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Productivity and skills in vehicle component manufacturers in Britain, Germany, the USA and Japan.

Introduction and methodology

Five studies by the National Institute(1) of matched firms in selected industries, have highlighted skills differences between Britain and Germany as key factors underlying substantial differences in manufacturing performance, as measured for example by productivity. The suggestion is that Britain should move closer to the German model of education and skills training.

The vehicle components industry, examined in this article, is of substantial economic significance, both directly and in terms of its effect on the more visible vehicle assembly industry. In 1988 vehicles and vehicle components accounted for L6-1 billion of Britain's L14 billion overall trade deficit; in 1978 they had contributed a 0-3 billion pounds surplus (2). In spite of a particularly strong international position in the past, LJK vehicle components nevertheless contributed just over 1 billion [British pounds] directly to this deficit. The import/export ratio of the sector increased from 0-24 in 1970, to 0-49 in 1980, to 0-97 in 1985 and reached 1-30 in 1988 [3]. It is the sort of industry which, if any, should have benefited from Britain's contentiously proclaimed 'productivity miracle(4) and it has been in the vanguard of new technological and manufacturing developments, such as CAD/CAM, IT, FMS and JIT.

In the early-1980s, thirty UK vehicle component manufacturers were matched on the basis of six main products against eight manufacturers in West Germany, five in the USA and thirteen in japan. These six products were chosen to cover a number of features affecting competition and included:-automotive rolling bearings, automotive forgings, automotive electronics (instrumentation), automotive exhaust systems, spark plugs and brake linings. Thus the cases examined in detail varied considerably in terms of the level of technology; the degree of concentration, in turn affected by extent of possible scale economies or experience effects; and the degree of exposure to international competition, in turn influenced by the very different logistical characteristics of chosen products. Interviews, both at top executive and shop floor levels, were carried out in 1981-3, additional discussions being held with seven vehicle assemblers. Field research was directed to broader strategic issues, rather than concentrating only on the issue of skills, and this paper therefore focuses on just the most relevant and reliable data.

The progress of British vehicle component manufacturers was subsequently tracked ', and in 1989-90 interviews were held with a further 22 British and 23 German vehicle component manufacturers, as well as car assemblers in both countries. More recent interviews have dispensed with the principle of product matching in order to achieve an adequate sample size, and have involved a wider range of products. Access was a particular problem in the case of German companies and effectively determined the sample. In 1989-90, not only was top level access requested, but companies were also asked for highly specific details on how major decisions were actually taken, placing heavier demands in terms of more sensitive information.

Some 400 companies had to be approached in Germany, compared with only 100 in the Britain, to gain a satisfactory sample size. The resultant sample involved a good spread of companies in terms of size structure, though there was a slightly higher proportion of smaller companies than in 1981-3, and there may have been some slight bias in terms of more progressive firms responding. However, three of the eight German manufacturers visited in 1982 were among those revisited in 1989/90, thus providing some degree of continuity. Productivity comparisons in 1982/3 Comparative productivity figures for this period were obtained from company interviews (supplemented by data from company accounts) as detailed in table 1.

Some of the data are less reliable, reflecting the quality of information companies were able to supply and small effective sample sizes. Forging companies keep very reliable data on piece numbers and tonnages, especially in Britain and Japan. Data on bearings was considered reliable, but the small number of companies contributing data on spark plugs and exhaust systems means that this data should be treated with some caution. Productivity comparisons supplied by multinationals (MNCS) are more subjective, but reflect an intimate knowledge of fairly comparable situations.

Given such limitations, and the fact that the potential for productivity differentials varies considerably across products with very different technologies, it would be wrong to expect smooth statistical relationships; but table 1 does suggest a pattern of substantial international productivity differentials in 1982/3 particularly against US and Japanese producers. The average value of sales per employee of UK firms in this sample of a little over L28,000 was consistent with ICC data for a much larger sample of UK firms.

These figures corroborate Germany's productivity lead against Britain at this time. Indeed one multinational's internal productivity indices suggested its British plant's productivity was 50-60 per cent of the level in Germany, even with fairly comparable technology. In another multinational one component was being dual sourced between the two countries, to the same design, the same quality specification, on the same type of machinery, and with production runs also being the same length. A senior executive who had worked in both these subsidiaries, and who had responsibility for making economic comparisons within the group, stated that productivity their UK plant was between 30 and 50 per cent of the level in their German plant, even in such a remarkably comparable situation.

