So why is Stanton downsizing?
- After changing hands several times, Stanton Ironworks is now owned by the French company Saint Gobain.
- Saint Gobain is an example of a Multi-National or Trans-National Corporation, a company that is based in many countries around the world.
- Saint Gobain fits nicely the characteristics of such a company, high profits- £18 billion, brand name and employs 171,000 people in 46 different countries.
- Saint Gobain has decided to close its pipe-making plant at the site, with the loss of around 220 jobs. It will maintain its U.K. headquarters at the Lowes Lane site.
- Saint Gobain blame the high cost of scrap steel and energy prices, but the company also has manufacturing concerns in South Africa and China.
- Critics would argue that this is natural behaviour for such a company, it needs to make profits for its shareholders, so like an octopus, has no problem in removing an arm that is losing money. Higher profits can be made by relocating manufacturing to countries with lower overheads such as labour costs.
- But Saint Gobain have announced that they are considering moving their pipe making facility to France or Germany. In fact this would make some sense, both countries have the same currency the Euro, thereby negating any loss of selling to E.U. Euro currency countries, and the high value of the pound makes selling products more difficult aboard.
- Impact on the area?
When any major industry closes in an area, it will have an impact, of course, there will be a loss of employment, but this may contribute to a general downward spiral, what Geographers call the negative multiplier effect.
Of course, the following is a generalisation…
- Stanton closes.
- Loss of employment, but also a loss of trade to local companies that supplied materials for Stanton, hence fewer jobs.
- Less money is spent in local businesses and on services.
- Fewer taxes are collected in the local community.
- An increase in benefits, needed to support the unemployed and their families.
- Less money for local services, such as education.
- Less to improve infrastructure and the environment.
The final point is particularly important, because if the area is to attract new investment, it must have an appealing environment and be accessible.
This relates back nicely to a question we asked you on the ‘My Place’ questionnaire, do you see your future in Ilkeston? The majority of you didn’t, is this because of the lack of job prospects? This means…
- The young and economically mobile move out of the community.
- There is a loss of community spirit.
It isn’t all doom and gloom though, which leads us nicely to the next question…
What to do with the site?
P.S. The cheeky Iraq link, Saint Gobain is one of the companies involved in the Iraq Development Programme . The aim of the programme is to encourage countries to contribute to the rebuilding of Iraq, ironically that we had a part in degrading, but as the mission statement suggests..
Enjoying enormous trade and investment potential, Iraq has the resources to become the highest revenue generating country in the Middle East region.
Anyone tempted?
I know that several of my ex-students are serving in Afghanistan and Iraq, if you’re reading, please feel free to leave comments.
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