Reassurances needed on Nanjing's and Shanghai's intentions at Longbridge

We have had globalisation sold to us as the only way for much of the last 10 years or so. The last 10 months' credit squeeze, however, has somewhat tarnished globalisation's bright image.

Globalisation of industry, capitalist or otherwise (e.g. Nanjing/Shanghai) and globalised finance turned out to be so inextricably linked that it was highly susceptible to serious wobbling once the globalised financial engineering sector proved as incompetent in its performance as any allegedly poor performing nationalised industry. That private sector - so efficient!

We shouldn't be going cap in hand to London to fund local industry, never mind Shanghai or Nanjing.

By the way, where would the global financial engineering sector have been without the vast Chinese lending to the capitalist system over the last 5 years?

The simple fact is that we are allowing decisions to be made about our local industry thousands of miles away.

Globalisation always had to be balanced by localisation. Some measure at least of localisation of industry finance is a good counterbalance to set against the vast and, as we have found out, completely unpredictable, unsound movements of globalised industry and (it turns out) its necessary associated financial engineering.

Let's make sure we have a strategy that at least allows for both. Local acts of financial independence and economic self-determination have to be engineered long term into the system; and with as much detail and precision as the globalised financial engineers took with sub-prime, monoline, sausage machine. If 10 years ago, long-term patient local finance had been invested in our local businesses and industry, perhaps the impact on local industry of the current credit crunch/threatened recession would have been lessened.

Instead owners of business and industry in the region are more likely to dread the telephone call from the bank (based God Knows Where) telling them that there's an overdraft crunch and it's time to cuts costs drastically. And we all know what that means.

Most (including me) welcomed the Shanghai/Nanjing investment because there realistically did not seem any alternative through the then prevailing frames of reference. Although David's probably right in hinting that Shanghai would have been a better alternative.

There should have been an alternative planned into the economy 10 years ago.

But perhaps we now view things rather differently after the last 10 months of global capital chaos. We all have very new, changing and uncomfortable frames of reference.

If we had known 2 years ago that everyone would come to believe that it would become an economic necessity to nationalise a bank, perhaps the concept of 'nationalisation' through local ownership of Rover wouldn't have seemed so batty an idea!

I should disagree with you John and Alex. I cannot see how TVR, Rover, Jaguar and LDV are any different from Porsche, Volkswagen, Mercedes and Ford in this global economy. Nonetheless, the latter including Ford Europe are doing extreemly well when the former beem struggling for years now.

As far as I can remember two years when the MGTF ressurection project was initiated there been a lot of doubt amongst the British engineering community participating in the project as to who in their sane mind is going to buy a car so outdated that the acient romans could well have used it as a vehicle of choice to get to their dinner parties.

Perhaps it would be more fair to stop blaming the external forces and take a look at the chronic factories mismanagmenet, high university fees, lack of solid wider real sciences education and low prestige of engineering trades.

Peter, I would agree on your comments regarding the wider education system and management failure; but I think an unfavourable external environment - particularly the nature of the UK financial system and lack of any clear industry policy by the government have been pivotal to the wider problems faced by the West Midlands economy in recent years.

Whilst the companies you mention are doing fairly well, I don't think we are going to see a return to the days of volume-based manufacturing.

The fact remains that unemployment in the Birmingham area is much higher than the national average and has been so for quite some time. Plant closures such as Rover will only have released more workers onto an already depressed regional labour market. A focus on "basic training" will not be enough for these people and the concerns I raise around "quality" employment.

There is evidence to suggest that quality employment is not just about job security; but also about fostering a workforce with the incentives and skills to raise productivity and hence competitiveness - which in turn is better for all of us.

This is a cracking debate and I think there is actually a degree of agreement that both 'internal' factors (such as a lack of long term, patient finance, plus education and training failings) as well as external factors (such as the ongoing process of globalisation, driven by and in the interests of big capital) have combined to produce a hollowing out of our manufacturing base at a more rapid rate than anywhere else in Europe.

Add in a lack of an industrial policy to back the high-tech growth industries of the future, and we have a problem, as Alex notes.

Manufacturing matters in terms of providing quality, well paid jobs - as the Work Foundation / Radio 4 study showed a few years ago, most ex MG Rover workers went into significantly lower paid jobs that they felt much less positive about.

John is quite right in stressing that "local acts of financial independence and economic self-determination have to be engineered long term into the system; and with as much detail and precision as the globalised financial engineers took with the sub-prime, monoline, sausage machine".

In other words, if the financial whizz-kids of Wall Street could salami-slice up high risk debt and package it up with 'good debt' and sell it aorund the world (so that everyone is infected), why can't we think of a way to provide long-term finance for local business, as well as housing and infrastructure.

Well, in fact the answer can also be found in the States; much housing investment is raised through municipal and other bonds. The low risk attached to public, government-backed debt means that a low rate of interest has to be paid and it can work out cheaper than going to the market. If the Americans can do it, why can't we?

Why can't we have local or regional governments issuing bond which are then used to finance social housing (so we don't all have to mortgage oursleves up to hilt to buy houses) or even to back long-term investment in local business?