UK: Toshiba's vision of the future. (2 of 3)

UK: Toshiba's vision of the future. (2 of 3) - It is all a long way from the Plymouth plant's early roots. Originally built in 1947 for Bush Radio, the plant came under the umbrella of the consumer electronics division of The Rank Organisation in 1972. T

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Last Updated: 31 Aug 2010

It is all a long way from the Plymouth plant's early roots. Originally built in 1947 for Bush Radio, the plant came under the umbrella of the consumer electronics division of The Rank Organisation in 1972. Those were the boom years for colour televisions. Turnover soared and the profits rolled in. But the good times were not to last and Rank sowed the seeds of its downfall. With a top-heavy management structure, it lost control of costs, overdid the expansion and failed to make a name for itself in export markets. The division went into the red and by 1978 total losses amounted to £22 million.

By then annual losses were down to under £1 million. But it was clear that Rank had little future in TV manufacture on its own. Overburdened by its costs, and with seven separate trade unions vying to get their voices heard, it was unable to raise output to a viable level; furthermore, it did not have the wherewithal to fund research and development.

Toshiba meanwhile faced a completely different set of problems. In the late 1970s its penetration of the UK market was being held back by European Community regulations which restricted its imports to just 20,000 Japanese-made sets a year. The obvious solution was local production. In 1978 it entered a joint venture with Rank with the intention of gaining a solid manufacturing base.

However, what looked like a reasonable fit for both parties soon proved uncomfortable. Rank, as the majority shareholder, held on to the reins of management and the expected changes did not materialise. The company failed to achieve the necessary economies of scale and Toshiba's engineering and organisational skills were apparently under-exploited.

In March 1981 Rank announced that the business was to be wound up. Some 3,000 people in four factories were made redundant, a crushing blow for the South-west, and Plymouth in particular as the home of the main TV manufacturing plant. However, it had been agreed that Toshiba would take the Plymouth factory over.

Two months later production started up again - but with a newly recruited workforce of just 300. The fact that the reopening took place on a bank holiday, with no mention of extra pay, was a sign of the demanding nature of the new owners. Says senior shop steward Ron Pemberton: "They want their pound of flesh. They expect a day's work for a day's pay."

Pemberton joined Rank Toshiba as a security man in 1978. Along with everyone else he was made redundant in 1981. One of the lucky ones taken on by Toshiba, he is now in charge of the soldering irons.

He vividly recalls the atmosphere at the time of recruitment: "The shock of being out of work was very great. If they turned to you and asked if you would accept flexibility or whatever, there were 10 people in the queue behind you who would, so you said yes. They could practically put in any conditions they wanted."

Pemberton's report is frank, but he obviously approves of the change. He supports, too, the logic of the sole bargaining rights awarded to the EETPU. Under earlier regimes "there were so many unions you could argue as much between unions as with management", he says, shaking his head disapprovingly.

Despite the inauspicious background, Toshiba was firm in its resolve. Radical change was required for the venture to work. The company was fortunate in the managing director appointed to head the Rank Toshiba joint venture in late 1980, Geoffrey Deith (now head of Aynsley China). He stayed on to launch Toshiba's new venture and his ideas very much coincided with those of the Japanese.

Deith and his management team set about breaking down the barriers between management and the workforce. Single status was the key, and remains so. Rank's four canteens were combined into one self-service restaurant. All employees were encouraged to call each other by their first names. Pemberton remembers the strange feeling that these propositions aroused: "You could be in the queue for dinner and you'd turn round and the managing director was behind you. It felt odd."

Now everyone is used to the idea of single status. "You get a much closer relationship with someone if you can call them by their first name. It sounds a trifle, but it isn't."

More fundamentally, single status meant open plan offices, standard hours for staff and shopfloor, common pension, sick pay and holiday arrangements and monthly salaries (instead of weekly pay packets) for all. Physical evidence of equal status comes in the form of the uniform blue jacket (or coat as it is called at TCP) which is worn by everyone from the managing director to the postboy.

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