Nevertheless, table 1 suggests that Japanese and US manufacturers in turn led West Germany on productivity, and by no small measure"). High US productivity figures benefited from particularly high production runs: indeed the US forge visited served as a captive forge, necessitating few product changeovers. This was not, however, the case in Japan, and Japanese forges supplied productivity figures adjusted to take account of their use of subcontracting, in respect to heat treatment, dye manufacture, machining, and on-site subcontractor staff. The German forge was fairly traditional (compared with larger German companies such as Gerlach whose forges were reportedly extremely modern), being similar to one British forge visited, employing around 900 employees. Japanese forges were not notably large, ranging from 300 to 550 employees, but they were more modern. In contrast to the USA and even Britain where suppliers have suffered from short production runs, Japanese plants were remarkably flexible as a result of radical reductions in changeover times.

Productivity progress in more recent years

Table 2 shows averaged sales per employee figures (nominal and also inflation adjusted) from twenty UK vehicle components companies, publishing continuous data between 1970 and 1987. Evidence from manufacturers visited was compatible with the picture of virtually stagnant productivity levels during the 1970s, suggested by inflation adjusted figures. However, interviews with component companies and their customers suggest that the period 1979-83 was so exceptional, that the most accurate assessment of productivity changes over this period is obtained by taking sales per employee figures not adjusted for inflation. Even though the most specific price index available for motor vehicles and their engines rose 35 per cent, most component prices for Rover reportedly were subject to a four year price freeze', some even falling(7). This seems to have reflected a radical shift in the bargaining positions of assemblers and suppliers. On this basis, figures in table 2 would imply a rise in productivity in 1979-83 of about 40-50 per cent, which could well be consistent with major de-manning programmes forced on component companies over this period.

Subsequently under less exceptional pressures between 1984 and 1987, component prices probably moved more closely in line with the price index given. Inflationadjusted figures in table 2 suggest a reversion to very slow average productivity growth(8), though my interviews with companies suggested many had continued doing better than these figures would imply.

Sales per employee comparisons internationally need to be interpreted cautiously because of exchange-rate issues, but suggest some narrowing of the gap between British and German suppliers. Sales per employee at ten German suppliers, able to supply data in 1989/90, averaged 158,000 D-Mark or L52,900 converted at today's exchange rate of L1 =3 D-Mark. This compares with an average of L48,900 for nine British suppliers providing such data, or L37,400 based on the financial reports of twenty British companies continuously monitored since 1970. The average improvement in productivity of four German suppliers, able to provide inflation adjusted data for 1989/90 as compared with 1982, was 34 per cent in real terms.

This would suggest a significant improvement in British suppliers' relative productivity against West Germany, but not enough to have closed the gap. The multinational company involved in the highly comparable dual-sourcing situation already discussed, was revisited in 1989. The senior executive involved was re-interviewed. His latest estimate was that productivity in their German plant was still some 35 per cent ahead of the British plant (based again on units per head), though there had indeed been some closing of the gap since 1982, consistent with differential productivity growth rates suggested by official figures for manufacturing generally. Despite higher wage rates, the German plant's cost level was about 5 per cent lower than the British plant's.

Another multinational visited in 1990 had carried out extremely detailed international productivity comparisons for one specific component, in conjunction with other international producers. Although positions are less comparable in terms of output levels, capital equipment and car model variety handled, table 3 provides illuminating back-up details. These unit based figures indicate a still very significant productivity gap between Britain and Germany, and even perhaps cast doubt on whether the gap has actually closed though the company was unable to produce any earlier figures for this component, to enable this issue to be examined).

The critical conclusion, however, is that, whilst Britain may still have some lessons to learn from West Germany in respect to manufacturing productivity, the much larger and still continuing gap is against japan. The incorporation of an index, designed to allow for the variety of car models handled, bears out the Japanese achievement particularly in relation to the USA, and even on this basis their labour productivity appears to be 2-5 times that in Britain. The question that really needs addressing is, perhaps, not whether Britain is closing the gap against Germany, but whether either country is closing the gap against Japan. Thus, whilst the German automotive forge visited in 1982 was a little ahead of British forges, and whilst its productivity had advanced some 25 per cent by 1989 to 38 tonnes/man year, this would scarcely have closed the gap with Japanese forges already averaging 86 tonnes/man year in 1983. One automotive battery producer suggested that, whilst the most efficient battery plants in Western Europe were now generally up to six or seven batteries per man hour, Japanese manufacturers were producing over ten.

