Rolls Royce earnings are up
British based power systems giant Rolls Royce (RR)
today reported better-than-expected earnings for 2010 with strong demand from
emerging economies offsetting a more modest recovery in its traditional
According to RR, the growing middle class in several
emerging economies is driving demand growth for travel and energy at twice the
growth rate of such countries' GDP.
And pretax profit beat analysts' expectations,
climbing 4% to £955 million, up from £915 million. Revenue rose by 6% to £11.08
billion, up from £10.41 billion. RR upped its final dividend by 6.7% to 9.6p,
which together with the 6.4p already paid makes a total dividend of 16p, up
from 15p a year earlier.
But, as noted in yesterday's blog, the firm is
vulnerable to exchange rate shifts with engines priced in dollars. While the
firm manages this foreign-exchange risk through its long-term hedging
programme, this still leaves the firm's bottom line vulnerable to sharp
Not surprisingly, net profit fell to £539 million from
£2.22 billion, reflecting what's called a 'mark-to-market adjustment' caused by
the spot revaluation of various financial instruments at the end of 2010.
The firm's order book rose to £59.2 billion, up from
£58.3 billion a year earlier. That includes some 5,100 civil aero engines,
equivalent to over 35% of today's operating fleet, which has been delivered
over a quarter of a century.
While demand for air travel and freight was rising,
the pace of recovery varied by engine programme, customer and region, the firms
said, with future trends uncertain given the macroeconomic climate and defence
cuts in some countries
Office market continues to recover
market made a steady recovery during 2010, according to new research.
Rents in Birmingham went
up by five per cent last year – a big improvement on 2009 when they declined by
15 per cent – according to Cushman & Wakefields Office Space Across the
World 2011 report,
The city is now
ranked equal fourth in the UK when it comes to prime office rental levels. The
survey reveals that while other cities also improved their performance, the
picture is by no means uniform.
The survey suggests
that the UK office market is becoming increasingly polarised. After recording
the largest rental declines in 2009, London saw a sharp bounce-back in values
in 2010 with increases of 25 per cent or more in the West End and City of
London. However, some cities outside London haven’t performed as strongly.
the largest regional fall in rent – a decrease of 13 per cent.
London held its top
spot as the most expensive office location in Europe. The West-End sub-market
saw a 27 per cent leap in rents, maintaining its position as the second most
expensive office location in the world, following a 25 per cent decline in
2009. The City of London experienced a similar uplift (25 per cent), bouncing
back from a 16 per cent drop the previous year.
As well as
Birmingham, another office market to show an increase in rents was Glasgow (11
per cent), which saw a -8 per cent drop in 2009. As the recovery takes hold,
demand for office space from corporates is likely to increase and reduce the
supply of space. Office rents were stable in Manchester, as they were the
Scott Rutherford, head of Cushman & Wakefield’s Birmingham office in London, said: “Birmingham has bounced-back from where it was in 2009, and has regained its position as one of the most popular city for businesses to locate in outside of London.
“That said, we are currently in a situation where we have an over supply of quality space in the city, although it will only take one or two deals to turn this around. ”
Globally, several office markets around the world experienced sharp increases in rent. After recording the largest rental declines in 2009, Asia saw a sharp bounce-back in values in 2010 with rents in Hong Kong rising by 51 per cent.
There was a huge rental boost in Brazil, reflecting the fast recovery of its economy. Rio de Janeiro knocked New York off the top spot in the Americas – the first South American location to do so.
Barrie David from Cushman & Wakefield said: “Like the impact of rising food and commodity prices, the higher cost of office accommodation is increasingly a global factor for businesses to consider. However, it is not just a matter of rental growth being pursued by landlords.
“Tenants also face a cocktail of rising occupancy costs due to inflation-fuelled service charges as well as governmental action pushing up taxation costs in some markets.
“With these pressures likely to continue until at least the first half of 2011, we expect to see a further increase in occupancy costs.”
Alumet raises charity money
Warwickshire-based specialist façade contractor Alumet raised a total of £2,185 for Motor Neurone Disease Association through a number of fundraising events during 2010.
Managing director Gary Summers and sales director Dean Walton presented the cheque to MNDA’s corporate fundraising officer, Ben Sharpe after raising the money throughout the previous year.
