17. While the pressures facing car manufacturers are similar throughout Western Europe, certain factors make some plants more vulnerable to closure than others. Whatever contribution the actions of management may have made to the timing and exact circumstances of its collapse—and we note, with regret, that the Companies Act investigation into these circumstances has not yet concluded—MG Rover failed primarily because it lacked the resources and capability to develop new models on its own and was unable to secure partners. Even where companies are able to develop new models that customers like, however, they may be unwilling or unable to use existing plants to produce them. Our witnesses mentioned the following factors as major considerations when the future of plants was to be decided:

—  flexibility, which encompasses such matters as the age of the plant and the scope for rebuilding it; and whether the production lines are adapted to a 'platform' approach or whether the plant is dependent on a single model;

—  the relationship of the plant to others in the group (whether, for example, it is just an assembly plant or whether it produces any components) and to the company's supply chain; and logistics more generally;

—  costs, in particular for labour and energy; and

—  productivity rates, labour flexibility and skills.

Other factors appear to us to be the extent to which the company regards the country as its 'home base' for a particular regional market; and the influence of exchange rates on competitiveness.

Plant flexibility

18. Two of the plants identified for closure last year, PSA's at Ryton and TVR's at Blackpool, were old factories. As a result, they both needed reconstruction to meet modern manufacturing requirements for equipment and processes, but media commentators noted that there were doubts whether either site was capable of redevelopment in the way needed.[62] Amicus said that it had no evidence that planning problems played any part in Ryton's and TVR's closure, though it conceded that purpose-built plants on greenfield sites had a competitive advantage.[63] The T&G, on the other hand, said that many UK car plants were suffering from the fact that there was limited scope for re-equipping the sites, thus hindering innovation. The T&G said that, while companies had invested in production facilities, they had been unable or unwilling to invest enough to bring the UK industry "towards the 21st century".[64] GM compared the difficulties posed by its legacy of production at Ellesmere Port with the situation of some of its competitors "who have been more recently established, they have not had to make the changes, the updates, they have been able to come in with a fresh set of facilities, a fresh set of working practices and the ability to start from a clean sheet."[65] GM suggested that, at a rough estimate, older plants in brownfield sites were 20-25 % less efficient overall than newer greenfield ones.[66]

19. PSA confirmed that the age and configuration of the Ryton factory posed major difficulties to the company. The only model produced at Ryton in recent years had been the Peugeot 206. Although Ryton had produced two other models from its single production line during the 1980s, the company decided that the design of and assembly techniques for the 206 were so different from those of the earlier models that a single production line could not be shared.[67] After the 206 was introduced, PSA had adopted the strategy of designing its plants for the production of multiple models on the basis of a single 'platform'.[68] When it was decided to reduce production of the 206, Ryton was not configured so that it could produce a variety of models on the basis of a platform. We asked whether it would have been possible to rebuild or refit Ryton, and PSA said that this had been considered but it would have cost about £255 million to adapt the plant to platform working and to install the tooling to assemble particular vehicles. As the group was trying to reduce costs throughout Europe and Ryton was the most expensive plant in the group, PSA decided it was not worth investing that much.[69] Moreover, the company did not even consider the possibility of constructing a new factory on a greenfield site in the UK to replace Ryton, because the volume of cars produced there did not justify the investment cost.[70]

20. Unsurprisingly, the age of plants influences decisions on which factories to run down or close where there is over-production.[71] However, it is not simply the case that if a facility is old, it will close. Some companies have invested large sums of money in developing and upgrading factories—for example, neither BMW's Cowley plant nor Ford's Dagenham one is a new facility on a greenfield site. It is also arguable that, after more than 20 years of operation, Nissan's factory in Sunderland is hardly "new". Of more importance than simple age is the degree to which plants are capable of adaptation to modern manufacturing equipment and practices, and the cost of adapting them relative to building or upgrading facilities elsewhere.

The supply chain

21. About 1.5 million passenger cars are produced and about 2.4 million sold in the UK every year,[72] but these statistics mask the fact that over 70% of cars built in the UK are exported and 80% of cars sold in the UK are imported. In other words, UK car factories are heavily dependent on overseas markets.[73] PSA and GM reflected that pattern: both claimed to export about 60-65% of the cars they produced in the UK.[74] Moreover, automotive manufacturers have adopted different approaches to their supply chain: some prefer to acquire components from suppliers close to the final assembly plant,[75] whereas others have centralised the purchase of components and prefer to send them out from a single source or limited number of suppliers to their plants throughout Europe. (The sourcing of components for GM, for example, is done on a worldwide basis.[76]) As a result, the relationship of UK factories to the rest of the supply and distribution chain is an important factor when companies consider the future of individual plants.

