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Why dors the UK have such a poor manufacturing industry compared to Japan and German Watch

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    we are the world's 4th largest exporter of finished jewellery behind France, Russia and the USA
    we produce the world's second most popular bullion coin with the sovereign only beaten by the south African krugerrand and seconded by the Canadian maple
    we produce some of the world's more specialised cars for track events and the luxury markets
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    (Original post by karl pilkington)
    When you think about Japanese companies Toyota Panasonic Nikon Canon Nissan Makita Hitachi. Germany companies Bosch BMW Audi etc I can think of hardly any British companies.
    What these companies have in common is that they produce a lot of consumer goods in the 10-10,000 GBP price range. This gives them a lot of consumer visibility but that is only a small segment of the market for industrial goods.

    If you fly to America your aircraft will not have a German or a Japanese jet engine. It has about a 50% chance of having a British jet engine.

    If you have a smart phone it has a British-designed CPU.

    If you are in the market for a fighter-bomber you are more likely to buy it from the British than either the Japanese or the Germans.

    British oil is more plentiful than German oil and British nuclear bombs than Japanese nuclear bombs.
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    Successful German manufacturing firms tend to invest in R&D, training, good managers with engineering background, export oriented, find niche of best practice to compete internationally. Apart from MNCs such as SIEMENS and BMW, one can find many family owned small and medium enterprises (called hidden champions). There is a better co-existence between owners and the labour workforce that is represented by the labour council or union as stakeholders. Within Europe, German firms tend to have a high productivity rate due to investment in technology and flexible process.
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    (Original post by Rakas21)
    Yes. I imagine that in M&A it would be hard to find a more open economy.

    I quite like the US idea which we see with Google quite well for example. That is to say that in the US you have split shares for foreign ownership and control. When Google was floated a large portion of ownership was sold however the founders retained controlling shares.

    The alternative approach from Germany (though they've eaten bits of our pie) is for government to retain the right of first refusal so that when a British firm wishes to give away equity they would be obliged to offer it to government first. I believe this is the arrangement that the German government have with Volkswagen.

    It's protectionist to some degree but if we don't want outsourcing (though there are of course merits to it for us) then we may have to take such steps.
    I don't see any advantage to banning foreigners buying our companies. The vast majority of companies have little strategic importance. If you sell a company for 400bn you have not "lost" it; implicitly you valued it at less than 400bn or you wouldn't have sold it so you have gained in profit the difference between the 400bn and your valuation of the company.

    By selling companies for money, and then reinvesting the money more widely in the market, Britain's investments become more diversified. This is an advantage for us and makes our investments more efficient than those of countries that tilt the market in favour of national industries.
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    (Original post by Joinedup)
    Opinions differ... IMO British management culture screwed up a lot of british industry involved in making consumer durables
    That might be a factor but the correlation between "industries that don't exist any more" and "industries that were nationalised" is pretty damn striking. Why was management so much better in making tobacco, which is still a massive British-owned industry, than in making cars, which isn't? Tobacco barons are just better, more likeable people? Why did all our domestic mining collapse yet we are able to manage (and still do manage) trillion GBP portfolios of mines located in other countries? It could be that management was strikingly different in each or it could be that the government kept its hands off mines we owned in South Africa or Australia.

    A poster just mentioned the success of the German Mittelstand. Britain's socialist governments had an explicit policy of destroying the British Mittelstand by consolidation on the theory that Mittelstand couldn't possibly survive a world that they believed would follow a path of endlessly greater consolidation. A path it did not in fact follow.

    It is hard not to see the - strikingly localised - industrial devastation Britain has experienced as being overwhelmingly a result of government mismanagement.
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    (Original post by karl pilkington)
    When you think about Japanese companies Toyota Panasonic Nikon Canon Nissan Makita Hitachi. Germany companies Bosch BMW Audi etc I can think of hardly any British companies.
    It's actually quite simple.

    We didn't invest in high tech manufacturing post war and we pay high wages relatively so none high skilled manufacturing is a no go.

    It can however be turned around as you see with our car industry


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    Range rovers, rolls Royce, Aston Martin, we make some pretty good cars
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    (Original post by Observatory)
    That might be a factor but the correlation between "industries that don't exist any more" and "industries that were nationalised" is pretty damn striking. Why was management so much better in making tobacco, which is still a massive British-owned industry, than in making cars, which isn't? Tobacco barons are just better, more likeable people? Why did all our domestic mining collapse yet we are able to manage (and still do manage) trillion GBP portfolios of mines located in other countries? It could be that management was strikingly different in each or it could be that the government kept its hands off mines we owned in South Africa or Australia.

    A poster just mentioned the success of the German Mittelstand. Britain's socialist governments had an explicit policy of destroying the British Mittelstand by consolidation on the theory that Mittelstand couldn't possibly survive a world that they believed would follow a path of endlessly greater consolidation. A path it did not in fact follow.

    It is hard not to see the - strikingly localised - industrial devastation Britain has experienced as being overwhelmingly a result of government mismanagement.
    Lumping mismatched companies together into unwieldy conglomerates was also a private sector obsession until quite recently. Now of course the reverse doctrine holds sway... that it's preferable breaking businesses down into small companies with 'focus' and 'core competencies'.