Mr Sharpe said: “I would like to thank everyone at the Alumet group for all their support throughout 2010 and for the wonderful fundraising total that they achieved.
“The £2,185 will ensure that we can continue to provide essential support for people with Motor Neurone Disease.”
The company chose MNDA as their nominated charity after a friend of the company, Simon Adams was diagnosed with the disease.
Mr Summers said “We are very pleased to present our fundraising total to MNDA.”
Super-car production increased
A Coventry firm is creating 40 new skilled jobs as it ramps up production of its new “supercar”.
CPP, which is producing the Spyker C8 Aileron, is bringing in new staff to work on the car and on other projects it has underway.
The first customer model is set to roll off the production line this spring – destined for the export market.
CPP managing director Brendan O’Toole said the supercar was a “landmark project” for the city of Coventry.
“That, along with a range of other exciting projects we are currently working on, means we need further staff,” he said.
“I know there is the skills set in the area because of Coventry’s, Warwickshire’s and the wider West Midlands’ automotive and manufacturing heritage.
“We could go outside the region for staff but I would much prefer to tap into the knowledge and skills that are already here.”
CPP had been producing body panels for Spyker for more than a decade before the decision was made to move full production of the new Spyker C8 Aileron from the Netherlands to the city in 2010.
Several Spykers – with bodies produced at CPP – are now in the Coventry Transport Museum on general display and also in the Le Mans exhibition.
Mr O’Toole added: “The new Spyker C8 Aileron has attracted a great deal of interest and excitement in the region – and rightly so.
“It is bringing renewed confidence to Coventry and to manufacturing and that is very pleasing to see and we are delighted to be part of that.
Profits rise at National Express
Transport group National Express has revealed a 38 per cent rise profits – despite sales dipping by more than a fifth.
Edgbaston-based National Express (NEX) has revealed pre-tax profits of £160.5 million for the 2010 financial year.
The group said it would restore the dividend with a proposed final payout of six pence on the back of the rise.
Overall, group revenue fell by 22 per cent to £2.13 pounds while the underlying profit margin rose to 9.6 per cent from 5.9 per cent.
Chief executive Dean Finch said: “This is a renewed company. Our much improved financial performance provides a platform to drive further growth, continue targeted investment and restore a dividend. With a clear focus on our strategy we are confident in the year ahead.”
Metaswitch moves to Midlands
to West Midlands in search of skills
A technology firm has
moved to the West Midlands in a bid to take advantage of skilled workers in the
Metaswitch, which has
its head office in north London, has opened a new product development office at
the University of Warwick Science Park’s Business Innovation Centre.
The move to Binley is
part of the company’s ambitious expansion plans and bosses branded the city
‘ideal’ due to its central location.
carrier systems and software to a customer base which includes AT&T, BT,
Cisco, Ericcson and Microsoft and, for the past seven years, has featured in
the top 15 of the Sunday Times 100 Best Companies to Work For.
John Palombo, senior
vice president of international development at Metaswitch Networks, said he was
pleased to have found a base which met the firm’s requirements.
He added: “When
Ericsson announced its withdrawal of R&D from Ansty Park, Metaswitch saw
the opportunity to recruit an experienced team to further its international
“As a company we
already manufacture and develop telecommunications equipment for international
markets and this new office helps us to accelerate those plans. We see our move
to Binley helping us access a pool of undergraduate talent for intern roles and
graduates/post graduates for permanent positions – we have a lot to offer as one
of the most exciting UK companies around.”
With the new Coventry
office, Metaswitch now has four offices across the country as well as three
sites in the United States.
It was founded in
1981 and now employs around 600 people worldwide.
Range Rover demand rises
Waiting times for
luxury Range Rovers have soared to up to four months as customers flock to sign
up for custom-built versions of the Solihull-built vehicle.??Average
delivery times for the jewel in Land Rover’s product range has increased by six
weeks in just 12 months as demand continues to grow worldwide.
Range Rovers, which
sell for between £68,945 and £85,695, are increasingly popular with drivers
prepared to wait for months for bespoke versions of the luxury vehicle.
