Manufacturing has a strong future but there will be casualties along the way, director general of the Institute of Directors Miles Templeman warned on a visit to the West Midlands.

And, touring Worcester Bosch, the domestic heating and hot water products manufacturer, he hailed the company as an example for others to follow.

Accompanied by regional director John Phillips and a party of representatives from the IoD and development agency Advantage West Midlands, Mr Templeman also saw round the Morgan Motor Company at Malvern Link and new facilities for Worcester University.

The director general was clearly impressed by the levels of research and development, training and investment being committed by Worcester Bosch.

"Their whole attitude towards things like new technology and the environment is addressing the sort of key issues that business needs to face today," said Mr Templeman.

And of the overall state of the manufacturing sector - hurting during the recession - he was upbeat.

"We are doing better than people give us credit for. There is still a lot produced in this country and indeed a lot produced by the car industry. I am very positive about our manufacturing sector. There are going to be winners and losers. We need new technologies and new businesses coming through. Some of the old industries where they are unable to compete will end up going, however painful that proves to be."

And he said he was comfortable about overseas ownership of British companies where visionary partnership approaches offered a good future.

Worcester Bosch, founded in 1962 by entrepreneur Cecil Duckworth was acquired by German giant Bosch in 1992 - today the group has 271,000 workers and a turnover of 46 billion euros (£42 billion).

The company employs 1,200 workers at its headquarters in Warndon, 250 more at a second plant at Clay Cross in Derbyshire and some 450 field engineers.

It has a turnover of £332 million, has seen growth average 13 per cent per year and it enjoys a much coveted 'By Appointment to Her Majesty The Queen' badge.

During the visit Richard Soper, managing director of Bosch Thermotechnology, which takes in Worcester Bosch, urged the Government to offer the sector "clarity" in terms of the green agenda.

"We are very positive about the future, but we just need some light as to which way to go in order to ensure that we invest in the right way."

Meanwhile, Morgan Motor Company turns over around £26 million and produces 700 cars a year.

And Mr Templeman said he was fascinated how it had managed to marry the old with the new.

Classic Morgans now vied with "space age models" for people's affections.

Praising the quality workmanship which goes into the cars, he also highlighted the giant strides made in their environmental performance.

"I had heard a lot about the company and it was as good as I expected," he asserted.

Its best known models today are the Aero 8 and the Roadster.