Can Foreign Investment Give Future Prosperity? the Recent Mothballing of the Indian-Owned Teesside Cast Products Plant in Redcar Has Raised Questions over the Wisdom of Getting into Bed with Foreign Allies. Should We See Them as Long-Term Partners or One Night Stands? Report by Jez Davison and Sue Scott
Byline: Jez Davison ; Sue Scott
IN 2007 Teesside rejoiced when Indian powerhouse Tata Group became the new owner of steel giant Corus.
The move was meant to give financial security to the Anglo-Dutch company and preserve a proud steel-making tradition stretching back 150 years on Teesside. Three years on and the mood has switched from euphoria to recrimination amid accusations of betrayal, boardroom brinkmanship and political subterfuge.
Last month the Teesside Cast Products (TCP) Redcar plant was mothballed with the loss of 1,600 jobs -and thousands more set to melt away through the steel supply chain.
The overriding feeling on Teesside is that an Indian ally that profited handsomely from TCP has sold them down the river.
Middlesbrough businessman Trevor Arnold - who helped Thornaby's K Home International engineer a sizeable presence in cash-rich Dubai and Abu Dhabi before moving on to Balfour Beatty and is now partner in Billingham-based Simpson Coulson and Lees - lamented that Tees Valley could no longer control its future because most of its basic industries were now foreign-owned.
It's a familiar lament in the process sector, but the workers whose jobs were reborn when Artenius' plastics plant at Wilton was rescued from administration by Korean Lotte's KP Chemicals division don't have a problem with it. And neither should anyone else, says Bob Coxon, chair of the North East Science and Industry Council and the North East Process Industry Cluster, which claims to have pounds 8bn in foreign direct investment projects waiting in the wings.
"What we should remember is that this is an international region and we rely on the fact that we are outward looking and international in our thinking. If we turn that around we are lost," he says.
Although mergers and acquisitions have declined over the past 12 months, figures suggest that overseas wealth has continued to provide a lifeline for companies. In the year to April 2009, the North-east attracted 60 new foreign direct investment projects, generating more than pounds 200m for the local economy.
Nationally, investment from foreign companies in the UK created 815,905 jobs in the decade to 2009, justifying the government's twin pronged approach to rebuilding the economy through aggressive pursuit of export markets while at the same time attracting foreign cash to plough into British kit and ideas. Recent charm offensives have - ironically, given the TCP crisis - focused on India, which is predicting nearly 9% growth this year, having emerged relatively unscathed from recession.
Described by the president of the World Bank as a "rising global economic power", second only to China in its rate of expansion, India is stamping a big footprint on the world -and not just in carbon emissions from its growing industrial base.
Here, it already owns sizeable chunks of the car industry through Tata Motors' somewhat fraught acquisition of luxury marque Jaguar Land Rover, the steel industry in the shape of its Anglo Dutch division Corus, several IT and services firms, including Tees Valley's Respondez, and, of course, Tetley Tea in Eaglescliffe. Only this week, pounds 1bn turnover Hindustan Dorr Oliver Group, a giant engineering procurement and construction company, announced the takeover of well-established Sheffield …
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Publication information: Article title: Can Foreign Investment Give Future Prosperity? the Recent Mothballing of the Indian-Owned Teesside Cast Products Plant in Redcar Has Raised Questions over the Wisdom of Getting into Bed with Foreign Allies. Should We See Them as Long-Term Partners or One Night Stands? Report by Jez Davison and Sue Scott. Contributors: Not available. Newspaper title: Evening Gazette (Middlesbrough, England). Publication date: March 2, 2010. Page number: 6. © 2009 MGN Ltd. COPYRIGHT 2010 Gale Group.
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