Land Rover UK PR
Manager Lucy Reynolds said: “The current waiting time on Range Rover is
approximately three to four months, about four to six weeks longer than it was
“The increase is due
to strong demand for Range Rovers, both in the UK and globally. It’s mainly
driven by a good customer reaction to our new 11 Model Year product and, in
relevant markets, the new 4.4 diesel launched towards the end of last year.
are bespoke products and drivers want personalised vehicles. Motorists walk
into a dealer and say they want certain seats, stereos, engines and so on.
manufacturer builds the majority of cars to order. Our higher end products in
particular offer customers increased options and opportunities to create a more
“We try to limit the
amount of cars built for stock.”
Range Rover sales
have played a key role in transforming Jaguar Land Rover’s fortunes, helping
turn losses of tens of millions of pounds in 2009 into huge profits last year.
announced a record net quarterly profit of £275 million for the three months to
December 31 last year, putting the Midlands biggest manufacturer on course for
a £1 billion profit figure over a 12-month period.
JLR has enjoyed a
particularly lucrative upsurge in sales in China.
Budget hotel Travelodge thrives
Tough economic conditions helped Travelodge enjoy a strong year during 2010 as the group benefited from budget-conscious consumers.
The hotel chain, which offers rooms from just £19 a night, had a record 13 million customers stay with it during the year - 12% more than in 2009.
It also continued its expansion programme, opening a further 70 hotels during the course of the year.
The group credited the recession with enabling it to target sites that would have been beyond its reach before the economic downturn, while it also completed a deal with pubs group Mitchells and Butlers under which it acquired 52 of its Innkeeper’s Lodges.
The acquisitions saw the group continue its strategy of shifting away from roadside locations to city centre ones.
Only a fifth of its rooms are now on the edge of motorways and major roads, with 18% in London and the remaining 62% in other major towns and cities.
The group has already opened four new hotels this year, including one in Cardiff city centre, while it is building a further 36 hotels.
The latest openings mean it now operates 463 hotels, including 10 in Ireland and three in Spain, and it said it remained “well on track” to reach its target of having more than 1,100 hotels and 100,000 rooms by 2025.
Overall, sales in 2010 increased by 13% to 7.2 million rooms, with like-for-like growth up 6%, driven by an 11% rise in London.
Guy Parsons, chief executive of Travelodge, said: “Despite the tough climate in 2010, we have delivered a robust performance whilst continuing our strategic UK growth programme and demonstrating Travelodge’s continued strong recovery.
“The year has started in line with management’s expectations, though clearly there has been an impact on the consumer from the recent VAT increase and the fuel and energy price increases.”
New MG6 Saloon unveiled
New MG6 saloon unveiled by MG Motor UK at Longbridge
Longbridge’s Chinese owners have taken the wraps off a new £17,000 to £20,000 saloon car as the rebirth of the Birmingham car factory goes into over drive.
Shanghai Automotive-owned MG Motor UK unveiled a new five-seater MG6 saloon at Longbridge.
It will go on sale in the UK in July.
The saloon version will be the second volume car produced at Longbridge as full car manufacturing finally gets under way again at the factory for the first time in six years.
Pre-production work of the MG6 sports hatchback, Longbridge’s first all new MG for 15 years, is already under way in advance of a full launch in the spring.
Meanwhile the new saloon will supplement the MG6 and sell for between £17,000 to £20,000.
Full production targets have not been released but the car firm is looking to produce several thousand vehicles when the assembly lines are up and running.
A total of 39 UK dealers are already in place whilst MG Motor UK has also unveiled a new badge and logo in line with the new production plans.
Guy Jones, marketing director, said: “We have been building a little part of a new global automotive business here in Birmingham.
“We have the backing of the largest manufacturer in the world’s largest market.”
He said SAIC had already pumped in £45 million worth of capital investment into Longbridge along with hundreds of millions of pounds in new product development.
“The strategy at MG can be summed up in one word and that is quality. Part of the magic of MG is the great love people have for the brand.”
The firm’s PR manager, Doug Wallis, said: “These are pre-productions cars but its pretty much the finished article.”
The launch of two new vehicles will mark the restart of car production at Longbridge for the first time since MG Rover closed in 2005 with the loss of 6,500 jobs.
Nanjing bought the assets of MG Rover for £53 million in July 2005 and were later taken over by the Shanghai Automotive Industry Corporation.
High speed rail will benefit many
Building the London to Birmingham HS2 high-speed rail line will benefit towns and cities across southern England, according to a report.
