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Monday, 15 January, 2001, 12:58 GMT
Nissan's Sunderland fears
Nissan car production plant, Sunderland
The workforce adapted so well that Sunderland-built cars started to be exported to Japan
By the BBC's North East Business and Industry Correspondent, Ian Reeve

The Japanese car company Nissan is deciding where to build its new Micra model, which is currently built at Sunderland in the North East of England.

The company claims that it is been hammered by the strong pound, and there are fears that a factory in France will win the work, putting at least some of the jobs of the Sunderland workforce at risk.

When Nissan came to the North East in 1984 it trailed nothing short of a workplace revolution in its wake.

Nissan factory - Sunderland
Being the most productive car plant in the company counts for little

It may well have been a manufacturing company coming to Sunderland, a manufacturing town, but its working practices were so different that they required the first workers recruited by the Japanese company to forget all they had learned in the shipyards, down the mines or in other traditional jobs.

Japanese cullture

Although Nissan styled itself as a North East company that just happened to have its parent company in Japan, the workplace culture it brought with it was straight off the the Tokyo shopfloor.

The new Nissan recruits worked in teams, they all wore the same uniform, and ate in the same canteen as the managing director - who also wore the obligatory blue overalls.

They also had to adapt to working notions such as continual improvement or keizen in Japanese.

No matter how good a job you did, you could always do better.

Remarkably, the workforce adapted so well that Sunderland-built cars started to be exported to Japan.

The quality was indistinguishable from those made in the mother country, and they were built quicker and cheaper too.

That reputation is still cherished by management at Sunderland.

Threat of the pound

But what the Sunderland workforce can't do is outwit the strong pound which has increased the price of each car - in terms of euros - by around 30%.

That means that most of the cars that come out of the North East factory are sold at a loss.

About 75% of the 330,000 cars made there are exported to Europe.

And for every Micra model that the workers make the company incurs a loss of about 2,000.

What Nissan says it can do is increase production to about 500,000 cars a year. It's also managed to get the 5000 workers to agree to working new, more flexible shifts.

And it is likely win a 40m Government grant to help kickstart production of the new Micra.

Made in France

But even that impressive package could not to be enough, and the work may well be placed at Renault's factory in Northern France.

Renault, of course, now takes the important decisions, having taken a 37% stake in Nissan eighteen months ago, effectively stopping the Japanese company from going bust.

And if the new Micra is built in France, the decision will be significant for a number of reasons.

The most obvious is that at the moment 1,300 workers make the Micra, and a further 5,000 work in North East supply chain companies making Micra parts.

If, from 2003, the new Micra is built in France then those jobs could go.

Building a new Nissan car outside of the Nissan family for the first time would would also mean the so-called branch plant economy is alive and well.

Nissan may well claim that it is a North East company that just happens to have its headquarters in Japan, but it looks as if being the most productive car plant in the company counts for little.

When the economics begin to bite it is the overseas branch that gets lopped.

Political ramifications

Some people believe that the Government shouldn't be swayed by Nissan's threats.

The company has long said any new investment at Sunderland can't be countenanced until the UK commits itself to what it calls a "stable exchange rate mechanism".

That is shorthand for joining a single European currency. Supporters of sterling will no doubt raise a cheer as the Micra motors off to France.

Perhaps the oddest thing of all though is that the trade unions at Renault don't want the Micra.

According to Phillipe Martinez of the CGT union, the French factory has enough work already.

"The factory here is actually short-staffed...for the workload that exists there just aren't enough workers," he said.

For those Nissan workers who build the Micra, after seventeen years of keizen, the subjugation of their individuality, the new ways of working, and the lack of any real union power, to lose their jobs to workers who don't want the Micra would be an irony almost too hard to bear.

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