    You could check out GEC - third largest company by capitalisation when the FTSE launched in 84

    The Tobacco companies were for a while diversifying all over the place too - the wiki gives a rather misleading account of their once frenzied M&A and seems to concentrate on continued activities rather than all the ill assorted pies they briefly had their fingers in (this might have been partly to insulate them from the effects of possible regulation and litigation related to the tobacco business)

    It's doubtful whether the greatest management in the world could make much money mining stuff in the UK anymore.
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    (Original post by Joinedup)
    Lumping mismatched companies together into unwieldy conglomerates was also a private sector obsession until quite recently. Now of course the reverse doctrine holds sway... that it's preferable breaking businesses down into small companies with 'focus' and 'core competencies'.

    You could check out GEC - third largest company by capitalisation when the FTSE launched in 84

    The Tobacco companies were for a while diversifying all over the place too - the wiki gives a rather misleading account of their once frenzied M&A and seems to concentrate on continued activities rather than all the ill assorted pies they briefly had their fingers in (this might have been partly to insulate them from the effects of possible regulation and litigation related to the tobacco business)

    It's doubtful whether the greatest management in the world could make much money mining stuff in the UK anymore.
    My point is not that consolidation is always bad (posters on this thread also cite a number of successful German and Japanese conglomerates) but that there is a very strong correlation between companies being subject to government industrial policy and those companies failing. When the government manages businesses, it tends to make mistakes.

    There are a number of industries in which British companies are genuine world leaders: biotech, mining/oil & gas overseas, music, mobile (but not landline) telecoms, beverage production, chip design. It runs the full gamut from low margin/low skill to high margin/high skill. What all these have in common though is that they either didn't exist or the government didn't think were important enough to micromanage during the Keynesian Consensus years.
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    Margret Thatcher.
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    (Original post by Observatory)
    My point is not that consolidation is always bad (posters on this thread also cite a number of successful German and Japanese conglomerates) but that there is a very strong correlation between companies being subject to government industrial policy and those companies failing. When the government manages businesses, it tends to make mistakes.

    There are a number of industries in which British companies are genuine world leaders: biotech, mining/oil & gas overseas, music, mobile (but not landline) telecoms, beverage production, chip design. It runs the full gamut from low margin/low skill to high margin/high skill. What all these have in common though is that they either didn't exist or the government didn't think were important enough to micromanage during the Keynesian Consensus years.
    Well of course it could be that companies that were struggling in the first place were more likely to get nationalised. I'm not really a fan of nationalised industries,but it's more complicated than nationalised bad, private good.

    Industrial policy and protectionism can take different forms such as choosing the technical criteria for selecting between bids for government contracts so that the home team has an advantage, arguably the UK isn't as good at playing this game as some other countries.
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    Also I am talking about export technology Germany and Japan bring in huge amounts of money through car exports if you look at this we are ninth in terms of exports

    https://www.statista.com/statistics/...ies-worldwide/
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    (Original post by Joinedup)
    Well of course it could be that companies that were struggling in the first place were more likely to get nationalised. I'm not really a fan of nationalised industries,but it's more complicated than nationalised bad, private good.

    Industrial policy and protectionism can take different forms such as choosing the technical criteria for selecting between bids for government contracts so that the home team has an advantage, arguably the UK isn't as good at playing this game as some other countries.
    A lot of them were nationalised during the war and simply never privatised.
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    (Original post by karl pilkington)
    Also I am talking about export technology Germany and Japan bring in huge amounts of money through car exports if you look at this we are ninth in terms of exports

    https://www.statista.com/statistics/...ies-worldwide/
    Germany manufactures and exports most white goods, in the UK it's estimated that most of your kitchen appliances for example will be made in Germany.

    Japan has actually lost its historic trade surplus however it still ranks highly for innovation and is well placed for the future. One of the bigger reasons for being so dominant post war though was that automation increased substantially and it was able to crush the US car industry. Trains and energy are also things it's big in.

    Most of the UK's big engineering stuff that would have competed in value was simply poorer and we lost. Our militant French like unions were also a bane that made us unreliable and expensive. Today our manufacturing industry is a bit better and we rank pretty well for innovation so we have better prospects for the future albeit we'll need slower consumption to reduce imports in all likelyhood and move to a position of trade surplus.
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    Oddly enough Bosch and Flymo lawnmowers are made in the UK, at least the ones for the UK market despite being associated as German and Swedish brands.
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    Rolls Royce automotive and rolls Royce engineering are different companies
    ( one German owned and one uk owned)

    British management in the 50's to 80's was in a state of denial and tried to wring the last penny of profit without investing. Think Phillip green.

    The uk motorcycle industry gets a bad reputation as they were blown away by the Japanese but the designers had advanced designs ready to go but were stopped by management who were convinced that the public would continue to buy whatever they made.

    Thatcher regarded service industries as the way forward and we lost our place a step "the workshop of the world"

    The uk is amazingly inventive but absolutely rubbish at taking inventions to market
 
 
 
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