A number of areas will have faster and more frequent services thanks to the new capacity that HS2 will free up, said Greengauge 21, a group set up to develop the case for high-speed lines.
Places which will get improved services include Lichfield, Tamworth, Nuneaton, Rugby, Northampton, Milton Keynes and Watford, said Greengauge 21 director Jim Steer.
Due to eventually run north of Birmingham, HS2 is a key part of the Government's transport strategy but is bitterly opposed by some groups as it passes through beauty spots and is not seen as offering value for money.
Mr Steer said: "Services which simply cannot be fitted on today's network will become viable once HS2 is built. Non-stopping inter-city services from the North of England and the Midlands to London will transfer across to HS2, making space on the West Coast Main Line for more freight on rail and more local services."
He added that rail services to a number of destinations would be "faster, more frequent and with much better connections, with peak-period travel restrictions ending".
Mr Steer went on: "It also becomes possible to operate new connecting and cross-country services that would need to travel short distances on the West Coast Main Line. So, East West Rail - the project long sought-after between Oxford and Milton Keynes - becomes possible.
"The case for the Croxley Link - near Watford - will be much improved because of the transformed service at Watford Junction."
Mr Steer said HS2 could also allow through-services from London to Wrexham and Shrewsbury again, while West Midlands services could be expanded.
Transport Secretary Philip Hammond said: "This is a welcome contribution to the debate on high-speed rail (HSR). We believe one of the key strengths of our HSR proposal is the benefits it could have for passengers on the existing rail network.
"We are already investing in more carriages to ease overcrowding for commuters, but a new high-speed line could offer them a transformational increase in capacity on existing lines."
Barclay's cut bonuses
Banking giant Barclays said that it has reduced the bonuses paid to its staff, despite pre-tax profits rising by 32% to £6.1 billion in 2010.
It announced a new compensation system following its Project Merlin deal with the Government which will see it pay 7% less in performance awards than last year.
At its investment banking arm Barclays Capital, which saw pre-tax profits excluding own credit increase by 2% to £4.4 billion, the bonus pool will be 12% lower than last year.
Despite the reduction in the bonus pool, overall remuneration to staff increased 20% to £11.9 billion. Total performance-related pay, including bonuses which had been deferred from previous years, increased by 25% to £3.5 billion.
Barclays also announced a raft of new measures which will see senior staff bonuses deferred over three years and will only be paid if the bank meets its capital requirements under the Basel agreement.
The number of staff who will see 60% of their pay deferred has also been significantly expanded beyond the requirements of the FSA’s remuneration code, the company added.
Chief executive Bob Diamond is due to receive an expected package of more than £9 million in pay and bonuses but details are unlikely to be revealed until Barclays releases its annual report next month.
Barclays said its decision to reduce 2010 bonuses was influenced by its recent Project Merlin agreement with the Government which saw the big four banks agree to pay less in bonuses than last year and lend more to small businesses.
Mr Diamond said: “We are committed to demonstrating that we are both responsible in our compensation decisions and practices and that we take our regulatory obligations and UK Government commitments seriously.
“In particular, our overall performance awards in 2010 have been directly influenced by the commitments that we have made under Project Merlin.
“In reaching our final decisions, we have had to balance carefully our obligations with our need to ensure that our decisions are commercial in a highly competitive global environment.”
Len McCluskey, general secretary of the Unite union, said: “The Barclays decision to award these mammoth bonuses for their top bankers is shameful.
“These bonuses undermine any claim by the Government that there is fair pay in banking. Those at the top of the big banks are paid more then 100 times the pay of those workers at the lowest level.
“These excessive rewards widen the gap between those at the top and ordinary workers struggling to pay their bills.
“As Barclays reports higher-than-expected profits, why does this Conservative-led coalition Government continue to ignore the devastation the banks have brought to this country and let the bosses continue to line their pockets with the money they have robbed from the taxpayer?
“While communities across the country face the closure of their local swimming baths, medical centres and Sure Start centres, these bosses continue to enjoy their lavish lifestyles.”
The ratio of pay to income at BarCap rose to 43% from 33% the previous year, suggesting that pay had increased to compensate for the 12% reduction in bonuses.
But Mr Diamond denied that overall remuneration at BarCap had increased, saying the figure was affected by an increase in the number of staff and by pay deferred from previous years.
