DECLINE AND RESTRUCTURING IN THE UK MOTOR VEHICLE COMPONENTS INDUSTRY
| Published date | 01 August 1990 |
| Author | ASH AMIN,IAN SMITH |
| Date | 01 August 1990 |
| DOI | http://doi.org/10.1111/j.1467-9485.1990.tb00584.x |
Scottish Journal
of
Political Economy,
Vol.
37,
No.
3.
August
1990
0
IY90
Scollish
Economic
Society
DECLINE
AND
RESTRUCTURING IN THE
UK
MOTOR
VEHICLE COMPONENTS INDUSTRY
ASH AMIN
AND
IAN
SMITH
Centre
for
Urban and Regional Development Studies, University
of
Newcustle upon Tyne
INTRODUCTION
This paper outlines some
of
the key developments which have occurred in the
British motor vehicle components industry during the
1980s.
It draws on the
results
of
a two-year study
of
the car components industry, which commenced
in October
1984
and was funded by the Economic and Social Research Council.
In the first part are described the parameters
of
aggregate decline, in terms
of
employment, output, investment, and trade performance. The second part
of
the paper focuses on the car components industry and attempts to explain why
the industry collapsed in the
1980s.
Particular emphasis is given
to
the progres-
sive deindustrialization
of
car manufacture in the
UK,
rising import penetration
and growing concentration in the domestic market for replacement equipment,
all
processes in which the UK-based multinational car manufacturers have
played a determining role. The third part examines the anatomy
of
decline at
the more disaggregated level
of
individual product markets and firms, and
focuses on the response of different actors in the industry to decline. Finally,
some
of
the implications
of
change with respect to the future for components
manufacture in the
UK
are drawn out in the conclusion, which offers few signs
of
hope.
I
THE
ANATOMY
OF
DECLINE (1979-1986)
In less than a decade, the fortunes
of
the British motor components industry
(electrical and non-electrical) have been radically transformed. Until the late
1970s,
the industry was a major employer and export earner for Britain. In
1979,
the industry employed over
200,000
workers
(157,000
in the metal and
other non-electrical components and
44,100
in the electrical components indus-
tries), and it raised
fl.8
billion
(1980
prices) in export earnings which yielded
a
f780
million
(I980
prices) surplus in the country’s external trade balance.
Since
1979,
the year when the present government’s neo-liberal and mon-
etarist economic policies were first introduced, the industry has entered a phase
Date
of
receipt
of
final manuscript:
17
July
1989.
209
210
ASH AMIN
AND
IAN SMITH
TABLE
I
Annual average change
(3)
in
the
UK
motor vehicle componentsa industry 1979-1986b (I!?80
prices)
-
Total Wages
&
salaries
Gross
output
Gross
profitsC Net capital
employment expenditure
Total Per capita Total Per capita Total Per capita Total Per capita
1979-1980
-
6.0
-
6.7 -0.8 -13.5
-8.0
-
0.6 5.7 -41.2 -37.5
1980-1981 -16.4 -18.7 -2.3 -16.8 -0.4 7.1 28.1 -28.7 -14.7
1981-1982
-11.1
-11.3 -0.2
-
7.1 4.6
-
7.0 4.7 -35.1 -26.8
1982-1983
-
8.7
-11.0
-2.6
-
0.9 8.5 27.6 39.8 -28.5 -21.7
1983-1984
-
4.1
-
1.8 2.4 4.4 8.8 3.9 8.3 67.1 74.1
1984-198Sd
1.5
-
3.4 -4.9 7.8 6.2 21.7 19.9 14.4 12.8
1985-1986
-
3.3
-
3.4
-0.1
-
2.3
1.0
-10.6
-
7.6 7.8 11.3
1979-1983 -10.6 -11.9
-1.5
-
9.6 1.2 6.6 19.6 -33.4 -25.2
1983-1986
-
2.0
-
2.9 -0.9 3.3 5.3
5.0
6.7 29.8 32.7
1979-1986
-
6-9
-
8-0 -1-2
-
4.1 3.0 6.0 14-1
-
6.3
-
0.4
a
Includes metal components, seats, safety belts, brakes, clutches, KD sets for cars and commercial
vehicles, electrical components for motor vehicles and aircraft. Excludes speedmeters and lamp bulbs.
Figures prior to
1979
are not available since data for the metal components sector are not separated
in the omcial statistics from those referring
to
the motor vehicle industry.
'
A
proxy measure calculated by subtracting, from gross output, wages and salaries, capital expenditure,
and the cost
of
materials, parts, industrial and non-industrial services, insurance premiums, bank
charges, advertising, rates, etc.
Data after
1984
are not strictly comparable with those for preceding years, due
to
the inclusion
in
the
omcial statistics of
300
enterprises in the electrical components sector in
1984.
Souree:
HMSO
(1985
and
1986),
Census
of
Production:
Summary Tables,
PA
IW2,
HMSO,
London
TABLE
2
Selected production indicators
for
the
UK
motor vehicle components industry 1979-
1986
(
I980 prices
)
Enterprises Employment Wages
&
salaries
Gross
output
Gross
profitsa Net capital
OOOS
expenditure
1979
1980
1981
1982
1983
1984
1985
1986
1383
1388
1406
1338
1356
1564
1665
1744
201.1
189.1
158.1
140.5
128.3
123.1
125.0
120.9
Total
fm
f
fm f fm
E
fm f
1048.9 5216 3693.0 18364 291.0 1447 251.6 1251
978.2 5173 3193.8 16889 289.2 1529 147.9 782
795.6 5032 2658.5 16815 309.8 1959
105.5
667
705.4 5021 2470.3 17582 288.1 2051 68.5 488
627.5 4891 2446,6 19069 367.7 2866 49.0 382
616.4 5007 2553.3 20742 382.2 3105 81.9 665
595.3 4762 2753.2 22026 465.2 3722 93.7 750
575.2 4758 2689.0 22241 415.8 3439
101.0
835
Per capita Total Per capita Total Per capita Total Per capita
-
A proxy measure calculated by subtracting, from gross output, wages and salaries, capital expenditure,
and the cost
of
materials, parts, industrial and non-industrial services, insurance premiums, bank
charges, advertising, rates, etc.
Notes a-d from Table
1
also apply.
Source:
HMSO
(1985
and
1986),
Census
of
Production:
Summary Tables,
PA
1002,
HMSO,
London.
DECLINE AND RESTRUCTURING IN MOTOR INDUSTRY
21
1
50
40
30
20
10
of
protracted decline. Between 1979 and 1986, employment dropped at an
annual rate
of
6.9% (Table
l),
with the bulk of the labour shake-out occurring
between 1980 and 1983 (Figure 1). By 1986, there were less than
121,000
employees in the industry (Table
2),
40% fewer than in 1979. This rapid and
vast job loss has involved not only large-scale redundancies, but also the closure
of at least a third of the factories which were in existence in 1979. With the
exception of engineers and scientists, all occupational sections of the work
force, at least in the sectors producing non-electrical components, have suffered
-
-
.-
-
-
\
\
\
\
\
\
\
0
79
80
81 82 83
84
85 86
Figure 1.
Gross
output, net capital expenditure and employment in the
UK
motor vehicle com-
ponents industry-Indices (1979
=
100).
Source:
HMSO
(1985.
1986)
Cettws
of
frodrrccfon.
PA1002.
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