Saturday February 22, 2020

Industrial devolution: The North's manufacturing future

Landmark Belfast shipyard Harland and Wolff is on the brink of closure while other titans of Northern Irish industry have already fallen. There are hopes, however, that a new focus on technology could safeguard the North’s economic prosperity

18th August, 2019
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Harland and Wolff’s Samson and Goliath cranes on the Belfast skyline and Titanic workmen statue on the city’s Newtownards Road Pictures: Getty/Pacemaker Press
Robert Mahood was laid off by Harland and Wolff last month after 48 years at the shipyard

For as long as anyone can remember, Harland and Wolff has been a totem of Belfast life and an emblem of its industrial might. Samson and Goliath, its yellow cranes, stand proud and tall, dominating the city’s skyline and psyche in equal measure. Decades of gradual decline and its owners’ financial travails finally plunged the shipbuilder into administration earlier this month, stilling its towering cranes, perhaps forever. The day of reckoning came on August 6, as accountancy firm BDO was appointed after Dolphin Drilling ASA, formerly Fred Olsen Energy, went bust.

For all their might, Goliath was slain and Samson betrayed, blinded and ultimately buried beneath a mound of rubble. Now the industrial edifice of Belfast is crumbling too.

Harland and Wolff (H&W) was founded in 1861 and by some estimates employed as many as 35,000 in the early 20th century. It was the birthplace of liners such as the Canberra, the Olympic and, most famously of all, the doomed RMS Titanic.

For generations, floods of workers passed through the famous gates on the banks of the River Lagan, but that has slowed to a trickle and its future now hangs by a thread. The 120 or so workers left are optimistic that the old yard will purr into action again, but others fear its fate is already sealed.

Gallaher’s tobacco factory, once the largest cigarette maker in the world, has shut its doors; Ballymena’s Wrightbus is in financial trouble; and the nearby Michelin tyre factory has been lost.

Belfast’s world-leading linen mills and ropeworks have long ceased to exist while Short Brothers, now owned by Bombardier, faces an uncertain future as its Canadian parent seeks a buyer for what remains a major employer in the region.

The old titans of Northern Irish industry are disappearing one by one.

On the picket line

“[In] this area of East Belfast, we’ve lost [a lot] of big manufacturing companies that have never been replaced,” Norman Downey says at the shipyard picket. “Now, it seems to be a service industry [economy] only.”

Downey, 64, sits as he speaks, not just because days spent idling outside H&W waiting for news of a lifeline drag on, but because a recent accident suffered while carrying out maintenance work on a crane left him with a broken fibula, a dislocated kneecap and spinal injuries.

Harry Caldwell at the picket at the Harland and Wolff shipyard in Belfast which has been placed into administration Colm Lenaghan/Pacemaker

“It’s a bit of a double-whammy for me really,” he says. “I’m 65 in November, so nobody’s going to employ me. There’s not too many cranes out there to be drove.”

His colleague Harry Caldwell, aged 58 and a fitter at H&W since 1977, says he remains hopeful a bidder can be found or the shipyard can be nationalised, but admits he’ll have little option but to move on if something doesn’t materialise soon.

“My wife doesn’t work, I’m a long way from retirement age and the redundancy is probably only a pittance. It won’t be big money, so I’d have to get something,” he says.

Truckers honk, drivers salute and the mood among the workforce on the picket remains relatively upbeat despite the dire situation in which they find themselves.

Denise Walker, regional organiser with the GMB trade union, says the men have been heartened by the donations they have received from the community.

Politicians are conspicuously absent, much to the chagrin of the workers, but playwrights, comedians and even the odd ice cream truck swing by from time to time to keep them company.

The realities of the situation are harsh and inescapable, though. Facing the “real world”, as Downey puts it, is not a prospect anyone is relishing. Skills like his are valuable, but whether they’re still in demand in the service economy is unclear.

Finding a new bidder or nationalising the shipyard are H&W’s last chance of survival and its workers’ best chance of finding work.

The Troubles effect

Dr Graham Brownlow, a senior lecturer in economics at Queen’s University Belfast, says H&W’s demise is not the end of manufacturing in the North, but it is the end of industrialised commodity manufacturing.

