Interview with Chris Allen, Director and General Manager of GE Aviation
By: Liz Corlett
31 October 2008
Roughly what proportion of the Island’s manufacturing sector does the aerospace industry represent
The Isle of Man manufacturing sector comprises three main groups - precision engineering, general engineering, and food and drink - which together employ approximately 3, 200 people and produce 11% of the national income, forming the second largest sector behind banking.
The IoM Aerospace Cluster companies lie within the precision engineering sub-group. The member companies employ
approximately 600 people, roughly 19% of the total engaged in the manufacturing sector. All are engaged in high value added activity and so contribute a higher proportion to the national income figures for manufacturing.
Can you broadly explain the objectives of the IoM Aerospace Cluster?
Its vision is to ‘facilitate the promotion, development and coordination of Isle of Man aerospace companies to achieve and sustain an international market leading positions’. It achieves this aim by implementing various initiatives which bring cost, service and capability benefits to the industry.
How much growth do you think we will see in the Island’s manufacturing industry in the next 5-10 years?
Currently, the manufacturing sector is driving for increased value added per employee, so there will be low/modest headcount increases but higher value added per employee. Over the last three years, manufacturing has grown by over 20% in terms of business performance.
What are the challenges to that growth, and what can be done to address those issues?
Most Island manufacturers are competing on the world stage against other countries which potentially have lower labour and operating costs than ourselves. The challenge for manufacturers has two elements: cost competiveness and unique product offering.
Therefore, manufacturers are trying through their respective strategies to capture unique/specialist products and skills focused at the higher value added end of the marketplace, where our labour and island-operating costs represent a small proportion of the final cost of the product, with the result that we can still compete on the global stage.
The Isle of Man Government also recognises the value of manufacturing both to the wealth of the Island and for the vital role it plays in maintaining a diverse economy. To this end, it continues to support manufacturing with relevant aid, be it financial, legislative or service offerings, to ensure that Isle of Man manufacturers have as level a playing field as possible against its competitors.
The Department of Trade and Industry, in particular, works closely with the Aerospace Cluster companies and the IoM Chamber of Commerce Manufacturing Committee to find solutions to issues which threaten the sector’s longevity.
One key area that can affect growth is the availability of manufacturing skills on the Isle of Man. Initiatives are being pursued by the Manufacturing sector (with support from Department of Trade and Industry and Department of Education) to address future skills gaps.
What are the main strengths of the Island which could encourage companies to invest here?
The Isle of Man offers a number of benefits to companies wishing to establish a new base here. There are obvious financial incentives such as generous grant structures, business support initiatives and zero corporation tax. The island
also offers good IT links and a strong supporting infrastructure.
The quality of life is high for employers and employees alike, which, with a high standard of education system and low levels of crime, can be an attractive proposition for building a workforce. Ease of access to government is a further benefit, not enjoyed by businesses elsewhere, which creates the opportunity to manage legislative, competitive and compliance issues more readily
There are downsides to being based on the Island but those who align their products, services and strategy with the benefits on offer should and will be able to flourish.
How well do you think the Island’s manufacturing/engineering sectors will withstand the current climate of recession?
The manufacturing sector has a long heritage on the Island, with many businesses established here for over 50 years. Many have seen cyclic swings in the economy and their own fortunes. Manufacturing has developed strategies to beat off global competition and secure ongoing prosperity. The economic climate is another variable in the playing field that drives the need to adapt for survival.
History has shown that there are always winners and losers in any sector but manufacturing is a key element to the economic diversity which is so important to Government strategy that loss of manufacturing on the Isle of Man should not be seen as a real prospect.