Nissan was greeted with suspicion, even hostility, in the UK at first. Here was a Japanese manufacturer muscling in; attempting, some said, to beat import restrictions by building its cars in Europe. It was setting up far from the automotive industry’s West Midlands heartland and insisted on novel working practices and a single union deal. It would never work.
But last year, Nissan’s Sunderland factory built 288,800 cars, more than any other plant in the UK. The Economist Intelligence Unit’s 1997 survey ranked Sunderland’s workforce the most productive in Europe, making 98 cars per worker annually. Sunderland was rated 11th in the world the most productive plant outside Japan.
And last week it began recruiting 800 workers to join the existing 4,200, for when a third model, the Almera replacement, is added to the Micra and Primera line-up next January.
John Cushnaghan, Nissan Motor Manufacturing UK’s new managing director, started as production director at Nissan in 1984. ‘I didn’t see it growing this quickly,’ he says. ‘I expected a reasonable progression from phase one, which was for 24,000 units. I didn’t think we’d move this far this fast.’
He says there were several factors in Nissan’s success. ‘First, we started with a greenfield site and a blank piece of paper. Second, we had a Japanese parent. At that time, all the leading plants in the world were in Japan. So we knew that we had a world-class benchmark, but we also had a parent company which encouraged us in developing a strategy to reach a high level, and was prepared to allow us the time to reach it.’
‘Third, we had to educate and involve 100% of our employees, from engineers and manufacturing to financial people.’ Without this, the goal would have been impossible to achieve, Cushnaghan believes.
Hitting that target entailed creating a data-based company in which people speak with facts, not opinions, says Cushnaghan. Everyone is trained to collect and analyse data. The result is a company-wide ethos of problem-solving, leading to a culture of improvement and change.
Even so, it took six to eight years to reach Japanese standards. Quality and reliability targets had to be met first: only then did the focus turn to productivity.
Cushnaghan’s preoccupation now is preparing for the new Almera. ‘We set our engineers an interesting challenge,’ he says: ‘Increase the plant’s flexibility and capacity with the minimum investment in new equipment.’
The Almera replacement entailed a modest investment of £215m. From mid-1999, instead of dedicated lines for the Micra and the Primera, the new car will share the Micra line and part of the Micra volume will be transferred to the Primera line. ‘So we’re not just training 800 new people,’ says Cushnaghan. ‘Everybody will be doing something different next year.’
Full production will start in January 2000, immediately after New Year. Overall plant capacity will rise from 310,000 to 350,000, a figure expected to be reached in the first year.
Nissan’s arrival and its use of the Japanese approach have transformed the UK motor industry. Back in 1984, Cushnaghan and his fellow directors felt frustrated. ‘We came through a time in the mid to late 1970s and early 1980s when we were losing our way as industry plc in this country,’ Cushnaghan says.
During the 1970s he went through British Leyland’s management development programme, and at the height of the 1970s unrest he was senior industrial relations officer of the Cowley assembly plant.
‘That was probably one of my most challenging jobs. It was painful, but interesting,’ he says. ‘There were 14 employees allocated full-time to trade union duties and my full-time job was dealing with them. It’s not a very productive way to spend your time very frustrating. But things have changed completely now.’
What of the threats and opportunities facing Nissan’s suppliers? ‘The only threat is a lack of competitiveness across the board. If they’re based in the UK they’re at some disadvantage because of sterling’s strength.
‘Having said that, I do not subscribe to the theory that you jump suppliers because of currency strength. It’s taken us a long time to build up a good supply base: it’s a long-term partnership.’
Nor does he anticipate problems from the parent company’s lack of profitability in Japan.
‘We’re the most productive plant in Europe and next year we’ll supply 70% of European sales. We’re in cumulative profit we can justify investment on the strength of our own balance sheet. Sunderland is of central importance to Nissan in Europe.’