Episode 2 The Town Taking on China

In one small town in the north of England, a battle is taking place.

They're taking on the might...

..of one of the fastest-growing economies in the world.

This is the battle of Kirkby versus China.

And the weapon of choice? Cushions.

Until recently, China meant cheap.

But not any longer.

What I'm trying to do here is bring work back from China to the UK.

Factory boss Tony thinks Britain has a chance

to profit from spiralling Chinese costs.

In China, wage costs and general inflation is very high at the moment

and it's becoming less and less competitive.

Tony has hired Merseyside's best raw talent

and challenged young people to learn an old craft.

I can't do it at all.

Making 1,000 of these a week,

so I'm just ready to fall off.

Now Kirkby has got to up its game

and make the deal of the decade to save the factory.

The only way that this is really going to work is if we can get really good prices on here.

Nail varnish been ripped off by all the fabrics.

Hey, Jay, Sophia. Come in.

They'll come face-to-face with the competition...

-What d'you think? We're fast, then?

-..And go behind enemy lines.

-Ni hao.

-Hello.

Every factory we've gone past is textile.

We've not got a chance!

'I do the same job as them.'

Looking back now, I feel as though I live a life of luxury.

So, can Tony turn the tide of history

and breathe new life into British manufacturing?

This country cannot live long-term by selling each other cappuccinos over the internet.

Let's see what the numbers say when it's all done.

Can they stage a comeback?

There's a lot of growth in a short space of time.

We always say British is the best, so we've got to prove that now.

Bring it on, I say! Bring it on! Love a challenge!

Can Kirkby prove that the British manufacturing lion

can roar once more

and take on the Asian tiger?

Tony Caldeira owns two cushion factories.

Morning, ladies.

-Nice and busy there?

-Yes.

This one is near Kirkby, Merseyside...

Uncle now. Uncle Tony.

Are you?

..And this one is on China's industrial east coast.

He's halfway through a three-month experiment

to bring jobs back to Britain from China.

If he can pull it off, he could make the move permanent.

But the whole project hangs by a thread.

Despite high unemployment,

finding the right staff in Kirkby is proving a challenge.

He's taken on 18 new workers,

but a third of them have done a runner already.

It is frustrating when people are very positive

and they tell you that, "Actually, yeah, I want to learn how to do this.

"I want to be involved. I want a full-time job."

And then after two or three weeks,

just leave and go somewhere else.

Hanging onto them isn't the only problem.

Training those that have stayed around is also proving difficult.

On the sewing floor, experience is pitted against inexperience.

Supervisor Pam has been in the trade for 38 years

and has absolute faith in her boss.

Tony's always kept us in a job. He's never let us down.

And I don't think he's going to start letting us down now.

But young trainee Sophie, who's been in the job just six weeks,

is only working at a 20% capacity.

And beating China is the least of her worries.

Nail varnish been ripped off by all the fabrics.

I've got more in my bag but I don't think I'm allowed to do it.

Just get your head down. Concentrate like I've told you. You'll be fine.

I've had a chat with Sophie today.

She's 19.

She's not like a schoolgirl, just from school.

She's got a good head on her shoulders.

And if she puts her mind to it, she could be a good machinist.

Even experienced machinist Emma,

who factory manager Malcolm brought in,

is struggling to keep up.

The girls down there, they do about two bundles an hour.

It's taking us maybe an hour-and-a-half for one bundle.

Now the stakes have been raised even higher in the battle for Britain,

there's £200,000 worth of extra orders on the workbook.

But fewer trained staff means that work is piling up.

On top of this, there's another new headache

for long-suffering Malcolm,

a man who spent 12 years by Tony's side.

That's why I'm going grey!

He now needs to get ready

for the biggest annual event in the cushion calendar,

the Frankfurt Textiles Trade Fair.

We've only got two days to dismantle all this

and have the wagon loaded.

This showroom has to be taken apart, shipped to Germany

and rebuilt there for what Tony hopes is a selling spree.

Tony's like... well, he's the boss, isn't he?

Malcolm just asked to go with him, doesn't he?

So, he has to make it happen.

Tony wants it, Tony gets it!

SHE LAUGHS

This and pressures of production and getting the orders out,

as well as year-end and stocktaking.

So, very pressured time of the year for me.

Carole's doing her bit for the trade fair

by sewing samples in the lunch break.

There's no machine to me to do it in normal work time.

So, I do it in my dinner,

and then when I've done it, I'll go for my dinner,

and then the other girl can come back on this machine.

But this is where the whole experiment

to bring work back from China could fall down.

They're high on orders

but low on space, machines and staff.

We haven't got enough room here.

Here, every time you want to get through with the trolley,

you move this table forward, back, forward.

It's like that all day.

Two massive showrooms have to be dismantled

and shipped to Frankfurt for the trade fair.

Kirkby will have to be at its competitive best

or face a familiar fate.

Joanne began sewing at the age of 16

and has been made redundant four times before.

I was frightened when work started going abroad because you think,

"How long am I going to be in a job for?

"Will I ever be in another sewing job?"

Because if it all goes abroad, there's nothing left over here, is there?

Tony's workforce is counting on him.

As he heads to the trade fair,

he knows the battle for Britain

could be won or lost in the next few days.

This is the time when I'm going to find out whether the factory has a really good long-term future or not.

