An article which was published in the Daily Telegraph on 1st June, 1994 in the “In My View” column.
S F Bush
There are about 250,000 chartered professional engineers in Britain, deployed to design, build and maintain the manufacturing, energy and transport systems which sustain our lives. No society requires an unlimited number of engineers, but it is vital that those it has should be among the most able of their generation and educated to the highest international standards.
In the second half of the 19th century the engineer’s central role was highly visible, not only through the construction of bridges, canals, roads and, above all, railways, but also through popular writings typified by Samuel Smiles’s Lives of the Engineers. In the second half of the 20th century engineering has expanded to touch everone’s life, yet curiously the role of professional engineers is less distinct in the public mind than it was 100 years ago.
The huge aircraft which transport millions of people a year, the chemical or polymer plants which run continuously under automatic control for thousands of hours, and the computers which perform upwards of a million operations a second, are largely taken for granted, yet are triumphs of engineering.
And it is to engineering brains that society will turn to solve tomorrow’s problems – combining scientific discovery and engineering method to reconcile the demands for more and better products with the need to enhance our environment and optimise the use of our natural resources.
When Brunel built the Great Western Railway in the 1830s he not only designed the track, tunnels and junctions, but he surveyed the route personally, negotiated with landowners and was closely involved in the enactment of the relevant Bill.
Today, every professional engineer recognises that the range of factors beyond the purely technical for which he must allow – financial, health and safety, environmental, product liability – has expanded substantially.
A modern engineer must thus be a more universal man and, naturally, this development has been reflected in changes to the university engineering degree course. One of the major changes of the past 10 years is the inclusion of a much larger element of management and commercial subjects. Such changes have also made an engineering degree an open road to a range of jobs outside engineering.
Engineers are now found not only in indusrial research, manufacture and construction, but also in public administration, the environment, patent law, commerce and, increasingly, finance, where their numeracy and computer literacy are greatly appreciated.
Internationally, no other qualification is as widely marketable as a good British engineering degree, as evidenced by the £35,000 many thousands of overseas students pay to acquire one.
British engineers are found all over the world, not least in Silicon Valley, in civil engineering contracting and in petrochemical plant of all kinds. Engineering can truly be seen as the enabling discipline of the age.
Besides the established three-year courses leading to bachelour degrees, there are a number of four-year master degrees for high fliers. Allowing as they do more time to develop personal skills and management subjects, these degrees should answer more effectively the crying need for a higher proportion of technologically literate managers at the top of British industry. There is nothing more exciting on offer anywhere.
Stephen Bush was professor of polymer engineering at University of Manchester Institute of Science and Technology (UMIST) at the time.
See also papers and articles in the Industry and Economics section.
This is an article about the sale of Rover to BMW which was published in the Independent on 21st February 1994.
Despite the general chorus of approval in the City and financial press, the proposed sale by BAe of Rover to the German company BMW, if approved by their respective shareholders, brings into sharp focus fundamental faults in British capitalism which, if not corrected and corrected soon, will take our country to industrial oblivion. At £4,300 million turnover, the transfer of Rover is the largest single loss of control of industrial output and market ever – about 4% of our gross manufactured product, dwarfing other recent transfers like Jaguar to Ford (about £800 million) and ICI Fibres to Dupont (about £300 million).
Contrary to the City comment at the time of the announcement of the sale, it is not chauvinistic to safeguard your most strategic industrial capacity from foreign takeover. To every foreign engineer and manager I know, it is the merest commonsense on the grounds of the opportunity difference between having one company and having none. I doubt if there is a single British professional engineer who does not take the same view.
In terms of GNP per head, Britain has in 30 years slid from near the top to near the bottom of 24 Western industrial countries in the OECD. At the same time, British manufacturing operations have hauled themselves from near the bottom of the efficiency league to near the top, Rover being an outstanding example. We who work with or for British Industry, as well as the millions outside who depend on it for a living, are entitled to ask what magic insight is it, denied the rest of us, that allows a tiny group of financial institutions and corporate managers to watch complacently as British industry is expelled from one sector after another, and yet swear it is the inevitable “restructuring” of the international economy which is working in Britain’s long-term interest?
The Rover sale exposes three of the most profound issues for national debate which must not continue to be brushed aside by the City establishment and their allies in the present government.