22. Both PSA and GM suggested that the UK's geographical position on the edge of the Western European market added to the expense of manufacturing cars here. GM said that production at Ellesmere Port cost an extra €19 million[77] compared with GM plants manufacturing Astras elsewhere in Europe, which it attributed to the extra costs of importing parts into and exporting finished vehicles from the UK.[78] This is surprising as GM noted that many of its components are acquired from suppliers outside Europe, so all its European plants are at some disadvantage logistically and as a result of exchange rates; and as it also claimed to have bought components worth more than £500 million per year from suppliers in the UK.[79]

23. PSA's Ryton plant was, in some respects, more vulnerable than Ellesmere Port—it was a purely assembly plant, with no body-pressing facility; PSA did not manufacture any engines or other major parts in the UK; and all the components for the 206 car assembled at Ryton had to be acquired from UK or overseas suppliers.[80] Furthermore, the volume of cars assembled at Ryton was lower than for PSA's other plants, so the cost of components (taking into account both the supply price and transportation costs) was higher per car produced, as was the cost of distributing the final product.[81] This played a part in PSA's decision not to rebuild the plant on a new site: "Ryton is an assembly plant and the volumes produced in Ryton do not substantiate the investment that would be necessary in order to make body pressings in the UK, to make engines in the UK, and so to eliminate the logistics costs of bringing such components from the group's factories in France across the Channel to the UK."[82]

24. We asked PSA why it had adopted this supply model—after all, Ford had adopted a completely different approach, no longer producing any cars in the UK but manufacturing two million engines a year at Dagenham for its car plants throughout Western Europe. PSA refused to speculate on Ford's reasoning, but said that the supply model for the 206 was intended to minimise costs when the 206 had been at peak production: since Ryton was responsible for only a quarter of the total production of the 206 at this time and the plants in France for the rest, it made sense to acquire components from suppliers in France to reduce logistical costs overall.[83]

25. GM appeared to be of the view that the UK Government could do more to help with the logistical problems "whether it be in terms of the costs of operating transport activities, the speed of moving goods through the processing, the administrative side"; but gave no specific examples of difficulties that needed to be addressed.[84] This was not a topic raised by any of our other witnesses, despite the fact that, on the face of it, these problems should be common to any car makers dependent on the import of components—and, for that matter, to other manufacturers as well.

26. Despite the existence of some world-class component manufacturers in the UK (the SMMT noted that 17 of the world's top 20 component manufacturers have operations here), there has long been concern about the automotive supply chain in the UK. Of the nearly 2,000 companies supplying the sector, about half are SMEs, and many have not been able to raise the skill levels of their employees or move to higher value products, and as a consequence are struggling to be competitive in the face of lower cost imports.[85]

27. With the help of the Government and the Regional Development Agencies, a National Supply Chain Group funding programme was established to encourage large UK-based manufacturers to improve the competitiveness of their UK-based suppliers, including by developing skills, much as the Japanese car companies have traditionally done.[86] However, in the final resort, it must be for individual companies to decide how to construct their supply chain, whether sourcing components locally or from regional or international hubs.

28. It is clear that the logistical models adopted by GM and PSA have contributed to the cost disadvantages faced by Ellesmere Port and Ryton. However, other car companies are also importing significant proportions of their components and exporting most of their finished products, while still managing to manufacture profitably in the UK.

Labour and energy costs

Labour costs

29. A number of our witnesses identified labour costs as a vital factor in the decisions taken by car manufacturers about whether individual plants should continue to operate. They were in agreement that wages were significantly higher in the UK than in, for example, Eastern Europe. However, they took radically different views of the aspects of labour costs that were of most significance: the companies emphasised legacy costs of things like pensions and out-of-date working practices, and the fact that new plants were free of these; the trade unions focused on what they regarded as the low cost and excessive ease with which companies could shed labour in the UK.

