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Thursday, October 22, 1998 Published at 08:47 GMT 09:47 UK

Business: The Company File

Gloomy day for UK car industry

Mandelson: not in the driving seat

The future of the UK's car industry is looking increasingly gloomy as Rover discussed plans for further job cuts on the day that Ford said it is to cut production in the run-up to Christmas.

But while Rover blames poor productivity at its Longbridge plant for the job cuts, Ford's Dagenham plant has seen productivity increase dramatically over the last few years and the company blames falling export demand for its decision to cut back production.

Mandelson meets Rover

The UK Trade and Industry Secretary Peter Mandelson has held talks with the chairmen of Rover and BMW to discuss plans to cut 2,400 jobs, mainly at Rover's Longbridge plant in Birmingham.

Stephen Evans reports on the problems facing Rover
Bernd Pischetsrieder, chairman of Rover's parent company BMW, said it had been a "good meeting" and "we informed the government of what the situation is."

Mr Pischetsrieder said he had not asked Mr Mandelson for any specific aid.

The Trade Secretary has already ruled out any government intervention to reduce the job losses and made it clear that it is up to the company to "sharpen up its act".

"Ultimately it is for the company to rise to the challenge and to ensure that Rover continues to thrive in the global marketplace," Mr Mandelson told the Commons.

Chancellor Gordon Brown reiterated the stance when he told the BBC's One O'Clock News that Rover was in trouble because of low prodictivity, not the high pound or interest rates, restating his position of earlier this year.

[ image: Tony Woodley:
Tony Woodley: "Serious shock for workers"
Union officials are continuing to discuss their response to being told to accept the redundancies or face the closure of the factory at Longbridge.

According to the unions, such a move would jeopardise up to 14,000 jobs at Rover and 50,000 with suppliers.

Chief negotiator of the Transport & General Workers Union and Chairman of the Joint Unions Committee at Rover, Tony Woodley, said the unions had not yet accepted the job cuts, but stressed that nobody doubted the seriousness of Rover's situation.

Tony Woodley, chief negotiator for the unions, says BMW told them job cuts were imminent
He said Rover suffered not only under the high value of the pound, but from a "short-term cash and confidence problem" as well.

Rover's problems have caused a political dispute, with the opposition accusing the government of causing the crisis.

Mike Williams looks at the evolution of goverment industrial policy
Traditionally, Labour governments have had a hands-on approach to industrial negotiations, especially during the strike-ridden 1970s.

In today's market however, with decisions affecting British car production being made in Munich and Detroit, this is no longer viable and Mr Mandelson is insisting that the issue has to be resolved between management and unions.

Management believes that the low productivity of the workforce compared to other car factories is the main problem.

Rover's Bernard Carey says the company wants its workers to be more flexible
Before meeting the unions, Mr Pischetsrieder said : "The shareholders of BMW can't be prepared to spend money in a business that hasn't a viable output and therefore the productivity gap has to be closed."

Rover's management says that as well as job losses, it is pressing for other cost saving measures, including a possible wage freeze and changes to working practices.

Ford sees exports fall

Ford has announced further production cutbacks at its biggest UK plant because of a fall-off in exports.

Its plant at Dagenham in Essex, which is already on a four-day week, will not produce cars on eight extra days in November and December.

The company said the move was part of a continuation of the "softening" of exports and was not linked to the strength of the pound.

The company stressed that no worker would be laid off or made redundant despite the cutback in production.

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