...the car industry and the British economic model.

You'll probably detect a slightly downbeat mood to this blog, which is to be expected. I'm a bit of a cynic and started this as an outlet for my frustrations with the way this world functions. One of these frustrations is mis-information and the way we are often only given 'half the story' - spoken to as though we are school children rather than adults. Where is this going? Well, i've read today that GM is looking to axe a thousand jobs from its Ellesmere Port plant on Merseyside. This is a third of the workforce. To cut a long story short, this is the beginning of the end for this plant. Although GM has made no such announcement, we know they are looking to axe 12,000 jobs in Europe and this will include plant closures. Peugeot has closed Ryton in Coventry using exactly the same approach - a slow wind-down. The reality is that Ellesmere, like Ryton for Peugeot, is a small satellite operation for GM. It has bigger plants employing far more people in Germany and Belgium and it makes perfect business sense to consolidate production there. So what is going wrong for the British car industry? I think we (or should I say successive Governments) decided to turn our\their backs on the car industry nearly 30 years ago. We were told that decline was 'inevitable' and that manufacturing could not compete with the 'cheap labour' economies of the new world. This argument was then used to change employment legislation in the UK to allow for lower wages and greater flexibility (i.e. the ability for employers to change your job or sack you with a moments notice). Again we were told this would ultimately safeguard jobs and attract new industries scared of setting up in 'high cost' Europe. For a while this seemed to be true. Indigenous car companies across Europe were struggling and our own continued to decline. Yet, at the same time, we were attracting Japanese car companies to open new plants here. The plan appeared to be working. However, at the same time governments in Europe (especially in France) continued to support their own car companies, providing much needed investment. Employment legislation too continued to offer greater protection than in the UK. If we fast forward to 2006 its clear we've been hood-winked.

Today 'high cost' Germany and France produce approx 6 and 3.5 million cars a year respectively, compared to a deteriorating 1.8 million in the UK and workers there enjoy greater employment protection and healthcare. I was shocked to learn that Spain makes more cars than we do at approx 3 million. Our high cost neighbours are home to four of the world's biggest, strongest and most profitable companies - Renault, PSA (Peugeot/Citroen), Volkswagen and BMW. So much for 'inevitable decline' eh? and the need to free up the labour market. After an initial surge thanks to the Japanese, expansion in Britain ground to a halt. We've allowed our indigenous car company to die (once the biggest in the world) and we are now nothing more than a satellite assembly location for several multinationals. Coupled with our weak labour laws, announcements like those at Ryton, Dagenham and Luton before and Ellesmere port to come, are - dare I say it - 'inevitable'.

I don't believe our car industries decline was inevitable 25-30 years ago, but today it is a fact. We were fed a line back then. Government's of both colour struggled with the trade unions and the car industry became public enemy no.1. In another 30 years there will be little or no car production in the UK. Have a nice day ;-)