UK: Britain hitches a ride in a world class Japanese machine. (1 of 2)

UK: Britain hitches a ride in a world class Japanese machine. (1 of 2) - Contact with Japanese firms in the UK is bearing fruit for British companies willing to rise to the challenge, writes Peter Popham.

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Last Updated: 31 Aug 2010

Contact with Japanese firms in the UK is bearing fruit for British companies willing to rise to the challenge, writes Peter Popham.

"People talk about screwdrivers," says Ian Gibson, chief executive of Nissan in the UK. "Some of our presslines cost £40 million each. Those have to be the world's most expensive screwdrivers."

The phrase "screwdriver operation" is the most lethal putdown yet to emerge from the ongoing debate about the nature and consequences of Japan's manufacturing investment in the UK. To those who hate the phenomenon it sums up all that is most odious about it: the sense of the UK being cynically used by the Japanese because of our low wages and desperation for new employment, just as countries to which we do not generally care to be compared, such as Malaysia and Thailand, have been used before.

To Britain such employment brings the palliative of some unskilled work, but no lasting benefit, it is argued, because what is transferred is merely the final and simplest stage of the manufacturing process: our people bolt the bits together. All of the research, design, machining and so on is done thousands of miles away. Result: no substantial transfer of industrial knowledge, but rather the destruction of what expertise we still possess, in the teeth of ruthless Japanese competition.

As a description of some, perhaps the majority, of the UK's Japanese-owned factories, this may be no more than the plain truth. David Waterstone of the Welsh Development Agency argues that this is a phase through which the companies must inevitably pass. "It is, I believe," he says, "almost inevitable that when one establishes a manufacturing presence in a distant continent you are going to start with fairly mundane assembly and work up, as confidence gains, to more sophisticated activities. This is exactly what is happening - perhaps not as quickly as we would like. Sony has been established at Bridgend for some 17 years and has gone from very plain assembly through manufacture of increasingly sophisticated components and now in a small way to the development or research."

The story of Nissan in Sunderland has been the same, though with a much compressed time scale. The requirement that Nissan cars must have 60% local - ie. European - content in order to sell in Europe has forced the company to throw its energy into finding ways of sourcing supplies locally. In some cases this has resulted in Japanese component manufacturers setting up shop on the company's doorstep, thereby reinforcing the paranoia of the "screwdriver" school of thought. But it has also resulted in more creative developments.

Gibson describes the way that Nissan UK has grown since the early days: "Our first full year of production was in 1987 ... The next year brought a lot of change because we added a number of new technologies ... We launched metal stamping. We started up our plastic injection moulding plant. We started building engines instead of taking them pre-built from Japan."

In that year, 1988, Nissan started exporting to Europe because it had achieved 60% local content, "partly", Gibson says, "through the additional processes that we launched here and partly through increased supply from European suppliers of components".

But perhaps the most important and seminal development came in 1989 with the creation of the Nissan European Technology Centre (NETC). "The concept of NETC", he continues, "is that it will design and develop new products for Europe from scratch. This means it will design more cars for Europe, but additionally it will design suspensions for cars made in Japan or the US or elsewhere in the corporation worldwide. So it will fulfil both the whole role for a European product and a part role for a global product."

This is not something that can be accomplished in the twinkling of an eye. The length of time that it takes is a reflection of how badly Britain's failure to maintain a competitive motor industry has impacted on the development of the skills necessary to sustain such an industry. NETC will not be designing new products from scratch until the second half of the 1990s, says Gibson, "because there are not lots of home-grown automotive design engineers floating around in the UK, let alone in this region. We have to start with design engineers with a non-automotive background or with relatively inexperienced engineers and train them, and that takes time.

"Skills development is difficult: it takes time; it takes heavy upfront investment in money and management of people; it is the longest lead factor in building for an inward investor - it certainly is for us. Not money availability, not commitment, just time to grow the people and the skills."

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