Nissan and the local economy

On 8th September, 1986, the Iron Lady Margaret Thatcher, made her way to Sunderland to cut the ribbon marking the opening of the new Nissan factory. The Japanese car manufacturer had its inaugural Bluebird model roll of the production line as the then PM announced the Tyne and Wear factory open. Along with it came hope and expectation for an area that had been used to witnessing closures.

Over 30 years ago, the factory employed 500 people and sent 5,000 cars out of its doors in its first year. Three years ago, while the manufacturer was celebrating its anniversary, it was similarly boasting an output of more than 100 times the number of cars it was back in ’86 and 15 times the amount of staff.

Nissan’s immediate future seems safe however with Brexit providing uncertainty, we take a look at the economic impact the carmaker has had on the North-East of England.

Direct financial impact

In 2016, aligning with its big British birthday, the Japanese company reported that 507,430 vehicles made their way of the production line. When considering this is comparison to the number of cars made in total in the UK of 1.7 million, that means almost one in three British cars are made in the Nissan base in Washington, just outside Sunderland.

During the company’s 2016-17 report, they laid claim to £427million in wages being paid to their direct staff, of which at that time there were 7,755. This figure does not include all those who supply materials to the firm part-owned by Renault, from throughout the UK, which they estimate to be around 30,000. Three quarters of these supply chain jobs are based in the North-East of England.

Following the defeat of the miners’ strike in 1984, Michael Heseltine announced in 1992 that 31 out of the 50 pits that remained open in the UK would be facing closure, resulting in the loss of 30,000 jobs. Heseltine, then President of the board of trade, noted in an interview with the Guardian that Thatcher’s tight restrictions on the unions will have been a driving force for Nissan heading to Tyne and Wear, in favour of France or Germany.

However, Nissan’s life in the UK, and initial decision to move here hinged ultimately on two things. Their appreciation of the English language and its connection to engineering, but perhaps more significantly, their EU membership and free trade links. Still to this day, the north east of England is the only part of Britain that exports more cars than it imports.

At one time, the factory only stores enough materials to complete half-a-day’s work. 85% of the parts are imported, most of which come form Europe, and without ‘friction-free’ import, the company’s production efficiency will ultimately dwindle.

What you might not have known

If you were asked to name a British car, you’re more than likely going to fall into the trap of saying Mini, Jaguar or Land Rover. In fact, neither of these three brands, that you may first consider to be more Blighty than James Bond himself are owned by British manufacturer’s anymore. Mini, despite being built in Oxford, are owned by BMW, while Jaguar and Land Rover are a subsidiary of Indian’s super constructors, Tata Motors.

On the other hand, Nissan, Honda and Toyota, have all been built here for several years now. If it were the FIFA World Cup, we could have them claim allegiance to England instead.

And it was Nissan who paved the way for their Japanese counterparts to set up their European camps here in the UK.

Investing in youth

Establishing the UK’s largest ever car plant and planting a seed to attract fellow manufacturers was just the start for Nissan. The company launched its new initiative in 2014, looking to give back to the area of the UK that has given so much to its brand.

The Nissan Skills Foundation which brings children to the Sunderland plant prior to choosing their GCSE subjects, was designed with the aim of encouraging them to pick the STEM (Science, Technology, Engineering and Maths) subjects.

The program included different activities such as:

Learning about global environmental issues faced by Nissan
Formula F1 racing in the classroom
Interactive work-shops focused on the art of creating things

Nissan’s 33-year life in the North-East has been undoubtedly been a major success, not only for the company but the local economy alike. The financial crisis in 2009 took its toll on Nissan, just like every other industry and unfortunately it was forced to make 1,200 redundancies. However, popular models such as the Nissan Qashqai were commissioned soon after attracting further investment back to the factory.

Inside the wall of the plant stands the slogan, ‘like no other’ – quite fitting to describe its relationship with the area.