Why Nissan is in the driving seat

Feb 1 2008 by Andrew Mernin, The Journal

Car giant Nissan gave the North-East economy a huge shot in the arm yesterday as it announced plans to create 1200 new jobs in the region. Andrew Mernin finds out why the Japanese firm is bucking the trend of bad-news stories for the UK’s manufacturing sector

IT has not been a comfortable journey for Britain’s beleaguered car-building industry over the last few years, with the once-proud sector often these days reduced to a laughing stock by the likes of Top Gear host Jeremy Clarkson.

Images of workers trudging grimly from the gates of the former Rover plant in Longbridge following the bombshell news three years ago that the Birmingham factory was to close with the loss of 6,000 jobs will be hard to eradicate.

But yesterday’s announcement from Nissan goes some way to easing the pain. And the delighted response from business leaders, politicians and union leaders spoke volumes for what the announcement could mean for the North-East’s economy.

Nissan plans to create 800 new jobs, 400 of them temporary and 400 permanent, in Washington and expects to generate a further 400 North-East jobs through its local supply chain as it adds a third shift to the production line of the increasingly popular Qaisqai model. The company created 200 temporary jobs just over a year ago, due to the success of the little car with a sizeable following.

Industry experts say the news confirms the long-term commitment of Nissan to the region – good news since the company employs more than 4,300 people, almost a third of the 15,000 transport equipment workers in the North-East.

Experts also hailed the North-East work ethic as a key factor in helping Nissan defy the belief held by many other car firms that vehicle manufacturing in the UK is a thing of the past.

Roger Maddison, national officer of the Unite union, said union members were central to the success of the Qashqai.

He said: “This vote of confidence in the Nissan workforce and the UK car business is a smack in the face to the Peugeots of this world, who claim the UK is not the place to invest, and proves once again that UK manufacturing is alive and kicking.”

Tony Willard, editor of car dealer magazine Dealer Update, said the success of the Washington plant was a result of forward-thinking management and an extremely productive workforce.

“The productivity of the Washington plant is even better than in Japan – the people in the North-East have proved that they are going to do a top job for the company,” he said.

Last night Business Minister Baroness Shriti Vadera agreed that Nissan’s decision showed car manufacturing in the UK had a viable and bright future.

“Nissan’s increase in production and the creation of more than 800 new jobs is good news for the North-East, the economy and British manufacturing,” she said,

“The success of the British-designed Qashqai and record production at the Sunderland plant last year shows that the UK remains a competitive location for the automotive industry.”

Rover, which dropped the axe on Longbridge, was not alone in deciding that car manufacturing in the UK was not good business sense in the face of low-cost competition from overseas. In 2006 French car maker Peugeot-Citroen announced it was ending production at its factory at Coventry, with the loss of 2,300 jobs.

But amid the doom mongering, Nissan has continued to dominate pole position by staying in the UK. This is particularly fortunate as Nissan, along with the similarly successful Japanese manufacturer Toyota, are still seeing growth in turnover while rivals, particularly US giants like General Motors and Ford, are bleeding sales and profits and hacking jobs.

Indeed Nissan this week announced that its global production over the last year has risen 6.2% to 3,431,398 units. The Wearside plant continues to be one of the giant company’s most productive – even exporting the Qashqai to the land of its creators, Japan.

So under the bonnet, what is the secret of the Japanese firm’s success?

Much of the plaudits must be saved for the Qashqai – a crossover between a 4x4 and a hatchback which was designed and developed here in Britain.

The unusual hybrid with the fashionably robust looks, height and roomy interior of an off-roader and the easy handling and compactness and perhaps most importantly, price, of a regular hatchback have made it popular both with families and young people.

The car has picked up 14 awards since its launch and has enjoyed impressive sales across the world.

Andrew Hunt, research associate at Durham Business School, said: “Nissan is selling within the EU so if they manufactured cars outside Europe they would have to pay extra tariffs.

“If the company manufactured in Eastern Europe it would enjoy cheaper labour costs but productivity would be lower than here in the North-East because a lack of skills and education.”

Mr Willard agrees: “The Japanese like to be close to their market, so they have the Sunderland plant for the European market. Also their supply chain is in the North-East so parts can be made just in time to be put on the car.”

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Chris has never looked back

CHRIS Dent finished his apprenticeship with Nissan last May and has been working at the Washington plant ever since. He is employed on the die-maintenance pressing machine, maintaining the tools that press the car panels.

The 22-year-old, from Trimdon Village in County Durham, started to study A-levels at Sedgefield Community College but left a year into the course to begin a five-year Mechanical Engineering apprenticeship with Nissan.

He said: “I’ve always been a hands-on sort of person. I started at college and decided it wasn’t for me. I found it quite hard financially, I had a part time job.

“I applied and got on to the apprenticeship and I’ve never looked back. It’s good money all the way through, I’ve got a lot of qualifications. It’s been a positive thing that I’ve chosen to do. If you’re looking for a hands-on apprenticeship where you are learning academically as well as learning a trade or a skill, then go for it. It sets you up having a skill or a trade.”

Chris earned a BTEC national diploma and HNC in manufacturing engineering, plus an NVQ Level 3 in toolmaking during his apprenticeship. He is studying for an HND in manufacturing engineering, attending college around the three-shift pattern he works at Nissan. After he decided to return to college, Nissan said it would pay half of his course fees and he is now keen to develop his career with the car company.

“It’s looking good for the future of the company at the moment with all these new jobs,” Chris said. “Hopefully I’ll be here for the long term. I enjoyed the apprenticeship and I enjoy working with Nissan.”