If the orders don't come, if it turns out that everybody

actually wants to continue buying from China

and nobody wants to bring the work back to the UK, then we've got a big problem.

If we get this week right, the whole year will go well.

If we get this week wrong,

then we've got major problems for the rest of 2012.

The biggest cushion fight this decade is about to begin.

In the red corner, Tony's Chinese factory.

Big, cheap and growing.

In the blue corner, his Merseyside operation.

Older, wiser and staging a comeback.

The backdrop for this battle?

Heimtextil and Frankfurt.

73,000 visitors from more than 136 countries,

including India, where this potential customer has 500 stores.

-How many pieces in total can you buy? It sounds like you've got a lot of shops.

-All of it.

All of it? Wow, OK.

The fate of the two factories could rest on the business they do here.

I'll give you 1.35 for entire quantity.

It's going to cost us more than that, you know.

-We'd be making a loss, that's the trouble.

-You have to lose some money!

THEY LAUGH

Cheeky offers aside, this trade fair will see one of Tony's two factories

come away with more orders than the other.

But will China or Britain clean up?

OK. And the other one that I'm looking at is the Dupione.

Tony's Chinese factory makes cheaper cushions

aimed at the value end of the market.

The products in our Chinese booth

tend to be less costly than our UK products.

You could have a simple chenille cushion,

which may cost £2 or £3,

depending on the retailer and the quantity.

They would sell it anything from around £5-£10.

But over on the British stand, quality sells.

The kind of clients that you get on a stand like this

would be more departmental stores,

more middle to upmarket retailers.

Not so much your discount stores.

The reality is is they can't really afford some of the products

cos some of the fabrics are relatively expensive, but very, very nice.

These all come from Italian Jacquard looms,

mainly for the top-end department stores and special collections.

So, we literally have everything across both stands

from very simple, cheap, plain cushions that people can just sell at you know, I don't know...

£4.99 or £5, all the way to cushions that sell for £50 and £60.

Anyone who's anyone in the world of cushions, curtains and bed linen is here.

Not only is it a chance to find new customers,

but to talk to old friends.

Ivor's a curtain pole manufacturer

who downsized his British factory to go to China.

When I sold my equipment,

I couldn't be in the factory when it went, I was so upset.

I sold it to Italy

and I couldn't watch the lorry take the equipment away.

It just broke my heart.

Just like Tony, Ivor built his business

from a market stall over 20 years ago.

Now he's bringing his business back home as well.

We're doing something similar to yourself

where we're now planning to bring back our final production,

-back into Salford in Manchester.

-Really?

We want more flexibility within our stock

and we want to reduce our lead time.

And another point that people quite often forget,

it's not just the COST in China,

it's the cost of moving goods around the world.

Despite this, things are looking dicey for the Kirkby factory.

The Chinese stand is generating twice as many leads.

That sells very well.

It's good. It's really good.

If the British stand can't get the orders,

then this experiment will have failed

and the jobs will return to China.

There are only two days left to get it right.

A new day dawns at the Frankfurt trade fair

and it's the day of reckoning for the Kirkby factory.

At last, they have a big American customer

interested in their British cushions.

We've done some work with them in the past in the UK stores

and the US stores and the Canadian stores.

But altogether, they've got two-and-a-half thousand stores in the US,

which is more than all of our UK customers put together.

Now, they're looking to put a range in for the Olympics

and a Made In England range.

If that comes off, it's absolutely huge.

Tony's commercial manager, Lindsey,

has been tasked with looking after the client,

TJX, the American parent group of TK Maxx.

So, where do you want to start?

Do you maybe want to show us what's new and exciting?

Of course.

For the Kirkby factory, this is a make-or-break deal.

These are traditionally the kind of things that TK's in the UK

have done in the past, you know,

sort of gone with the bright colours on the neutral grounds in the spring.

I think the colours just really jump out.

Awesome.

The UK products in the States add value because...

Just because it's made in the UK and the customer sees value in that.

Yes, we do buy a lot from China.

It sells quite well and it's more fashion that we know can go to the masses.

Stuff we get from the UK is more specific

and it's more fashion-driven.

So, it does carry a different retail

because it's different than everything we're buying out of China.

They've not gone to the Chinese stand at all.

They're only interested in British cushions.

It's going really well.

They're really keen to get going straight away.

They've actually asked if we got any stocks on anything

and how quick can they have it.

So, it's, like, the main girl that buys for the majority of the stores

is, like, "I'll buy that tomorrow."

In the world of cushions, price is everything.

Despite their love of British craftsmanship,

it'll mean nothing if Lindsey can't offer them a low enough figure.

The only way that this is really going to work

-is if we can get really good prices on here.

-OK.

So, I am glad you're sitting cos I want to just give you these offers.

Before I fall off my chair!

LINDSEY LAUGHS

-They're not terrible.

-OK.

Is that UK or is that...

That's actually New York.

Oosh!

She's just asked for a 40% discount on the normal price.

-I totally need your help.

-I know.

-Listen. We all picked a lot here.

Yeah.

-So... and we know we're not going to make the kind of money we need to make there.

-No.

So, in order for us cut it off and make the report card look good,

to make these guys tell us we can keep buying more...

If you guys get rid of some of your stock.

The deal is on the table.

Cost will decide whether Kirkby can win its battle against China.

I wasn't expecting so many of them to turn up.