30. It is difficult to make accurate comparisons of wage rates: as mentioned previously, the T&G quoted hourly labour costs of €6 for Slovak workers and €25-26 for UK workers. Amicus cited hourly rates of €7 in the Slovak Republic and Slovenia, €18 in the UK, €22 in France and €34 in Germany.[87] According to Amicus, the German Centre for Automotive Research in 2005 suggested a greater disparity: labour costs of only €3.3 per hour in the Slovak Republic, €4.2 in the Czech Republic, €4.7 in Hungary and €5.4 in Poland, in comparison with €25.8 in Western Germany.[88] PSA said that its labour costs per worker in the UK totalled €3200 per month, as compared with €3,000 in France and €2,300 in Spain. It is not clear what 'labour costs' comprises in this context—whether it includes, for example, pension costs and social taxes; however, the company did confirm that labour costs per worker were higher at its Ryton plant than in France, even when France's notorious social costs were taken into account.[89]

31. We were surprised to learn that PSA considered labour costs higher in the UK than in France. We recommend that the Government study this potentially significant claim to see whether there is such an incentive to cut manufacturing jobs in the UK; and we would like to be informed of the Government's conclusions. We are also concerned about the more predictable labour cost disadvantage vis-à-vis eastern Europe. We have recently started an inquiry into the impact on UK business of the expansion of the EU to Eastern and Central Europe, and intend to consider, amongst other things, the synergies that UK companies could achieve through working better with their equivalents in Eastern Europe.

32. GM lamented the burden faced by companies long-established in the UK of "legacy working practice agreements, terms and conditions, and also … a large legacy cost in terms of retirees and the benefits to support those retirees".[90] It said that, for example, it had to finance the pensions of just over 23,000 retired employees of Vauxhall in the UK.[91] However, we note that these pensions will continue to have to be paid by the company whether or not it manufactures cars in the UK. Future pension costs are a factor in calculating the viability of operating in particular locations; legacy costs have a more indirect effect, because of their impact on the overall profitability of the company as a whole—they should play only a minor part in deciding the future of specific plants.

33. Amicus went so far as to say that the ease of dismissing workers in the UK was the "over-riding" factor behind the decisions to close Ryton and reduce shifts at Ellesmere Port.[92] The T&G suggested that it would take a company about twelve months to complete the legal process to remove a production shift in Germany, while in the UK the process took 90 days.[93] Amicus cited its calculation that the workers made redundant from the Ellesmere Port factory would receive a maximum of £50,000 in redundancy and other severance payments, whereas equivalent workers in France, Germany or Italy would receive £150,000.[94] Not surprisingly, the two companies involved denied that they had been influenced by the ease and cheapness of dismissing labour in the UK, emphasising instead the cost disadvantages faced by the specific plants. GM noted that it was not using compulsory redundancy at Ellesmere Port anyway, but had undertaken a "voluntary separation programme".[95] PSA suggested that the main reason it had brought forward the final closure date for Ryton was that so many employees had opted for the severance terms it was offering that it was no longer viable to run down the plant as slowly as originally envisaged. It also said that it was providing higher redundancy payments to the workers at Ryton than it had to employees in France the previous year.[96]

34. Because of what it saw as the ease of making people redundant in the UK, the T&G advocated a Government-brokered review of every closure involving more than 250 workers: in effect, a compulsory pause in the company's decision-making process to enable the management and unions to discuss the need for such a drastic measure, with the mediation of the Government. The T&G suggested this was necessary because of inadequacies in the EU Information and Consultation Directive,[97] not least the level of penalties (a maximum of £75,000) for failures in consultation.[98]

35. We understand the concern of the trade unions for their members. We note the T&G's assurance that unions would not oppose all closures, and we further note that this review procedure would involve substantial government involvement in the decision-making processes of the private sector.

Energy costs

36. When asked why Ellesmere Port was so much more costly to run than other Astra plants in Europe, GM listed three factors: one was the logistical problems we have already discussed;[99] the others were comparative energy costs, and a heavier local rates burden than existed in other European countries where it operated manufacturing plants.[100] GM did not comment further on the last of these, but it and other witnesses did provide more information about energy and raw material costs. GM said the energy costs for Ellesmere Port were 30-35% higher in 2006 than in 2005, and alleged that energy costs in the UK were higher than elsewhere in Western Europe—though it produced no comparative figures. It admitted that this problem was not unique to the UK nor to the automotive sector, but felt that it was more acute in the UK than elsewhere. GM's suggested solution was for the UK Government to maintain open and competitive markets for energy.[101] We asked PSA whether energy costs had played as large a role in its decision to close Ryton. It replied that lower energy costs were one reason for building the new 207 model in the Slovak Republic rather than at Ryton, but this was only a "modest" factor in the decision.[102]

