Sunderland shows you can with a Nissan
News Analysis: Rover isn't the only car maker lagging behind Japanese efficiency
Friday 21 August 1998
The manufacturing workforce of just under 2,800 at Sunderland produced 98 cars per employee last year compared with the 33 cars produced by each member of Longbridge's 10,000 workforce.
Analysis by the Economist Intelligence Unit lends support to claims by the Chancellor, Gordon Brown, that the recent job losses announced by Rover had less to do with the strong pound and more to do with increasing productivity.
The Sunderland plant, built in 1985, is one-fifth more productive than its nearest European rival, General Motors' Eisenach factory in east Germany. It is also more efficient than any car plant in North America and better than most factories in Japan, according to the EIU's global audit.
Only two other UK car plants feature in the European top 10 and one is another Japanese factory - Honda's at Swindon.
There's better news for workers at Ford's Dagenham plant in Essex. According to the EIU, this is now the most productive Ford plant in Europe, producing 62 cars per man a year compared with 59 at its Saarlouis factory in Germany. This is one of the two Ford plants on the Continent selected in preference to Halewood to build the successor to the Escort.
Ian Robertson of the EIU said the main message from the annual audit was that, while Japanese car plants remained in the lead, European manufacturers were closing the gap. In 1996 only two European car plants produced more than 70 cars per employee. Last year that figure rose to four.
But the gulf between Nissan and the chasing pack has widened: Nissan has improved from 73 to 98 cars per employee, with its nearest rival, Eisenach, going from 70 to 77.
"In Japan, there is greater emphasis on producing cars that are simpler and therefore quicker to build," said Mr Robertson. "That means concentrating on getting the design and manufacturing processes right first time so less time is spent rectifying defects."
Analysis for the Treasury by management consultants McKinsey shows that UK productivity lags 40 per cent behind that of the US and is at least 20 per cent behind western Germany. Productivity in the UK automotive industry is half that in Japan and 20 per cent below that of the US, says McKinsey.
A spokesman for Rover, which blamed the strength of sterling for 1,500 job losses, said it was misleading to compare Longbridge's performance in 1997 with other plants because of the number of different cars and niche models produced there. Last year Longbridge was producing the Rover 100, 200 and 400 as well as the MGF sports car and limited production models such as the Rover 200 coupe and cabriolet and the Rover 400 Tourer.
"We have made major strides, improving productivity across the group by 19 per cent in the last two years," the spokesman said. "We want to do better but we think we are doing quite well already. We are also investing pounds 600m a year, which will undoubtedly increase levels of productivity."
In the past, manufacturers such as Ford and Rover have complained that comparisons with Japanese transplant factories in Europe are unfair because these are "screwdriver" assembly plants which lack the full range of processes.
However, Nissan's Sunderland plant and Volkswagen's Wolfsburg plant in Germany, which makes the Golf, are now considered to be the two most integrated car plants in Europe. The Sunderland plant made a record 271,800 Primeras and Micras in 1997 and production is set to exceed 280,000 this year.
The EIU's audit is designed to produce like-for-like comparisons, and includes workers employed in press shop, body-in-white, paint shop, trim and final assembly and rectification.
Sunderland also houses an engine assembly and machining shop, an aluminium foundry making cylinder heads and exhaust manifolds and a plastics moulding shop.
The EIU audit does not take into account model changeovers which can affect productivity significantly. Honda's Swindon plant has slipped from fourth to seventh this year, while Toyota's Burnaston factory has gone from third to 12th. The survey attributes this to model changes and the need to take on extra, untrained employees for the next phase of expansion.
However, Mr Robertson says model changeovers can be opportunities to introduce major productivity gains. For instance the Ford Ka, made in Valencia, is put together from 1,200 components compared to the 3,000 in a Dagenham-built Fiesta.
Longbridge's productivity is expected to improve this year due to the workforce cuts and the phase-out of the Rover 100.
But the EIU says GM's Vauxhall plant at Luton, which produces the Vectra, has failed to reach its expected output.
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