I wasn't expecting them to be on the stand for as long as what they were.

And I really wasn't expecting them to pick out as many products as what they did.

It's about 20,000 pieces,

and it's probably worth, at cost, 300,000.

I'm looking to get the product in my stores as soon as possible.

If you could ship tomorrow,

if Caldeira could be in my floor tomorrow, that'd be great,

but I think it'll be about three months.

But that's a good time, too.

Got the meeting sheets from today.

As the show draws to a close, the British stand has done well.

Although it has fewer leads than the Chinese factory,

the orders are bigger and from more reliable clients.

Is this a short-term thing

or do you get the feeling that there's a lot more companies

looking to bring the production back?

I just think that a lot of them are like, "You know what?

"The amount of times we get things sent wrong,

"we have quality issues, we have late shipments."

I mean, empty shelves cost money, don't they?

You know, I've been quite confident that the tide's starting to turn.

If this is more evidence,

if your customers are saying that they're looking for more and more UK manufactured products,

and it's not just a flash in the pan, then, you know,

I'm going to need to, you know, get some...

You know, get staff quickly.

I'm going to need to make changes in the factory.

Business is set to boom at the Kirkby factory.

The problem now is finding staff to make the cushions.

The pressure's on,

and Tony's long-suffering factory manager is feeling the heat.

The factory, we're going to need to expand fairly quickly,

especially on the sewing floor.

We're going to need to bring in more machinery,

we'll need to move to a different location so we've got more space,

and we need more people.

And we're going to need them very quickly as well.

It's a lot of growth in a short space of time

and that's the scary part about it.

The gauntlet has been thrown down.

Now Kirkby needs to rise to the challenge.

Customers DO want their cushions,

but can they actually make them?

Or will the work slide back to China?

Time for Tony's experiment to step up a gear.

The hard work actually starts now.

We've kind of had the glory in Frankfurt and everything,

but now we've got to knuckle down

and make sure that we take advantage of all the opportunities that we've created.

If they can pull this off,

maybe Tony will close his Chinese factory

and move ALL the work back to Britain.

With so many orders,

the sewing floor's been pushing itself in a record-breaking week.

-Well, we did well last week, didn't we?

-Yeah.

We did really, really well last week.

-What was the total figure?

-15,000 last week.

-That's a lot, that.

-That's not bad.

-Is that the best ever, that?

-Yeah.

-15,000 cushions in one week?

-Yes.

You did three!

But there's no more space on the sewing floor.

With new orders imminent, it's time for the management to take action.

If the customers are interested in more orders

and we can increase our production,

how quickly and how easily would it be to expand the factory here?

What are your thoughts about that?

The biggest constraint as we know is the sewing floors are pretty packed

for space at the minute, and potentially and likely,

we're going to need to move that floor to a larger area.

As long as we've got more room.

Cos we're all squashed up now.

-I know. It's a nightmare. I've got bruises all over me.

-We have!

-On the top of your legs here, banging into tables.

-Keep banging into stuff.

My hand and the other sat there.

What was that like, with that big bruise?

I need to be thinking about that now and that's what I'm hoping to do.

Malcolm's come up with a plan

that he hopes will solve all the factory's problems.

At the moment, this mezzanine level is used for storage.

But Malcolm wants to turn it into the new sewing floor.

It might be Malcolm's plan, but Tony's keen to get involved.

If we're going to get bigger, we need to use every inch of space, aren't we?

One, two,

three, four, five,

six,

seven, eight...

How many machines have you got? One, two, three,

four, five, six, seven, eight. 80.

So, it's like nine pairs, isn't it, at the minute?

The other thing I need to do also

is start to see what machinery is available as well.

Yeah, you're going to need more sewing machines.

'I think it will take a month, something like that.

'We've talked about... we might want to put together a curtain sewing area,'

'which we could also utilise...'

some of the space up there. There's a good chance we need to... We need to start doing some training,

so we might set a little training school up over there as well.

Training new staff has been

one of the toughest challenges they've faced so far.

In the past,

Malcolm's relied on hiring experienced machinists,

but they're few and far between.

They need new blood.

But the rigours of manufacturing work

have been taking their toll on Sophie's hands.

When you're sewing,

and you've got to get your second piece of material on top...

You've got to keep hold to guide it.

As you're doing that, the zip just goes across your finger,

and either takes your nail varnish off, or, don't know,

my skin's gone kind of shiny, but all my skin's coming off.

Don't know. Only on them, only on them fingers.

So my nails are a bit wrecked. It's quite sore.

I've been bringing moisturiser and nail varnish in to do my nails and to moisturise my hands.

It looks like I am working my fingers to the bone for minimum wage, aren't I?

In the warehouse, brothers Nick and Paul are about to be

rewarded for their efforts in the battle so far.

Before starting work here, Nick had been unemployed for five months.

-Hi, lads, you all right? How's it going?

-Smashing.

-Oh, good.

-No problem, mate.

-Well, hopefully I'm going to make it a bit better for you.

-Oh, yeah?

-I've got your contracts together here, lads.

-Oh, happy days.

-Thanks very much.

-Well done to both of you. You deserve it.

-Thanks very much.

-Thanks very much, mate.

-Have a good weekend, lads.

-You too, mate.

It's cos of our hard work.

We're not scared of hard work, are we, mate?

-No, we're used to it, aren't we?

-Yeah.

