Friday, 14 October 2011

Putting all your eggs in one basket.

It would be ridiculous for me to say that news that the new £400m Airbus plant, which will manufacture carbon-fibre wings for its new aircraft the A350, will retain about 650 jobs at the Broughton plant in North wales  plant alone is anything but good news

Airbus already has more than 550 orders for the aircraft, which will be due for service within two years, and the new factory means it is the largest such factory in the UK.

This has partly been achieved due to the Welsh Assembly under th e Labour Paid Coalition investing investing£29m in the project.

Of course David Cameron, was there despite the fact his ConLib government had virtually nothing to do with the funding and whose polices may well have put the entire Airbus expansion in doubt.

It is however ironic that this opening happened at virtually the same time that it was announced that Unemployment in Wales rose by 16,000 in three months to reach 131,000, in the alarming figures showed yesterday.

The 9% jobless rate included a sharp rise in the number of young people out of work, to record levels, while the claimant count for jobseekers allowance reached 78,500, some 6,500 up over the year.

Around 26,000 fewer people are in jobs, as the employment rate in Wales fell by 1.2% to 67.3%, compared to 70.4% across the UK.
But the problem with Airbus its a single industry and a single product and we must ask ourselves how risky it is investing in just one product?
  • What happens if sales for the Airbus do not meet expectations?
  • What is the life expectancy of the Airbus project 10,20,30 years?
  • Can anyone see the use for the factory of that size  if the project fails to take off (no pun intended.

OK with 500 orders we can hopefully expect a period of well paid secure jobs forsome years to come and Broughton has got an extremely proud history  of 70 years of aviation history so it may be a good investment and worth the risk. Certainly it wasn't worth the risk of the Assembly not backing the project.

But when is the Welsh Assembly government going (and all the opposition Parties for that matter) to realise that they must invest similar sums to the £25 million invested in Broughton? and spread it out.They must look at backing smaller industries (including cooperatives) in  areas like the  South Wales  Valleys and West Wales.

One of the reasons that Germany is not facing the economic disaster that much of the rest of the Western Economies are i s that even the Christian Democrats did not follow the Thatcherite  free market policy which saw the manufacturing industry in the UK decimated..

We still have not learned the lesson of Bosh,LG and other projects who provided jobs for a period and then left for cheaper horizons or in the case of LG never even  providing the expected work. 

The LG factory in Newport which never realised anything like it's potential,The LG site has had a troubled history, with up to 6,000 jobs promised in 1996 never materialising.A £1.2 billion sister factory on the site, which was to make semi-conductors, never went into production and is still largely empty. The LG Philips factory making colour tubes for monitors and televisions closed in 2003 with 870 job losses.
At its height, 2,000 people were employed at the site. The LG factories on the site originally received more than £87m of grant money, and in 2005 some £34m was repaid to the then Welsh Development Agency

We cant go on having industries that provide 10 years of prosperity but then leave us with 20 years of an unemployed generation. Its good news from North Wales but it is not the way to secure the future long term economy of Wales.

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