Much has already been written about the City’s incompetence and short-term outlook in industrial matters and there have been occasional signs that it is prepared to defend itself against these charges. But Rover is the clinching case for those of us who believe the charges are made out a hundred times over. Essentially Rover is a growing success which is being sold at a failure price, to enable British Aerospace to relieve the difficulty arising from its aircraft leasing arrangements. As a rule of thumb, a well run modern manufacturing company will have capital assets valued somewhere in the region of its annual turnover. On this basis Rover is being sold at well under half its value, even if you count the takeover of debt as part of the price: in fact LandRover on its own is worth the £800 million cash being paid.
This leads to the first fundamental point. Why do the financial institutions place such blind faith in the abilities of a gilded circle of corporate managers, who lacking technical expertise fully to get to grips with the businesses they are entrusted with, are whisked from one chairmanship to another, in an elaborate game of musical chairs in which every participant receives a huge prize every time the music stops? In high tech manufacturing such as cars and aerospace, it is the three-way conjunction of long-term product research, process design and marketing which ought to be the primary concern of the board, as it clearly has been in our successful chemicals and pharmaceuticals businesses. Almost exactly two years ago Akio Morita, chairman of Sony – one of the companies that have propelled Japan to world economic leadership said it was “very curious that so many British industrial companies are headed by accountants or lawyers . . . in Japan almost every major manufacturer is headed by an engineer or technologist . . . I do not believe accountants and financial professionals should be at the helm of industry”. Just as British manufacturing has learned enormously valuable lessons from the Japanese, why do not the financial institutions do likewise in their own interest and that of the millions whose investments they manage? Why do they continue to reinforce failure?
The second fundamental issue is the future of Britain’s prodigious research and design expertise. In an address on February 1 to the Parliamentary Scientific Committee, the Prime Minister complained that too much of Britain’s scientific achievement benefited our competitors rather than our own industry. The answer is you cannot transfer science and technology to an industry which is not there or is not prepared to absorb it. The Rover sale takes out of British hands around £4,300 million of annual turnover in high technology products. No conceivable expansion in the birthrate of new high tech companies can begin to replace the added value this turnover represents. With the world awash with production capacity the key strategy in high technology industry is to spread your very expensive research and design over as many products as possible, retaining only inexpensive badge engineering to create market differentiation.
It is inconceivable that BMW will retain two research and design facilities, since their consolidation into one, centred in Bavaria, is the obvious way for BMW to recoup much of the cost of the purchase. Of course this will not be noticed for some years by the general public, or even by the production workers, since the existing models will run for several years yet. It is for this reason that BMW is able to give a continuity of employment guarantee to production workers.
But the loss of research and design autonomy will be felt immediately. With the centre of design decision making being removed to Munich, discussion with British component suppliers about new developments will come rapidly to a halt as designers realize that for future models BMW will have their own views about component supply. Inevitably young British graduate engineers will realize that promotion and prospects depend on fitting in with Munich not Birmingham. There will be an enhanced flow of our ablest young people to Germany, ultimately to serve German, not British industry.
For our research scientists and engineers to make a useful contribution to our industries, they have to know what the objectives are – what the markets are likely to be. It is this knowledge of the linkage between R & D and the market, which domestic ownership of the market and production provides in strategic sectors of industry. The sale of Rover represents a massive reduction of that linking and therefore a massive opportunity loss in mechanical engineering as well as in plastics, electronics and metals.
Perhaps the most fundamental point of all is the devastating blow to our national morale and self-respect. It is not true as some aver that the battle for the British car industry was lost in the 1970s. This is the defeatest argument which has dominated British public life since Suez. It is never too late to build a new industry if the will is there as the Japanese, the Koreans, and now the Malaysians are demonstrating. Thirty years ago BMW was itself an ailing company, smaller than Jaguar is now. Since then by keeping in the business a much higher proportion of profits than is usual in British industry and by dedicated expertise at the top, it has grown to its present position. Growing a business in this way is in fact much more typical of German industry than of British industry where corporate managements tend to prefer the takeover of existing businesses as the easier route to growth. It was entirely symptomatic of the malaise of British corporate management that the only engineer present at the news conference announcing BMW’s takeover of Rover was Mr Pischetsrieder, chairman of BMW.
