Nobody knows whether Cheverton Down, the wind farm planned for a picturesque
flank of the Isle of Wight, will churn into life, let alone who will build
it. But if it does go ahead, the turbine blades will not be made locally.
Vestas, the Danish renewable energy specialist, said last month that it would
close its blades factory in Newport – the only wind turbine manufacturing
plant in Britain – with the loss of up to 530 jobs in the island’s capital.
The shutdown is part of a wider restructuring, under which faltering demand in
Northern Europe has prompted Vestas to cut surplus capacity in Denmark and
Britain in favour of expansion in America and China.
Residents near Cheverton opposed to the wind farm might consider it an
indirect victory, of sorts – but for the island as a whole, the closure has
come as a cruel and unexpected blow.
“It’s very disappointing,” said Kathy Slack, area director for the South East
Economic Development Agency and chairman of the task force that has been
hastily convened to support Vestas staff. “It’s a big private sector
employer on what is a small island. One of the things we have to guard
against is that it doesn’t knock confidence too severely, that it doesn’t
create an attitude of hopelessness. There is a fantastic skills base here.”
For trippers stepping off ferries at Yarmouth, Ryde or Cowes, or for those for
whom the Isle of Wight – Queen Victoria’s favourite holiday hang-out – means
1950s-style seaside B&Bs and well-heeled yachties, it might come as a
surprise that this breezy, beach-lined outcrop makes anything at all.
But the island has a long history of skilled manufacturing, spanning
boatbuilding, aerospace, defence and electronics. The world’s first
hovercraft was produced and launched in East Cowes in the 1950s –
descendants of which, now built on the other side of the island at St
Helens, still skim passengers across the Solent from Southsea.
The same East Cowes factory also made the Saunders-Roe Princess, the largest
and last flying boat built in Britain. And today, in a small hangar in
Bembridge, the Britten-Norman Islander is still produced – the 1960s
propeller-driven aircraft used by armies and aid agencies alike.
By value and percentage of full-time equivalent jobs, manufacturing ranks
comfortably ahead of hotels and catering in the island’s economy. It also
helped to propel its growth at a faster pace than the rest of the South East
in the first half of this decade – at an average annual 5.3 per cent.
But the Vestas closure threatens to put further pressure on an economy that
has since followed the mainland into recession. On the latest figures,
unemployment among the 140,000-strong population is running at 6.9 per cent,
substantially higher than the average of 5.1 per cent in the South East.
Should none of Vestas’ workers find jobs, that number will swiftly nudge 8
per cent. In short, it threatens to single-handedly widen the differential
between island and mainland unemployment that has narrowed steadily since
the recession of the early 1990s.
Potential job losses among Vestas’ local supply chain could further enlarge
that gap. Gurit, a Swiss manufacturer of composite materials for wind
turbines, employs 400 staff on an adjacent site to Vestas. Although not all
of its output is destined for its Danish-owned neighbour, some form of
knock-on effect seems inevitable.
Not all is gloom. Another division of Vestas remains committed to building an
£89 million R&D facility close to the site earmarked for closure.
The new plant, which will test and stress prototype turbine blades, is due
to open next year and plans to take on about 150 staff.
Other big engineering employers on the island, such as GKN Aerospace, are
still hiring staff. GKN makes wing structures for the likes of Airbus,
Boeing and Lockheed Martin and employs 1,000 workers on the East Cowes site
once occupied by Westland and British Hovercraft Corporation.
“The only effect of Vestas on us is that it will enhance the pool of available
labour,” Jeff Armitage, GKN’s managing director, said. “We like the skills
they have.” He said that the company has vacancies for up to 40 staff.
GKN’s advantage is that it addresses what, for the moment, is a more resilient
corner of the “green” economy: making winglets, or near-vertical wing tip
extensions, for commercial airliners.
These composite structures reduce drag on an aircraft and improve fuel
consumption by about 5 per cent – a valuable saving, given recessionary
pressures on airline revenues. As well as featuring on new aircraft designs,
they can also be “retrofitted” on planes already in service, providing a
huge potential secondary market.
Nor does Mr Armitage claim to have suffered any ill effects from the factory’s
isolation from Britain’s wider aerospace industry, despite the inconvenience
of having to ship all its output by container and ferry to Southampton
before onward delivery.
“We’re a long-cycle, high-value manufacturing operation, where the cost or
interruption caused by a small stretch of water has proved negligible in the
eight years I’ve been here. It’s never affected a customer. In fact, our
overseas customers like coming here – precisely because it’s so different
from everywhere else.”
Neither can the plant claim any commercial advantage from its location. “We
are given no concession by either GKN or our customers for the fact that we
are on an island,” Mr Armitage said. “We have to be world-competitive.”
It is the same story at RF Engines, a nine-year-old start-up on the edge of
Newport, which designs semicon-ductors for digital signal processing, mostly
for defence and commercial satellite applications.