BarCap, which accounts for the bulk of the bank’s profits, had a strong final quarter of 2010, despite City expectations that the final quarter would be disappointing following poor results from American investment banks.
The investment arm saw revenues rise to £3.4 billion in the final quarter, a 20% increase on the previous three months, as bad debt reduced and it benefited from the global economic recovery.
The strong final quarter helped BarCap total income for 2010 increase 17% to £13.6 billion.
In UK retail banking, profits increased 39% to £989 million after a 21% fall in bad debt charges to £819 million was partially offset by an 11% increase in operating expenses to £2.8 billion, partly due to higher pension costs.
Lower bad debt charges also benefited Barclaycard, which increased profits by 9% to £791 million in the year.
Cadbury search for 100 new workers
Cadbury is set to start recruiting for 100 new roles at Bournville as part of US-owner Kraft’s plans for the firm.
Kraft announced two job creation programmes a year on from its controversial £11.7 billion hostile takeover of Cadbury, which triggered waves of protests from unions and politicians.
Cadbury is recruiting 50 new “expert position” jobs at its research and development arm at Bournville while another 50 jobs are on the way to the factory’s customer service and logistics department from April.
The firm is laying on an open evening for the new customer service jobs from 5 to 8pm next Thursday, February 17, at Bournville.
Customer services director Phil Hartshorne said: “We’re building a new team here at Bournville and these roles will offer opportunities to progress within the business.
“The jobs are in customer service and finance administration and it’s another vote of confidence in Bournville following the decision to base the global chocolate centre of excellence here.”
Meanwhile, the 50 new “expert” roles will be based in the research and development arm following Kraft’s decision to make the Birmingham factory the heart of its global chocolate R&D.
Last year Kraft unveiled plans to create a worldwide ‘Centre of Excellence’ at Bournville, to drive new product development, new technologies and best practices for brands such as Dairy Milk, Flake and Creme Egg.
Nick Bunker, president of Kraft Foods UK and Ireland, said: “We are extremely pleased with our performance in our first year operating as a combined company in the UK.
“We are investing significantly in Research and Development, in our manufacturing plants and our iconic UK brands such as Cadbury Dairy Milk, Kenco, Philadelphia and Dairylea continue to perform well under the stewardship of Kraft Foods.”
Pressure for National Express
Shareholders exert pressure for National Express sale
Birmingham-based National Express is facing pressure to put itself up for sale in a move that could lead to a tie-up with rival Stagecoach, according to reports.
Elliott Management, an American hedge fund that owns 16 per cent of the bus, rail and coach operator, informed the National Express board of its views two weeks ago but was told there were no immediate plans for a tie-up.
As well as Stagecoach, other potential buyers could include French state-backed transport group SNCF.
Under new chief executive Dean Finch, National Express has turned around its fortunes since being forced to return its loss-making East Coast rail franchise to the Government in 2009.
At the same time it had to fend off opportunistic bids from several rivals, including Stagecoach and FirstGroup.
It has seen its market value improve to £1.3 billion after a period in which it has restructured its bus operations and secured a two-year extension on its C2C rail franchise covering the Southend and Tilbury commuter routes.
The Spanish Cosmen family - the company’s biggest shareholder with 17 per cent - attempted to break up the National Express business two years ago but is now said to be supportive of the current strategy.
Export Business Boost
West Midlands aerospace companies seeking to boost their export business are being invited to take advantage of an opportunity to meet top international buyers.
UK Trade & Investment (UKTI) is organising Aerospace Opportunities 2011, a Meet the Buyer event taking place at CentreLink House, Delcam, Birmingham next month to encourage business.
The event takes place on Wednesday March 2 from 9am to 5pm.
Lord Green, Minister for Trade and Investment, will be attending the event as part of his first official visit to the West Midlands.
More than 20 buyers from across the world will be at the event to do business with West Midlands companies.
UKTI’s international cluster co-ordinator for aerospace in the West Midlands, Matt Clive, said: “This is the perfect opportunity for aerospace companies from the region to meet top quality international buyers face to face.
“Holding the Meet the Buyer event in Birmingham means they don’t have to travel overseas, saving them a huge amount of time and money, and we will be on hand throughout to advise and assist them.
“Any company in this sector is welcome to join the event and I’d urge them to register their interest as soon as possible.”
