April 1997 a good month for UK car plants

Among the turmoil and insecurity of the previous few months in the motor industry, in April 1997 three British plants seemed to have secured their futures into the next century. All cases have involved the negotiation of changes in working practices.

April 1997 was a very good month for securing the future of British car plants. The Ford Halewood plant on Merseyside and the Peugeot Ryton plant in Coventry have both secured the production of new vehicles into the next century. The future of Rover's Longbridge plant is in the balance while an announcement is delayed over whether a new model Mini will be produced.

At the beginning of the month, a GBP 15 million package of government support was announced for the Ford company at its Halewood plant. The aid is part of a Regional Selective Assistance grant, but will be conditional upon Halewood achieving significant productivity improvements. The investment will safeguard 1,850 jobs at Halewood, according to the Government, and many more indirectly in the car component industry. The aid is towards the production of a new Multi-Activity Vehicle (MAV) which is expected to be launched in 2000. The company had announced in January 1997 that redundancies would be imminent if support for the MAV was not forthcoming (UK9702101F). Under the revised plan, Ford will be seeking 980 voluntary redundancies, leaving the total workforce at around 3,000.

At Peugeot's Ryton plant in Coventry a strike was avoided when employees voted three-to-one in favour of a revised offer over pay and shift patterns. By 19 April, the company had announced that it intends to build a replacement for its 205 model, the 206, at Ryton. The new model will join the 306 which is already produced there, and the two models will be produced using the same line. Peugeot says that the new investment will safeguard the 3,000 jobs at Ryton.

Another plant whose future will, it is hoped, be secured is Rover's Longbridge factory. Rover is hoping that BMW will announce that the new Mini due for launch in 2001 will be built at the plant, but unions and senior management are at the moment locked in negotiations over new working practices. Longbridge is thought to be the preferred location for the production of the Mini but Walter Hasselkus, chief executive of Rover and BMW board member, has delayed an announcement until after the negotiations. A company spokesperson said on 26 April that the decision still had "not been officially confirmed, but that it was the preferred option".

It is significant that the future of all three plants has been secured on the precondition of changes in working practices. Flexibility agreements were concluded earlier in the 1990s in all three cases, but management is said to want even more flexibility in a bid to increase productivity.