Sunday January 25, 04:04 AM
Nissan job cuts hit hard in Britain's 'Motor City'
By Guy Jackson
 |
SUNDERLAND, England (AFP) - The loss of 1,200 jobs at a giant Nissan car factory in northeast England is fueling fears that the wheels are coming off Britain's "Motor City", as the global economy grinds to a halt.
The Nissan cuts are also reviving grim memories of previous downturns, in a region which has struggled to re-invent itself after the decline of traditional industries in the past.
Japan's third-biggest carmaker said this month it was axing a quarter of the Sunderland plant's 5,000 staff following a dramatic drop in worldwide demand for new cars as buyers see finance options dry up in the credit crunch.
While Nissan insisted it was acting to safeguard the future of the plant, the announcement left many workers fearing that more job cuts could follow in a region where unemployment is already above the national average.
"It is devastating news," said Dave Telford, the regional officer for the Unite union.
"I hope the plant will be safe in the long term, but who knows how long the problems are going to last? Nobody knows."
When Nissan chose Sunderland as the site of the first European factory operated by a Japanese automaker in 1984, it was a huge shot in the arm for a region where shipbuilding and mining had gone into terminal decline.
Opened two years later, it has become the largest car manufacturing facility in Britain, making Nissan's Micra, Qashqai and Note (Stockholm: NOTE.ST - news) models, and is widely regarded by industry bodies as the most productive in Europe.
But recent figures tell their own story. In the 2007-2008 financial year it made 372,000 units, but in the year to March 2009 just 300,000 will be produced.
The plant, a collection of cavernous grey and blue sheds, sprawls over a former airfield where Sunderland's industrial suburbs start to give way to fields and hedgerows.
Above the factory's roofs, wind turbines whirr away, supplying 'green' electricity to the plant. But increasingly, the production line is at a standstill.
To prevent over-supply, it is being halted for 24-hour periods known as "stand-down days", leaving some staff surplus to requirements.
"It's frightening. I've never seen it as bad as this," said one worker outside the factory, pulling on his silver and red Nissan jacket as he prepared to start his shift.
"People are just going through the motions, waiting to see who will be made redundant," said the 38-year-old, who like his colleagues asked not to be named.
"I don't think this is the end of it," said another man. "I'm sure there will be more cuts after these."
The 1,200 jobs to go include 400 contract workers, who will pick up their last pay packet next month, and 800 full-time staff, who have yet to be identified. Nissan hopes to find volunteers for redundancy.
A "response team" to try to help the jobless workers has swung into action.
Alan Clarke, the chief executive of the state-funded regional development authority, One North East, who chairs the team, said he had no concerns that Nissan would turn its back on Sunderland.
"If people are not buying cars and it is more difficult to get finance to buy cars... then you obviously can't continue to produce the same number of cars," he said.
"So Nissan have made a strategic decision. They know they can make cars efficiently and productively in the north east and they see this (the downturn) as a temporary problem that has to be dealt with.
"They are very confident in the medium to long-term future."
The leader of Sunderland City Council, Paul Watson, said the job losses will inevitably have a "psychological effect" on the region -- echoing the 1980s when then prime minister Margaret Thatcher closed most of Britain's coalmines.
"Nissan was part of, and probably the start of, the restructuring of the economy and changing from the traditional industries so (the job cuts) are quite a big and brutal shock to the system," Watson told AFP.
"But we've seen it before and we're pretty resilient now."
He said Sunderland had learned the lessons of the past by diversifying its economy. And it's not all bad news -- another major local employer, US sportswear manufacturer Nike, recently committed to keep its UK base in the city for another 15 years.
But while the city's leaders can see a brighter future ahead, another storm could be brewing on the horizon.
Car manufacturing is reliant on hundreds of suppliers making everything from seats to circuit boards. More than 250 component companies, employing 6,000 people, are based in the north east, attracted by Nissan.
They have already been hit by Nissan's slowdown, but most of their output is exported to the United States, where the once-mighty Chrysler and General Motors (NYSE: GM - news) continue to struggle despite a massive state bailout.
"One of the biggest worries is what happens with the American car industry," said Tom Hurst, Sunderland council's Chief Investment Officer. "A lot of the suppliers do the bulk of their business with Chrysler and General Motors.
"If they go down, then it doesn't matter how successful the component companies are, they will go down with them."
|
|
|
Send Article by Email
Send Article by IM
Blog This with Y! 360
Printable View
