Europe South Asia Asia Pacific Americas Middle East Africa BBC Homepage World Service Education

Front Page



UK Politics







Talking Point
On Air
Low Graphics

Wednesday, December 2, 1998 Published at 18:04 GMT

Business: The Economy

Our two-speed car industry

A long road back for Rover

UK industry is home to some of the most efficient carmakers in Europe, as well as some of the worst.

Observers need look no further than the Midlands to see just how stark the contrast is in the performance of these manufacturing lynchpins of the British economy.

In Birmingham, a deal has finally been struck by Rover and its unions to ward off the prospect of closure of the Longbridge plant, threatened by parent company BMW after a string of losses stemming from a poor productivity record.

The same week, just 20 miles away in Coventry, the Ryton Peugeot plant is announced as the French carmaker's choice above all its European factories to meet a big increase in demand for its new 206 model.

Peugeot says Ryton deserves the boost in capacity which will see it take on almost 1,000 new workers because of an unmatched productivity and quality record.

Best and worst

[ image: Nissan Sunderland: Industry leader]
Nissan Sunderland: Industry leader
This contrast in fortunes is reflected across the country and is the result of sharp divisions in productivity between different companies in the same industry.

Productivity is a measure of how efficiently a company makes its goods or services and is usually measured as output per worker.

A survey in August by the Economist Intelligence Unit showed Sunderland's Nissan plant was the most productive of any in Europe or North America, producing 98 cars per worker each year. However, Rover's Longbridge ranked as one of Europe's worst, managing to turn out just 33 cars per worker annually.

Meanwhile, a report by the consultancy McKinsey showed that UK productivity is the worst in the Group of Seven industrialised nations.

It seems that working arrangements on the factory floor and the level of investment in new plant and equipment is crucial to the productivity performance.

[ image: Ford UK lags its sister plants]
Ford UK lags its sister plants
Sir Alex Trotman, chairman of Ford, said his company's UK plants were "at least 20%" less productive than the group average among its factories all round the world.

He cited outdated working practices leading to excessive labour costs, and costly plant and equipment.

At its most basic, this means high overtime payments and old machinery.

The UK government is concerned by the glaring disparities between companies and has urged those at the bottom of the scale to update and adopt industry's best practices.

No level playing field

To be fair to the worst performers, it hasn't exactly been a level playing field in the car industry.

Rover has a long history in British car making and has struggled to leave behind the infrastructure of previous decades along with working arrangements hard-won by the workers in more militant times.

But Nissan is a new kid on the block, with greenfields sites incorporating the latest technology and no industrial baggage preventing the latest flexible working conditions.

Importantly, Nissan and other carmakers received government grants to entice them to set up in the UK. No such hand outs for Rover and other existing manufacturers.

So it was no surprise that the beleaguered chairman of BMW, Bernd Pischetsrieder, said he would be asking the UK Government for financial help to save Rover.

It remains to be seen whether this help will come and whether Rover's 'new deal' can help lift it from the bottom of the productivity league to sit along side the likes of Nissan and Peugeot.

Advanced options | Search tips

Back to top | BBC News Home | BBC Homepage | ©

The Economy Contents

Relevant Stories

01 Dec 98 | The Economy
Midlands scores big job gain

02 Dec 98 | The Company File
Rover loses 2,500 jobs, and its chief

23 Oct 98 | The Economy
Productivity: Mind the gap!

21 Aug 98 | The Company File
Sunderland Nissan 1, Other Carmakers 0

Internet Links


Peugeot UK

Ford UK

Nissan Europe

The BBC is not responsible for the content of external internet sites.

In this section

Inquiry into energy provider loyalty

Brown considers IMF job

Chinese imports boost US trade gap

No longer Liffe as we know it

The growing threat of internet fraud

House passes US budget

Online share dealing triples

Rate fears as sales soar

Brown's bulging war-chest

Oil reaches nine-year high

UK unemployment falls again

Trade talks deadlocked

US inflation still subdued

Insolvent firms to get breathing space

Bank considered bigger rate rise

UK pay rising 'too fast'

Utilities face tough regulation

CBI's new chief named

US stocks hit highs after rate rise

US Fed raises rates

UK inflation creeps up

Row over the national shopping basket

Military airspace to be cut

TUC warns against following US

World growth accelerates

Union merger put in doubt

Japan's tentative economic recovery

EU fraud costs millions

CBI choice 'could wreck industrial relations'

WTO hails China deal

US business eyes Chinese market

Red tape task force

Websites and widgets

Guru predicts web surge

Malaysia's economy: The Sinatra Principle

Shell secures Iranian oil deal

Irish boom draws the Welsh

China deal to boost economy

US dream scenario continues

Japan's billion dollar spending spree