Although Japanese plants have not been revisited, these figures would be consistent with the momentum of productivity growth observed in 1983. One automotive forge indicated that its productivity had doubled over the previous five years. Similarly one Japanese brake lining manufacturer had increased productivity from 31 disc pad pieces per man hour in 1978 to 67 in 1982. An exhaust systems manufacturer claimed productivity advances of 20 per cent per annum until a slump in demand had led to this falling to 16 per cent; in comparison, productivity at a British exhaust manufacturer visited had only increased from 67 to 72 units per man year, between 1975 and 1982. Indeed, Japan's recent cost competitiveness in the face of a rise in the yen, from 400 to the pound in 1982 to around 250 today, underlines the momentum of subsequent productivity growth. An internal management report by one UK supplier recently concluded that, for a sample of eighteen products examined, prices averaged 94 per cent higher than guide prices supplied by Honda: a far more significant cost differential than against Germany.

Skills differences between Britain and West Germany Comparisons carried out in 1982 mirrored findings by the National Institute and by other researchers(9), indicating the strength of German production skills, in contrast with we documented weaknesses of UK production managers (10,11,12). Of five German production managers interviewed in 1982, at least three had served full craft apprenticeships; three were Dip). Ing. graduates, one was qualified to an Ing. Grad. level, and the other one had undergone Meister training. Of three quality control managers interviewed, one was a Dipl. Ing. graduate and the other two were Ing. Grad.. Of two industrial engineering managers interviewed, one was Ing. Grad.; the other was not. German managers and engineers were also considered more 'rounded' in business terms, by suppliers and customers in both countries.

No British chief executive interviewed claimed postgraduate qualifications, either in 1981/3 or in 1989/90. Three out of six German chief executive interviewed in 1982 had educational qualifications beyond Diploma Ing or Diploma Kaufman graduate degrees. Table 4 shows this proportion was similar in 1989/90, the proportion with doctorates being 20 per cent. Table 4 also highlights German chief executives' longer periods of tenure, and this appeared to encourage a longer term, more strategic approach when taking major decisions.

Strength in depth in Germany was provided by the relative professionalism of superintendents and foremen, many of whom were Meister trained(13). One new foreman interviewed in 1982, for example, had been selected because he had acquired such a range of skills, that he could handle virtually any of his department's machines or equipment. He was now undergoing additional training, organised by the company, on Friday afternoons and Saturday mornings, along with other foremen, superintendents and other employees. A superintendent, who was also quite fluent in English, pointed out that his training both as a Melster and on other technical courses, was critical to his ability to handle sophisticated heat treatment processes and all the assorted control systems. He enjoyed a close relationship with operators, who naturally came to him for technical advice. Continuing effects of skills differences on AngloGerman productivity differentials

In the highly comparable situation of dual sourcing within a multinational, British productivity was said in 1982 (by the senior executive referred to earlier) to be between 30 per cent and 50 per cent of that in Germany. This was in spite of identical product specifications, and almost equivalent equipment purchased less than three years earlier. The senior executive interviewed blamed management and unions equally for blatant UK overmanning. In Germany, one operator ran five machines; in Britain, one operator ran two and achieving even this nearly involved a strike. Tool setting in Britain had been plagued by demarcation problems, but UK production managers were blamed for a lack of leadership on the shop floor. He himself had had to bring one particular situation to a head, by personally demonstrating to everyone concerned including union representatives, how an unskilled operative could be trained within ten minutes to take out tooling using just two allen keys. By 1989, UK productivity had improved to some 65-70 per cent of that in Germany, industrial relations had improved (14), inflexible working practices and blatant over-manning had gone; yet British operators still only handled three machines compared with five in West Germany.

Continuing differentials were partly attributed to skills problems. In 1975, for example, it had taken two years to locate a new production director, and they had had to accept only minor academic or technical training beyond a craft apprenticeship-a situation 'almost unthinkable' in Germany(15). In 1989, the quality of UK production management was still causing problems. For example, though the UK plant had benefited from heavy investments in new equipment, not once had automatic feed systems been seen running properly as in Germany. The same German senior executive stated: The feed equipment is there, but it needs setting up and maintaining if it is to be used effectively, but they would rather just put say two men onto the machine. That is why I say Britain is lacking in management skills. It's easy-we've got cheap labour-just put an extra man on it!'. No British foreman or superintendent has yet sat for any formal qualification equivalent to their German Meister training. Despite high local unemployment, lack of local skills, from production managers to skilled toolsetter operators, was a key reason why they were not expanding faster in Britain.