No nation can survive on a diet of everlasting retreat and evacuation. Our country desperately needs a victory in the intense industrial war which is fought out daily around the world. There was no immediate need to sell Rover: the partnership with Honda, committed as they were to keeping Rover a British company, had many miles to go. In round terms, the £100 billion bonanza from North Sea oil has financed the bulk of the huge British investments in largely non-strategic sectors of overseas economies. Just two percent of this sum is all that is needed to save the strategically vital Rover for the British economy. Instead the City and the BAe board have handed us another Dunkirk in order to obtain short-term financial relief. When a system continues to deliver nonsense, the thing to do is to change it – not pretend that it works. As Churchill said in 1940, “Wars are not won by evacuations”.
Professor Bush, formerly with ICI, holds the Chair of Polymer Engineering in Manchester and is Chairman of the North of England Plastics Processors’ Consortium. He directs his own technology company and is a Fellow of the Institutions of Mechanical Engineers and of Chemical Engineers and of the Institute of Materials.
An article, full title “What Price Hope and Glory as Europe’s Net Tightens”, published in The Field magazine in April 1990.
Listeners to the radio recently will have heard the vice president of the West German central bank, the Bundesbank, remark in the course of an interview about the unification of East and West Germany that ” . . . of course a country which merges its currency completely cannot remain independent politically”. Thus, in the matter-of-fact tones of someone stating an incontestable fact, did Dr Walther demolish completely the claims of those Europeanists, including some prominent members of the Conservative Party, that European monetary union would not jeopardise our status as an independent country.
Later this year, Britain will be forced to attend an ‘EC Intergovernmental Conference’ at which the principles of a new Treaty will be drawn up to bind EC countries into a monetary union – a common monetary and economic regime controlled in practice by a united Germany. If we were to acquiesce in this process, the disappearance of the Queen’s head from our currency and the substitution of a foreign currency, the Ecu, would remind us daily of the fact of our disappearance as an independent country.
The imminent approach of this Intergovernmental Conference, which the present Government has said repeatedly it does not want, is the crossroads at which we must decide if we wish to continue as an independent country or to be absorbed into a United States of Europe, governed nominally from Brussels, but in practice from Berlin. We must have the simple courage as a people to say that, despite all the chorus about ‘missing buses’ and so forth we will not travel down that road.
The public approach of committed Europeans to this crossroads follows the classic tactic adopted (by much the same people) in another decisive transformation of our national life since 1945: immigration. This tactic is to assert in the early years that the changes are small and beneficial and no threat; that to oppose them is to be a ‘Little Englander’ and xenophobic. Later, as the problems become clear to almost everyone, we are assured that they are ‘transient’. Then a decade later, we are told we must live with the problems, and more changes are proposed (or avoided) which ensure that we never solve the problem.
In 1973-’75 the British people were continually assured that the EC was essentially a free trade area or ‘Common Market’, the term by which it is still freely described in Britain, despite its single most important feature being the most highly-rigged agricultural market in the world (which is saying something).
Thus, seven years after accession to the EC (in1973), once the predictable budgetary problems were obvious, Britain was locked in battle month after month to reduce the absurdly high exaction placed on it, a battle in which the president of France, a country which received rather than paid, could haughtily describe our Prime Minister as une fille d’épicier – a grocer’s daughter.
Today, ten years on, the German government feeds the Europhile press in this country with a steady diet of remarks carefully designed to jangle the British establishment’s nerves – that if we do not enthuse over German unification, we risk staying ‘on the sidelines of history’, we shall be ‘marginalised in Europe’, our role will be ‘merely that of onlooker’ and so on, all of which sentiments are heartily endorsed it seems by Mr Edward Heath.
Europeanists frequently talk about Britain’s role, or lack of it, in Europe, of allegedly ‘missed’ opportunities of ‘leading’ Europe. Their predecessors in the soft-centre of British politics in the ’20s and ’30s would wax lyrical about Britain’s role in the League of Nations, and about the moral leadership that we should give to a waiting world.
In fact, among nations it is influence, not leadership in the personal sense, which governs relationships – and influence follows power. Today it is industrial power which counts. Britain is acceding to a wholly unequal treaty with the EC because it has been, and still is, industrially weak by comparison with its principal European competitor, Germany, and to a lesser extent, France.