We used to work, like, 10 times harder in our last job

than what we do here, so, I mean, this is a bit of a doddle

compared to that last job, to be honest, isn't it, mate?

Mmm, yeah, it is, yeah.

It's not only life-changing for the new staff, but for Tony, as well.

His experiment to bring jobs back to Britain

is putting his whole business at risk.

What I don't want to do now is fail. I'm an entrepreneur.

I hate failure. It's sort of in my genes. I hate it.

Tony's travelling back to the company's roots - his family.

And there's a new addition - maybe a machinist of the future.

I can try. So, how do I do this? Like this?

-Yeah.

-There you go.

BABY CRIES

Come on, Ethan, look happy.

LAUGHTER

It might be too soon for baby Ethan to start work,

but Tony's sisters were at his side sewing when the business started.

I think I'm desperate for more sewing machinists,

so if you two ever decide that you want to start sewing again,

you come back, all is forgiven.

LAUGHTER

You know, there aren't that many that can probably still

keep up with you two on sewing machines over on the cutting table.

-Probably, not.

-Probably not, no.

-But I'm still not available, though.

-LAUGHTER

Their mum started the business in the late '80s,

sewing cushions from old curtains, and selling them on a market stall.

It was quite hard, wasn't it? Doing the markets and working from home.

It was hard work.

Our mum drove us hard, but I could understand that, could you?

-Yeah, it was right to do, wasn't it?

-She wanted us to do well.

-That's it.

What most people don't realise now is when they see factories around the world, and offices in New York,

what they don't realise is the business actually started in the back of the house.

If you remember, when it first started off, everybody got whatever we had,

we just literally piled together.

I remember Mum pawned all her jewellery,

and all the money that I had from a paper round,

and all this money that we had together, literally just put it all together

to buy the first few boxes of roll ends and remnants from the curtain factory.

-She did what she had to do.

-Yeah, that's it.

-In order to get it up and running.

Today, Tony is doing what he has to do to keep his business going.

But is bringing jobs back to Britain the right thing?

-Morning, Tony.

-Morning.

He's discovered he's not alone.

Joining him in the fight against the far east is Coventry's Amtico Flooring.

These are the rolls that we then laminate together,

and so it's been combining the best way of doing this

with some of the things that we've spotted

the Chinese have been doing

that have let us bring that production

back into the UK.

And, you know, my objective in life

is to keep these machines busy, and bring more production back.

Back in 2006,

the company started a Chinese operation to make a cheaper value product.

Over the years we've learnt from what the Chinese do,

copied some of their best techniques,

and at the same time engineered our own costs down

so that now we are cost competitive.

When Jonathan went to China, it was 30% cheaper than the UK.

But in the last few years, the tables have started to turn.

What we've found is that Chinese costs go up

at about 8 to 10 % every year,

and actually, from a UK manufacturer's point of view,

that's good news because it means that you progressively become more and more competitive.

Hi, Shane.

And how long does it take to train somebody to understand the quality control and the machines?

Anything from three months, six months till they're fully trained.

-And that will give them skills then to pass on to other people.

-Well done.

-Yeah.

I think the story here on training people up to work for industry

is a bit like investing in the manufacturing plant itself.

It's very easy to lose, but it's very hard to rebuild, because if you lose it,

it can take decades to rebuild.

Jonathan's waiting for the nod from the bank before he can expand his UK factory more.

But he's hoping to create 100 jobs over the next year and a half.

Most of the studies say that one manufacturing job

creates four or five other jobs, like service jobs, around it.

This country cannot live long-term

by selling each other cappuccinos over the Internet.

Manufacturing is very important.

I'm feeling a little bit uplifted after that,

because I'm not on my own.

There are more people out there, and who knows,

maybe there's going to be even more come back from China in the near future.

Back in Kirkby, his battle to hire and keep new staff

has taken another hit.

Two more have jumped ship. Out of 18, he's now lost seven.

One of them is Emma, who was hired for her sewing experience.

She'd done embroidery. Embroidery machine's different than a flat machine.

I said to her, "I really don't think that you're going to make it."

She was in agreement with me that she didn't really think

that she was going to make it.

So I said, "I'm sorry to say, but you're on a week's notice."

For Malcolm, it's a wake-up call.

He has always believed that hiring experienced machinists

is simpler than training.

She came in as a machinist, so she shouldn't have been costing us as much money as she was.

Finding the right person is difficult.

You're looking for somebody who can do this second nature,

they've got the stamina to keep it going all day over

at a high level of pace and, yeah, they're few and far between.

It's difficult to find.

To have a chance of competing with China,

they urgently need to find more new workers and keep them.

Tony thinks he knows how.

You probably need four or five on the sewing side, but then you're also going to need

some fillers, some packers, some warehouse.

So you probably need to go at least back to where you started.

So we need to start looking at some different ways of actually getting some staff.

Maybe we can have a combination of experienced machinists, maybe some apprentices,

maybe some of the people we've still got on file from last time.

-Because now...

-Yeah.

..not only do we need to take on people for the next few weeks and months,

but it looks as though, with the work starting to come back from China,

we're going to actually need to take people on for the long-term.

Is it Linda? It's Malcolm from Caldeira.

I was just wondering whether

you'd be OK to come in for an interview?

Despite Tony's advice, Malcolm's putting his trust in experience.

