UK: Cynon Valley welcomes big business. (2 of 2)

UK: Cynon Valley welcomes big business. (2 of 2) - The commercial streamlining of the WDA is apparent in a variety of other ways too, but notably in the agency's attitude to loans and equity funding. "Traditionally", Jones reasons, "we were seen as lende

Last Updated: 31 Aug 2010

The commercial streamlining of the WDA is apparent in a variety of other ways too, but notably in the agency's attitude to loans and equity funding. "Traditionally", Jones reasons, "we were seen as lenders of last resort, an awful position to be in if you are looking for a commercial return. If we could have found the wizard who could have pulled that one off, he would have been snapped up by the City in no time." Instead the WDA has elected largely to hand this particular role over to the City, in the form of its 90% venture capital partner, Lazards.

The upshot of this, Jones hopes, will be an increase not simply in the number but in the quality of jobs attracted to the valleys. "If firms come along and say 'How much government grant can you offer?', I refer them to Southern Italy," he observes, tartly. "If you get firms of the right quality they will reinvest and reinvest."

This logic appears to be borne out by the experience of companies like the German brake components manufacturer Alfred Teves. In 1975 Teves opened its Ebbw Vale plant, says managing director Horst Vogt, as part of its strategy to site production near to major players. In spite of the UK motor industry's subsequent demise, and consequent "massive redundancies", Teves has clung doggedly to its Welsh manufactory, by 1988 having expanded its plant (courtesy of the WDA) to 18,000 square metres, its catchment area away from the UK to Western Europe and its workforce to 439, of which 100 are either salaried or on apprenticeship schemes.

Over at Merthyr Tydfil, Shuku Masui, managing director of Star Micronics, tells a similar story: expansion both in output and in the number of Welsh-manufactured components in the firm's Welsh-assembled printers, requiring a growing percentage of skilled labour in the firm's 550-strong workforce. Both men are frank that cheap labour played an initial part in attracting their firms to the valleys, but that other attractions - including the WDA's solicitousness - have kept them there.

All of this seems to fend off the traditional criticism that the WDA is busy creating a race of industrial peasantry. One point repeatedly alleged is that of gender imbalance in jobs created, many being unsuitable (in the immortal phrase of one valley-based managing director) for "big, burly miners". Jones, not unnaturally, dismisses such talk as "fashionable", pointing out that, in any case, "quality" firms like Bosch will bring with them traditionally male-oriented employment, and that "there is nothing wrong with creating jobs for women anyway".

Even the mythically bureaucratic local borough councils have apparently been infected by the WDA's sense of commercial realpolitik. Tony Roberts, chief executive of Cynon Valley's, points to his council's recently commissioned skills audit survey (carried out by Coopers and Lybrand Deloitte) which will allow retraining to be more specifically targeted to meet the demands of higher-tech employers.

All of this has proved timely and may do so again over the next decade. The number of new jobs created in the principality actually rose from 9,882 in 1989 to 5,884 in recession-bitten 1990, while redundancies fell from 10,543 to 7,386. The recession, says Jones, has brought "hesitation" from investors, rather than cancellation. One potential blot on the landscape might be the emergence of an Eastern European bloc, able to offer many of the attractions that Wales can claim (space, cheap labour) along with others that it cannot (central European location), but Jones is confident that by the time that Eastern Europe is firmly on-stream, the Welsh will have no need of the sort of unskilled, bulk-employment work that Poland et al is likely to attract.

Star's Masui echoes his words, pointing out that his firm has started a knockdown assembly in Eastern Europe, but that it has also started one in China which, he notes enigmatically, no one suspects of "leading to a reduction of our Welsh operation". It is, no doubt, a sanguine view, but not, it seems, unjustifiably so.

(Charles Darwent is a freelance writer.)

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