The event is being run in partnership with the Midlands Aerospace Alliance and the Enterprise Europe Network.
There is still time for West Midlands companies to join Aerospace Opportunities 2011. For further information and to register, please visit the website www.aerospaceopportunities2011.co.uk
Jaguar Land Rover create 1000 jobs
Jaguar Land Rover is set to create 1,000 engineering jobs as it takes another step towards becoming a billion pound company.
Jaguar Land Rover looking for 1,000 engineers in the West Midlands
The company has already posted half year profits of £493million and with business booming around the globe it is set to post another strong set of quarterly results on Friday.
Speaking at the launch of a new low carbon vehicle lab at Warwick manufacturing Group at Warwick University, JLR CEO Ralf Speth said the company was looking to grow production in the coming year from 232,000 vehicles to more than 300,000 - and that meant growing the workforce. “We are currently looking for the right guys at the moment,” he said.
Help needed for exporters
The Government has been urged to do more to help
firms sell goods overseas after a study found a lack of exporting culture among
The British Chambers of Commerce (BCC) said a
survey of 8,000 companies showed that 5,500 did not export anything, partly
because they thought their products were unsuitable or because they had enough
business in the UK.
But one in 10 said they lacked resources to help
them export goods while a similar number believed they would need help finding
Among exporting companies, 15% said they still
faced difficulties accessing finance
and insurance, while many said they would welcome more Government support.
The survey was published ahead of a White Paper
today on trade, which the BCC described as “highly anticipated”.
David Frost, director general of the BCC, said:
“Our survey reveals some uncomfortable truths for British business and for the
Government about our ability to export.
“Too many of our companies lack an exporting
culture, even though they produce high-quality goods and services. We cannot
rebalance Britain’s economy when so many companies say they’re simply not ready
or able to take their products overseas.
“Despite its rhetoric, the Government is not yet
doing enough to encourage and incentivise exporting. The UK doesn’t provide
enough help to small and medium-sized exporters, whereas governments in Canada,
Germany, France and the USA take more steps to make sure their companies
“The Government’s trade White Paper must include
some radical moves to get Britain exporting. Unless we see more help for small
companies seeking trade finance, which the BCC has insisted on for three years
now, the UK will continue to see hundreds of millions of pounds of lost
“At the same time, ministers must also take this
opportunity to commit to greater trade promotion, which is as essential to
Britain’s economy as the NHS.”
Bank levy charges
Bank levy increased to £2.5bn
An increase in the bank levy has been brought forward, with the Treasury hitting bankers for an extra £800m this year to ensure they 'make a fair contribution to closing the deficit'. Making the levy on banks permanent, raising an extra £2.5bn every year.
Chancellor George Osborne declared that the lower tax rate intended for the first year no longer applied, with banks returning to health faster than predicted. The Chancellor said he wanted to make sure they 'make a fair contribution to closing the deficit'.
The Chancellor said: 'the measure we have just announced means there's an extra £800m coming in to the Treasury this year. What I have announced is a permanent tax on banks, every year banks will contribute £2.5bn net.'
Critics have said that compared with other measures that have been tough on finances of individuals and small businesses; the levy has been too soft.
The Chancellor confirmed the increase now, before Budget in March, to ensure that banks take the levy into consideration prior to the announcement of pay and bonus deals.
Banks shares barely moved after the announcement, demonstrating that the additional tax is not seen in the City as being significant.
In the hour following the announcement, Barclays slipped 3.2p to 309.55p, with HSBC 0.5p lower at 705.5p, Lloyds down 0.11p to 64.46p, and Royal Bank of Scotland, 0.18p lower at 44.04p.
Meanwhile, ministers are closing a deal that will see banks reveal how much their top staff are paid.
If the agreement goes ahead, each bank will have to publish the pay and bonus of a number of their highest-paid staff outside the boardroom,
However employees outside the boardroom whose salary and bonuses are released would remain anonymous. Last week it emerged Britain's three biggest investment banks were poised to sign off bonus awards of around £5bn.
The Government will say the pay rules as the most transparent in the world as it seeks to close in on City excess.
But critics are likely to say the deal only is not enough, and still more needs to be done.
Government launches new apprenticships
Government launches new apprenticeship drive
The Government is urging employers to help create 100,000 more apprentices by the year 2014, pressing firms to say “you’re hired” to people eager to be trained.