He's found a small supply of veteran machinists from a curtain factory that's just gone bust.

It's always sad when a sewing factory closes down,

but it is a bonus for us,

and hopefully it'll be a bonus for them that we can hopefully put them

back into employment very quickly,

into an environment and the type of work that I'm sure they like doing,

cos most of them have been with this company for up to 10 years and more, at times.

While Malcolm does things his way,

Tony wants two of his staff to see exactly what they're up against.

He's taking two of his most trusted and experienced machinists,

Joanne and Sharon, on a mission to China.

He wants them to see the competition at first hand.

I've never travelled that distance before.

I've only ever been, like, longest, four and a half hour flight.

So really nervous.

Spain, Italy. Italy's the farthest I've been.

More nervous about travelling, and, like, whether I will like the food.

Cos, like, the food over here, if you go, like, Chinese over here, takeaway,

probably not the same as over there.

It's a 12-hour flight to Hangzhou on the east coast of China.

Tony's factory is located 50 miles north, in Huzhou.

It's a long way from Kirkby.

Everything is textiles. Every factory we've gone past is textiles. We've not got a chance.

And how can we compete with all these factories?

It's like what we used to have, but we haven't got no more.

So this must be where all the jobs have gone,

when the factories have shut in the UK.

-Yeah.

-Must be, like, here.

Wonder if this is it, Joanne.

Wait - it is! It's a cushion... Oh, that's it!

I can see them cushion factory symbols.

Look at the size of it, Jo. Bigger than ours.

-Massive, isn't it?

-Yeah.

-Really bigger than our factory.

-Not as nice as ours, though, must admit.

-No.

Wonder which floor the sewing floor's on.

The battle for Kirkby has always been a David and Goliath fight.

Tony's Chinese factory is five times bigger than the one in Merseyside.

He first came to China in 2004,

and purpose-built this plant four years ago.

-It's so different.

-Long way to come to work, isn't it?

-Really different.

-You're not joking.

-It's not like coming out to East Lancs, is it?

-Not at all, no.

-Shall I show you around?

-Yeah.

-Yeah, course.

Joanne and Sharon have arrived at 11.40, which, at the Chinese factory means one thing.

They're late for dinner.

We only have toast at half eleven.

They may work for the same company, but these staff are their rivals in the battle for Kirkby.

Gosh, it's so different, isn't it? Eh?

-It's hit me know, Joanne.

-I know, it's hit me, as well.

-TONY LAUGHS Is reality striking now, is it?

-It is, definitely.

-Don't know how lucky we are.

-You're in China now, aren't you?

-Yeah.

-Don't know how lucky we are.

It's really different. They have their dinner when we have our breakfast.

On the menu today, nothing too challenging.

Meat, potatoes, cabbage, and egg fried rice.

I don't mean the cabbage, but what is that? Is it potatoes? Looks nice.

Got to give it a go.

Are you any good with chopsticks?

-No.

-No.

-Are you going to try? Crash course.

-I'll try.

-Yeah.

-All right.

I can knit. I can't use chopsticks.

I'll just shovel it up.

LAUGHTER

This meal costs just 30 pence.

Our breakfast is 11 o'clock, and our lunch is half past one,

so I don't understand the time thing, really.

I don't know why they have it so early.

I just find it funny, cos, like, we're eating breakfast

when they're eating dinner,

and we're eating toast, jam, or a cup of tea.

And they're having, like, rice, meat, potatoes, vegetables.

Like what we'd eat for dinner. Really weird.

For Joanne and Sharon, seeing behind enemy lines is an eye-opener.

Compared to Kirkby, it's vast.

The showroom alone is 12,000 square feet.

-Wow!

-Look at the size of it! It's like a big department store.

It's a first chance to inspect the standard of work of the competition.

-Look, their zip's like...

-Yeah.

Can't believe you're comparing zips. Everyone else is like, "This is a really nice cushion."

-You're looking at the zip.

-We do them different.

-That's what we do

It's not just the size of the Chinese factory,

but its low-cost that makes it such a lean opponent.

The flat rate of pay here is just one pound an hour, compared to six pounds and eight pence in Britain.

In filling and packing, there are very different ways of working to Kirkby.

-This particular section works in a team, and they're paid on a team bonus.

-Right.

-They do it a bit different to what we do.

-Yeah.

It was quite annoying me, really, because ours is a quicker pace.

Cos they do everything as a team, we do individual,

and I just think ours is a lot quicker pace,

and I couldn't believe the way they was filling to how we fill in the UK.

The workers may be slower, but they work much longer hours.

Overtime goes on till 9pm, and Sunday is the only day off.

-So what do you reckon, then? Looks familiar?

-Yeah.

-Yeah.

-Too familiar.

-LAUGHTER

Finally, the sewing floor.

We do zips different than that, but we have done zips like that.

But she's very good.

-So, do you think she's faster than you, then?

-Oh, no.

-At that?

Well, I'd say at that zip, yeah.

-But if you were doing your zip, and she was doing her zip...

-I'd beat her.

But there is hope for Kirkby.

Tony has already started scaling back his Chinese operation,

because wages have soared by 500% since he first came to the country.

At one time he employed 200 staff here.

Now it's just 50.

Shocked. Really shocked at the factory so far.

It's, like, really different to ours.

I thought it'd be, like, a full factory.

I thought there'd be, like, millions of people.