“De-industrialisation has been part and parcel [of life for a while]. I think peak industrial employment in Northern Ireland was 1962. De-industrialisation kicked in a long time before the Troubles,” he says.

The Troubles. Nothing in Belfast is untouched by the conflict as Joe Passmore, Unite trade union shop steward at H&W, knows only too well. “[H&W] had a reputation years ago of being a loyalist stronghold, and I can’t deny that it was to a degree. In the 70s and 80s when I started, that’s what it was and nobody’s trying to deny that, but then it was a microcosm of Northern Ireland as a whole.” he says.

Joe Passmore, Unite trade union shop steward at Harland and Wolff

Pete Hodson, a PhD student who has studied H&W’s history from World War II on, estimates that its workforce, which numbered 22,000 at one stage after the war, was about 5 per cent Catholic for most of the latter half of the 20th century.

“There were expulsions as late as 1970 of Catholic workers from the shipyard. The flashpoint of the Troubles kind of mirrored the expulsions, that dates from the 1880s through to the 1970s,” he says.

“In 1970, it was the point of a gun that forced people out. That’s still quite deeply ingrained, certainly in the nationalist psyche.”

Passmore had a first-hand view of the yard’s sectarianism. Speaking about a man shot dead on the grounds of the yard at the latter end of the 1980s, he says: “The only reason I can think is because he was a Catholic. If I could point to one moment of change that was it. Everybody realised how inanely stupid it was.”

Passmore says the make-up of the workforce has changed dramatically and is probably about 60/40 in favour of Protestants now, but nobody knows because it’s just not an issue any longer.

According to Hodson, the Troubles kept the yard alive when perhaps it could have folded.

“Essentially it was seen as too big to fail,” he says. “There was an anxiety there that closing the shipyard would unleash an angry workforce and make the Troubles a lot worse.”

Talk of £80 million deals left on the table prior to administration, upcoming Royal Navy contracts, green energy jobs and new bidders as potential saviours do the rounds, but for now H&W’s future looks bleak.

“I don’t want to write the shipyard off, but I think it’s had its nine lives and perhaps the time is up for it, really,” says Hodson. “The shipyard is so deeply ingrained in the Belfast psyche, I think. It’s a symbolic closure as well. It’s the end of an era.”

Robert Mahood’s father “died working” at Harland and Wolff. Mahood himself was laid off from the yard last month after 48 years, and his son lost his job there more than 20 years ago.

The yard might not exist long enough for a similar fate to befall his grandson, despite Mahood’s one-time presumption that it would be where he’d work, too, one day. “[My son’s] in Bombardier now,” he says. “That’s another one. I think they’re a wee bit safer than these workers here.”

Bombardier workers’ jobs are certainly safer than those at H&W, but they’re not exactly safe either. The Canadian aerospace giant announced in May that it was selling off its Belfast business, and work continues to find a bidder but, for now, its 3,600-strong workforce remains in the dark over whether job cuts will follow.

Bombardier declined to make anyone available for this article, but a spokeswoman said: “We are taking the necessary time to find the right buyer for our operations and have no announcement to make at this time. Details of the ongoing sales process remain confidential.”

For all its symbolism, H&W offers only a fraction of the employment and wider economic benefit that Bombardier does these days. “It’s not like Bombardier where there’s a clear supply chain multiplier effect,” Dr Brownlow says.

The Brexit threat

The North’s tricky transition away from powerhouse manufacturers of days gone by is compounded by the threat of a no-deal Brexit.

A stark report published by the Northern Ireland Civil Service in July warned that a no-deal Brexit would result in the loss of up to 40,000 jobs across the region and have a “profound and long-lasting” impact (see panel).

Exiting the European Union without a deal would result in “immediate and severe” consequences for the North’s competitiveness, its tourism industry and its attractiveness as a destination for foreign direct investment (FDI).

Stephen Kelly, chief executive at Manufacturing NI, says agri-food and manufacturing businesses would be among the worst affected. “For many firms it’s an existential crisis,” he adds.

One of the North’s “unheralded successes” over the past ten years has been the growth in specialist, precision manufacturers in mid-Ulster, including areas such as Craigavon, Ballymena and North Antrim.

“What we’ve been trying to say to government and others is there’s more to come here, but don’t be putting concrete boots on the sector at this point in time,” Kelly says.

