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PAUL WILENIUS: Cars - and for the nation's
car lovers there's nothing better than a classic British Mini. But now
there's only one British owned car manufacturer left, Rover, and that's
in trouble. Overproduction, dropping prices and the high pound are hurting
the rest of the motor industry. Union leaders and industry chiefs feel
it needs urgent help before it suffers a serious breakdown.
CHRIS MACGOWAN: I don't think the word crisis actually
is too serious a word to use. I think the motor industry here in the United
Kingdom is in crisis.
SIR KEN JACKSON: If we stay out of the
Euro, then in my view the future of manufacturing, motor manufacturing
in this country would be virtually nil.
WILENIUS: In the Sixties cars like
this Mini Cooper put Britain's car industry in the fast lane. But now
Tony Blair's facing the prospect of thousands of job losses before the
next election and major plant closures afterwards. Many in the industry
feel that the only hope is, if Blair says Britain will join the Euro soon.
It was more than thirty years ago when the Mini put the swing into the
Sixties. Together with a host of other cars, it was stylish and modern.
But now the car industry is in decline. Rover is struggling to survive.
Ford will soon end all car production in the UK after seventy years.
Vauxhall will have a long lay off over Christmas because of falling sales.
The long term future of the Japanese car firms such as Nissan, Honda and
Toyota, is in doubt and union leaders feel this is only the beginning.
JACKSON: It's under extreme difficulty
at the moment - it is facing cutbacks. Every sector of the British manufacturing,
or motor manufacturing is under pressure, people are going, laying off,
looking forward to cutting back investment.
WILENIUS: The go ahead for Japanese
investment was sparked off by the creation of the European Single Market
in the nineteen-nineties. Even though Britain has a highly flexible labour
force, it's losing out. The danger is that, instead of exporting more
cars, it'll export more jobs. On The Record went on the road to test the
scale of the crisis.
MACGOWAN: Nearly every other European nation
is involved in the Euro in one way or the other and what are we seeing
at the moment? We're just seeing jobs migrating away from the UK because
they can't produce the components, they can't produce the products, at
market prices. Now, if we remain outside the Euro and if the pound remains
as strong as it currently is, or the Euro remains as weak as it currently
is for a long, long, time, it has got to have a debilitating effect on
any manufacturing industry.
WILENIUS: Thousands of job losses
could hurt Labour, as it speeds towards the next election. It could alienate
voters in the key swing seats of the South and Midlands and depress turnout
in its industrial heartlands of the North.
KEN PURCHASE MP: We do see an election on the horizon
and no politician with any sense would underestimate the damage that could
be done to any party in power by a considerable level of job losses in
the run up period to that.
WILENIUS: So the run into the election
may not be smooth, as some of the nation's car plants are in areas where
Labour has marginal seats. Luton is the home of Vauxhall. It's also home
to Labour MPs, fighting to hold on to their jobs at the next election.
Workers at the Vauxhall plant have already been given an extended lay
off as demand for their cars has fallen. Local MPs are also worried about
the future of the plant.
MARGARET MORAN MP: It's got a downturn at the moment
over this Christmas period, there will be a five week shutdown, largely
because of the pressures, the global pressures, in the market, there is
massive competition globally and so the smaller car is booming, the medium-sized
car of the sort, the Vectra that Vauxhall produce, has been doing less
well. I'm sure, speaking to Vauxhall managers, that the issue of whether
we are in or out of the Euro is going to be a very significant factor in
the decision making, it will affect the productivity of the plant.
WILENIUS: Further North, up the
M1, we went to South Derbyshire. It's the site of one of the most efficient
car plants in the world, built by the Japanese car giant Toyota. Yet it
can't sell its cars at a profit because of the high value of the pound.
All future investment has been put on hold. One local MP says, if Britain
stays out of the Euro, its long term future could be in doubt.
MARK TODD MP: The issue of membership of
the Euro-zone has been raised with Toyota in the past and they've consistently
said that is a factor in their future planning for this plant, both continued
investment there or indeed its continued existence.
WILENIUS: But even further North
there's more immediate trouble. The Nissan plant in Sunderland is highly
efficient but there are real fears in January it will lose the new Nissan
Micra to France. Labour MPs and union leaders are worried the strength
of the pound against the Euro is the biggest single problem.
SIR JACKSON: I'm extremely worried that
the Nissan Micra could be lost to Britain - it could be built in France,
not only in terms of the problem with the pound and Euro, but also the
political pressure that's being put on Nissan to build the Micra in France.