One reason for continuing differences in manning levels, was that many German machine operators, unlike those in the British plant, were dual skilled: they could handle toolchanges, monitor their machines using statistical control methods and they could perform more straight forward maintenance tasks to keep them up to standard. Training, however, is restricted by budgets and it takes many years for better trained people to come through the system in sufficient numbers to make any real impact. As yet there is no programme for extending German inhouse training programmes to Britain, so that employees can be developed on the job.

Another multinational also pointed to the persistence of such problems. British engineers were particularly weak in work study and method study. The older generation of staff were poor, particulary in middle management. Local German machine suppliers complained that, even after training, UK staff (of all the countries they deal with) persistently call them back in for easily traceable problems. As a result, state of the art machinery installed 18 months previously was still having commissioning problems, although working satisfactorily in the company's German plant. The senior German engineering executive, responsible for overlooking major investment decisions, stated: The UK plant suffers from breakdowns, often from easily rectifiable causes ... this sort of thing happens frequently .... the difference is due to training being considered essential here, even for older staff, not discretionary as it is in the UK'.

Skills differences between Britain, the USA and japan

Comparisons in 1982 indicated that German levels of technical training were unequaled either in Britain, the USA or japan, and they were generally well ahead on technological developments associated with computer aided design and manufacture, and flexible manufacturing systems, and on new product developments. Neither in the USA, nor in japan were formal skilled apprenticeships so much in evidence. At a higher level, Japanese technical skills compared poorly with even those of British engineering graduates in the early years of their careers, and were well behind those in Germany. University standards appeared lax, and initial in-company practical training was far behind those of British chartered engineers. German executives, recently interviewed, regarded Japan's team-orientated engineers as blinkered in respect to new methods, and evidenced the inability of Japanese suppliers and also their equipment suppliers to keep pace with technology appropriate to flexible manufacturing systems for example: the Japanese have to use eight machines manufacturing one product, where the Germans use only three, and they lack associated auxillary equipment.

Japanese manufacturers were, however, able to utilise a relatively larger pool of engineering graduate recruits, as suggested by table 5. The best universities offered proportionately more engineering places (17), and the subject attracted good students hoping to gain life time' careers with prestigious engineering companies.

Whilst Japanese engineering graduates received relatively poor formal training, on-going in-company career development was much more impressive than in Britain. Young engineers are grilled formally on their projects by their bosses and technical colleagues, regularly and relentlessly. Career progression depend on such performances, and peer group pressures resulted in high levels of motivation. Until their late-thirties training takes the form of technical seminars conducted by other company engineers, the emphasis then shifting towards more managerial issues. In contrast to British engineers who were often frustrated in their careers and politically isolated, Japanese engineers enjoyed extensive supportive social networks within companies and moved fairly easily into operational areas, having assimilated essentially corporate values. In companies visited, there was no real concept of a separate design department, and R&D was often even subordinated as a service to production departments.

Graduates in Japan were happy to rotate every four or so years between different technical/production jobs, gradually building up experience, secure in the knowledge that their salaries will rise incrementally every year, in line with other functions such as sales or finance(18), and that their long-term career prospects were second to none. Personnel departments systematically tracked career development, through typically six monthly appraisals which determined whether the next job rotation would be a coveted move in the right direction, or four years in a backwater. As they gained management responsibilities, even more extensive appraisal systems drew on comprehensive feedback from bosses, colleagues and also subordinates, weeding out very early those lacking leadership skills(19). Graduates provided an extensive, highly motivated cadre, and just kept on learning throughout their careers.

Most Japanese companies, however, placed even greater emphasis on the need for on-going career development by production personnel, including the operators themselves. One major Japanese vehicle component company had found itself lagging technologically well behind a Japanese rival, which recruited from exactly the same universities. They concluded that the problem lay not in the quality of their engineers, but in the degree of support that they received from production supervisors and the production operators. The efforts of their engineers were constantly distracted by unnecessary subsidiary tasks-a problem plaguing many British companies. The solution, successfully adopted, was a radical shift of training emphasis so as to motivate and develop such production personnel. The problem they perceived in British companies was that 'workaholism' merely applied, divisively, to a very narrow class of employees. Japanese employees, however, benefited from comprehensively high levels of basic school education(20); the sort of literacy problems recently highlighted among General Motors' US production workers, would be unheard of in Japan(21). With well educated employees, even modest improvements in on-going training provision repaid handsome dividends to this Japanese company: with better shop floor support, their engineers became very much more effective.