“You need to allow them to continue making a bigger contribution to the Northern Irish economy, but what we see ahead of us is essentially concrete boots [being put on] which will mean that some of our firms will sink to the bottom and be unable to press themselves off.”

A no-deal Brexit is roundly seen as a disaster in the region, but with the Northern Ireland Assembly still not up and running, the general feeling is that the North’s priorities are not those of Westminster.

Kelly says: “What happens in the next two-and-a-half months will define the next ten years. Get it right and Northern Ireland has an opportunity to prosper as a bridge between the EU and the UK post-Brexit. Get it wrong and 40,000 jobs are at stake, which is 7 per cent of private sector jobs in Northern Ireland.”

The British economy contracted for the first time in seven years during the second quarter of the year. Ulster Bank NI’s latest purchasing managers’ index last week showed “a marked deterioration in business conditions in the second quarter”, as new orders fell and inflation rose.

The Good Friday Agreement has not been accompanied by the levels of economic integration that may have been expected, nor have living standards in the North improved.

Research compiled by the Economic and Social Research Institute this month found “no evidence to suggest that Northern Ireland has benefited from any peace dividend” with little change in the region’s GDP per capita between 2000 and 2014. Furthermore, it remains “one of the poorest UK regions” and the gap between rich and poor has grown, according to the report.

The authors identified “substantial gaps” in the North’s educational system and found that the Republic had much higher proportions of activity centred on high-value exports to the rest of the world and a stronger FDI employment base. Both factors, the report stated, were “key determinants” of the high growth rates in the Republic prior to the financial crash.

The path to a modern economy

It’s clear that the North’s economy needs to modernise and that greater integration between North and South would benefit both economies, even if that is now at risk as a result of Brexit.

For all that, unemployment remains remarkably low at 3.1 per cent – up from a historic low of 2.9 per cent in the first quarter of the year – and the North’s tourism market is going from strength to strength.

The region has historically had a high proportion of public sector jobs, but there are now about 20,000 fewer public sector workers compared with the peak in September 2009. The private sector, however, has grown, pointing to a much-needed, albeit nascent, rebalancing of the economy. In 2018, a third of new jobs were in three sectors: healthcare, wholesaling and IT.

For Northern Ireland Chamber president John Healy, the region is well on the way to modernisation. He points to software firm Allstate, which he heads, and global investment bank Citi, which employ about 5,000 staff between them in Belfast, as well as the Chicago Mercantile Exchange’s IT office and large legal firms such as Baker McKenzie.

“There’s quite a big FDI environment, but there’s also an increasingly well-developed group emerging from an entrepreneurial fintech perspective,” Healy says. “A super cluster has built up here. Allstate was first in after the peace process and has been here for just over 20 years.”

Ensuring kids have the technology skills that will set them up for the future will be key to safeguarding the North’s economic prosperity over the coming years, he says.

“Technology is one that is going to be really important in terms of the future and that’s not just in terms of pure technology companies, but technology today is all pervasive, it reaches into manufacturing, healthcare, agri-foods.

A mural of Shipyard workers in Belfast Pictures: Colm Lenaghan/ Pacemaker

“It is driving the modern economy and as such there’s a push in terms of driving information technology into the schools because they’re the skills that [children in] Northern Ireland, Ireland, Europe, wherever are going to need to have to be successful in the future.”

Dr Brownlow agrees, but fears the North’s lack of political autonomy is slowing the pace of change. The North, he says, has a huge oversupply of schoolteachers, for example, and an undersupply of IT graduates.

“We have massive inefficiencies with where we’re allocating resources and the question you would ask yourself as a cold-hearted economist, as I am, is [whether] the extra pound is better spent on . . . propping up shipbuilding or [on] training kids in coding and the jobs of the future?”

Essentially the choice boils down to whether sunrise industries or sunset industries are supported, he says.

“My own view is we’d be much better investing in [future skills]. It’s sad and it’s tragic for the people concerned [at H&W], but I think for NI plc, we’ve allowed politics to strike out a lot of very sensible economic decisions.

“I completely understand why people in the past took the symbolism [into account] and did what they did, but here in 2019 you see where the rest of the world is – we need to get real.”

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