Saturday 27 October 2018

So this is Brexit. An end to manufacturing.in the UK and especially Wales?



The Wasting Mule reports that

Leading Brexiteer Jacob Rees Mogg has urged the public to listen to a Cardiff economist who said Brexit would lead to running down the car industry “in the same way we ran down the coal and steel industries”.
The comments from Cardiff University’s Professor Patrick Minford have come under the spotlight after Mr Rees-Mogg praised him in a newspaper article.In 2012, he told MPs on Westminster’s Foreign Affairs committee that car manufacturers in the UK would have to be wound down if Britain left the EU.
In the run up to the referendum in 2016, he also said that Brexit would "eliminate" manufacturing.
Professor Minford came to prominence as a champion of Margaret Thatchers’ economic policies at time when she was under heavy attack by academics – and today he is one of the highest-profile economists in favour of Brexit.
Mr Rees-Mogg is an admirer of the professor’s work and argues he “deserves to be listened to because of his remarkable track record”.

 I seem to remember Mikhail Gorbachev saying that he had six economic advisers one of whom was a genius but he did not now which one it was.


Maybe Mr Mr Rees-Mogg  has admiration for an economist whose an Idiot. If economics is a science Professor Patrick Minford is the equivalent of a biologist advocating Intelligent Design
Concern about the future of car production in the UK is high, following warnings from Toyota, which has an engine plant in Deeside, that a no-deal Brexit could affect investment decisions. Jaguar Land Rover has warned of “tens of thousands” of jobs being at risk, and Ford, which has major operations in Bridgend, has described a no-deal outcome as "pretty disastrous".
Mr Minford now argues that the automotive sector has the potential to thrive outside the EU.
'During the 2012 hearing , Tory MP Rory Stewart asked the economist if he was talking about the “collapse of the entire UK car industry” and the “wiping out of the manufacturing industry”.According to the transcript of the committee, Mr Minford said:

“It is perfectly true that if you remove protection of the sort that has been given particularly to the car industry and other manufacturing industries inside the protective wall, you will have a change in the situation facing that industry, and you are going to have to run it down."It will be in your interests to do it, just as in the same way we ran down the coal and steel industries.“These things happen as evolution takes place in your economy. In the long run they are in your interest, but of course you have to deal with the compensation problems along the route.”
When asked about Britain’s leverage to negotiate transitional arrangements, he said:
“That is a quite good parallel. If you have an industry that is not economic, it is your interests to run it down.”
Mr Minford’s comments have now been widely shared on social media.
In the run-up to the 2016 Brexit referendum, Mr Minford wrote:
“Britain is good at putting on a suit and selling to other nations.”“A lot of what now happens in the car industry is now pretty skilled labour-intensive, and that could become more so.”....“What tends to happen is the competition that is unleashed by removing protection forces the industry to go up the value added chain, [to] more skill-intensive bits of the production process and outsource more of it..."The stuff that they are now focusing on is stuff that is really quite skill intensive, like engine manufacturing...“Obviously protection will be removed quite slowly in response to free trade agreements around the world so it won’t all happen overnight but probably, if you are looking [10 years ahead] we will see it moving up, becoming more productive really.”


He also sought to put his comments about the elimination of manufacturing into context, saying he 
He said: 

If, for some reason, there were no willingness by the other countries’ car owners and governments to cooperate in this and there were a faster run-down of our car industry as a result of that lack of cooperation, we would have to compensate them in a way rather like the steel and coal industry...
Over time, if we left the EU, it seems likely that we would mostly eliminate manufacturing , leaving mainly industries such as design, marketing and hi-tech. But this shouldn’t scare us.
Quite a lot of the car industry has changed quite a bit from what it was in 2012, believe it or not. It’s now very much more high value-added...
 “huge drop in the currency” has been “enormously favourable to the car industry and that’s not going to go away in a hurry”.
“meant that unskilled intensive manufacturing, you know, metal-bashing, would be eliminated” but that “the bits of manufacturing that were skill intensive would probably expand”.
“If you look at what Dyson does, for example, in this country, it’s all very skill-intensive, it’s engineering boffins trying to think of new ways of doing stuff.”
“meant that unskilled intensive manufacturing, you know, metal-bashing, would be eliminated” but that “the bits of manufacturing that were skill intensive would probably expand”.
Dyson? Well we know where Dyson stands  founder  James Dyson is a major supporter of Brexit and has just announced he is planning to open a new car plant , not in Brexit Britain.


Dyson vacuum cleaners and washing machines were made in Malmesbury, Wiltshire until 2002, when the company transferred vacuum cleaner production to Malaysia. There was some controversy over the reason for this move, as well as over plans to expand Dyson's factory to increase production. Moreover, trade unionists in Wiltshire claimed that the move would negatively impact the local economy through the loss of jobs.[31][32] The following year, washing machine production was also transferred to Malaysia. This move was driven by lower production costs in Malaysia (lower by 30% compared with the UK); however, it created a loss of 65 jobs.[34]

In 2004, the Meiban-Dyson Laundry Manufacturing Plant was launched in Johor, Malaysia. The newly opened RM10 million (approx. US$2.63 million) plant is a joint venture between Dyson and the Singapore-based Meiban Group Ltd., which has manufacturing facilities in Singapore, Malaysia and China.[35]

Dyson stated that the cost savings from transferring production to Malaysia enabled investment in research & development at their Malmesbury head office.[

In 2007, Dyson formed a partnership with the Malaysian electronics manufacturer VS Industry Bhd (VSI) to take on a major role in Dyson's supply chain, from raw material sourcing and production to distribution. VSI also undertook an extensive production plan to supply finished product to Dyson's destination markets around the globe (America, UK, Japan, etc.).

It is said that Dyson has around 7,000 employees. Dyson has not publicly stated where those employees are actually located, though it is known that VS Industry Bhd (VSI) currently has around 4,250 employees at their Malaysian facility which manufactures Dyson products,[39] and in 2007 it was reported that Dyson alone was responsible for 80% of VS Industry Bhd (VSI) revenue.[40]

Dyson launched a $360 million plant in Tuas, Singapore in 2013, which can produce 4 million digital motors a year.[41] In 2016, Dyson injected $100 million to increase the production output to an estimated 11 million digital motors a year.


At least we have the Mule giving space to Plaid Cymru Carmarthen East and Dinefwr MP Jonathan Edwards said he was alarmed but not surprised by the 2012 remarks.
He said:
“It doesn’t take an economic genius to work out that the communities that are going to lose out are Welsh communities – that’s the reality of leaving control over our economy in Westminster...
“If you look at the sort of people who have really been driving the whole Brexit agenda, their economic vision is to turn the British state and London in particular into a Singaporean-type economy. That means zero business tax, zero corporate tax, zero regulation and an economy based on high finance; in every scenario Wales loses out." 
 “The reality is if we do leave the single market and the customs union there will be a huge hit for manufacturing. The same people who took away our coal mines and our steel plants [are] now going to be pursuing the same ideological economic philosophy in the post-Brexit era.
 This is exactly what the Tories want nor just William Rees Mogg , they see themselves  raking off  a fortune for themselves in such a scenario. The rest of us will however be left to rot.

1 comment:

Leigh Richards said...

with manufacturing in wales dying - along with agriculture - as a result of brexit looks like wales future is going to be to serve as one big theme park for tourists.

As we know such a miserable state of affairs is sadly the norm for many 'third world' countries, and that's where wales now appears to be heading.