FRASER KEMP MP: I think if people have
a choice between joining the Euro and having a stable economic environment
or having the Queen's Head on a Pound. I think the vast majority of people
will actually choose to have that economic security.
WILENIUS: So the British car industry
is in trouble. And it needs urgent assistance. The government can dish
out regional aid to help ailing car firms with new investment, to help
keep them on the road. But there are limits to what the government can
do under European regulations, as it's finding out over the proposed aid
package for the Nissan Micra. And there would be fierce political opposition
if the government went down this route.
ALAN DUNCAN MP: I don't believe that any government,
new Labour or otherwise, should issue subsidies or something like that.
What they have to do is keep the country competitive, and the way to do
that is to keep out of the Euro, and to make sure we are a, an under-regulated,
rather than over-regulated country, and keep down taxes.
WILENIUS: But in other parts of
Europe governments have no qualms about giving extra help to their workers.
They will help prop up industry with aid and extra protection for their
employees. The government is under pressure to do the same, making it
harder for companies to dump British workers. The engineering union leader
says this misses the point.
SIR JACKSON: You can always bring in areas
where regulation does defend jobs for a period of time, but you know Nissan
and Toyota are the most productive car plants in the world, they are not
making money, they are not making a profit on the vehicles that they sell,
and so at the end of the day it depends on what you sell, the profit you
make on it, not how hard or how easy it is to sack people.
WILENIUS; The real spanner in the
works for Tony Blair is the Euro. Pro-Europeans want him to promote it,
to keep Britain's car industry on the road. But he can't, because it's
potentially damaging at the next election. The Labour high command does
not want the Euro issue dragged into the centre of the forthcoming election
campaign. Strategists would like to keep the issue low key but they will
find it very difficult in the heat of battle. The Tories feel this is
their trump card and will keeping pushing the issue forward as they feel
it can bring them votes when Britain finally goes to the polls.
DUNCAN: If there's anything to
do with the Euro the Conservative Party will say no, and I think clearly
the Labour Party now has big jitters about it, they know it is not a solution
to problems, but they want to do it, and I think they would be very very
unwise to proceed with it and increasingly, I think people will realise
that the Euro is not a solution, it's potentially a very, very big problem.
PURCHASE: I think my constituents
will understand that we just can't risk the chance that not being in the
Euro would lead to heavy disinvestment in Britain, and what does that mean?
Loss of jobs.
WILENIUS: If Tony Blair does win
the election, his problems with the Euro and the car industry will not
be over. He will come under immense pressure to take personal control
of a pro-Euro bandwagon, and also to go for an early referendum.
SIR JACKSON: My view on the referendum
and when it might happen, it's got to take place within the first year
of a new government. We can't continue to delay making a decision, there's
too many jobs at risk, there's too many companies that actually do need
a decision in order that they can make future plans on investment.
WILENIUS: So in the end it all
comes down to Tony Blair. Euro campaigners feel he must eventually choose
his own destiny. Will he fight for the single currency, or risk reducing
parts of the car industry to scrap?
SIR JACKSON: Every motor manufacturer,
every Chief Executive, every Chairman of every manufacturing company in
the car industry has made that quite plain - they've made it quite plain
to me, they've made it quite plain to Ministers, that they see their future,
their immediate future under threat if we're not in the Euro.
WILENIUS: To rescue the once great
British car industry, and return it to its former glory, Tony Blair will
have to make hard choices. Many inside the motor industry fear the worst
if Britain stays outside the Euro, but the Tories feel people have to accept
the reality of economic change.
DUNCAN: I'd like to think that
we can keep a British car industry but you know as the decades go past,
the structure of industrial life does shift and where particularly wage
rates matter, inevitably things tend to move from the richer countries
to the poorer ones, but at the same time of course, we've got lots of new
investment in high tech companies, new businesses and things like that,
so we should not be afraid of industrial change and we ought to actually
allow things to move and to keep fresh and be refreshed and then innovation
I think will keep us rich, employed, productive, competitive and prosperous.
MACGOWAN: If we don't go into the Euro
it will continue to be an enormous political issue - I have no doubt about
that at all. We're already watching jobs migrate out of the United Kingdom,
because people are having to relocate factories outside the UK, and you
can only imagine this process accelerating, and I'm very fearful, that
if we don't address the Euro issue, jobs will go and of course what does
that mean? Plants will close.
WILENIUS: Euro-sceptics believe
the Euro is not the answer for the British car industry. While the pro-Europeans
feel the only way to halt its decline is to swiftly join the single currency.
It's the stark choice which may face Tony Blair and the British voters
sooner than they think. The fate of the pride of British industry depends
on it.
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