Nissan president Carlos Ghosn

The £40 million ‘regional selective assistance’ grant, approved by the European Commission, swayed the balance in favour of building the next Micra in Britain, Nissan president Carlos Ghosn said today.

Announcing the decision, Ghosn, nick-named ‘Le Cost Killer’ for his ruthless programme of reducing costs in the combined Nissan-Renault auto operations, said he made the decision only after ‘extensive profitability analysis’.

“It relied on three elements,” Ghosn said. “First, our belief that the UK will again provide a place where we can build cars competitively. We believe it can offer us a favourable business environment with a competitive and stable exchange rate.

“Second, the £40 million regional selective assistance, which swayed the balance, particularly in the short term, towards Sunderland.

“Third, the convincing record of our Sunderland plant where we have already invested £1.5 billion in delivering on superior quality and productivity and committing to a 30 per cent cost reduction through 2003.”

In a statement, Nissan added that the Sunderland plant secured the investment by overcoming the present cost disadvantage of manufacturing outside the Eurozone.

Workers have agreed a 24-hour working system, management is committed to a 30 per cent cost cut programme and a new purchasing policy will “minimise the present negative impact of the unfavourable currency exchange rate”.

That is likely to mean bad news for UK suppliers as purchasing shifts away from UK suppliers, many located in the north-east near Nissan’s Sunderland car plant, to Europe.

Nissan’s announcement came just hours before Valeo told 330 workers that it is to close a Welsh car components factory and other UK operations in July.

To read the news article concerning Nissan’s £40 million aid grant, please follow the link below:-

UK: Nissan Sunderland gets £40 million aid package