General Sports, blackhawk mines corp

Blackhawk Mines Corp - Victoria line

1/22/13 in General Sports   |   cherrydonney33   |   0 respect

TO MAKE an impeller—the fan-like part of the pumps that push ore-slurry down a pipeline—the folk at Weir’s foundry in Todmorden, West Yorkshire, begin with a polystyrene cast coated in ceramic paint. They place it in a flask tightly packed with sand, into which a molten alloy is poured. The polystyrene burns away, leaving a metal copy. A 15-tonne impeller takes just a minute to cast but needs 11 days to cool. Metal ores are hard on machinery, so every three weeks one of these giant metal parts must be shipped from Britain to a copper mine in Chile. The worn impeller is sold for scrap.
 
Some 200 miles to the south, in Bushey, a suburb of London, another British firm is manufacturing high-tech tools for export. Smiths Detection, part of Smiths Group, an industrial mini-conglomerate, specialises in devices that can detect toxic gases in seconds, including hand-held ones that run on AA batteries. The American military has issued more than 57,000 of them.
 
 
Smiths and Weir are remarkable survivors: the only engineering firms in the FTSE100 list of leading companies that were founded in mid-Victorian Britain and are still independent. Politicians worry about the decline of engineering and fret that the country sells too few goods beyond stagnant Europe. The factories at Todmorden and Bushey show that some firms can do both, profitably. Overall sales at Smiths have increased by 40% since 2007, whereas at Weir they have doubled. Yet the firms also show how hard it has become to manage the tension between globalisation and British heritage.
 
“Our market has evolved,” says Keith Cochrane, Weir’s boss, in his Glasgow office. “140 years ago it was shipyards; now it’s oil, gas and power.” The firm was set up in 1871 by two brothers. They soon had a factory in Cathcart, on the outskirts of Glasgow, making boiler pumps for steamships and devices for purifying salt water. As shipbuilding boomed, so did the firm. By 1914 G&J Weir was one of the world’s largest manufacturers.
 
Companies that rise on the coat-tails of a burgeoning industry usually follow it into decline. Weir was fortunate. As shipbuilding began to collapse, it won an landmark order from the then British Petroleum (now BP) for a high-pressure pump for use in the newly discovered Forties oilfield. Orders from other oilfields followed. As North Sea oil peaked in the 1990s, the company began to snap up firms serving the mining industries in the Americas, Australia and, more recently, Africa.
 
Smiths has reinvented itself even more radically. Founded in 1851 as a clockmaker, it moved into instruments for car dashboards. In the heyday of the British car industry, Smiths and Lucas, a Birmingham-based firm, carved up the supply of most car parts between them. Smiths sold its car-parts business to Lucas in 1983, as the British car industry imploded. By then it had developed sidelines making medical equipment and cockpit instruments for aircraft. It has diversified into detection devices and mechanical seals for oil pipelines and refineries.
 
Pivoting away from declining Western industries towards expanding ones and the emerging world is a hard trick to pull off. Although Smiths and Weir are headquartered and listed in Britain, only around a tenth of production is now there. With globalisation has come resilience. Revenue hardly faltered at either firm during the worst years of rich-world recession. The boom in energy and industrial commodities has been kind to both.
 
But there is another reason why revenues did not wobble—something that draws both firms away from Britain. Smiths and Weir make a growing share of their profits from after-sales service, a steadier source of income. A lost day’s work at a mine or oil well is costly. So, like other companies that manufacture in Britain, they also need large workforces outside it. Weir has 100 service centres near its main customers, dealing swiftly with maintenance and breakdowns. Almost two-thirds of revenues at John Crane, the seal-making arm of Smiths Group, now come from after-sales service.
 
Of the two firms, Weir is the one that draws most on its heritage. Each year it brings its top 100 managers to Scotland to get a feel for the home country. Its R&D is global, but blue-sky thinking is done in tandem with the firm’s research centre at Strathclyde University. Most of its investors are in Britain. And Mr Cochrane finds Britain a convenient spot from which to run a global business. “I can speak to Australia first thing in the morning and the US last thing at night,” he says.
 
The Todmorden foundry was built in 1893 to supply parts to the local textiles industry. So there is a deep well of engineering skills in the region, which Weir can draw from: three generations of one family work at the factory. Output at the site doubled between 2005 and 2011. The staff, which increased from 320 to 410 in that time, have an almost religious devotion to lean manufacturing. They hold daily meetings to discuss productivity.
 
Push-me pull-you
 
Smiths feels a much stronger tug from its global customers. Many are foreign government departments or state-backed energy companies, which often want to see local people employed. Some are naturally wary about having classified products made abroad. Smiths Detection has built a parallel production line to Bushey in Maryland, in part to keep America’s defence department sweet.
 
Start from scratch, says Philip Bowman, Smiths Group’s boss, and it is unlikely the firm would choose to locate in Britain. Most of its factories, jobs and customers are in America. But the firm’s British shareholders, some of whom are restricted in how much they can invest in foreign businesses, would be loth to allow it to shift its headquarters there.
 
And the firm’s pension debts are off-putting to potential overseas acquirers. The retirement fund’s deficit jumped from £199m ($318m) to £620m in 2012, because of a fall in bond yields (which makes future obligations dearer in today’s money). To plug the gap, Smiths has to set aside almost as much cash as it pays out in dividends.
 
Smiths and Weir began life when Britain was the workshop of the world. It is now merely one of the world’s workshops. The boffins at Bushey, who devise kit for the world’s most sophisticated military, and the foundry workers at Weir, who make pumps for Chile and China, show that the first industrial nation can still make the grade in world manufacturing. But globalisation, which has been essential to the survival of both firms, exerts a fearsome centrifugal pull.
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