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 05 July 2008 23:16 BST

"Mixed prospects" for UK's car manufacturers

Thursday, 29 Mar 2007 09:46
Britain's car manufacturing sector faces an uncertain future

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A group of MPs has admitted that Britain's car manufacturing industry has only "mixed prospects" in the future.

The trade and industry select committee was analysing the recent closures of car manufacturing plants at Longbridge, Ryton and Ellesmere Port in a report published today.

Among the problems faced by the manufacturing sector identified by MPs are a shift towards cheaper production in eastern Europe, logistical improvements making British plants relatively expensive to run and higher labour costs in Britain.

"Though the combination of problems experienced by these [closed] plants may have been especially acute, we heard nothing to make us believe that they were unique to these plants or their parent companies," the report noted.

"It is therefore all the more important that both the industry and government put extra effort into improving skill sets throughout the sector, increasing the commitment to research and development, adopting lean manufacturing techniques and strengthening the local supply chain."

Despite these potential improvements MPs suggested that a trend in the industry, combined with the increasing ownership of British plants by overseas companies, poses a threat to the security of jobs among car manufacturing workers.

"There is a lingering suspicion that companies strongly connected by ownership, management headquarters or production capacity with a particular country will, unless countervailing arguments are overwhelming, choose to err in the direction of axing jobs overseas rather than at home," they noted.End of story


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