Examination of Witnesses (Questions 180-189)
AEROSPACE TECHNOLOGY
STEERING GROUP
11 JANUARY 2005
Q180 Mr Hoyle: What you have mentioned
is very important. What are your views on, say, the Joint Strike
Fighter where there is an argument on this joint project that
the transfer of technology is not coming to the UK?
Mr Smith: Technology goes both
ways on the Joint Strike Fighter. We are responsible for the propulsion,
the lift fan system and many other parts. We have programme share
on an international project on the back of that technology. I
doubt very much whether as an industry we would have got programme
share without the technology, or maybe as a supplier only.
Q181 Mr Hoyle: I beg to differ with that.
We do share the propulsion technology but in the frame technology
and other parts we know that that technology is not being shared
and that is why the assembly is not taking place in the UK. There
is a worry that what we envisage being transferred to the UK has
not happened and I am just wondering what your concerns are. Obviously,
Rolls seem to be happy but what about the rest of the sector?
Mr Smith: We do not give them
the IPR and the intellect to know how to make the bits that we
manufacture.
Q182 Mr Hoyle: So you are not transferring
technology either. It is both ways.
Mr Maciver: I no longer have a
company to speak for. I was positioned firmly in mid-Atlantic
when I had so it would have been an interesting reply.
Mr Dopping-Hepenstal: The US has
restrictions on technology transfer for the UK and it is a challenge
for us. We will only address that by tackling it head on in discussions
with the US about getting equality, but we will only get towards
equality if we have a capability that is high enough to warrant
that. We have to reach this competitive position ourselves.
Mr Maciver: There is a major problem.
It is not helpful that there are major barriers to working jointly
with the United States certainly on military projects. As far
as what we are charged with, the National Aerospace Technology
Strategy, it just underlines its importance. There is no easy
way of working with the United States in certain areas. Where
we have strong technology, we can take advantage of the situation
but it makes it even more important that we have a strong technology
base ourselves.
Q183 Mr Clapham: You would see the National
Strategy as reinforcing our position as the smart competitor,
keeping the technological lead here but obviously, in terms of
subsidiaries and outsourcing, the lower end of the technology
is passed on?
Mr Maciver: There is very little
technology passed on when you subcontract low level manufacturing.
The bulk of the technology remains here and that is the bit we
should not surrender, because it is the value creation which ultimately
is what creates employment. That is based on the technology.
Q184 Mr Clapham: There is another aspect
to the technology transfer argument and that is whether it has
an impact on the retention, for example, of experienced, skilled
workers in the UK aerospace industry. Are these threatened at
all by outsourcing?
Mr Maciver: I am not sure I can
quantify it. In the highly skilled work, the complex manufacturing
processes, the assembly and test processes, I personally think
it is unlikely. If the technology is here, these skills tend to
be here as well. Some of the low technology work will undoubtedly
go but that is not critical to the long term success of the industry.
Mr Smith: The academic base is
linked to the real needs of the programme that drives the technology
into a product.
Mr Maciver: You are quite right
in that we are equally reliant. There is no point in having the
technology if you cannot deliver the product and we are dependent
on a highly skilled workforce to deliver the product.
Q185 Mr Clapham: Is there any evidence
that outsourcing the low cost jobs to low cost economies is balanced
by creating higher skilled jobs or more technologically orientated
jobs in the UK?
Mr Maciver: The balance of the
total workforce will change. It is becoming more educated and
more skilled. Is it increasing in absolute terms? I would have
thought not. If the value created increases, that tends to result
in greater employment in the wider sense. I know jobs are important
and if we do not make things there is no point in doing all the
other things, but it is the skill level that is important rather
than the sheer number. We have to be more efficient as well in
how we deliver because there is competition in price. The biggest
determinant is technology but having got through that barrier
you then have to deliver the product on a competitive basis. Will
there be an absolute increase? I would doubt it, but I see no
reason why the value created should not increase; nor any reason
why the employment level should not be at least sustained. It
would be wrong to suggest that there is the opportunity for a
significant increase.
Q186 Chairman: Do you not see an opportunity,
for want of a better expression, for upskilling of those people
whose jobs are being outsourced, because some of them are accidents
of history in the sense that they missed the boat on apprenticeships
and things like that or training schemes before? Do you try and
retain people and actively make up the skill gap?
Mr Smith: Very much so, where
at all possible, but I think we are talking about outsourcing
R&D and outsourcing R&T. We need to be quite careful between
that and outsourcing manufacturing jobs. Our premise is if we
let the R&T go then the R&D, the development programmes,
will follow and even more of the manufacturing jobs will follow
then. Most of the companies have already taken decisions on what
they outsource and the crown jewels are usually retained where
the research and technology has been done and you have a cohesive
skill base there. Clearly, we do try and upskill people all the
time. We work very heavily with the training boards and the RDAs
to make that happen.
Mr Maciver: The industry is very
committed to skills at all levels from the graduate engineer to
the skilled people in plants. We depend on them.
Mr Smith: If we do not have exciting
programmes for engineers to work on, they will vote with their
feet. A few years ago, we had a major exodus of engineers from
my company to the States where their programmes were more exciting.
The same will happen. If we do not maintain the through flow of
demonstrator vehicles, the engineers will not stay here.
Q187 Mr Hoyle: We noticed that within
the report there is no area that covers the future workforce,
in the establishment of the report. It does not say, "This
will happen to the jobs in the UK" or where the future lies.
I wonder if you could tell us what the implementation will mean
for UK aerospace jobs?
Mr Maciver: You are referring
to the original IGT report?
Q188 Mr Hoyle: Yes.
Mr Maciver: It did identify the
fact that skills were seen to be very important. We did not attempt
to forecast the numbers but very broadly we would see the level
of activity being sustained if we maintain the technology. We
would see the mix of the labour force moving towards the highly
skilled end. We have to be very alert. There will be changes in
the skills required. This is not static. We need engineers with
different skills from what we might have needed 20 years ago.
We did, in the original report, make recommendations that we should
be very alert to that and very conscious of the changing skill
needs and to work in partnership with government bodies or whoever
in ensuring that those skills needs are met. We did also recommend
a continuing dialogue with the teaching institution as to the
sort of skills the industry would need for the future. That was
very much in our minds. It may not have come across with sufficient
emphasis but you cannot have technology without skills right across
the board and not just purely the more academic skills. You cannot
validate these technologies and you cannot have practical demonstration
of them without skills at all levels.
Q189 Mr Hoyle: It can be good news as
long as the companies recognise that there is going to have to
be upgrading of skills continuously?
Mr Maciver: I think the companies
recognise it. There are concerns about will the system deliver
the people we need, which I am sure you are very familiar with,
but if there is a will to do it we are sure it can be done.
Chairman: Thank you very much. If there
is anything else, we will get back to you but you have been very
comprehensive in your replies. We are very grateful.
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