British Aerospace Industry: Winners and Losers
July 12, 2012
Dr. Vince Cable captured headlines today when he announced a boost in Government investment for research in the aerospace industry. Dr Cable is quoted in the Times as stating ‘This sector is one of our winners. There is nothing wrong in Government getting behind a sector, a successful industry, a large employer, one with such growth potential’.
Some of the money is going to fund 500 new aeronautical post-graduate university places, but a large slice – some £40m – is apparently to be invested in a Rolls-Royce led low carbon aircraft engine project called Siloet.
Investment in industry is to be welcomed. One can`t help feeling though that this is just the Government jumping on a bandwagon and that the Rolls-Royce led project may not really need the government contribution. This is a company that charged some £463m of R&D expenditure in its 2011 financial statements and capitalised another £93m. With a profit before tax of some £1.1bn after charging the above £463m of R&D it hardly seems to need another £40m from the Government to help fund the project, although no doubt it will be welcomed.
On 10 July the BBC reported the Government announcement that 27 Remploy factories were to close putting 1,471 jobs at risk.
The two stories present a stark contrast, perhaps an unfair one. But whilst the former presents a picture of a government with imagination and willingness to invest, the latter seems like a particularly unimaginative approach to the issue of employment for the disabled.
It would be much better if the government were to encourage positive discrimination by companies towards those organisations in which disabled people are employed. This approach has been adopted by some large companies in Europe, where corporate social responsibility is paid more than the lip service it often receives in the UK.
One large company VINCI S.A. has such a policy and a few extracts from its financial statements are shown below. The UK Government could do more to encourage this sort of attitude from large companies in the UK, particularly those which are as successful as Rolls-Royce.
The first extract from VINCI S.A. reads (page 135):
“Measures to promote the employment and social integration of disabled people The Group’s strategy has two main strands: redeploying staff who become unable to perform their current roles and hiring disabled people.
There is a further strand in France, i.e. increasing the use of companies and non-profit organisations that specifically employ people with disabilities.”
“The strategy of using companies and non-profit organisations that specifically employ disabled people is coordinated by the Group Purchasing Coordination unit. This unit acts on the Group’s strong desire to increase the amount of work subcontracted to these companies and organisations, as discussed on page 145, in chapter 3.3.2 “Managing relations with suppliers and subcontractors”.
“In 2010, €6.1 million of revenue was awarded to companies with workforces made up primarily of employees with disabilities. This represents an increase of 72% in the last two years.”