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Why the UK car industry owes a debt to Sunderland

By Jay Nagley

The news that 2013 UK car production hit 1.5 million, its highest level since 2007 and on target to pass the all-time record of 1.92m set in 1972, raises the question of how have things gone so right?

To get a bit Life on Mars for a moment, in 1982, production sank to 888,000 and seemed to be heading towards zero at a frightening pace. It was fashionable at the time to say that car production was a daft industry for us to be in anyway – we should be making software and leave metal bashing to low-paid workers in Asia and, eventually, Africa. Indeed a man who was very fashionable at the time, Clive Sinclair, said exactly that. Two unforeseen things then happened (or three if you include the demise of Sinclair).

     
 
 

Jay Nagley was a market analyst at Porsche Cars GB before spending the past 13 years as the head of Redspy Automotive, his own analysis and forecasting consultancy.

 
 

Firstly, the Western car industry decided the doom-mongers were half-right – carmakers’ only chance of prospering was to make more technologically advanced (and reliable) cars that would stay ahead of factories in emerging markets. A 1979 Ford Escort was technologically little different from a 1959 Ford Anglia. A 1999 Focus was on a different planet, and was impossible to copy without the resources of Ford – as the likes of Proton demonstrated so clearly.

Secondly, Nissan’s factory in Sunderland was established. Sunderland was not simply a clone of a Japanese factory – it was far more important. It had managers from the UK car industry who were given a clean sheet of paper to come up with personnel policies that would make industrial strife a thing of the past. Some clever policies and a great deal of hard work demonstrated the apparently impossible – a fantastically productive British car factory with great quality and excellent industrial relations.

The policies now seem so obvious, like all the best ideas: Pendulum arbitration meant each side had to make realistic bids when negotiating pay rises – the choice was between the two figures submitted, so a silly bid from one side automatically lost it the argument. Foremen selected their own workers, so they could never complain about the performance of their team.

 

How the ‘Nissan effect’ took hold

The “Nissan effect” rippled through the rest of the UK car industry, although it did take 20 years to reach the furthest shores (Land Rover’s Solihull plant arguably being the last one to come into the 21st century after a mighty effort by Ford).

Today, the UK is a good place to assemble cars. Productivity is high and strikes are rare. While there are occasional flare-ups, such as the argument at Mini’s factory about the treatment of temporary workers a couple of years ago, relations are more harmonious than almost anywhere else in Europe.



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