Nissan: is it still the age of the car?

car-factory-pic-for-blogNissan’s decision to move producing the X-Trail from its Sunderland plant to Japan has undoubtedly been caused by fears over Brexit. In particular, the recently negotiated free-trade deal between Japan and the EU might result in Nissan’s complete departure from the UK with a catastrophic effect on the Sunderland area. Nissan has been there since 1986 –when 500 workers were taken on to build its first model.

Since Nissan’s arrival, the car industry has experienced a rise in fortunes, with other Japanese multinationals arriving (Honda in Swindon and Toyota in Derby, for example). Most have benefited from huge amounts of state aid. The leaked letters about Nissan standing to  gain some 80 billion if they’d gone ahead with the X-Trail confirms the fact that state intervention continues to play a role in global Neo-liberal capitalism!  Until the concerns about Brexit led to a loss of confidence and a fall in investment, 1.75 million cars were being built in the UK – though when we say ‘built’ we really mean ‘assembled’ as vehicles  and vehicle parts invariably  cross the channel  sometimes more than once, before two completed cars  roll off the production line every minute.

But while the importance of the car industry as a provider of secure, high quality jobs should be recognised (Nissan currently employs over 8000, 75% being direct manufacturing jobs, with another 30 000 employed in various supply chains),  as new technology advances and productivity increases, the automobile industry will be much less the mass employer it used to be.

Fifty years ago the motor industry employed 500 000 people, car workers being amongst the best organised and the most militant within the Labour movement. Today employment in the motor industry is a little over 150 000 –less if you only include jobs directly concerned with production. 50 years ago the motor industry took on hundreds of apprentices every year, in contrast Nissan has taken on about 1100 in the 30 years since it arrived and in one year  (2012) took on just 25. Indeed, during 2017-18 there were less than 40 000 in the entire manufacturing sector.

Also the volume of cars produced is not what it once was – in the early 1970s approaching 2.4 million  left the factory each year.  Car production now represents less than 1% of total UK output (and only 10% of total manufacturing which itself makes up just 10% of UK total output).  While it’s true that cars can be built more cheaply and more efficiently in Asia and Pacific Rim countries, the industry faces an uncertain future and arguably a longer term demise.

Demand is stalling in western societies. While there are concerns about pollution, consumer trends are changing, with more people living in cities and relying on public transport and car sharing. If for the baby-boomers the car was a status symbol and a confirmation of affluence, this is unlikely to be the case for Millennials, many of whom cannot afford one anyway.  As is the case with other consumer products the corporations now focus on ‘emerging markets’ in developing economies, particularly China, but there’s no guarantee that demand will be sufficient to absorb an expanding supply. The supremacy of the car may be coming to the end.

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