The causes of Britain’s decline since its pioneering of the Industrial Revolution have been extensively debated by economists; but perhaps two aspects stand out. One is that the nadir of Britain’s industrial performance, in farming as well as in manufacturing, probably occurred in the years just before the First World War. Over the 80 years since then we have slowly improved, with some slipping back and some spectacular successes. Of course, all but a few saw Britain in 1910 as immensely powerful, but a huge trade deficit was disguised by interest on overseas investments made by earlier generations.
The second obvious fact about our weak industrial performance in the last 100 years is that it has depended entirely on ourselves. We have not been ravaged by foreign conquest; we have not been denied access to vital new materials. However, rather than give our industry, and above all manufacturing industry, the primacy it must have if we are to survive as a modern nation, each generation of political leaders this century, with few exceptions, has sought redress from our loss of influence in the quack remedies of ‘special relationships’, international conference attendance, EC membership and, recently, ‘services’.
Politics and politicians in Japan, Germany and even the USA are essentially in the entertainment category; only in Britain are they taken seriously. With an industry led mainly by accountants and lawyers we have lost industrial battle after industrial battle because we have not really fought. We have been like an army led, not by infantrymen and gunners, but by the Pay Corps and the Legal Branch with off-stage exhortation by Parliament.
Can anyone seriously believe that more of the same, this time from Europe in the shape of Mr Heseltine’s Euro-Senate pantomime, can do anything to help Britain pull itself up into the ranks of a fully-competitive industrial power? Can anyone believe that Germany, dominating the EC, would lift a finger to allow Britain to become a serious competitor? Even today West Germany, with an overwhelming balance of trade surplus (the largest single element of which, nearly £10 billion, comes from Britain), will not allow Britain a devaluation of the green pound to give our farmers the returns from the CAP which other EC farmers enjoy. This is because Germany’s net EC budget contribution would rise in consequence.
The steady fall in the real price of manufactured and agricultural products since the Industrial Revolution has dramatically improved our standard of living. Services show little, if any, productivity rise. During six years of the last war, British agriculture changed from relative backwardness to being one of the most mechanised and productive in the world – yields rose by 50 per cent, output doubled, and labour productivity rose by 90 per cent. This was brought about by a national act of will, the skill of farmers, the products of a new agricultural machinery industry (the number of tractors increased fourfold) and the application of synthetic nitrates made by our chemical industry. This achievement continued up to 1973, with productivity gains averaging 7 per cent per annum in the 12 years before that, which compares with the average for industry as a whole of about 2.5 per cent. Over the last 50 years, agriculture and chemicals, by commitment, skill and technology, have been our most successful major industries.
The same blend is urgently needed in the rest of our industry before it shrinks still further or passes into foreign hands. To revive our manfacturing industry, on which all else depends, we need above all a national commitment to making it happen. If we cease in any meaningful sense to be an independent nation, it cannot happen.
We need specific measures, such as the power to protect ourselves against foreign dumping of products – power which we have lost to the EC. Above all, we need to convince our young people that we are still in business as a nation and that it is their duty, as well as in their interest, to help us survive.
Without this commitment to our independent future our most talented people will drift away to the industrial heartlands of Germany and the USA; already German firms are actively recruiting our engineering and science graduates, while the flow to the USA continues, as any visitors to the hi-tech industries of California will find. Of course, free people have a right to move to other countries. but it is folly then to give these countries the right to fashion your economic policy and determine your currency.
A suggestion three months ago by Mr Andriessen, the Dutch EC commissioner, that we and the Danes should resume membership of an enlarged European Free Trade Association (EFTA) linked to the EC in a wider European Economic System (EES), offers us everything we could possibly want, though derided by the Foreign Office. This is clearly the way to accommodate our own deep desire to remain independent, the aspirations of the newly-independent nations of Eastern Europe, Denmark’s wish to rejoin Scandinavia, and the desire of the other ten EC countries to unite.
From this position we could trade freely with the rest of Europe and engage in sensible, non-bureaucratic, technical co-operation through the Eureka programme. We could arrange our own trade agreements with the rest of the world, reduce food bills and balance of payments deficit and exploit our unique links of language and history with the Pacific basin – centre of more than half the world’s manufacture.
