James Dyson: Dyson cleans up in America, but has he brushed a few things under the carpet?

The man who breathed fresh air into the vacuum cleaner once called for a renaissance of British industry. Then he promptly moved abroad. So, is he a genius or just a realist, asks Clayton Hirst

There are few businessmen who raise the passions of the British people quite like James Dyson. Thousands of customers swear by his iconic grey and yellow vacuum cleaners; to them Dyson, the man, is the quintessential British inventor-cum-businessman, the eccentric who has taken on the industry giants, and won. To others - especially the trade unions - he is a traitor, the man who called for a renaissance in British manufacturing and then upped sticks and moved his factory abroad.

There are few businessmen who raise the passions of the British people quite like James Dyson. Thousands of customers swear by his iconic grey and yellow vacuum cleaners; to them Dyson, the man, is the quintessential British inventor-cum-businessman, the eccentric who has taken on the industry giants, and won. To others - especially the trade unions - he is a traitor, the man who called for a renaissance in British manufacturing and then upped sticks and moved his factory abroad.

It's two and a half years since Dyson announced that 800 people would lose their jobs after he decided to move production from Malmesbury in Wiltshire to Malaysia, and still the debate rages over this British inventor. Dyson is polite, quietly spoken, a tad posh, and is certainly no loudmouth - hardly the sort of person who typically incites such divided opinions. But the 58-year-old has become a symbol in the increasingly personalised debate over globalisation and outsourcing. So will the real James Dyson step forward?

"I would prefer not to use the word 'hypocrite'," he says of his decision to move his factory to Malaysia. "I prefer to say that I had to do a volte-face."

This volte-face is paying mighty dividends for Dyson the company and the man. It emerged last year that Dyson and his wife, Deirdre, took £17m out of the company, a revelation that aroused fierce criticism from the unions. Last week we learnt why Dyson was able to extract such a large stack of money: the business is booming. Unaudited figures reveal that for the last calendar year, Dyson made a £102.9m profit, up 137 per cent on the previous year. He is now enjoying considerable success in the US, having overtaken Hoover as the No 1 vacuum-maker; he commands a 20.7 per cent market share.

Impressive stuff. But this, argues Dyson, probably wouldn't have been possible if the company had kept its vacuum production here. "I have been manufacturing in Britain for the past 36 years," he says. "I invested £40m into a vacuum cleaner factory, and I would love to still be there now. But it simply wasn't possible. If anyone else thinks it is, then they are welcome to have a go. But I wasted a lot of money on the factory trying to do it."

Dyson was forced to review the Malmesbury factory after the local council rejected planning permission for an extension. This led him to realise that there were at least three other reasons why he should move production to the Far East: the factory would be closer to its suppliers; workers' wages were a fraction of those in Britain; and, controversially, he believes that the workforce is better skilled. As a result of the move, Dyson's production costs have fallen by around 30 per cent.

The company's head office is still in Britain, where it employs 1,200 people, including 350 scientists. This model, in which manufacturing is carried out in far-flung places, while the intellectual stuff - the inventing, the designing and the marketing - is done in Britain, now represents the future for much of the county's engineering industry, Dyson argues. Even so, he is concerned that the odds are still stacked against British manufacturing and engineering companies.

He blames education. "Culturally we are taught that manufacturing is dull, boring and rather exploitative, which is why I studied Latin and Greek instead of science subjects when I was at school. I remember being told that if I didn't pass my exams I would end up in a factory - which, of course, I have." He also says that the Government is at fault. "Manufacturing has been seen by the Government as something you tax and milk. The attitude has been, 'let's make some money out of it'."

A third factor, of course, is globalisation. No matter how well we educate our students in engineering and how much the Government lavishes grants on manufacturing firms, it will still be cheaper to assemble in the Far East than in Europe.

Many politicians have comforted themselves with the belief that while foreign countries can make things more cheaply, they lack the skills and nous to do the really clever stuff British companies are good at, such as research and development.

Dyson, however, warns against complacency. While he says that he has no intention of shifting his R&D to the Far East, he warns: "As a country, we haven't just got to carry on as we are. We've got to get a lot better at science and engineering to stay ahead. We have to exploit our nascent British skills of creativity and inventiveness. This is not something the Chinese, and to a certain extent, the Japanese have shown - so far."

Last year Dyson spent £40m on R&D in Britain, and he plans to increase this to £50m in 2005. But what has he got to show for it?

On 14 March, he will launch what he claims will be the biggest step change in vacuum design since he introduced the first bagless cleaner, the DC01, in 1993. It'll be called "The Ball", but that's all he is prepared to divulge at the moment.

Dyson's scientists have also developed a new electric motor based around microchip technology. The motor is smaller, lighter and can spin more than three times faster than existing units, he claims.

"This is not an evolution - it's a complete break from the old technology," Dyson says. The motor will be used in future Dyson products, but the invention has also received envious glances from some unusual quarters. "We have had a lot of interest from aerospace companies that want high-speed, lightweight, and robust motors."

Not every part of Dyson's empire is booming. While the company was last week keen to push out impressive figures for vacuum sales, data on its two-drum washing machine was noticeably absent.

"Washing machines are doing quite well," says Dyson. But he admits: "Not everyone wants to buy a washing machine that is relatively expensive at the moment. We are hoping it will pick up. We could ultimately be successful in the washing machine market. These things take time."

So, what should we make of this very successful vacuum cleaner manufacturer and moderately successful washing machine maker?

Should we judge James Dyson as a brilliant inventor and businessman or as a hard-headed manufacturer who is exploiting the free market to the full? The answer is probably both.

BIOGRAPHY

Born: 1947

Education: studied furniture design and interior design at the Royal College of Art

Career

1970: joins Rotork, an engineering company, where he manages the marine division

1973: director of Rotork

1974: leaves Rotork to concentrate on inventing. Products include the Ballbarrow wheelbarrow and the Trolleyball boat launcher

1979: starts developing the first bagless vacuum cleaner, called the G-Force

1986: launches the G-Force in Japan

1993: launches the Dyson DC01 which, two years later, becomes the best-selling vacuum cleaner in Britain

1995: moves production to Malmesbury in Wiltshire and develops more bagless vacuum cleaner models

1997: becomes trustee of the Design Museum in London

2000: launches the Contrarotator, a washing machine

2002: moves production from Malmesbury to Malaysia, costing 800 British jobs

2004: resigns as chairman of the Design Museum after a row with a director. Claims that the museum is concentrating on aesthetics at the expense of product design

2005: Dyson overtakes Hoover to become largest vacuum maker in US