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25 June 1998
DRIVING FOR WORLD CLASS PRODUCTIVITY LESSONS FROM SUCCESS IN THE CAR INDUSTRY
Sharing the lessons of success as a key to meeting the challenge of raising productivity in the British car industry was the theme of a Downing Street seminar today.
The seminar, the third in a series which will inform the Competitiveness White Paper, Pre-Budget Report and 1999 Budget, was hosted by Chancellor of the Exchequer Gordon Brown and President of the Board of Trade Margaret Beckett and attended by Sir Alex Trotman (Chairman and CEO of Ford).
Gordon Brown said :
"Raising the productivity of the British economy is a central national challenge. Today we have taken a step forward with a seminar to develop a shared understanding of the productivity challenge facing a specific sector of the British economy: the car industry.
"Britain's performance in this sector is improving but has not matched our competitors. Productivity has lagged significantly, average productivity is barely more than half that of plants in Japan. There are many causes and the industry has worked hard to improve its performance. But we need to do more.
"The success of the three Japanese plants in the UK helps to point the way. Here British workers and managers are achieving remarkable productivity, more than twice that of some other plants. Indeed Nissan's Sunderland plant was found to be the most productive car manufacturing operation in Europe. The task must be to match this success across the whole of the industry. This can only be achieved with manufacturers, suppliers, employees, management, and government working in partnership.
"There are lessons here for the rest of British manufacturing. Firms need continually to drive improvements. They need to benchmark themselves against the best, commit themselves to continuous improvement, and focus on quality in partnership with their suppliers."
Mrs Beckett said:
"I welcome the focus of today's seminar on this important sector of our economy. The automotive industry employs over 200,000 people and is a vital contributor to exports. If the industry is to continue to provide jobs and generate wealth for the country then it's vital that the industry rises to the productivity challenge.
"Over the last few years Britain has been very successful in winning investment by international vehicle manufacturers. But we cannot be complacent. In an industry operating on a global scale, Britain's manufacturing performance needs to match the best in the world. Although it is improving rapidly, we have not yet caught up.
"The DTI takes very seriously the need to work in close partnership with the industry, both through the SMMT and directly with the supply chain. The motor industry and its Industry Forum are doing excellent working in different sub-sectors to improve competitiveness. We in the DTI are committed to a continuing dialogue with the industry to work on actions to close the productivity gap."
NOTES FOR EDITOR
1. The seminars in this series are focusing on how to bridge the productivity gap between Britain and our main competitors, up to 40 per cent behind the US and around 20 per cent behind Germany and France.
2. The seminar at 11 Downing Street today included a presentation based on independent work on the sector from McKinsey, the management consultants. Sir Alex Trotman (Chairman and CEO, Ford) and John Neill (Unipart) responded.
3. This work is being conducted jointly by the Treasury and DTI. Press enquiries should be directed to the Treasury (0207 270 5188) or DTI (0207 215 5981).
4. Non-press enquiries should be directed to Richard Thomas in the Treasury (0207 270 4465) or to Tony Pedrotti in the DTI (0207 215 6350).