Business Secretary Vince Cable marked the start of Apprenticeship Week by underlining the Government’s commitment to increase the budget for apprenticeships to over £1,400 million in 2011-12.
He urged employers to follow the lead of firms such as British Airways, British Gas, BT, Superdrug, Jaguar Land Rover and Proctor and Gamble, which are offering thousands of places to budding apprentices.
Dr Cable said that investment in training the next generation of highly skilled workers would be key to sustainable economic growth, and called for an end to “outdated values” that have seen vocational learning branded a poor relation to academic study.
“””I want to reinforce the message to business and young people that apprenticeships are a first-class way to start a career. That is why my department has pledged to work to create some 75,000 additional adult places than those promised by the previous government.
“Some of the most prestigious companies in England - large and small, public and private - employ apprentices and benefit from doing so.
“More than 30 per cent of Rolls-Royce apprentices have progressed to senior management roles within the company, and 80 per cent of those who employ apprentices agree that they make the workplace more productive.
“I’m calling on more businesses to follow this lead.”
Dr Cable launched Apprenticeship Week at BT’s head office in London and will later visit apprentices at HMS Sultan, a training base in Gosport, Portsmouth, to meet apprentices in a range of industries, including engineering for the Royal Navy and Network Rail.
Skills Minister John Hayes announced that greater recognition and status will be given to those who successfully complete their apprenticeships, and made it clear that apprentices can progress to higher stages of learning through the apprenticeships programme, including to university.
“Our ultimate goal remains to see apprentices achieve equivalent esteem and status with university graduates, so that a place on an apprenticeship scheme is as valued as one at a university,” he said.
British Airways announced it will expand its engineering apprenticeship scheme, with the inclusion of a fourth partner in Uxbridge College.
The airline said it will be looking for 120 students, up from 90 students in 2010, recruiting them from Kingston College, Brooklands College, Farnborough College of Technology and Uxbridge College.
Garry Copeland, BA’s director of engineering, said: “We are delighted to be continuing the work we started last year. It is great to have Uxbridge College on board, and the expansion of the scheme shows that we are committed to investing in people, and to bringing the very best talent into BA Engineering.”
Government plans to triple tuition fees to £9,000 a year from 2012 are fuelling an interest in apprenticeships, according to an ICM Omnibus poll commissioned by Pearson Training for National Apprenticeship Week.
More than half of the 1,100 people questioned said the rising cost of higher education has made them think more positively about apprenticeships as a career choice for young people, and amongst 16-18-year-olds this figure was 55 per cent.
Below cost tendering forcing construction firms out of business
Below-cost tendering forcing construction firms out of business
Construction firms are being squeezed by below-cost tendering – leading to a spate of collapses – according to the man at the top of one of the country’s most historic building firms.
Rick Willmott, chief executive of regeneration and support services company Willmott Dixon, said firms in the sector continue to struggle against the “construction recession” – which can linger long after GDP growth has returned elsewhere.
In recent weeks a series of construction companies in the region have called in administrators, and researchers are predicting a prolonged period of job losses in the sector.
Mr Willmott said while Willmott Dixon is shielded by its diverse portfolio, conditions remain tough.
He said: “Construction recessions are an unknown for people in other sectors.
“If you look at GDP statistics there has been growth for the last year-and-a-half but the construction sector gets the tail end of the recession.
“At the moment construction is at a very difficult, sensitive stage.”
He added: “The message that I get from third parties is that things are looking better in London and the South East and not so good in the North West and North East.
“Everyone is incredibly busy pricing work – they have never been busier pricing. The private sector has realised that now is an incredibly good time to buy construction activity because the price has changed and is now perhaps 15 to 20 per cent cheaper than it was two-and-a-half years ago,
“There is more competition and less opportunity and an awful lot of below-cost tendering going on.
“That is a difficult downward spiral that someone has to break.”
Mr Willmott is the fifth generation of his family to work at the company founded in 1852 as John Willmott & Sons.
The operation in the West Midlands turns over about £200 million and about £75 million of that goes towards suppliers within a 25-mile radius of the city.
The group, named in third place in the 2009 Sunday Times Green companies list, employs about 1,000 people including in offices in College Road, Kingstanding, and Partons Road, Kings Heath.
