A former global banker set to advise the Government on how to grow Newcastle and other cities has warned of a workforce battle between Nissan and train company Hitachi.
Jim O’Neill, once a senior banker at Goldman Sachs and now putting together a commission on cities to be put to Government, has said a skills shortage is likely to see the two biggest names in the region go head-to-head for a limited workforce.
Train production firm Hitachi is set to bring thousands of jobs to Durham as part of a £1.2bn deal to make the next generation of inter-city trains in Newton Aycliffe.
But filing those vacancies may only be possible by poaching staff from nearby Nissan, with Whitehall so far struggling to find a solution, the commission chair has warned.
Mr O’Neill, once tipped as a Bank of England governor, heard evidence of a skills crisis when in Newcastle as part of a look at how the UK grows its cities.
He told The Journal: “Everywhere we have travelled to seek evidence for the Commission’s work has thrown up the skills issue as a major challenge early in our discussions. Our recent hearing in Newcastle provided us with optimism about the cyclical recovery in that region and, compared with many expectations, surprising evidence of rebounding employment including in small companies.
“However, it was also pointed out that the area’s unemployment rates remain high, and to make serious inroads, their workers – especially the young – need to have more suitable training and skills. For example, Nissan, a significant employer in the region, may face a challenge from Hitachi, which is hoping to grow in the region. The available pool of qualified engineers suggests supply is insufficient for both.”
His concern comes after an evidence session in Tyneside in which the shortage of skilled workers was raised as one of the biggest issues facing the North East.
Colin Herron, a former Nissan and One North East executive, told the Commission: “The skills side is a big problem – we are poaching skilled people from one big company to another. We have both skills and unemployment problems.”
Dr Herron added: “The region is powerful in automotive but there is no automotive cluster in the North East. It’s just Nissan and it looks after itself. If Nissan catches a cold then a lot of people become unemployed.”
Minutes of the meeting show that when asked if Hitachi could be come a competitor, Dr Herron said: “It could be, but would just suck skilled people away from Nissan into the Durham area, creating more imbalance.”
Mr O’Neill’s work on the City Growth Commission will be presented to the coalition and opposition parties later this year. The commission’s work has already highlighted the benefits of Northern cities coming together to work on bigger issues to help counter the pull of London, with the possibility of something like a city merger.
Mr O’Neill added: “The North East metro area has its own unique economic features and challenges, but its proximity to Scotland creates a particularly interesting issue, given the debate north of the border. As a result of some of the publicity from a previous article I had written proposing closer ties between Manchester and Liverpool, I was aware of the amusing ‘Newderland’ and/or ‘Sundercastle’ reaction in the region.”