Nissan riding a smooth road to continued success

Mar 20 2008 By The Journal

Japanese car maker Nissan has been the wellspring of Wearside’s industrial economy since it opened its UK factory 23 years ago.
Iain Laing looks at its success story as 800 more jobs are created at its Washington plant.

THE UK’s beleaguered motor industry has not had a comfortable ride in recent years. Where once it conjured images of stately Rolls-Royces cruising country lanes, in the last couple of decades one thinks more readily of news flashes announcing redundancies. Images of workers trudging grimly from the gates of the former Longbridge Rover plant 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.

Those images were burned into the national consciousness with the loss the following year of 900 job losses at Vauxhall’s Ellesmere Port plant and the closure of Peugeot’s Ryton plant, near Coventry, with the loss of 2,300 jobs.

But there are some very notable exceptions – and Nissan is one. The Japanese company’s legendary efficiency and its ability to keep up with market trends have meant it has held the road much better than its rivals. While US rivals like Ford and General Motors continue to shed thousands of jobs, Nissan keeps on growing.

The Washington plant’s bosses lifted the North East’s spirits when on a February morning they announced plans to create 800 jobs, 400 temporary and 400 permanent.

Furthermore, the expansion is likely to create another 400 jobs in Nissan’s supply chain in the region.

The delighted response from business leaders, politicians and union leaders spoke volumes for what the announcement could mean for the North East’s economy.

It comes with the addition of a third shift to the production line of the increasingly popular Qashqai model. The company created 200 temporary jobs just over a year ago, due to the success of the little car with a sizeable following.

The Qashqai was only launched 12 months ago and sales have topped 130,000 units to date. A record 353,000 units of Qashqai, Note, Micra and Micra C+C rolled out of Washington last year.

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.

Business minister Baroness Shriti Vadera agrees 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 the UK remains a competitive location for the automotive industry.”

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.

Sarah Green, regional director of the Confederation of British Industry North East, said: “This is fantastic news for the North East and is a real demonstration of how good manufacturing can compete in the UK. It represents Nissan’s largest-ever recruitment campaign in the region and it is a great opportunity for individuals to get an excellent career and develop world class skills.”

Roger Maddison, national officer of the Unite union, said the jobs announcement was “fantastic news” for the economy and workers, adding: “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, believes 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 says.

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 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. Wearside is even making Qashqais to ship back to Japan.

Andrew Hunt, research associate at Durham Business School, says: “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.”

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Timeline

:: 1984: Nissan and the UK Government sign an agreement to build a car plant in the UK.

:: 1985: After 62 weeks, the completed Nissan factory in Sunderland is opened and 22 supervisors join the firm.

:: 1986: The first Nissan Bluebird rolls off the production line and Prime Minister Margaret Thatcher officially opens the plant.

:: 1987: Employment reaches 1,100.

:: 1988: Employment reaches 1,300 as exports of left-hand drive cars to Europe begin.

:: 1991: Recruitment drive begins for 1,000 new workers.

:: 1994: Sunderland plant is named Britain’s biggest car exporter for the previous year.

:: 1995: Additional £250m worth of investment increases Nissan’s commitment in the UK to £1.25bn.

:: 1999: 800 new members of staff recruited from over 11,000 applicants.

:: 2001: 300 temporary staff join the firm for the start of production of the new Primera car.

:: 2003: World Markets Research Centre identifies the plant as the most productive in Europe for the seventh consecutive year.

:: 2005: The Qashqai becomes the 10th new model to come to Sunderland.

:: 2006: 1,000 jobs created as work begins on the Qashqai.

:: 2007: 280 new jobs created to keep up with demand for the Qashqai.

:: 2008: Nissan begins 800-job recruitment drive to produce yet more Qashqais.