While trading is tough and costs are rising, Caldeira, boss of a Merseyside cushion company of the same name, offers a 30 per cent increase. It sounds like a huge hike compared with the measly 1.4 per cent average annual raise that UK workers endured in 2011 reports The Telegraph.
But this is China, where a combination of inflation and manufacturing migration is resulting in spiralling wage demands from the workers who remain in the country’s east-coast production heartland. Xiao is not impressed with the offer – she says it’s her way, in the form of a 50 per cent pay rise, or the highway.
Caldeira appears almost powerless, a remarkable reversal of fortunes from when he first arrived in China in 2003.
“Millions of workers coming to the coast meant there was always a plentiful supply of labour. Now Chinese manufacturers are moving inland because of the prices in the booming coastal cities. The workers can stay closer to home, so what’s left is more jobs than workers. Eighteen months ago, we really started to struggle to get staff.”
Chinese jobs fairs now resemble a pre-Big Bang trading floor, he says. The salaries, shown on whiteboards, move by the minute, mostly upwards, as workers’ demands push up prices. “It’s wage inflation in front of your eyes.” Prospective staff can even expect to be shown workplaces to see if they meet their standards.
With 2.65m people unemployed in the UK and the economy still vulnerable to a reliance on financial services, “repatriation” of manufacturing sounds an attractive concept. But can UK workers compete with their Chinese counterparts on cost, skills and commitment?
The early signs were not encouraging for Caldeira, who began his hunt for staff at the job centre.
The jobs Caldeira is creating don’t pay much more than minimum wage, so the focus is inevitably on youngsters or the unemployed. This has provided an illuminating “snapshot of Britain”, he says. “Half of the young people we’ve taken on are just glad to have some work and build a career. The other half don’t want to know.”
Caldeira is undeterred, however, and believes investing in training willing young people will eventually pay off.
Emma Bridgewater, who has been manufacturing pottery and textiles in Stoke for 27 years, says she’s got the proof that a “quixotic” faith in UK manufacturing needn’t end in disaster. When her manufacturing partner went bust in the early 1990s, she resisted calls to follow the Eastern tide and bought the assets.
“People told me I was cuckoo. At times it’s been ghastly, but also worthwhile,” she says. Now she’s hoping more companies that moved offshore will start to follow Caldeira home. “I’m constantly astonished more people aren’t doing what Tony is.”
Having built a manufacturing operation while counterparts were either dying or leaving home, she insists the right workers can be found – if bosses are willing to be patient and not believe the “myth” that it’s too hard to hire and fire staff in the UK.
“The staff are often not madly enthusiastic at first. There’s a scepticism which is often born of years of very bad treatment. But people do want to work.
“We hire and fire a bit – if we have to we can adjust our capacity quite sharply. Get a good lawyer and you can get rid of people if you have to.”