Sterling forces Nissan cuts

Sunderland is the most efficient plant in Europe

Nissan is to introduce efficiency savings at its Sunderland car plant because the high pound has eroded productivity gains.

The company is looking to cut its costs by 30%, but stressed that this would not mean any reduction in the workforce.

For the past three years, the Sunderland factory has been named Europe's most productive car plant.

The emphasis is not on closure but on cost reduction

John Cushnaghan, Nissan UK

According to figures from the Economist Intelligence Unit, it is 28% more efficient than the second-placed plants.

But Nissan UK managing director John Cushnaghan says the high value of sterling is placing an "unsupportable burden" on manufacturers.

"Given all that the workforce and the plant's suppliers have achieved since the UK operations began, we still face our biggest, most severe challenge ever, to secure our future," he told an international motor conference in Sunderland.

Radical thinking

"This will only be done by some radical thinking about the way we operate and by taking efficiency and cost reduction on to a new plane.

"The emphasis is not on closure but on cost reduction."

Sunderland has started producing the Almera

Mr Cushnaghan urged the UK government to move closer towards a European currency - or risk thousands more jobs being lost in the automotive sector.

"Right now the UK's manufacturing industries are not playing off scratch and are not capable of competing with this handicap," he told the meeting.

"Our competitors make better strategic use of their currencies and target our markets.

"EU monetary union has happened and it's not going to go away. The UK has the worst of all possible worlds as we are competing outside a major currency bloc.

Major employer

"The greatest threat lies with the strength of sterling and the idea we can ignore the EU."

Since opening its plant in Sunderland in 1986 Nissan has invested more than £1.5 billion and now employs 5,000 people.

It produces the Micra, Almera and Primera models.

But while Sunderland has been thriving, Nissan is in the process of closing factories in Japan and cutting 21,000 jobs.

Last year, French car maker Renault took a major stake in Nissan to help ensure its survival.