The Relocation of Dyson - Outsourcing

• James Dyson was heavily criticized for sacking 800 UK workers and relocating his manufacturing plant to Malaysia.
• During 2002, Dyson, was regarded as a patriotic figure because of his reluctance to relocate his operations abroad, despite the fact that labour would be cheaper, as well as land costs. 
• However, later in 2002 Dyson announced that he was relocating the production wing of his business to Malaysia. Due to this 800 semi-skilled UK assembly workers lost their jobs, although 1200 head office and research employees remained in place at the firm in Britain. 
• 2005 - profits of £102.9 million - representing a 137% increase in previous figures. 
• 20% turnover - UK workers paid more
• less tax towards the government 
• low production costs/ high sale prices - greater profit margin - larger income for employees
• During 2002 the company was faced with going out of business 
• Dyson was able to invest more money into technology/ design/ performance - example of this is the Ball product. 
• Lower wages for Malaysian workers - reduce unit production cost by 30%
• more of an open market and easier access to nearby suppliers - South East Asia
• Filtering - people have less money for upkeep of property, degregation of housing stock.
• allowed expansion of Quaternary sector
• close to new emerging markets - Australia and Asia
• government used high interest rates - need low exchange rate - make their exports competitive abroad. 
•  UK government failed to implement manufacturing supportive measures - training/ engineers/ apprentices/ scientists