Ni hao.

-Oh, ni hao.

-Hello.

Zhong has been working here for four years.

Like most of the workers, she lives on site for free,

in a tiny dorm room with shared kitchen and bathroom facilities.

The reason they're doing it, is because they don't want to waste money renting a house.

They'd rather send that money home to the family, or they'd rather send their kid to a good school.

-Is this your home?

-Yeah.

-Family?

-Er zi.

-That your little boy?

-Dui, dui, dui.

Zhong lives in this one small room with her husband,

who also works at the factory.

They've left their two children over 300 miles away

with the grandparents.

How many times do you go home?

Once a year? Is that all you go home?

You don't see your children? Once a year?

When you go home, how long they stay for?

It's not a long time, is it?

Zhong has travelled to China's east coast

because the pay is so much better.

Most of her earnings are sent back to the family.

This is common among the workers.

When I go to work, I go home every night.

I don't think I'd like to live here. I like going home on a night.

Can you see yourself working at the employment where you are now for a long time,

or can you see yourself doing something else in the future?

-Yeah.

-Oh, yeah.

If you could live anywhere in the world, in your dream job, what would it be?

Yeah, but everybody has dreams.

When I walked in and I just saw the bed, I'm thinking,

"Where's the toilet? Where's the kitchen?"

I can't see how she really lives in there.

But I suppose when they're working, they're only there to sleep, aren't they?

It just shows how desperate they are, you know, to earn the money.

We get desperate where we are

to earn money to live, but their way of life is so hard.

I can't imagine not going home after work.

You're tired, you just want your bed and everything,

and then you go back to a little room, and it's cold.

I do the same job as them.

Looking back now, I feel as though I live a life of luxury compared to how they do.

But they're so dedicated. It's what they want to do.

Well, it's not what they want to do, it's what they have to do, I suppose.

British workers like Joanne and Sharon may expect a higher quality-of-life,

but the Chinese are catching up fast.

In the last eight years, wages in Tony's factory

have gone up from £50 a month to 250.

And more money means higher aspirations.

You have 1.3 billion people here, ambitious, energetic, hungry.

It's a young, dynamic population,

keen to make its mark on the world.

You have a moment?

Zhai is the factory's financial controller,

but he started out in the rice fields 185 miles to the north.

In the last year, he started renting his own flat for £150 a month.

Now he has plans to buy, and is saving for a deposit.

-Hello.

-Hello, hello.

-Welcome to my home.

-Thank you.

He's invited Joanne and Sharon back to his flat for dinner with his family...

-Xie xie.

-Xie xie.

..along with Sophia, from Tony's sales team.

You eat lots of vegetables here, don't you?

We don't really eat that many in UK. We're not as good as you.

We do have them, but I'd sooner have chips.

His small flat has this room, two bedrooms and a tiny kitchen and bathroom.

-Cheers.

-Cheers.

-Cheers.

Where was your house before you lived here?

Before, I live in dormitory for a long time.

-Long time? With your wife?

-Sometimes.

-Yeah.

-Sometimes.

-Before we married, my wife also work in our factory.

-Oh, did she?

-Oh, did she?

-Yeah.

Don't laugh.

So, how long have you worked at the factory now, then?

-Eight years.

-Eight years. Long time.

-Before, I just do some small accountant job.

-Yeah.

But now it's more important.

-A big job. Big job now, yeah?

-You've moved off.

-Yes, yes.

How do you think life has changed in China?

I think before, about 15 years ago,

-most Chinese families is poor.

-Yeah.

But now, most people, most China family get very rich,

-they get, they now have their own house, they buy their car.

-Yeah.

-Are the wages getting higher and higher in China?

-Yes.

-Are the wages going up?

-Yeah, yeah.

It's amazing the way he first started out in the rice fields.

He's worked his way up to where he is now, which is a big deal for him.

I mean, his position he's in now with the factory and Tony,

he's done really well for himself, he really has. I'm proud of him.

Going to a real Chinese person's house today was really eye-opening.

Very welcoming, but the house is only small and cold.

They don't seem to have central heating like we're used to.

Look at that, looks dead good.

The trip has allowed Joanne and Sharon not only to see how the other half lives,

but how their competition works.

I feel like I live in a palace compared to what they do.

I'll be glad to get home, to be honest.

From this trip, I'll take away how lucky I am.

You don't feel it, till you look at other cultures,

how lucky and privileged you are.

As their mission behind enemy lines draws to a close,

they have plenty to report back that could win Kirkby a tactical advantage.

Morning, morning, morning. You all right?

-Have you missed me?

-No, not really.

-Oh, that's awful, that.

-I've missed your work, not your gob.

-Oh, that's terrible.

-Morning.

-You have a nice time?

-Yeah.

Enjoyed it. Eye-opener. But I really enjoyed it.

Yeah. And their factory -

-ours is dead small compared to theirs.

-Ah!

So how do the rate Kirkby's chances against the Far East?

Well, I think there's less machinists there than here.

I'd say, yeah, I'd say about, 15 there.

-I thought there'd be, like, millions there, but...

-I did.

But what shocks you more is the size of the factory to the people who are in there.

You think, "Why doesn't he sell?"

Are the machinists fast, like? Are they?

They have somebody doing a zip, and somebody boxing, not doing the full job.

You'd get the work out quicker, like we do.

They don't. They sort of spread their work out.

