View from the top: Interview with Andrew Reynolds Smith of GKN
Can UK manufacturing rebalance the economy? Can the skills gap be closed? And, more importantly, how? Paul Fanning asks Andrew Reynolds Smith of GKN.
Few could claim to be better placed to assess the state of UK manufacturing than Andrew Reynolds Smith. From his position as Divisional Chief Executive of one the UK's most successful manufacturers to his roles as chairman of the CBI Manufacturing Council and member of the Ministerial Advisory Group for Manufacturing, his experience gives him an enviable perspective from which to judge the threats and opportunities that face the sector.
Reynolds Smith's position was not always so exalted, however. He came into engineering via what he calls a 'classic apprenticeship route' with Texas Instruments, something he believes gave him an ideal grounding in both the technical and economic challenges posed by a career as an engineer. "I think it was an outstanding foundation for the way I've developed," he says, "and my career has gone forward because it gave me a real appreciation for the grassroots of manufacturing and technology – the real basics of it."
Given this, Reynolds Smith is naturally keen to encourage young people into manufacturing. "If you look at how you can contribute to the developing needs of the world around you," he says, "then it's clear how much of it is based on manufactured products – engineering and technology making things possible. If you look at things as wide ranging as the challenges we have in reducing CO2 emissions or in terms of feeding an ever increasing population, then it's clear that the solutions are going to lie in engineering and manufactured products."
Despite this, there is still a severe skills shortage, something Reynolds Smith ascribes in large part to outmoded perceptions of the industry and a failure to create a coherent message about the sector. "There's a role to be played here by manufacturers and engineers themselves in terms of the way they present manufacturing," he says. "But I also think there's a need for there to be a clear vision on a national level that says engineering and manufacturing lie at the heart of a balanced economy." The desire for a balanced economy has been expressed by all shades of Government for some time, but asked to define what he understands it to mean in terms of percentages, Reynolds Smith prefers to look at the bigger picture. "There are endless arguments around how large a percentage of GDP manufacturing should represent," he says, "but what is absolutely crystal clear to me is that today it is simply too small."
His roles with the CBI and the Ministerial Advisory Group give Reynolds Smith access to the higher echelons of power, but he is keen to state that he does not believe that this is solely a problem for Government. "I think it's very easy to say 'the Government needs to solve this problem'," he says, "but manufacturers are smart. If you look at the level of resilience during difficult times – particularly over the last couple of years – it's clear that our manufacturing sector has remained strong ... so manufacturers aren't sitting there asking for someone else to solve their problems."
Where he believes Government does have a vital part to play is in creating an environment conducive to long term manufacturing success. "The role that Government needs to play is in setting the vision and ambition for the shape of engineering and manufacturing as part of the economy." To achieve this, he advocates an approach based on more centralised support for manufacturing, rather than the localised approach previously represented by Regional Development Agencies. "I think it's less about central command and control and more about a centralised approach that brings to bear a greater level of national resources than a more localised approach. I think a good example is the composites strategy, where it was clearly established that we want the UK to be a world leader initially in aerospace composites ... Creating that vision has allowed a number of good decisions to flow."
The recession, of course, had a massive impact on all levels of industry, with GKN being no exception. However, the company has posted a pre tax profit of £175million for the six months to June this year, a success Reynolds Smith claims has been based on a clear strategy. He says: "We had a very clear focus for the year to ensure that we would work on the basics of the business. We would improve them to ensure that, as we came through the difficult recessionary period and the markets recovered, the underlying quality of the business was better. So a lot of work went into the operational structure and into the way that we develop our technical capabilities and particularly not taking our eye off the need to continually increase business wins.
"Our aim as a business is to ensure that we're ahead of the markets we serve. One way to do that is to be the best operationally, but companies also have to be differentiated technically by having the best products and processes. I think that understanding of technical differentiation and the value that it brings insulates you to some extent from the market and the competitive environment."
This emphasis on the importance of technical differentiation by the processes employed is exemplified, Reynolds Smith believes, by the composite wing spar that GKN is currently developing for the Airbus A350 programme. He says: "There's a great example of a product that is lightweight and very high performance and which meets the developing needs of fuel efficient aircraft of the future. But the key to it is how you make it: the automatic tape-laying that ensures absolute repeatability and quality in the volumes that are needed, for instance. I think that's a very good example of the capability that's now being developed in the UK that can make a difference."
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