Last week I, quite deliberately, did not write my usual ‘wrap’ of the week’s events. Who needs all the bad news recycled? This week, a reality check, as plant shutdowns got extended and more axes were taken to production schedules. Time to face facts, buckle up, and accept there’s probably more – a lot more – to come.
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The industry here in England took a whack it wasn’t expecting quite so soon. Nissan stunned the country by announcing it was sacking 1,200 of the 5,000 staff from its plant in northeast England “to protect the long term viability of its manufacturing operations in Sunderland”.
The plant turns out the smash-hit Qashqai crossover (similar to the North American Rogue), Note mini-MPV and the staple Micra – the latter shifts to India to be replaced by small SUV in 2010. The plant, opened around 1986, is renowned for revitalising a north-east hit by the closure of steel and ship building and its high productivity and quality, though it nonetheless has had to make its case within the Renault-Nissan alliance for each new model programme.
Japanese automakers value highly-skilled assemblers who take time and money to train to do work that is far harder and more physically demanding than it looks and don’t shed them idly – consider Toyota paying Texan truck plant workers for three months last year to carry out community work and suchlike while their factory was idle.
And it was bye-bye to a foundry here in the West Midlands, an area still recovering from the shock closure of Rover (6,500 jobs) in 2005. The big layoffs make the news but let’s not forget the effects on the dozens and hundreds in smaller manufacturing firms a few tiers up the supply chain. Today, it was reported BMW’s Mini plant had quietly let slip about 90 more temporary workers over the Christmas break and Honda extended its Christmas holiday shutdown all the way to June. And there were hints early in the week at Detroit more Jaguar Land Rover cuts were coming. They duly arrived.
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By GlobalDataWe are not alone – the words ‘cut’ and ‘axe’ have been prominent in just-auto headlines from all over the globe since we returned to work after the holiday break – just today Honda said all temporary production workers would have left its Japanese factories by April, Chrysler extended closures at three key plants in North America and Toyota again trimmed North American output, as did Nissan (which, along with Toyota is now expecting a fiscal year operating loss), and Hyundai. Most Japanese automakers have now slashed domestic output – and such cuts are now pretty well global as the credit crunch effects have flowed out to all corners.
No surprise, then, that the Detroit show was a subdued affair, with minimal spends on hospitality and model launch razzmatazz. Nonetheless, debuts of global interest included the new Toyota Prius (with the plug-in version yet to come), Honda’s rival Insight hybrid, the redesigned Mercedes E-class and much more to interest the paying car nuts and tyre kickers who will be flocking in this weekend.
A number of key automaker players stayed away from Detroit this year (in some cases local dealers clubbed together to fill empty stands). Detroit’s Big Three said they would not be taking their wares to Tokyo this year (US models are very low-key there anyway; the show still appears to be on) and the UK’s commercial vehicle show was canned.
Signs are the recovery will be long and slow, at least in some markets. Automakers and everyone else involved in the biz are simply going to have to cut their coats to the current cloth. Some people and companies will always have money to buy cars – witness the GBP120,000 a week footballer who totalled a Ferrai here recently and was photographed later the same day in one of a half-dozen other dream cars he owns, a Bentley Continental.
The big question is where key markets will settle and for how long. The big problem for governments will be what to do with the people laid off.
Of course, here in Britain, joined-up government is as far off as ever. While struggling automakers beg for freed-up credit and government ministers make a show of being concerned and tour the odd plant, local councils dream up new ways to use CO2 emission ratings to further tax vehicle buyers. Brilliant. Japan, on the other hand, announces tax incentives to go ‘green’.
Enjoy the weekend.
Graeme Roberts
Deputy Editor
just-auto.com
