When Wrightbus decided to buy the old Gallaher’s cigarette factory in Ballymena in 2016, it represented a symbol of hope for County Antrim’s manufacturers: a booming, hi-tech business – most famous for making Boris Johnson’s new London Routemasters – picking up the slack left by the departure of a dying industry. Those hopes proved short-lived: the bus maker announced 1,200 redundancies last week when no new buyer could be found to avert a cash crunch.
Wrightbus is not the only famous Northern Irish company to struggle in recent months: Bombardier is looking to sell Belfast’s historic Short Brothers aerospace operations, while the city’s Harland and Wolff shipyard – which built the Titanic – fell into administration last month.
Business executives in Northern Ireland are waiting to see if the struggles of three key manufacturers are an unhappy coincidence in a sector of the local economy that has otherwise performed strongly, or if they signal the start of a broader downturn in the region – one that could be exacerbated by a chaotic Brexit.
Manufacturers had been hit by labour shortages in part because of lower EU immigration, while foreign investors were choosing to spend elsewhere, said Tina McKenzie, the chief executive of recruitment firm Grafton and the chair of the Northern Ireland arm of the Federation of Small Businesses, the largest lobby group in the country. That has stalled the economy’s move away from a heavy dependence on civil service employment. “The private sector has got to pick up the mantle, and it was picking up the mantle, but unfortunately, [the] three years of stagnation we’ve got, we’re slowly going backwards,” McKenzie said.
Northern Ireland’s industrial heyday is long gone: the shipyards and linen mills have moved to nations with cheaper wages. Yet manufacturing still accounts for an outsize proportion of its economy compared with the rest of the UK – about 14% – and has been enjoying strong growth and record low unemployment as it bounces back from the crash of 2008.
However, the threat of a no-deal Brexit has started to do clear damage. One key economic indicator – the monthly purchasing managers’ index for private companies – indicates that the local economy may be entering recession after a relatively strong run, and output and order books in the manufacturing sector have both plummeted recently.
Despite its vulnerability to Brexit disruption, Northern Ireland is the home of a key part of the Leave coalition: while NI as a whole voted to Remain, 62% voted Leave in Antrim North, the constituency centred on Ballymena where Wrightbus is based. Along with 1,200 well-paid jobs at Wrightbus and the 800 jobs from the Gallaher factory that were axed, the town lost another 860 from the withdrawal of French tyre-maker Michelin last year.
Wrightbus struggled as global demand for buses slowed at the same time as manufacturers race to make large investments in hydrogen fuel cell and battery propulsion technologies. But the company also exemplifies the links between business, religion, and the politics of Brexit in some parts of Northern Ireland. Sir William Wright, the head of the family owners of Wrightbus, was an advocate in 2016 of leaving the EU. He also nominated Ian Paisley Jr for parliament for the Democratic Unionist party (DUP), staunch backers of Brexit.
The ultimate parent company of Wrightbus, the Cornerstone Group, also donated more than £16.1m to charity between 2012 and 2017. Those donations helped to fund the ambitious expansion of Green Pastures, an influential evangelical church in Ballymena run by Jeff Wright, the son of William Wright and now the majority shareholder in Wrightbus. Workers outside the factory on Wednesday vowed to protest outside his church this weekend.
For Boris Johnson, the administration represents the collapse of a company with a close personal link to him and in a key DUP constituency. Paisley said he believed Johnson’s government would help direct new orders towards Wrightbus if a buyer were secured. A source in government and a person close to the company said that no assurances had been given.
Keeping the DUP onside had been a key issue for the Conservative party under Johnson’s predecessor, Theresa May, with Northern Ireland’s largest party a potential block to any Brexit deal resulting in barriers between Great Britain and Northern Ireland.
However, in recent weeks the DUP has given indications it might be open to treating the region and the Republic of Ireland as a single area for agricultural goods to prevent checks at the border, as long as the Northern Ireland assembly in Stormont has a say in rule-making.
Extending that solution to all goods would be the best Brexit outcome, according to Nicholas Coburn, the managing director of Ulster Carpets, one of Northern Ireland’s most profitable manufacturers. It has secured new shipping routes through Ireland to avoid potential no-deal Brexit freight disruption in England.
Coburn said: “If you’re trying to look forward, what’s good for business in Northern Ireland is definitely an all-island-economy basis. I don’t think even the politicians can disagree with that.”
The Ulster Carpets factory is located on the Garvaghy Road, the site of an annual 12 July confrontation between Orange Order marchers and local nationalist residents. While much improved from the days of violence, the area remains a symbol of the continued tensions between unionist and nationalist politicians that led to the collapse of Northern Ireland’s executive almost three years ago.
Ulster Carpets is still pushing ahead with a £40m, six-year investment in its highly automated mill in Portadown, as it tries to stay ahead of Chinese competitors to make carpets for hotels, casinos and liners around the world. But a return to a functioning Stormont assembly is long overdue to secure longer-term investments in training, and to prevent damage to the Northern Irish brand, said Coburn, the grandson of the company’s founder. “Northern Ireland is really suffering because of the lack of an executive,” he said. “That does hit business. At a time when you’ve got Brexit you really need direction.”
But it is the potential impact of a no-deal Brexit that looms largest. The Northern Irish civil service has estimated 40,000 jobs would be lost in a no-deal Brexit. Piles of fibreboard imported from Spain and Belgium in Specialist Joinery Group’s factory in Maghera, County Derry, are a testament to the preparations made by companies across the region in case the UK leaves without a deal on 31 October.
Specialist, which makes custom furniture for offices and hotels, is still looking to expand to new markets, including potentially the US, with an aim of increasing turnover from £24m to £28m next year. However, its founder and chairman, John O’Hagan, said he craved an end to the uncertain operating environment for their blue-chip clients in London’s services industry.
The imposition of border infrastructure would be a “total disaster” for the Northern Irish economy because of the threat of a return of the violence that characterised the Troubles, said O’Hagan.
“You’re going to have trouble [if there is a new border],” he said. “I came through all that for 30 years so I don’t want any more of it. That’s a big fear.”
Nonetheless, O’Hagan and other executives express hope that the current travails may not be terminal.
Alan Lowry, who set up Environmental Street Furniture in 2012, has found exports offer some protection from Brexit uncertainty for his small company, which makes items such as bins and benches with inbuilt solar panels for theme parks such as Legoland and Disneyland.
And even though the uncertainty was damaging, Northern Irish companies had weathered much worse than even the most disruptive Brexit, he said: “No matter what you throw at Northern Ireland, there’s a lot of resilience here.”
