By Ellis Butcher Business editor

Last updated at 14:11, Friday, 10 August 2012

Pirelli is to drive £9 million into upgrading its Carlisle tyre factory.

The massive investment – a major boost to the city’s economy – was announced by Deputy Prime Minister Nick Clegg today.

He told a meeting of global and British business leaders in London that the cash would be used to advance process machinery and improve productivity.

Mr Clegg said: “The development of products in Carlisle will result in a further £9m investment in new process machinery for volume production, which will secure existing direct and indirect jobs.”

Pirelli told The Cumberland News that the Italian tyre giant’s investment would be added to a £2m Government grant recently confirmed for its Dalston Road operation – taking its investment for Carlisle to £11.4m.

Its commitment to the city has been hailed as good news.

MP John Stevenson said: “Any investment by Pirelli in Carlisle is hugely welcomed. It will secure the existing employment at the plant and for the future which is very significant.”

While no new jobs appear to be created in Carlisle at this stage, the investment is being viewed as a vote of confidence for its city factory, the northern most English outpost of the global firm.

The Italian-ordered programme at the Dalston Road plant comes after it benefited from investment-unlocking money from the Government’s regional growth fund.

That cash was won following a bid drawn up by business leaders on Cumbria Local Enterprise Partnership, Cumbria Chamber of Commerce and Pirelli executives.

Pirelli’s focus in Carlisle is on making “premium products” – high-end quality tyres for big brand luxury cars.

Ironically, it was the specialism in this sector of the market which saw the operation enter a worrying chapter when the credit crunch took hold, leading to a string of redundancies in 2008 and 2009.

Pirelli also today announced it was expanding research and development in the UK, ploughing millions of pounds into that, creating 37 new and protecting 120 UK jobs. It’s total UK investment including Carlisle is expected to be about £20m.

The announcements were made as the Deputy Prime Minister spoke at the first ever British Business Embassy event, being held during the Olympic Games to showcase home-grown success stories to the world.

Mr Clegg told the audience: “The skills and expertise of British businesses are gold medal standard and highly sought after across the world. The UK is one of the top 10 manufacturers in the world. Our manufacturing sector is a national success story and lies right at the heart of our strategy for economic recovery and growth.

“The announcements being made today will create and safeguard jobs and stimulate growth. They are a welcome boost to British business and a vote of confidence in the UK.”

The improvements and expansion of its operations completes a good 2012 for the Pirelli Group and Carlisle. This year, the group posted a recession-busting 46 per cent rise in profits. It announced £169m in the three months to the end of March, compared with £115m last year.

Senior representatives attending the London business summit included major global brands such as Airbus, Jaguar Land Rover, JCB, McLaren Racing, Nissan, Rolls-Royce and Siemens.

They will be discussing the strength of the UK as a trading partner and the investment location of choice.

It is one of 17 global business summits taking place during the Games, organised by UK Trade & Investment.

First published at 14:07, Friday, 10 August 2012
Published by http://www.cumberlandnews.co.uk