I think they do a lot of messing about. They don't work like we do.

We're... We flow, and are organised. It's not like that there.

And it was really getting on our nerves, actually.

It's not just Sharon and Joanne who've noticed the difference between the two countries.

Tony has, as well.

Productivity in the UK factory is much higher than it is in the Chinese factory.

My UK staff tend to have a longer attention span,

and are able to focus for longer periods of time,

whereas in China they tend to work for longer hours,

but don't tend to do as many products per hour.

But will his Chinese staff agree?

Hey, Zhai, Sofia, come in.

-Hi, morning.

-Hi.

-Huan ying ni, huan ying ni.

Now it's their turn to check out the competition.

Tony's invited Zhai and Sofia to look around his Merseyside factory.

And there are some big differences.

So here, the machine do by itself.

-Ah, yes, very clever.

-One person.

-In China, we do by workers.

By hand, yes. This one do by machine.

-In China, we use many workers to do...

-To do this kind of job.

-Yeah.

-Hello.

-Nice to see you again.

-Did you miss me?

-Yes, miss you very much.

Do you think we're faster? Are you impressed?

-Yes, fast.

-I told you it was fast, didn't I?

Here it's very busy, not like China warehouse.

Somebody looks a little lazy. Yes.

People here are quicker than China workers.

Round one to Kirkby.

But Zhai thinks he's spotted an advantage for China.

In Chinese, we have many men do sewing. But in here, all is...

All is women, yes.

Next, another of Kirkby's greatest assets.

Zhai wants to pay homage to the man who keeps the factory's wheels turning.

Zhai thinks that your factory is busier than his.

Yes, more busy than our factory.

You make the works very busy, don't waste time.

Yeah, we have some systems that we use to help us to plan for the sewing.

I think maybe we can study your work,

and we can make a good plan in China factory.

Here have many advanced machines and systems,

so here, save more time, save more space.

This we can study from UK factory.

While Tony has been organising an exchange visit,

Malcolm's systems have been swinging into action.

He's hired another six new staff, bringing the total back to 17.

I've done similar jobs before, but... so it's not too hard.

Getting on, aren't we?

My thumb's hurting, but that's it.

Bet you I'll be aching later, though.

In sewing, all Pam's hard work training Sophie

-is beginning to pay off.

-That's it.

In the last few weeks, she's gone from making 20 cushions a day

-to 140.

-Right to the middle. That's better.

This is still a long way off the 400 Sophie needs to be doing,

so Pam's come up with a plan,

surrounding her with experienced machinists

in the hope it'll rub off.

She's not been distracted now, cos Val tells her to get her head down.

And Pauline, if she turns round to Pauline,

Pauline will say, "No, don't be talking to me,

"you've got to get your head down."

So that way, she has grown up.

Do you feel more confident now?

-I think it's the last week I've felt more confident.

-Have you?

Trying to keep up with Val, as well, aren't you?

-Yeah, not doing very well.

-No. You will get there, don't be silly.

-Flying ahead now, isn't she?

-You will.

This is all good news for Tony,

who's been struggling to convince a sceptical factory manager

that training up youngsters is a good idea.

I think Sophie's been a bit of a culture shock to us, really,

because we've been employing experienced machinists for so long, I think we'd forgot

-what it was like to take on a trainee.

-Yeah, yeah.

Here's where you been spoiled for a long time, because you've had that many experienced machinists,

and it's been a dying trade, that you've really been able to pick and choose.

Now, we're going to need to start looking to pick up staff not just for the next two or three months,

but maybe for the next two or three decades, you just don't know.

Tony wants Malcolm and Pam to consider a whole school of inexperienced trainees.

If you got more space, you've got a bit more time,

and it's actually away from your main production line,

-do you think it actually might work for us...

-Yes.

..to start either taking on apprenticeships or do some kind of training.

If that's the case, I think we need to do it. We need to make that call.

-Would that work for you, Pam?

-I think it would be a good thing.

It would give people the opportunity,

especially the young ones.

That's one big decision made.

But there's an even bigger one around the corner.

Should Tony close his Chinese factory for good

and bring all the work back to Britain?

How much does it cost to make it here?

How much does it cost to make in China? It's a straight contest.

It's a straight fight. It's very simple.

Can we actually compete here in the UK

and should we expand the workforce and expand the capacity here?

Tony's picked one line of cushion currently made in China

to run a test on.

Could it be cheaper to make in Britain?

-We will win.

-We will.

Bring on, I say. Bring it on. I love a challenge.

This is the moment the factory has been building towards.

In the UK, Pam will record how many brown striped cushions

Joanne can make and how quickly.

Ready? Now!

Over in China, Zhong's got the same line,

but with blue and green stripes.

And while the sewing race goes on,

Lindsay is crunching the numbers, adding in shipping costs,

taxes and working out how the exchange rate affects the price.

Thank you.

The moment of truth has arrived

and the results are good news for Kirkby.

Last year, it was 55 pence cheaper to make it in China. Last year.

With the exchange rate and the costs in China going up,

what you're saying is, there's only eight pence difference this year.

That's where I think we are now.

I think if you can get your output out of the UK factory

up from 800,000 to a million, I think it's going to be closer

to no benefit, basically, of doing it in China.

So what you're saying to me now is, if we haven't hit it already,

we're very close to hitting that tipping point.