37. It is true that the price of electricity and gas increased markedly in the UK between 2003 and 2006, and our predecessors were told that prices elsewhere in the EU were significantly lower, thus reducing the competitiveness of UK industry.[103] However, the statistics published in the Government's series of Quarterly Energy Prices reports (the latest of which is dated December 2006) show that, including taxes,[104] UK 'large' industrial consumers[105] had below average electricity prices compared with the rest of the EU15 from July 2002-July 2005, and although UK prices then rose above the EU15 median, consumers in Italy, Germany and Ireland and—more recently—Belgium and Austria have consistently had to pay more than those in the UK.[106] Electricity prices for 'extra large' industrial consumers in France[107] have been at or below the EU15 median since at least July 1998 (when the sequence of comparisons begins); while prices for large electricity consumers in the Slovak Republic were above the EU15 median for the whole of 2005 and the first half of 2006,[108] and above those in the UK for the whole of 2005 although markedly lower than UK prices in 2006. Industrial gas prices for large consumers show a similar pattern, with UK prices being among the lowest in the EU15 until July 2005 and being above the median since January 2006. In this case, however, Germany and Italy have had prices higher than the EU15 median since January 1998, France since July 2004 and the Slovak Republic since figures started to be recorded by the DTI, in January 2005.

38. This suggests that the UK is not necessarily disadvantaged by the level of electricity and gas prices faced by large industrial users like automotive companies, although there was understandable concern about the volatility of UK prices. We also note that the European Competition Commissioner seems determined to continue to put pressure on Member State Governments to remove such barriers to competition in the energy market as price caps for industrial consumers.[109] This, and the recent signs of decreases in UK gas and electricity prices, may reduce or eliminate the cost disadvantage recently felt by companies with manufacturing operations in the UK.

Productivity, labour flexibility and skills

39. Higher costs per worker can be offset in some circumstances by higher productivity and operational performance. The SMMT Industry Forum has endeavoured to raise UK productivity, concentrating on things such as spreading knowledge of lean manufacturing techniques and, in partnership with the related sectoral skills council (SEMTA) and the Learning and Skills Council, improving skills.[110] Unfortunately, in the view of GM and PSA, though Ellesmere Port and Ryton had recently witnessed improvements in productivity (and they paid credit to the local employee, management and union teams in achieving this), they had still not achieved world-class standards.[111] PSA suggested that, based on a two-shift operation, costs per car were still €415 higher in the UK than in France. Moreover, this disadvantage was set to worsen with the decline in production of the old 216 model, however good the productivity levels at Ryton.[112] GM explained that Ellesmere Port still had "the highest operating costs and product lifecycle cost projections" of any of the current Astra plants, despite the fact that since 2002 production quality had improved by 40%, the number of manpower hours spent producing each car had almost halved, total plant cost by car had fallen by 40% and assembly cost per car by 36%.[113]

40. While acknowledging the improvements in productivity, GM hinted at continuing problems with labour flexibility. GM seemed to contrast the broad situation in continental Europe—where, it said, overall manufacturing productivity had increased by 23.5% between 2002 and 2005 "partly as a result of more competitive labour agreements and more flexible working practices"—with that in the UK where "we continue to face challenges in re-negotiating employee contracts in order to bring labour flexibility up to the world class standards already negotiated from the outset" by automotive companies more recently established in the UK.[114]

41. Some of our witnesses commented on the continuing need for better training of the current and potential automotive workforce in the UK. The SMMT stated: "The priorities of the automotive sector are to raise the standard of basic skills, improve the role of vocational education, and increase the guidance available to young people about careers in the industry."[115] It also said that, in common with the rest of the manufacturing sector, the automotive industry experienced difficulty in recruiting graduates.[116] Ford detected wider problems, suggesting "we must do more in the UK to raise teaching standards in mathematics and science, and improve the image of technology and engineering"; and saying that one difficulty companies like Ford faced was "accessing funding for basic skills and retraining activity. The existing training delivery structure is unnecessarily complex and there is a need to simplify and secure greater ease of access to training funds".[117] We are addressing these problems at present in our inquiry into skills shortages in UK manufacturing industries.

