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Steve Evans reports for BBC News
"Two months of will they, won't they? ends in victory for the British factory"
 real 56k

Brian Bush, Nissan worker
"The workforce is really pleased"
 real 56k

The BBC's Charles Scanlon
"This was very much a last-minute decision"
 real 56k

Thursday, 25 January, 2001, 19:39 GMT
Sunderland wins Micra contract
Carlos Ghosn, Nissan's chief operating office, and Tony Blair, UK prime minister
Carlos Ghosn (left), with Tony Blair, announcing the decision to back Sunderland
Japanese car firm Nissan has announced that it will build its new Micra model in Sunderland, securing the plant's long term future.

Nissan chief Carlos Ghosn said that the firm is to pump 235m into the factory, in the north east of England, creating 500 jobs and raising output by 50%.

The first new-style Micras will begin rolling off Sunderland production lines at the end of next year, with the plant's overall production rising eventually to 500,000, Mr Ghosn said.

"This investment is not only for the next couple of years but is an investment for 5-10 years," he said at a press conference at 10 Downing Street, home of the UK prime minister.

This is great news, not just for the North East but for the entire UK car industry

Sir Ken Jackson, AEEU

Nissan, controlled by French car maker Renault, had threatened to make the new Micra in France.

But Mr Ghosn said the record of the workforce at the Sunderland factory, the most productive car plant in Europe, was crucial in the decision.

"This decision was made possible because of the strong commitment in terms of performance made by the management and the workforce," he said.

"The credibility of this decision is in fact based on the previous track record."

Euro stance

The govenment's favourable stance towards signing the UK up to the European single currency was also "very important", he said.
Car worker at Sunderland plant
The Sunderland factory: Europe's most efficient car plant

Tony Blair, UK prime minister, on Thursday reaffirmed the government's commitment to adopting a "successful" euro when economic conditions are met.

But he denied that he had made any behind-the-scence concessions to Nissan, which had warned that the UK's position outside the single currency zone was a major disincentive towards investing in Sunderland.

"We simply set out the government's position," Mr Blair said. "That position is very clear, and it is the same publicly as it is privately."

He welcomed the decision as a "tremendous tribute to the management and workforce at Sunderland" which will give the "a whole new future".

Nissan's move underlines the UK's position as the "major place in Europe for attracting inward investment" and reinforces the importance of investing in workers' skills, he said.

Jobs threat

A decision to manufacture the new Micra in France would have endangered 1,200 of the 4,500 jobs at Sunderland.

However, UK suppliers to the Sunderland plant could still be losing out.

Nissan's British management has promised to meet tough cost-cutting targets, including buying cheaper parts manufactured in the eurozone, among concessions aimed at winning the new investment.

The move also comes at a troubled time for UK carmakers, and comes the same day as General Motors workers throughout Europe are protesting at the closure of Vauxhall's carmaking facilities in Luton, with the loss of 2,000 jobs.

Sir Ken Jackson, general secretary of the Amalgamated Engineering and Electrical Union, said the Nissan investment was a "real shot in the arm" for the sector.

"This is great news, not just for the North East but for the entire UK car industry," he said.

The news demonstrated that companies such as Ford and Vauxhall "were wrong" in deciding to scale back UK operations, Sir Ken added.

Goverment lobbying

The decision by Mr Ghosn, who has earned a reputation as a tough operator, to opt for Sunderland came after much lobbying by British ministers.

A week ago the government won permission from the European Commission to give Nissan's UK operations a 40m grant.

Mr Ghosn on Thursday acknowledged the government's "decisive help" and "active concern" over the investment.

Car industry analyst Howard Smith told the BBC: "It was very important for the Blair administration to keep Sunderland open and the 40m that they have offered and that has been approved by the European Commission was clearly the swing factor in the end."

Renault reaction

The new Micra will be the first car built around a common Renault-Nissan platform.
Louis Schweitzer, chairman, Renault
Louis Schweitzer: "Flins more expensive"

Renault, which owns the French Flins plant which had been viewed as alternative to Sunderland, on Thursday welcomed Nissan's decision to opt for the UK factory.

"We are pleased with the decision," a company spokeswoman said. "Our chairman [Louis Schweitzer] always said that building the Micra at Flins was technically feasible, but it would have requrieed a more substantial investment."

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See also:

25 Jan 01 | Business
Q&A: Why Nissan chose the UK
25 Jan 01 | Business
From Datsun to Nissan
25 Jan 01 | Wales
Car plant closure: 330 jobless
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