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'Lean' British impress German industrialists

GERMAN industrialists yesterday predicted that Britain's importance as a production centre will increase, underpinned by low taxes, investment incentives, good worker morale and 'quiet' trade unions.

This was the verdict of a 21- strong delegation from the Confederation of German Industry (BDI) that was visiting four companies in Britain to learn about their experiences with lean production.

'For many, what they saw was a key experience,' said Kurt Steves, who headed the delegation. 'Firms have managed to achieve a high work rate, with minimal production errors, and a degree of flexibility unknown in Germany.'

The four firms visited were Nissan in Sunderland, Bosch in Cardiff, Komatsu in Durham and ITT Tever in Ebbw Vale.

Mr Steves said lean production was not a technical process, but a management philosophy based on trust and the delegation of responsibility, neither of which was common in the German business environment.

What has happened at Bosch and Nissan will not stay lone examples, but will exert far-reaching influences in Britain, increasing its advantages over Germany as a production centre, according to Mr Steves. Management structures in Germany must become flatter, less hierarchical, and there must be more teamwork, with responsibility pushed downwards.

In Britain it is possible to run machines seven days a week, 24 hours a day, unlike in Germany. Bosch had a no-strike agreement with its unions. The more flexible and effective management structure enhances a cost advantage for the firms in Britain that is already massive.

According to Sigrid Zirbel, the BDI's lean production specialist, the firms visited enjoy cost advantages of between 20 and 50 per cent compared with western Germany.

The delegation found that Bosch, above all, had managed in Britain to find an advantageous balance between Japanese practices and German methods. 'The firm has managed to place motivation at the forefront of its management method, informing workers clearly of company goals,' Mrs Zirbel said.

West German industrial orders fell a price and seasonally adjusted 3.5 per cent in December from November and were down 6.7 per cent year-on- year, the Economics Ministry said. For 1992 as a whole, western German industrial orders fell 3.7 per cent from 1991. Domestic orders dropped 3.4 per cent in 1992 from 1991 while foreign orders were down 4.1 per cent.

The Federal Statistics Office announced that business insolvencies in western Germany jumped by a quarter to 799 in November from the same month a year earlier.