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Review Friday, 15 December, 2000, 17:25 GMT
Car industry troubles
It has a been a bad year for the UK car industry, with closures at Vauxhall and Ford and an uncertain future for Rover and Nissan. BBC business reporter Jonty Bloom gives personal view of the industry's problems.

I have frozen and soaked outside Ford's Dagenham plant and BMW's Headquarters in Munich for far too long for my own good.

Colleagues at the BBC have had similar experiences at Longbridge in the Midlands and Vauxhall¿s plant at Luton.

But our experiences fade into insignificance when compared to the worry, discomfort and anger felt by thousands of car workers in this country in 2000. It has not, with the best will in the world, been a good year for the British car industry.

Auto production is to end at Dagenham
Auto production is to end at Dagenham
Ford decided to end car production at Dagenham in Essex, BMW dumped most of Rover unceremoniously, and General Motors announced just before Christmas that it is pulling out of Luton.

I suppose given all the bad news it is natural to look for one or two simple reasons to explain why this is happening to Britain now.

Questionable explanations

The strength of the pound against the euro hasn't helped the profitability of plants in the UK which have to sell on Continental Europe. But it is also the case that car giants are some of the companies most able to manage international currency movements.

There has also been much talk recently of social and workplace legislation pushing up company costs.

But although the indirect costs of hiring people in the UK is rising, it is nowhere near as high as in some other parts of the world, such as Europe, which funnily enough is where some of the production lost in Britain is moving to.

The trade unions look at this problem from the other side. The cost of firing someone in the UK is lower than on the Continent so car giants close plants here first. The figures also supports this argument but I don't believe Ford or BMW make long term decisions because of such short term, one-off costs.

Many causes

But all these theories ignore the fact that car companies close and open or expand factories for a host of different reasons.

Rover was thrown to the wolves by BMW because it was losing money hand over fist.

Also, it is fair to say that BMW had no problem finding a buyer for Land Rover and is keeping production of the new mini in the UK.

Ford closed Dagenham for a totally different reason.

It is a very old plant, surrounded by the Thames on one side and housing estates on the other.

New plants are inevitably more efficient and Dagenham was just too old and tired to be worth investing in once again.

Then there is Luton, which it was thought had been saved by a deal between the unions and management, only to be dumped earlier this week.

GM it seems, just had too much spare capacity around the world and, to be honest, Luton was not its most productive plant.

Companies, I am afraid, make mistakes just like everyone else, and having looked at the numbers again GM just decided Luton's car plant had to go.

But it isn't alone, GM announced massive job losses in Germany at the same time. We aren't the only ones to feel the cold winds of globalisation.

Reasons to be cheerful

And amidst all this doom and gloom there was good news for the British motor industry. Honda is to double production at its British factories and BMW is building a new Rolls Royce factory in the South of England.

But the changes in the world's car markets aren't going to end with the sound of Big Ben at midnight on the 31st.

Nissan's Sunderland plant is very efficient but still seems unlikely to be win production of the new Micra - that is likely to be built in France.

And the long term future of Longbridge is far from secure.

2001 is likely to provide some more excuses for more hand wringing about what is wrong with the British car industry.

But the only conclusions I can draw is that no matter how efficient or large your car plant is it is merely a pawn in a massive global industry.

Perhaps if Britain actually owned or controlled a global car giant (or two) things might be different, but we don't.

Britain like many other countries is dependent on the decisions of multinational car giants and will continue to be so.

It seems I had better hope I get a new overcoat for Christmas this year.

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