Unions want BL enlarged in proposals to halt motor industry's decline

Unions want BL enlarged in proposals to halt motor industry's decline
By David Felton,
Labour Correspondent

Trade union proposals for the British motor industry call for a state-controlled BL to be enlarged by takeovers of some of the operations of the other manufacturers and more joint ventures with Japanese companies.

A TUC study of the industry, which has been prepared for a conference of unions at the end of the month, also recommends government action to control the activities of the other three big manufacturers in Britain, to control foreign imports and to give the economy a general boost to raise demand for cars and commercial vehicles. Paramount in the union strategy is a larger BL which would be capable of doubling its present output as a means of achieving total car and truck production in Britain of about two million a year. That compares with about 1,300,000 last year.

The Congress House document argues that the Government's plans to privatize Jaguar and Land-Rover and its denial of finance to BL for volume car production to models such as the Metro  "indicate its acceptance of BL's slow demise whilst independent smaller producers establish themselves in the specialist markets".

BL would have little hope of dramatically improving its exports markets, so it is argued that a much larger domestic market should be the basis of its growth. The British-produced share of the expanded two million vehicles a year market should be about 70 per cent, compared with last year's share of about 43 per cent.

"To enlarge BL's operations and make its life less precarious. a plan may have to be implemented for BL to acquire some of the production and dealership facilities currently owned by the foreign-owned multinationals operating in the UK. "In other words an extension of public ownership may be required and the success of this approach would also rely on an active trade policy encouraging import substitution", the report says.

There should be strong government action to curtail foreign imports and the voluntary agreement struck between British motor manufacturers and their Japanese counterparts should be established on a governmental level. The report also says that if the Nissan plan to build a manufacturing facility in Britain goes ahead, action ought to be taken to produce a compensating reduction in Japanese imports. In the general move against foreign penetration of the British car market, the TUC says that "the Government should use all powers it has available to pressurize the multinational companies. Among these powers are price and dividend controls, taxation of repatriated profits, access to the UK markets, government aids and public acquisition".

The TUC, the document says, fully supports the continuation of BL as an independent car manufacturer and puts forward the proposals as a survival programme to allow BL to grow again. The radical shift of policy towards the industry would involve  "a change in the ownership structure of the industry and the probable consolidation of existing companies into larger units.

Many of the suggestions made in the document are, the TUC says, short-term measures and the Government ought to undertake a comprehensive assessment of strategies for the industry leading to a detailed policy for its reconstruction. A key element would be reversal of its- present policies of "deflations and non-intervention". Multinational companies should also be expected to reduce their purchasing of foreign-produced components and as a further aid to the components industry British companies should be dissuaded from investing overseas.