Sanjoy Sen is a chemical engineer in North Sea oil and was the Scottish Conservative & Unionist candidate in Aberdeen North at the 2015 UK general election.
Tomorrow marks 30 years since the official opening of the Nissan car plant at Washington (near Sunderland) by Margaret Thatcher. You’d be hard-pressed to find too many dissenting voices over the factory’s subsequent track-record: 7,000 employed directly, 25,000 in the supply-chain plus knock-on benefits across the north-east. Churning out half a million units annually, over three-quarters are exported, some even to Japan. And all this without a single day lost to industrial action.
It’s worth recording milestones like this. Not just to remind those whose say the Tories did nothing for manufacturing but, more importantly, to ‘bank’ the learning for future industrial policy-making. In this context, it’s important to note that Nissan’s success is built upon three elements coming together: government, workforce and industry. There are limits to what government can and can’t do. By contrast, an earlier motoring (mis)adventure, Rootes at Linwood (near Glasgow) ended disastrously with those actors out of sync throughout. And, of course, no discussion of the motor industry can ignore the fate of BMC / BL / Austin-Rover / Rover Group / MG Rover (delete as appropriate according to the reader’s age).
Key to Washington’s success is government recognition that Nissan understood car-making much better than they ever would, thus noting the dangers of over-interference. Having offered attractive terms for the Wearside site they essentially left Nissan to get on with things. Ditto for Toyota, arriving in Derbyshire soon afterwards.
By contrast, in the late fifties, whilst Rootes saw its Ryton base (near Coventry) as the natural home for its new small car, government refused an Industrial Development Certificate. Instead, by offering relocation grants to a ‘designated development area’, the Hillman Imp came to Linwood. Sadly, worthy aspirations over-shadowed realities and chaos ensued.
The workforce was inexperienced, development rushed and the vehicle over-complex. Ryton facilities (completed before further expansion was barred) had to finish Linwood engines before returning them north for installation. Quality suffered and costs spiralled. And even after Rootes’s sold up to Chrysler, further headaches followed; when the new owner later ran into difficulties, the government bail-out merely piled pressure on rival British Leyland.
Given the state of industrial relations by the early eighties, strikes were doubtless a major concern for investors contemplating the UK. Persuading Nissan to take a leap of faith is arguably an unsung industrial achievement in itself. The single-union Washington deal (with the AEU) was controversial in its day but industrial relations remain positive.
And it’s not as though the workforce appears cowed by its mighty employer; Sunderland was emphatically pro-Leave despite Nissan’s warnings. Brexit has naturally led to questions but uprooting a successful operation and firing good employees rarely makes sound business sense. Earlier this year, well ahead of the referendum, Nissan announced further investment in electric vehicles at Washington.
With a workforce from the (once-Red) Clydeside shipyards, Linwood’s militancy helped guarantee its own early demise. Its third owner, Peugeot, paid just a dollar in 1978 but pulled the plug three years later. I’ve hypothesised how UK politics might now look had Nissan followed Rootes to central Scotland; it’s much harder to make the case for separation with thousands of extra pay packets in the industrial heartlands. In reality, though, reputations stick and it’s unlikely Nissan would have even contemplated gambling on that workforce. More worryingly for inward investors, the hard left seemingly lives on in niches; Ineos were forced to contemplate shutting the vast (former BP) Grangemouth refinery as recently as 2013.
Free market industrial players need to remain competitive in terms of value, quality and, crucially, something the government can’t help with: desirability. Those first Washington Bluebirds were crammed with ‘extras’ and capable of stellar mileages but looked depressingly conventional. Mighty Nissan ran into trouble globally soon afterwards, partly thanks to a dowdy product line, and the 1999 forced merger with Renault necessitated a re-think. Today’s Qashqai model owes its top-five sales position to precision market research and its British design studio; its apparent quirkiness is, in fact, planned to the nth degree. (Incidentally, when Rover attempted a similar ‘crossover’ concept some years earlier, the motoring press laughed; once it became fashionable to knock the British car industry, some found it hard to stop.)
Rootes pre-dated the era of the marketing graduate so missed out on creating the ‘premium active compact’ concept. (That’s Nissan’s latest Q30 variant, and no, I don’t know what any of that means, either.) Four years earlier, the Issigonis Mini had revolutionised the small car layout; rather than re-assess, as any project (private or state) periodically should, Rootes ploughed on with its expensive interpretation of an ageing concept and was ultimately ruined.
And, briefly, what of Rover? Whilst UK vehicle output is heading for a record of two million annually, we can’t readily dismiss the fall of our final mass-producer and the resultant loss of jobs and skills. The new British Motoring Museum at Gaydon (near Coventry, where else?) bears witness to so much wasted promise: rejected prototypes rub wing-mirrors with poorly-executed production models.
Despite previous BL woes, having enlisted Honda input, things were rapidly improving by the late eighties. But the sell-off to British Aerospace eventually led to a 1994 takeover by a BMW rival who themselves were almost dragged under by Longbridge’s losses. And when the opportunistic ‘Phoenix Four’ inevitably foundered in 2005, defeat was finally snatched from the jaws of victory.
That said, our diversified production base has reduced reliance on a national monolith. Despite a state holding, Renault becomes less French-focussed by the year, increasingly supplying the EU from its tariff-exempt Moroccan operation and Romanian sub-brand, Dacia. Meanwhile, Americans express dismay that despite their taxpayer-funded bail-out, GM continues to shift manufacturing to China. Had Rover survived, it would almost certainly be as part of a global conglomerate and staying competitive by out-sourcing.
The only workplace from my youth which I am certain still survives is the bookies, William Hill. All my early-career engineering employers, including British Steel and ICI, are either a shadow of their former selves or long gone. If we are to re-balance the economy away from banking and services and back towards manufacturing and create opportunities beyond the south-east, we owe it to ourselves to learn the lessons from the past.