Bill Jamieson: Manufacturers making a difference

Scotland confident; Scotland capable; Scotland surprising us: amid the latest gloom about our overall performance and prospects, we have good cause to mark better news than we had reason to expect and which should give us all hope.

I do not simply refer to what Fergus Ewing, minister for energy, enterprise and tourism, described this week as the “3Gs” – the Gamesa jobs announcement, the GlaxoSmithKline investment and the Green Investment Bank – positives though these are for our future; nor to those latest encouraging surveys on private sector hiring.

Rather, my reason for hope is 300-fold: the number who attended a national conference this week from the heartland of Scotland’s manufacturing sector. Against a grim backcloth of an economy struggling to show any growth came inspiring stories of progress and achievement. The conference, organised by the Scottish Manufacturing Advisory Service out of Scottish Enterprise, drew presentations by international business figures, with a host of smaller intensive sessions with Scottish business leaders.

Let’s start with David Currie, director of subsea operations at FMC Technologies, a sophisticated global business that is expanding in Scotland with operations in Aberdeen, Dunfermline and Glasgow. It is a global leader in its technology, it has 9,400 staff worldwide and its expansion in Scotland is being achieved in the teeth of tough international competition. FMC is not cutting jobs in Scotland, it is growing them. The biggest constraint on that growth is finding quality apprentices.

Listen to Mr Currie, one of the GlobalScot team, and you will not hear the mantra of cost-cutting and economy but of problems that come with expansion: recruitment, staff development and retention. There are excellent career opportunities in manufacturing, and FMC sees Scotland as a talent pool. But it needs help with educational partners and seeks greater emphasis on manufacturing in schools.

For a homegrown story of turnaround, few can beat that of Falkirk-based Alexander Dennis. Six years ago the group was a dud and labouring to make progress. Today it is the UK’s biggest bus and coach manufacturer, employing 1,900, of which 900 are based in Falkirk.

The story chief executive Colin Robertson tells is not one of whizz-kid transformation, but of attention to gritty detail: improving quality, upping productivity, setting clear goals, communicating with staff and paying more attention to customer needs. It might sound formulaic, but try enforcing it on a daily basis.

Alexander Dennis today is a different place. Sales have more than doubled since 2007, with 15 per cent fewer people. It is en route to becoming a £500 million business. It has a record £330m order book and an all-time high UK market share nudging 50 per cent. Arguably most impressive of all, the group has paid off its debt and is now sitting on a near £100m war chest for expansion and acquisition. Coach travel may be a secular growth business, but all of this has been achieved amid dire economic conditions. Mr Robertson’s presentation for this conference was a knockout.

From Gilad Tiefenbrun, managing director of audio group Linn Products, came a rollercoaster story of early success, chasing the CD market, a deceptive growth in revenues but falling profitability, a plunge into debt, followed by a painful slim-down of the business back to its core product and purpose: making music sound better. No-one could doubt that, having heard a recording by the Scottish Chamber Orchestra through the Linn streamer. The company has recovered strongly.

Outstanding stories came from, among others, Alastair Kennedy of the Global Energy Group; Ian McLeod of Hawick Knitwear; Kirstin Mackie, managing director of Mackie’s at Taypack, and award-winning Yan Tiefenbrun of Castle Precision (“imagination beyond the best”; “it takes years to become an overnight success”).

From Bill Black, head of quality at Zurich-based engineering giant ABB, came an overview of opportunities for Scottish companies round the world, the importance of apprenticeship and graduate training schemes, and the resonance of the “Made in Scotland” banner.

The conference overall was teed off by a pitch-perfect Scottish Enterprise chief executive Lena Wilson ahead of today’s unveiling of the agency’s ambitious business growth plan.

What made this all the more remarkable was its grim economic setting. UK GDP growth last year has been revised down from 0.7 per cent to just 0.5 per cent. Output in real terms is 4.1 per cent below its pre-recession peak, making this “recovery” the weakest UK recession/recovery cycle (excluding world wars) of the last 100 years – and worse than the Great Depression. Even Japan fared better in the 1990s.

So how are such stories possible? There is barely a business in Scotland that has not experienced the effects of the business cycle. But the defining characteristic of the cycle is that it turns. And what drives that turning is the inexhaustible human thirst for innovation, adaptation, improvement and enterprise. Time and again the micro can trump the macro. And time and again it is the micro that drives the business cycle forward.

We can all take heart from these and other stories from our manufacturing heartland. We certainly do not acknowledge them as often as we should My congratulations to Scottish Enterprise in organising this, and an earnest plea to it to provide a similar national convention for the SME sector. For it is these examples of resourcefulness and resilience that would help inspire and encourage thousands of small firms whose growth is critical for our recovery.

Meanwhile, for many companies in Scotland the most pressing problem today is not lack of confidence or lack of demand, though these are still painfully evident. The biggest challenge is finding young apprentices with basic competencies in reading, writing and science; and, if not science, a basic curiosity as to how things work.

What happened to a once-wonderful Scottish education system that now finds this so difficult? For a Scotland capable, Scotland confident, Scotland surprising us, this is the missing shoulder we must put to the wheel.

Bill Jamieson will be online at 12pm Thursday to discuss this column:

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