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Last Updated: Wednesday, 13 September 2006, 12:29 GMT 13:29 UK
New Mini steers UK manufacturing hopes
By Jorn Madslien
Business reporter, BBC News, BMW's Plant Oxford

UK Chancellor Gordon Brown and BMW boss Norbert Reithofer
The Mini's new launch attracted some big business names
The unveiling of BMW's second-generation New Mini brought together business and political leaders hoping to continue past successes.

One of the men on hand to launch the new Mini was BMW's freshly-installed chief executive Norbert Reithofer.

Mr Reithofer has taken over from the recently retired Helmut Panke, who during his four years in charge of perhaps the world's most successful premium car company saw sales rise 44% to 1.3 million and earnings increase by 21% to a total of $59bn (31.5bn).

The new Mini model also has a tough act to follow, though its task - to raise sales from 200,000 to 250,000 per year - could prove relatively unproblematic, given its predecessor's impressive performance since it hit the road in 2001.

"Mini is one of the few cars that have not seen any decrease in orders, even in its sixth year of production," said Mr Reithofer, whose company is expected to clock up operating profits of $5bn this year.

Mutual support

But perhaps the man with the biggest boots to fill was UK Chancellor Gordon Brown, who has been widely tipped as the successor to Prime Minister Tony Blair.

"The Mini has strong appeal and will continue to do so for years to come," said Mr Brown, who arrived straight from a closed-door dinner with union bosses to showcase his industry-friendly credentials.

If we can build modern manufacturing strength, we can all prosper
Gordon Brown, UK Chancellor

"It is an exciting symbol of a growing and dynamic economy," he said, highlighting the Mini as an example of the "continuing vitality of the UK motor industry" and as "an icon of what's great about Britain, a symbol of modernity".

Mr Reithofer was quick to return the compliments.

"BMW benefits from an investment friendly environment in the UK," he declared.

"Business leaders need economic stability when taking mid-term and long-term investment decisions," he added.

"Chancellor, your handling of the economy has provided the stability we need, providing the right environment for us to develop our business in the UK," Mr Reithofer continued.

Future direction

But amidst the praise there was veiled conditionality.

According to Mr Reithofer, BMW will only continue to invest in the UK, where it will soon employ 6,800 people, if the government - also under Mr Brown's anticipated leadership - continues to facilitate such investment.

BMW's new Mini production
BMW has invested millions in its UK production line

Mr Brown - who warmly welcomed BMW's 200m investment in the production of the new Mini model - vowed to do so, in a clear hint at his intentions for the future.

"We can have the most successful manufacturing economy ever," Mr Brown declared, vowing to announce further measures to remove barriers to labour market flexibility in this autumn's pre-budget report.

"If we can build modern manufacturing strength, we can all prosper," he said.

Responding to Mr Brown's comments was yet another successor, namely Richard Lambert who recently took over from Sir Digby Jones as director general of the CBI business group.

"I think he's dead right," Mr Lambert told BBC News on the sidelines of the launch, urging the government to continue the work on the opt-out of the European Working Time Directive.

Flexible workforce

Mini's growth in the UK has seen its parent company BMW innovate with regards to working practices in the car industry.

Factory workers build the cars to order, in accordance with the specifications of its customers, and a third shift has been added at its factories so that the firm has the capacity to work around the clock, seven days a week.

"One of our key strengths is our highly committed and flexible workforce," says Mr Reithofer.

BMW has even shifted engine production for the Mini from Brazil to the Midlands, and UK suppliers will deliver 60% of the new Mini's components.

It is a success story that Mr Brown is keen to play to his advantage.

"We in government recognise that to support manufacturing achievement, we have a role to play," he said.

"Success does not happen by accident. It happens by design."

New Minis on the production lines in Cowley

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