How Jaguar & Land Rover Make Their Marques In China

Modern assembly lines are creating jobs and driving British car brands’ success.

Powered by Guardian.co.ukThis article titled “Jaguar Land Rover roars into China as quality UK cars hit exports overdrive” was written by Dan Milmo and Eva Sogbanmu in Beijing, for The Observer on Saturday 25th August 2012 23.06 UTC

Golden Port Motor Park, a swish car dealership in the suburbs of Beijing, is a prime destination for Chinese professionals shopping for a status symbol. But the sleek emporium is also the new frontline for European car makers fighting for sales outside their declining home markets. Here, vying for wealthy Beijingers’ attention alongside the glittering showrooms of Audi, Maserati and Porsche is the vast flagship showroom for Britain’s own Jaguar Land Rover (JLR).

JLR embodies the boom in UK car exports that is making the automotive sector one of the few industries capable of keeping pace with George Osborne’s “march of the makers”. In the first three months of this year there was a quarterly trade surplus in cars – the value of exports exceeded imports by £564m – for the first time since 1976. Premium cars, from Bentleys made in Crewe to Minis manufactured in Cowley, are helping drive the surplus and JLR was a standout performer: in the three months to 30 June, its Chinese sales soared by 91%.

Inside Golden Port, a sharply dressed salesman says the sleek new Range Rover Evoque is catching the eye of young consumers, while the Jaguar XJ is the choice for the older businessman. The brands’ Britishness is a draw, he says, “but Chinese people like imported cars in general”.

The boom has been a key factor in JLR expanding production at its Halewood plant in Merseyside this month, hiring 1,000 more workers to launch a three-shift, 24-hour operation. The plant will now churn out even more Evoques.

One of the longest-serving employees at Halewood, 60-year-old Jimmy Owens, says the factory was labelled as one of the industry’s most militant when he joined in 1968. Back then, the plant was taking on former dock workers and there was a culture clash with managers at Ford, which owned the site until India’s Tata acquired JLR in 2008. “Ford’s management at the time was very authoritarian and we were taking guys from the docks who had to be tied to the line, and then we had the conflicts and the strikes,” says Owens. The problems saw the plant labelled as “militant” for decades, he adds.

Des Thurlby, JLR’s head of HR, concurs: “This was a shining light for the worst kind of plant.” Like Owens, however, he believes there were problems on both sides: “I don’t blame the unions. I am sure management were difficult and not great at man management. And there was a lot going on in the whole of UK society at the time, industrial strife and everything else.”

In the 1960s and 1970s, says Thurlby, “if you had come into the factories it would have been complete chaos.” Now, he says: “You will not see lots of cars lying around with bits hanging off, waiting for repair. It’s right first time, ready to be shipped off to China or somewhere else.”

The renaissance was helped by Britain’s willingness to embrace the modern manufacturing practices pioneered in Japan that have given UK sites a reputation for efficient, low-cost production to go with factors such as flexible employment regulations and access to seaports.

Halewood is now a paragon of modern production: assembly lines have an andon cord, which halts production when an employee spots a problem and pulls it. If that had been around in the 1970s and 1980s, says Owens, it would have created disruption. “If you stopped the line in those days all hell would be let loose.” Owens, now a production manager, says the plant’s industrial problems came down to a refusal to listen on both sides. “The style of British management was not great. It was ‘you do as I say’ and we did not listen. Now we listen.”

The major changes came after 2000, says Owens, when Jaguar – then a Ford unit – took over the sites and adopted more Japanese-style production techniques. At JLR now instead of a foreman calling the shots, production operators have a team leader drawn from their workforce. Instead of staff engineers conducting a time study by watching people on the line with a stopwatch, says Owens, it is the people on the production line who will carry out the study. “People are given ownership of doing the job,” says Owens. It is not just JLR that has modernised. Mark Fulthorpe, an analyst at IHS Automotive, says the presence of high-class manufacturers such as Toyota, Nissan, Volkswagen and BMW in the UK bodes well for the long term. The sovereign debt crisis in the eurozone is casting a shadow over the industry, he says, otherwise “things look pretty stable”, pointing to the financial muscle behind British manufacturers: JLR is backed by an Indian conglomerate, Bentley is owned by Volkswagen while BMW stands behind Mini. Last year, Britain produced nearly 1.4m cars, with more than eight out of 10 sold abroad.

However, there are warnings that this golden age might not last. One of the industry’s most prominent trade unionists says the success of Halewood and its peers must be backed by an activist industrial policy. Tony Woodley, former general secretary of Unite, remains involved in the industry as an executive officer with the union and this year helped to broker the deal that saved Vauxhall’s Ellesmere Port plant from closure.

The lack of a home-owned major player is cause for concern. “We don’t have a British car industry,” says Woodley, because ultimate decisions about the future of plants are made abroad, by owners such as BMW and Toyota. He believes that a weak euro and strong demand from developing countries have benefited UK-based producers, but obscured the lack of a coherent, well-funded UK manufacturing policy.

Woodley, who once built cars at Ellesmere Port, says the boom could disappear quickly: “If we don’t make the right decisions now, then this growth, these jobs, will be shortlived and we will be gone within the decade. There is no doubt about that.” Meanwhile, at an upmarket residential compound outside the Golden Port complex, JLR’s success continues. Ernie Hu, a 40-year-old IT executive, slides his Jaguar XF into a space outside a smart townhouse. He appreciates the “exquisite craftsmanship” of the British-built vehicle and believes it showcases his style and individuality much more than the ubiquitous Benzes and BMWs. “I’m sure when people see me in this car, they think it’s more expensive than it actually is,” he says.

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