Japanising Geordie‐land?
| Pages | 3-16 |
| Published date | 01 February 1989 |
| DOI | https://doi.org/10.1108/EUM0000000001015 |
| Date | 01 February 1989 |
| Author | Rod Hague |
| Subject Matter | HR & organizational behaviour |
JAPANISING GEORDIE-LAND?
by Rod Hague
University of Newcastle upon Tyne, UK
Economic links between north-east England and Japan go back to the turn of the century,
when Japan's first modern battle fleet was built by Armstrongs on Tyneside: no small irony,
then,
that British Shipbuilders (headquarters in Tyneside) should turn to the Japanese in the
1980s to re-learn how to build ships! Japanese direct manufacturing investment in Britain
began in the early 1970s. One of the pioneer entrants, the bearing manufacturers NSK, started
operations at Peterlee in mid-Durham in 1976. But the turning point for the north-east was,
of course, Nissan's decision in 1984 to locate its British manufacturing operation at Washington
New Town, near Sunderland. The number of Japanese companies in the north-east has since
grown steadily. By the end of 1988, 20 Japanese companies were operating in the area
between Teesside and the Tweed, involving 14 manufacturing plants. North-east England has
the largest concentration of Japanese engineering plants in Europe, and a rapidly growing
presence in electronics assembly.
Biggest by far of these ventures in terms of both
investment and employment is, of course, Nissan.
With the company now committed to building two
models at Sunderland, investment will exceed
£350 million and employment at the plant should
rise to some 3,700 workers by 1992. In a region
where registered unemployment stood at 14.4 per
cent in July 1987, exceeding 20 per cent in many
localities, and with the relentless shrinking of the
north-east's traditional base of employment in
mining,
shipbuilding and heavy engineering, the
hopes of economic renaissance pinned on inward
investment from Japan are easy to understand. But
the expectations are often unrealistic. Based on
expansion plans of Nissan and other Japanese
manufacturers in the north-east, it is estimated that
total direct employment by Japanese companies
will be around 6,300 in 1990 (rather less than the
7,000 redundancies announced in the second
quarter of 1986 by a dozen employers in the
region)[1].
Moreover, the publicity heralding the arrival of
Japanese firms belies the still modest scale of
Japanese inward investment in the UK. Important
though such ventures are from the point of view
of Tyneside or South Wales, Japan accounts for
a mere two per cent of foreign manufacturing
investment in the UK and a total (in 1987) of 57
companies employing about
18,500
jobs [2]. While
it is true that the UK has attracted about a third
of all Japanese manufacturing investment in the
EEC and that a further surge of foreign direct
investment by Japanese companies into the UK
occurred,
following the agreement of the five
leading industrial nations in 1985 on measures to
raise the international value of the yen, the UK
can-
not indefinitely expect to maintain its locational
attractiveness for Japanese firms against even
lower-cost locations in Greece, Spain and
Portugal[3]. The 1980s have been the "Japanese
decade", at least in terms of the enormous
managerial, media and academic interest in so-
called "Japanese" business methods. Debate over
the "Japanisation" of British industry connects this
interest with the extensive re-structuring of
manufacturing in Britain over roughly the same
period.
Whether British managements have
adopted "Japanese" techniques, either as a matter
of "best practice" or as a legitimating device for
managerially imposed changes, falls outside the
scope of this article[4]. But the direct impact of
Japanese manufacturing investment in the UK
would appear to be limited, and both regionally
and sectorally highly specific.
This article considers employment policy and
labour relations in three Japanese manufacturing
enterprises in the north-east. The firms considered
here (Nissan, Komatsu and SP Tyres) provide a
useful range of contrasts and comparisons. They
employ male production staff in a region with long
and dominant traditions of heavy industry and
strong trade union organisation. One of the plants
(Nissan) is an entirely greenfield site venture. The
second (Komatsu) involved the conversion of a
factory site acquired from an industrial competitor.
Like Nissan, however, Komatsu recruited its
workforce from scratch. In the third case (SP
Tyres), Sumitomo Rubber Industries to ok over the
existing Dunlop plant, management and workforce
at Washington New
Town.
The first two companies
ER 11,2
1989
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