Location of Japanese-Owned Car Assembly Plants in the United Kingdom

Abstract

Since mid-1980s, Japanese motor companies have newly set up vehicle assembly plants in EC countries, to meet both the voluntary restraint of car exports from Japan (since 1986) and the establishment of EC single market in 1993. Locations of passenger car assembly plants, however, are confined in the UK alone. Three car plants, that are NMUK (Nissan Motor Manufacturing UK), HUM (Honda of the UK Manufacturing) and TMUK (Toyota Motor Manufacturing UK), started production of passenger cars by the end of 1992. On the other hand, only Mitsubishi has a plan to build a car plant jointed with Volvo, Swedish company in the Continent. The UK Government policy to foreign direct investment, lower wage cost than other main EC countries and English, which is the most understandable second language for Japanese, are the main reasons of this British-oriented location.This article firstly aimed to clarify location process of Japanese car assembly plants in the UK. Then, the author described their business relations with local suppliers and labour recruitment. Finally, he considered some effects of Japanese performance in the UK economy. Following results were obtained.1) In the latter half of 1960s, output of passenger cars in the UK was more than 1.5 million units each year. This figure was the third largest in the world, next to the United States and West Germany. But after the oil crises in 1973, the volume of car production rapidly decreased until 1982. Car output fell 54 per cent to 0.89 million units in a decade. From 1982 to 1986, annual car output stayed around one million. This dramatic decline and subsequent stagnation were explained by main assemblers' strategies to enhance their competitiveness in the car market. BL, Rover Group at the present, scrapped inefficient plants in peripheral regions and sacked workers through restructuring performance. Moreover, Ford and Peugeot-Talbot, both multinational companies, closed some of their plants in the UK instead of new investment into the Continent, in order to restructure their production system within European range. These strategies brought remarkable fall in car output, which gave Japanese companies room for new plants' location.2) NMUK was established in an ‘assisted area’ in North East, where it could enjoy government grants, whilst locations of both HUM and TMUK oriented toward the existing cores of motor industry (South East and West Midlands). These three plants were built on lands previously used for airfields, that meant a small number of large scale industrial estates matched their needs in the UK.3) Japanese car producers were committed to achieving 80 per cent ‘local content’ within several years from their foundation. Therefore, they tried to find components' companies within EC in terms of quality, stability, price as well as delivery. Each assembler established business relations with about one hundred and fifty suppliers. Distribution of the suppliers mainly concentrated in Britain, but some others were in the Continent, especially in Germany and France.4) The assemblers selectively took on young workers who were committed to their companies from within a lot of applicants, by conducting examinations. Most of them were living in the local areas and had never engaged in the car assembly lines. AEU was only ‘one union’ officially approved in NMUK and TMUK, with no-strike agreements as well as other Japanese style working practices.5) Japanese working practices were highly appreciated, because they could improved productivity and labour relations in manufacturing plants. This system, however, did not seem to represent a transition from Fordist to flexible post-Fordist production, but represents to maintain and reinforce Fordist production, especially in old industrial regions, like North East.6) The assemblers also adopted Japanese style business relations with suppliers. Supply contracts were longer in duration