The company, which employs 26 staff, is part of a cluster of electronics
businesses centred on nearby BAE Systems Insyte – once Plessey – which
develops radar and surveillance equipment.
John Summers, the chief executive, reckons that an island location works in
RF’s favour, not least in attracting engineers who, having become
disaffected by a commuter lifestyle, have sought a change of scene. “We have
recruited from all points around the M25,” he said.
Equally, the nature of RF’s business – essentially the creation of
intellectual property – does not require physical proximity to its
customers, the likes of Thales, BAE, QinetiQ and LG, of South Korea.
“Ours is a low-volume operation, where our basic product is shipped
electronically,” Mr Summers said. “We put the designs on our website, from
where our customers can download them.”
Graham Biss, chief executive of the Isle of Wight Economic Partnership, which
provides a link between the public and private sectors, believes that there
is a pattern through which the island’s industrial base has evolved to cope
with what he terms the “cost of severance”. “There has been a basic
response,” he said, “which is to focus on high-value goods and services
where the additional cost can be accommodated.”
Others cite the island’s very diversity as its strength. “Vestas accounts for
around 12 per cent of the manufacturing base,” Steve Beynon, chief executive
of Isle of Wight Council, said, “but we also have around 6,000 small
businesses, which provide considerable resilience. That should be grounds
for quiet optimism.”
But it is Mr Beynon’s patch – the public sector – that is the biggest employer
of all: nearly one third of the island’s workforce is tied to government in
one guise or another.
There have been cutbacks, here, too. Pressure on local authority budgets –
lower revenues from planning applications and car parking because of a
retail and construction downturn – has prompted job cuts.
The council has also suffered from free bus fares for the over-60s: the
island’s high proportion of pensioners combined with its allure to
daytrippers from the mainland has left it footing some of the bill.
Yet there is also momentum behind a clutch of public sector projects that
should benefit the private sector, too: £160 million of spending under the
Government’s Building Schools for the Future scheme and a long-over-due £325
million PFI programme of road, pavement and street lighting improvements
spread over 25 years.
Bigger still is the “eco-island” initiative, under which the Isle of Wight
hopes to achieve the lowest carbon footprint in England by 2020.
Whether or not that objective can be met without wind farms – or, for that
matter, wind turbine makers – is a moot point.
Orders, orders everywhere
Company report: South Boats
South Boats is having no trouble staying afloat – if anything, business is
rather too buoyant. The Cowes-based company, the biggest boatbuilder on the
island, produces aluminium and glass fibre catamarans that are used as
workboats by divers and fishermen, but its biggest fillip, since founding 11
years ago, has come from the renewable energy boom. The speed and stability
provided by its 20-metre twin-hulled designs has made them ideal vessels to
ferry engineers and supplies to offshore wind farms. Customers include E.ON
and npower.
Yet limited space at South Boat’s existing site on the Medina River has meant
that it has had to transfer some production to an affiliated yard in Buckie,
on the East Coast of Scotland, more than 600 miles away. It is also
contemplating a move to a larger site further upriver, in Cowes.
The consolation is that the company’s order book remains reassuringly full,
comfortably more than twice annual turnover. The only obvious side-effect of
recession, according to Clive Jeffrey, South Boats’ owner, is that
difficulty in obtaining big-ticket funding for capital projects has meant
that some customers are splitting their orders into smaller lots.
The company’s other niche is a contract to repair Severn Class lifeboats for
the RNLI – a business that, in the event that renewable energy spending
turns down, should provide the ultimate port in a storm.
Rugged is the watchword as flying Islander still goes strong
Company report: Britten-Norman
Few exports from the Isle of Wight can end up in as many far-flung locations
as the Britten-Norman Islander. The propeller-driven aircraft, dubbed the
Land Rover of the skies, was designed in the 1960s for short take-off and
landing on rough ground. By the company’s estimation, about two thirds of
the 1,300 Islanders built are still in service and can be found in about 170
countries.
B-N, which employs 200 staff and is based in Bembridge, has proved as rugged
as its product. Once owned by Fairey, it was bought out of administration
nine years ago and is run by William Hynett, a former Fleet Air Arm pilot.
That background cannot have hurt B-N in developing stronger links with the
military, which, through the Defender, a variant of the Islander, accounts
for about half of sales. The civil side is also holding up well, helped by
the fact that B-N refurbishes older aircraft, making the planes particularly
cost-effective to keep in service.
B-N is also unusual in that it plans to bring manufacturing back to the UK
from overseas. For the past 40 years, Islander airframes have been made in
Romania and the aircraft assembled in Bembridge. Partly because of rising
costs in Eastern Europe, it is considering bringing fabrication to the
island and transferring the final fit-out to the mainland.
The only drawback is that half-finished Islanders would leave the island
rather ignominiously, by ferry, rather than by flight.
