filton, south Gloucestershire, for £136 million as a sign that the government was cultivating the right climate for investment in UK aerospace. “While the GKN deal came before the manufacturing strategy was announced, it does show a consistency of thinking,” said Godden.

The government’s strategy has also been well received by defence aerospace manufacturers, which have lobbied for firm measures to maintain the sector’s pre-eminent position as Europe’s leading player. Rees Ward, Director General of the Defence Manufacturers Association (DMA), commented that UK defence manufacturing companies continue to be world leaders in the production of defence and security products with world-beating strengths in innovation, new materials and advanced manufacturing technologies, adding now was the time for the media to focus more on the UK’s great achievements in defence and aerospace.

Rees also urged the UK government to continue focusing on inward investment. A major step is already being taken, by broadening the UK’s defence base and opening up procurement to international companies to encourage them to invest and relocate some of their operations. This more open procurement process has led big international companies such as Thales to invest heavily and expand their operations in the UK. “Our investment in the UK has been positively influenced by the government’s approach to open competition in the defence sector, which has allowed us to grow the business into the second largest defence electronics company in the UK employing 9000 people,” said Alex Dorrian, Thales UK CEO. Dorrian pointed out that Thales UK had invested over £3 billion in the UK in recent years, including over £100 million in new facilities in Crawley that will house much of its aerospace and UAV (Unmanned Aerial Vehicles) capabilities.

In particular we welcome the focus on low carbon technologies, skills and the global market.

Ian Godden

Chairman

SBAC

International companies are also being attracted by the government’s investment and support for R&D across the whole sector. A particular success story has been the state of the art Advanced Manufacturing Park in South Yorkshire, leading for example to Dormer Tools, the Swedish maker of tools for machining advanced aerospace materials, building a facility there.

Companies from leading industrial nations with highly skilled work forces have also been encouraged by the UK’s impressive record in boosting supply chain productivity, essential when competition from emerging nations such as India with lower labour costs is increasing. Such competition is being met by streamlining the whole supply chain through initiatives such as SBAC’s SC21 (21st Century Supply Chains) programme. Launched in July 2006, SC21 made a rapid impact, playing a big part in a dramatic increase in supply chain efficiency of 6.5% to £175,000 per employee during 2007.

The combined action by the government and industry bodies, notably SBAC and DMA, has left the UK aerospace sector well placed to continue attracting inward.