How Dagenham changed gear

A symbol in the Seventies of all that was bad about British industrial relations, Ford's worst plant has reinvented itself for the Nineties, writes Russell Hotten

Yesterday's announcement that Ford is to spend £200m making Dagenham the focus of the company's engine development is the latest demonstration of how times have changed. Car workers at Ford's Dagenham plant, once a symbol of all that was bad about British industrial relations, are now basking in the praise of their management.

As recently as 1990, Ford executives were making dark threats about closing the Essex factory unless standards improved. Just four years later, Dagenham is being hailed as one of the most efficient car plants in Europe. Under the plans announced yesterday, Dagenham has been given the prestigious job of building cars for Japan's Mazda, and some Fiesta production will be switched from Ford's Spanish plant at Valencia.

Alex Trotman, the Middlesex-born chairman of the Ford Corporation, says they almost gave up Dagenham for dead: "I didn't think we would ever compete in the UK. But I am immensely encouraged by what has happened in the UK in the last five years. The English plants can measure up."

Life on the shopfloor is now light years away from the confrontational, demotivated culture that dominated the 1970s and much of the 1980s. Placard- waving militants of yesteryear are more likely to be carrying flip-charts, contributing to seminars on how shopfloor production can be improved.

Practices like clocking on and demarcation lines, fiercely enforced by shop stewards whose principal function seemed to be to resist change, fostered an atmosphere of aggression and bloody-mindedness. Workers despised their daily routine, doing the same simple functions time after time in each eight-hour shift. Production workers looked for any excuse to down tools and escape the monotony. Yet any attempt by management to change the routine was treated with suspicion and also ended in an inevitable downing of tools.

The need to break this cycle was obvious if British car-makers were to compete with the more efficient Germans, and especially the Japanese. Yet while rivals began making progress in transforming their factories, Ford remained stubbornly stuck in the dark ages. In 1988, a time when the Government was announcing Britain's economic miracle, Ford had its biggest stoppage for a decade, a two-week strike that cost it £20m.

The dispute was partly about pay, but more to do with the introduction of Japanese working practices, such as teamworking and devolving responsibility to production staff. The aim was to encourage more pride in the job, as well as creating a more flexible and efficient worker. By encouraging teams to take charge of particular tasks in the production process, the end results should be a better-quality product.

It worked for the Japanese, and was beginning to bear fruit in other UK factories. But Ford was lagging behind in implementing new production techniques. The blame must fall on a complacent management which, blinded by previous success, did not see the threat from Japan fast enough. When Henry Ford came to Europe in 1931, its first factory at Dagenham was the world's most advanced car plant. By the end of the 1980s, it was arguably Ford's worst plant, suffering from chronic under-investment and a principal source of industrial unrest. Tests showed 342 faults in an Essex-built Fiesta, compared with 202 in Valencia and far fewer in Cologne. It took twice as long to build a Sierra at Dagenham as at Ford's Belgian plant at Genk. By the late 1980s, Ford's market share was being eroded by the Japanese, who were setting up more efficient factories in the UK. And Britain's so-called economic miracle was about to end.

Ford's demand that standards at British factories be improved were at first seen as more idle threats, but the unions were soon shocked out of that view. Plans to build a £40m electronics plant at Dundee, creating 1,000 jobs, were scrapped in 1989 in favour of a factory in Spain. But perhaps the defining moment in changing attitudes came with the decision to shift all Sierra production from Dagenham to Belgium, leaving the Essex plant with just the Fiesta. "There was a belief that Ford was limbering up for closure," says Steve Hart, Dagenham district organiser of the Transport & General Workers Union. "Attitudes changed completely. Both sides realised that things were serious and there was a need for negotiation. The phrase `talk don't walk' became a bit of a slogan."

Proposals that had been fiercely opposed by the unions were now openly discussed. Quality circles, set up for workers to discuss improvements, had been resisted because they bypassed shop stewards' authority. They were now established, while distinctions between skilled and unskilled workers were broken down. Blue and white-collar employment conditions were harmonised. Ford was able to recruit part-time labour, giving it more flexibility to meet production peaks. Importantly, teamworking was introduced, with groups controlled by highly trained supervisors. Workers were given more responsibility to improve standards. Shop-floor staff were sent to Ford factories in Cologne or Valencia to see if they could learn how to do things better.

The transformation was painful, with the Dagenham workforce cut from 12,000 in the late 1980s to 2,400 employees now - and no new jobs will be created as a result of yesterday's announcement. Yet the workers have overwhelmingly welcomed the investment, which has added to the talk of pride and loyalty being generated on the shopfloor. This drive for co-operation, not confrontation, has meant that it now takes 23 man-hours to produce a Fiesta, not the 57 hours of 1990. During the same period, the cost of making Fiestas there fell by 23 per cent. The result is that after producing 740 vehicles a day in 1992, Dagenham will be turning out 1,000 a day from June, with the engine plant producing 3,000 units a day.

Terry Belton, Dagenham's chief, says: "It is hard to imagine the industrial unrest of the Sixties and Seventies. A magnificent change has come about since the workforce realised the hard facts of quality expected in cars shipped abroad." That transformation was perhaps symbolised yesterday when union officials and Ford executives from America stood on the podium to unveil the engine deal. "Even a couple of years ago, management and unions would not have stood together to endorse anything."