The change for many Japanese suppliers visited came in the early-1960s. Having contended with strikes and shoddy quality in the 1950s, many seized hold of statistical quality control concepts such as those of Demming and Juran, which enabled production operators themselves to take responsibility for quality. These caught the imagination of foremen and production operators, many of whom then attended night schools, and rapidly spawned quality improvement groups. Companies were keen to encourage such positive participation and shifted their organisational orientation in order to promote the status of the production function and of operators themselves. Time was allocated to encourage the activities of such improvement groups, and this was supplemented by ruthlessly pulling operators off machines or assembly lines whenever they were not being fully utilised.(22)

Suggestion schemes were promoted and have become highly successful in the new context(23). The same improvement work groups also proved critical in improving productivity and, later, in the many detailed changes behind just-in-time and improved manufacturing flexibility. Assembler companies such as Toyota were in the forefront of these developments and played an important catalytic role in encouraging all suppliers to instigate similar changes.

There was ubiquitous evidence of the impact of such highly motivated improvement groups upon productivity, quality and manufacturing flexibility, throughout the Japanese supplier sector. Even in a small brake linings plant with only thirty people, the superintendent had not only heard of Demming's statistical control methods but produced a small library devoted to such issues, and indeed claimed to have another personal library at home. The proud achievements of his quality groups over the years had been documented in colour photograph albums, and were on display rather in the manner of a religous shrine. Company records showed that they had brought down reject rates from 0.68 per cent five years earlier, to 0.48 per cent. Strictly speaking they operated two circles', one on quality and one on productivity, but the same principles were involved. Thus more or less the same people had been responsible for increasing productivity from 31 disc pads/person/hour in 1978 to 67 in 1982. Similarly, exactly the same sorts of teams had been pulled off direct production in Japanese automotive forges, and could be seen in yellow uniforms, literally drilling' as they practised arduously to bring down tool change-over times, to an extent not even approached in Britain, the USA or even Germany. Such team developments in Japan not only improved effectiveness through better cooperation, but led to un-paralleled levels of motivation and on-going skills development across the whole workforce. Lacking such team support and flexibility, the US forge has subsequently closed.

A senior German executive recently working with the Japanese on a joint venture project, likewise argued that Japanese counterparts were winning out because all their operators were highly competent, highly motivated and constantly searching for ways of improving the working of their production lines. In spite of a total quality emphasis, quality circles for example, had made no impact at one German plant until 1989. Their foreman attributed lack of support to a strong hierarchical structure and an individual based culture. Managers' and engineers' relationships with ordinary operators were often distant, if respectful (particularly in the case of guest workers), and there was nothing like the fervent operator participation so commonly observed in Japanese plants visited earlier.

In conclusion Japanese manufacturers did not share the same advantages in terms of formally acquired skills as their counterparts in Germany; rather their owed their success to a subtler process of on-going career development, which engaged the motivation of the whole workforce.

Summary

The productivity gap between British and West German vehicle component manufacturers closed substantially, though by no means completely, during the 1980s. Differences in respect to formally acquired training still contribute to residual productivity differences, and contain some lessons.

There remain, however, far more substantial differences in productivity with japan, where formally acquired training is even less developed than in Britain. Bridging this gap, which will become crucial as Japanese suppliers follow Japanese car companies into Britain, places an even greater priority on comprehensive improvements in basic schooling standards, and on a radical switch of emphasis on on-going processes of career development, tied in with companies. During the 1980s British vehicle component manufacturers finally dealt with blatant under-utilisation of capital equipment, but this has not proved to be enough. For the remaining gap to be bridged, the 1990s needs to become the decade in which Britain grapples with similarly blatant underutilisation of people's full career potentials.

ACKNOWLEDGEMENTS

I should like to thank the ESRC who funded my earlier doctoral research in respect to Britain, Japan and the USA; the University of Warwick's Lord Roote's Fund who helped to fund my earlier research in Germany; and the Institute of Chartered Accountants in England and Wales who are funding an on-going study of British and German vehicle component companies. I should like to thank my colleagues on this latter project, B.Bayliss, Professor of Business Economics, and C.Tomkins, Professor of Management Accounting at Bath University, and also B.T.Houlden, Professor of Business Policy at Warwick Business School who supervised my earlier doctoral research, for all their help and advice. Any faults or errors are however entirely my own. I should like to thank the British Embassy in japan whose help was invaluable in gaining access to Japanese companies. Finally I should like to thank those companies who have given their time so generously.

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.1 11, 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 (1 98 8).

(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 0 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 Warwick, 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 Economic 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 pl. British university applications for engineering have fallen to about 18 per cent, a much lower figure, despite failing 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 pl8.

(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.
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Date:Feb 1, 1992
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