This is big news.

By squeezing out a few more cushions a year,

they'll make enough efficiencies to mean they're as cheap as China.

Wow!

I never would have guessed that. I knew it was close,

but I thought you'd be telling me you're still two or three years off.

But you're telling me that we're more or less here.

-Thanks.

-All right. Thanks.

-Bye.

It means a lot to me and this factory because it means,

because without that much difference,

we'll get even more work than what we've got now,

which is better for us. A better future.

The game's changed. It's like somebody has moved the goal posts

and I'm going to have to re-evaluate quite a lot of things

and make some key decisions very quickly.

But will it be enough for him to decide to close the Chinese factory?

It wouldn't be the first time he's closed part of his business.

He's revisiting the hardest decision he's ever had to make.

This is his old factory in St Helens,

just down the road from Kirkby.

At its height, he employed 150 people here.

But in 2004, he decided China was the future and shut it down,

making 100 redundant.

It's completely different to the way it was

when Caldeira had its cushion factory here. Completely different.

I'm quite emotional, really. It's quite a... It's quite a...

You know, it takes your breath away

and makes you suddenly kind of realise

that the business came a long way in a very short period of time.

And it's still going. It's still growing.

Do you regret shutting this particular factory?

In many ways, it was very difficult to close the factory.

At the time, we had to close this one and open another factory in China.

A lot of people that had worked with the company for a long time had put a lot of effort into the place.

But at that time, it was a question of survival.

We had the cheapest cushions in Europe and then, literally,

within a matter of three or four years, the Chinese competition

could sell products more cheaply than we could even make them.

We didn't stand a chance. So we had to react.

If we hadn't have reacted, we wouldn't be here now

because the company would have gone bust.

I'm not thinking straight at the minute.

While Tony's deliberating his company's past and future,

Malcolm's getting his hands dirty building a brand new sewing floor.

Sorry. It's the other way around. Turn it. Let me get this right.

He's only got one weekend to do it.

I'm a little stressed. Obviously, it's a big project and we've put a lot of work into it.

OK, Nick. Away you go.

A big new sewing floor will mean room for more workers

and more cushions to be made.

I'm just so thrilled and so excited.

He might think I'm being silly, but this is what I've dreamed of.

One of Pam's dreams is to be able to have space, time and resources

to train new recruits properly

and the new sewing floor will make that happen.

We could take some more like Sophie, who has done a bit at college.

All the firms could start doing the same

and maybe start getting the industry back where it should belong.

In Kirkby, a new dawn is rising.

-I wonder how much room we've got?

-Wow! Loads of room.

-Dead bright.

-We could dance in here!

-Oh, my God!

We'll find out where we are now.

Where am I?

They've taken on China for three months

and now orders are increasing, new staff are starting

and Tony's invested £50,000 in his Merseyside factory.

Look at table! Ain't it posh!

I tell you what, it's nice and bright, isn't it? Look at this.

It's brilliant! I can't believe how bright it is.

I feel like I've moved house!

To be honest, it feels like a new factory.

This floor is that big, you could have a dance as well!

For me, it's the bees knees.

It's like moving from a terraced house to a detached house

and having loads of space.

It's the first time most of the experienced machinists

haven't been scared for their jobs in a long time.

-It makes you feel more secure.

-I said that.

-Doesn't it?

Because you think, if he's spending all this money doing this floor

and this and that, then you know that he's going to be here for a while.

-Yeah, definitely.

-He's not going to do it for nothing, is he?

-No.

Trying to take on China has pushed the relationship

between owner, Tony, and factory manager, Malcolm, to new limits.

When you said we were going to start bringing work back from China,

I thought you'd lost your marbles, to be honest.

To your great credit, and to Pam and the rest of the team, you've managed to pull it off.

What I've learned is that I need to broaden my horizons, shall we say.

I'm steady Eddy, as you know.

But some of the things you were doing at the beginning of December,

I thought were completely wild and wacky.

But what effect will Kirkby's resurrection have on China?

Tony's gathered the workforce for a speech.

What I've decided to do is put my money where my mouth is.

We're putting the company's resources into this factory.

We're investing right here. This new floor is just the first step.

The way that Malcolm's designed the floor means that we can get more staff to work here.

The Chinese factory that we've built is too big and basically,

if somebody gives me a good offer for it, then I'm quite happy to sell it.

But China's still got a really important part to play in the business.

There are still some areas where the Chinese can outperform us and out-compete us.

But now, there are some areas where we can outperform and out-compete them.

Ladies and gentlemen, as far as I'm concerned, we're bringing it home.

CHEERING

# It's coming home It's coming. #

# Cushions are coming home. #

Is the work coming back because I did that very good timing?

It's all because of you, Joanne.

-So when do we get a pay rise?

-Oh, no!

CHEERING

I still need a business in China, but not the kind of business

that I envisaged, say, five or 10 years ago

when I thought it was all going to go over to there.

Kirkby has taken on China and won.

I knew that Chinese factory was too big.

I hope he does sell it. I really do.

It's very impressive that we're going to get everything back.

I think I've just shown that you can recruit young people

and they are going to work. Do you know what I mean?

We always say British is the best so we've got to prove that now

and prove it for Tony.

Whereas before it was, China's going to win and the UK's got no chance,

that's not the case any more. We're back in the game.

Subtitles by Red Bee Media Ltd.