Mr Willmott said the company has developed a mixed portfolio to safeguard it against fluctuations in the market – and parts of its operation were performing more strongly than others.
He said: “In general construction we have been successful in ensuring we have a place on regional and national frameworks – the Academy Framework is an example of that – which while the Government has slowed down spending, the ones we have been involved with have gone ahead.
“Had we focused more on the Building Schools For The Future programme then that workload would have disappeared.”
He added: “Other areas that are holding up well are things like local authority housing maintenance where it is a discretionary budget and standards have to be maintained.
“Those budget pots are reasonably robust because housing has to be kept at a standard. However, we have found significant savings in contracts over a five to 10-year period.”
Mr Willmott said the firm’s order book was 70 per cent full for this year and 25 per cent secure for next year.
However, elsewhere in the sector things are not as secure. In the last month alone, Coventry-based GAJ Group, Tipton-based Image Styles, Halesowen firm CPL Interiors and Armoury Demolition and Recycling have all collapsed.
Research from ConstructionSkills published in January predicted a “tough” year for construction with the loss of up to 76,000 jobs before it returns to growth.
It said the industry was expected to contract by one per cent in 2011.
Business leaders warned against breaking up the banks
Business leaders warn against breaking up bank
Business leaders say breaking up Britain’s biggest banks would be a mistake and could hold the sector back from supporting economic growth.
In a stark warning to the Independent Commission on Banking (ICB), which is considering a major overhaul of UK banks, new CBI boss John Cridland said rather than breaking up the big players, banks must be strengthened to play a part in financing a private sector-led recovery.
Mr Cridland, who took over as director general of the CBI last week, stressed the UK risked damaging its position as a global financial centre by acting unilaterally.
He said in the CBI’s submission to the ICB: “Breaking up banks would be a mistake; we need a strong banking system to help support the economy and growth.”
He added: “Improving credit flows and providing relevant financial products to businesses will be critical to drive growth and recovery.
“Financial services in the UK is a world-class sector, accounting for around 10% of total economic output, so we must not jeopardise this position by acting in isolation on reforms.”
The Government-commissioned review by the ICB is looking at whether to break up banks in the wake of the financial crisis and to support competition.
ICB chairman Sir John Vickers said in a speech last month the commission was considering splitting retail and investment banking operations to make banks safer and less at risk of taxpayer bail-outs.
But the CBI said reforms should focus on tightening capital buffer requirements and regulatory supervision rather than a full-scale restructure.
“Businesses value integrated services provided by large universal banks, so breaking up existing banks is not the way forward,” said Mr Cridland.
Its submission argues that large businesses need large, universal banks to support them and provide one-stop shop access to business banking, funding markets and services to reduce foreign exchange and commodity risks.
Large banks can also offer cost advantages through economies of scale that can be passed on to businesses, according to the CBI.
But the business group supported the need for greater competition in the banking sector.
It urged the ICB to look at ways to improve barriers to entry for new players while also promoting greater transparency and making it easier for businesses to switch banks.
While it agreed that lending to businesses needed to improve, the CBI said more diverse forms of non-bank funding should be encouraged, such as through insurance firms and private equity.
On the issue of bonuses, the CBI said the culture within banks needed to be addressed to win back trust.
“Boards need to be sensitive to public concern over the quantum of pay, a task they must juggle with the need to be able to compete for the world’s best talent,” said Mr Cridland.
Midlands Business Success in Turkey
Two West Midlands companies from the environmental technologies sector have won more than £300,000 of business after a visit to Turkey.
International Synergies, of Kings Norton Business Centre, and Black Country Metals, of Lye, secured the deals after a UK Trade & Investment (UKTI) visit to Istanbul and Ankara earlier this month.
International Synergies, which identifies, develops and delivers
industrial ecology-based solutions across all business sectors
worldwide, signed a contract worth £80,000 for industrial symbiosis
consultancy services in Turkey, with the prospect of further work in
Black Country Metals, a trader of ferrous and non-ferrous metals in
global markets, is expecting £250,000 worth of business to come from the
visit in the short term and at least double this within a year.
Peter Mathews CMG, chairman and managing director of Black Country
Metals, said: “Winning this business is great news for us and shows that
there are excellent opportunities in Turkey for West Midlands