By STANLEY REEDDEC. NYT December 8, 2016
Monday 12 December 2016, by Carlos San Juan
Britain’s automotive industry, once ailing and plagued by strikes, now hums with the vibrancy of a global manufacturing hub. Most of the cars made in Burnaston, models like Auris and Avensis, will make their way beyond the British borders. Toyota buys parts and hires workers from across the European Union.
But the level of integration, previously lauded, has made the carmakers especially vulnerable after Britain’s vote to leave the bloc. If a messy divorce follows, Toyota and others face the prospect of higher tariffs, a smaller labor pool and less access to the 500 million potential customers in Europe — all of which will be negotiated in the coming months and years.
Tied to Europe, Britain’s Car Industry Is Vulnerable After ‘Brexit’
BURNASTON, England — On Toyota’s brightly lit assembly line here, workers guide wheel and engine assemblies into unfinished sedans. Driverless carts carry parts through narrow aisles to work stations. The assembly line moves with clockwork precision, able to pop out a vehicle every 72 seconds.
Britain’s automotive industry, once ailing and plagued by strikes, now hums with the vibrancy of a global manufacturing hub. Most of the cars made in Burnaston, models like Auris and Avensis, will make their way beyond the British borders. Toyota buys parts and hires workers from across the European Union.
But the level of integration, previously lauded, has made the carmakers especially vulnerable after Britain’s vote to leave the bloc. If a messy divorce follows, Toyota and others face the prospect of higher tariffs, a smaller labor pool and less access to the 500 million potential customers in Europe — all of which will be negotiated in the coming months and years.
The drop in the British pound since the vote has not been much help, either. Many of the carmakers’ contracts here are priced in euros, even with suppliers in the same country like Johnson Controls, which makes seats for Toyota.
Continue reading the main story “We have made clear that if we lose some of these elements, it will make making cars in the U.K. less competitive,” said Anthony J. Walker, deputy managing director of Toyota Manufacturing in Britain. “We would have to reduce costs, which would be very hard.”
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An engine is fitted on the Toyota assembly line in Burnaston, England. The Japanese carmakers brought a more team-oriented approach to once-contentious British manufacturing. Credit Tom Jamieson for The New York Times Carmakers like Toyota are now in full-on defense mode. Toyota and others are telling the government that they need continued, unfettered access to the European Union, for exports, imports and engineering talents, which they say is in short supply in Britain. Toyota is particularly concerned that its just-in-time manufacturing system — which requires that parts arrive at the plant in a certain order just a few hours before assembly — should not be disrupted.
“It is absolutely suicidal,” said Peter Tsouvallaris, the plant’s senior representative for the union, Unite, which also represents workers at other carmakers. “I am concerned about the long-term future of the plant because we don’t know what Brexit means.”
The British government understands the stakes for the country, which is home to a cluster of world-class plants for overseas automakers like Nissan, General Motors, BMW and Honda. The sector employs about 169,000 and accounts for about 12 percent of the value of British exports, according to the Society of Motor Manufacturers & Traders, an industry group.
Already, the British prime minister, Theresa May, has shown a protective streak. The government has promised to invest 390 million pounds, or $485 million, to encourage advanced, low-emission vehicles, including driverless and electric cars. It has said it will continue to fund training for Toyota and other auto companies, as well as encourage development in component makers based in Britain.
Britain also offered assurances to Nissan, whose plant in Sunderland became a flash point in the time before the vote over the so-called Brexit. Although specifics have not been made public, Nissan said in October that it would build a new version of its popular Qashqai and another model at the plant.
“The support and assurances of the U.K. government enabled us” to make the investment decision,” Nissan’s chairman and chief executive, Carlos Ghosn, who had recently met Mrs. May, said at the time.
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Final checks are made on a Toyota Auris in Burnaston, England. Toyota and other carmakers have told the British government that they need continued access to the European Union. Credit Tom Jamieson for The New York Times That clout has been hard won for an industry that was struggling not so long ago.
Britain always had a flair for car design, producing such classics as the Jaguar XKE and Austin-Healey Sprite. But the industry in the 1960s and 1970s suffered from underinvestment, dated models, poor quality and frequent strikes.
The outlook began to change in the 1980s, as Japanese automakers began to look for a foothold in Europe to gain access to the single market. Britain beckoned. Under Prime Minister Margaret Thatcher, it was increasingly welcoming to foreign investment, unions were in retreat, and Britain’s own auto industry was not much of a competitive threat.
Toyota came in the early 1990s, finding a large site in central England that could be cleared and built to the company’s specifications. The Japanese companies brought efficient production methods. The nearby industrial center of Derby welcomed the new manufacturing jobs at a time when jobs at other companies were being lost.
“The Japanese completely reversed what was going on,” said Garel Rhys, a professor emeritus of motor industry economics at Cardiff University. “They showed that Britain was not a place that was out of control.”
The Japanese carmakers brought a more team-oriented approach to once-contentious British manufacturing.
Workers at the Toyota plant, who make more than 30,000 pounds on average a year ($37,360), are called “members.” To avoid delays when snags arise on the line, they pull a cord summoning help from a team leader, denoted by two yellow stripes on the navy blue baseball caps all workers