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Productivity and Skills in Vehicle Component Manufacturers in Britain, Germany, the USA and Japan

Published online by Cambridge University Press:  26 March 2020

Christopher Carr
Christopher Carr*
Affiliation:
Strategic Management at Manchester Business School
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Abstract

This article investigates international productivity differentials in one industry over the last 10 years, and the impact of skills differences. In 1981-3 interviews were held with Chief Executives and other personnel down to the level of the shop floor, in 56 matched vehicle component manufacturers in Britain, Germany, the USA and Japan. In 1989-90 further, more limited, interviews were carried out in 22 British and 23 German vehicle component manufacturers to gauge the effects of past differences and to investigate more recent progress. Findings suggest that substantial progress on manning levels and labour flexibility has resulted in some narrowing of the productivity gap against Germany, but a large gap remains against Japan. It is suggested that Britain may need to look to the Japanese skills model, emphasising high standards of basic education and vigorous programmes aimed at continuous employee development.

Type
Articles
Information
National Institute Economic Review , Volume 139 , February 1992 , pp. 79 - 87
Copyright
Copyright © 1992 National Institute of Economic and Social Research

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References

Notes

(1) See NEDO, Gauge and Tool Sector Working Party, Toolmaking: A Comparison of UK and West German Companies (NEDO, 1981); A.Daly, D.M.W.N.Hitchens and K.Wagner, ‘Productivity, machinery and skills in a sample of British and German manufacturing plants’, National Institute Economic Review, no.111, February 1985; H.Steedman and K.Wagner, ‘A second look at productivity, machinery and skills in Britain and Germany’, National Institute Economic Review, November 1987; H.Steedman and K.Wagner, ‘Productivity, machinery and skills: clothing manufacture in Britain and Germany’, National Institute Economic Review, no.128, May 1989; V.Jarvis and S.J.Prais, ‘Two nations of shopkeepers: training for retailing in France and Britain’, National Institute Economic Review, no.128, May 1989; S.J.Prais, V.Jarvis and K.Wagner, ‘Productivity and vocational skills in services in Britain and Germany: hotels’, National Institute Economic Review, November 1989.

(2) Source: Business Monitor MQ 10.

(3) Source: Motor Manufacturers and Traders/Customs & Excise.

(4) See for example P.Spencer, Britain's Productivity Renaissance, Credit Suisse First Boston (1989); K.Boakes, Britain's Productivity Miracle: More to Come, Greenwell Montagu, 1988; D.McWilliams, The Renaissance of British Management, inaugural lecture at Kingston Business School; N.Crafts, British Economic Growth Before and After 1979: A Review of the Evidence, Centre for Economic Policy and Research, London (1988).

(5) Carr, C.H. (1990) Britain's Competitiveness: The Management of the Vehicle Components Industry, Routledge.

(6) Such high Japanese productivity differentials are corroborated by an independent study carried out by Lucas, reported by A. van de Vliet, ‘Where Lucas sees the light’, Management Today, June 1986, p44.

(7) J.Bessant, D.T.Jones, R.L.Lamming and A.Pollard, The West Midlands Automobile Component Industry: Recent Changes and Future Prospects, West Midlands County Council Economic and Development Unit Sector Report No 4, West Midlands County Council,1984, p61.

(8) These figures are not inconsistent with OECD figures suggesting productivity in UK manufacturing as a whole rose 45 per cent between 1979 and 1988.

(9) See for example:-P.A.Lawrence, Managers and Management in West Germany, Croom Helm, London, 1980; S.P.Hutton and P.A.Lawrence, German Engineers. The Anatomy of a Profession, Oxford University Press, Oxford, 1981.

(10) These 1982 West German profiles may be contrasted with those of British production managers reported by S.P.Hutton and P.A.Lawrence, Production Managers in Britain and Germany, University of Southampton, Interim Report, September 1978. Of 12 interviewed (though 3 of these were only at the level of Superintendent) half had O level qualifications, a third A level, a third degrees, a quarter HND, a third had completed apprenticeships, and one had no signification qualifications. 14 colleagues, not directly interviewed, included one ONC, two HNDs and one graduate and this was not felt to be a-typical. In contrast, those encountered in German companies included 2 PhDs, more graduates; no-one had less than an Ing.Grad and all Ing.Grads had completed apprenticeships.

(11) A survey of German engineers showed that 84 per cent of Ing.Grad. engineers and 24 per cent of Dipl.Ing. engineers had undergone a formal apprenticeship.

(12) For further details of the author's comparisons in 1982, see C.H.Carr, A Comparison of British and German Companies Producing Components for the Automotive Industry, unpublished paper, Lord Rootes Fund research, University of War- wick, 1982.

(13) For further details of German Meister training see, for example, NEDO, Gauge and Tool Sector Working Party, Toolmaking: A Comparison of UK and West German Companies (NEDO, 1981).

(14) Department of Employment figures indicate that the number of industrial stoppages in 1990 was the lowest for 55 years.

(15) Pay may have been a factor: the advertised UK salary represented a much lower differential, as against shop floor operators than in Germany; it is notable that Nissan UK's differentials today are set higher than the UK industry average.

(16) S.J.Prais, ‘Qualified manpower in engineering: Britain and other industrially advanced countries’, National Institute Econ omic Review, no. 127, February 1989, (table 1).

(17) P.R.Rawle, The Training and Education of Engineers in Japan, London Business School MBA Project completed for GEC, London, February 1983, evidences a high proportion of Japanese graduates entering science and engineering in 1980/81 (p.69), and provides a detailed account of their education and training. Similar evidence is available for Germany: ‘Uni: Technische Facher beliebt’, Die Welt, (Berufs Welt), 13 January 1990, No 2 p1. British university applications for engineering have fallen to about 18 per cent, a much lower figure, despite falling entry standards. Pay may be a factor affecting both intake and retention: M. Dixon, ‘Why ambitious engineers seek different work’, Financial Times, 25.10.89 p18.

(18) No evidence was found of pay differentials in favour of other functional areas in the early years of employment.

(19) Alan Cox, Chief Executive of GKN Allied Wire and Steel, has stated that highly elaborate personnel appraisal systems are a crucial factor contributing to his Japanese joint venture partner's high productivity level.

(20) The poor relative standards of British schools today is evidenced in Peter Jenkins, ‘At the bottom of the class’, The Independent, 8 February, 1990, p.25.

(21) By contrast Korean car assemblers are claiming one of the most highly educated workforces in the world, and the number of graduates employed is extremely high.

(22) One British production manager recently interviewed admitted that, like his colleagues, he held on to under-utilised operators during slack periods ‘just-in-case’ of sudden surges in demand, instead of accomodating his company's formal policy of releasing operators for additional quality training.

(23) The Japanese exhaust systems manufacturer visited received an average of 9·6 suggestions per employee per year.