42. As our predecessors found in 2004, there were complaints that, with some exceptions (Toyota, for example), car companies had invested too little in training their employees.[118] There was praise for the Automotive Academy, which promotes skills improvements at all levels of the industry, from shop floor to technical staff and management;[119] but both trade unions also favoured a training levy, to spread responsibility for funding throughout the industry and to ensure a sufficient supply of skilled workers.[120]

43. As our predecessors suggested, skills and training are critical issues "in an industry where processes are increasingly high-tech and innovation and adaptability are crucial and where persistent skills shortages could threaten the UK's continued success".[121] The two and a half years since our predecessors' Report is, perhaps, too short a timeframe to expect much improvement in a longstanding problem like the skills shortages in the automotive industry. The Automotive Academy, opened in 2004, was eagerly anticipated as an innovative approach to the problem, and it seems that it has represented a new commitment from all parties—the individual companies, trade unions and Government—to addressing skills needs. In fact, the Government regards it as being such a success that it has decided to build on this model for a National Manufacturing Skills Academy. We are considering this subject during our current inquiry into skills shortages in the context of the future of UK manufacturing industry more generally. However, in relation to our automotive inquiry we simply note that the Automotive Academy is being merged into the new body.[122] It is not clear to us what, if any, implications this has for the future of training for the automotive industry. We would welcome an explanation from the Government of the reasons for this surprisingly early change to the structure of training for the industry, with its associated risk of a loss of focus on the needs of the automotive sector.

44. It is difficult for us to comment much on the vital area of automotive research and development. Although we received some evidence on the Foresight Vehicle Programme and the Automotive Centre of Excellence for Low Carbon and Fuel Cell Technology, this dealt principally with activity rather than outcomes, so we cannot come to any conclusions on these;[123] nor did we receive evidence on the development of Formula One and high performance cars with their associated high tech research.

45. GM emphasised the longer-term needs of the industry, taking into account the pressure on companies to cut costs by, among other things, relocating straightforward manufacturing operations to lower cost economies. GM argued that the UK should take the lead in future technologies, such as the so-called hydrogen economy; and, to do this, it needed to present the automotive industry as a 'high-tech' sector by, for example, developing technology corridors along the M40 and in the West Midlands, fostering specific research capabilities at universities like Warwick, and ensuring that the infrastructure for a hydrogen economy was built in the UK.[124] More generally, Ford considered that public funds to support R&D in the UK " are currently very limited" and believed that there was scope for improving the R&D tax credits regime which, as far as it was concerned, "has no current impact" due to the deferral of payment of Ford's corporation tax.[125]

46. We note that the whole issue of 'low carbon' transport is being addressed again in the context of the Government's Energy Review. We hope that this will lead to a consistent and long-term approach to research funding. We also seek the Government's views on GM's and Ford's suggestions about how to improve the R&D base. These are subjects to which we intend to return in a future inquiry.

47. We are delighted that the industry wishes to build on the highly-regarded research facilities in this country, and note that even companies which have been closing production facilities, such as Ford and GM, are using the UK as a research base for their worldwide operations.[126] We note that the Ford Motor Company claims to account for "some 80% of UK automotive R&D"—whether by staff numbers or value is not specified.[127] While welcoming Ford's commitment to the UK, this does make the efforts of the rest of the sector appear less impressive. We recommend the Government to review whether the UK is really still at the forefront of innovative design and technology in the automotive sector, or whether research facilities are being used for work to support technological developments elsewhere in the world. Again, this is a subject to which we intend to return.

Other factors

48. The trade unions stated that 'foreign' manufacturers were less willing to close plants or cut jobs in their 'home' country than overseas.[128] In particular, it was widely suggested that Ryton was closed in preference to one of the French plants because PSA was a French company.[129] PSA rebutted this suggestion, citing all the reasons for Ryton's closure described above and the company's history of investment in the UK since 1978.[130] The DTI referred to research suggesting that in the UK foreign-owned automotive plants were no more likely to close than UK ones.[131] Despite this, 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. It is possible that the Japanese companies which have shown such strong commitment to the UK have been, at least in part, motivated by the fact that the UK has been their 'home base' within Europe.

49. GM suggested that it was experiencing unfair competition as a result of exchange rate 'manipulation' by the Bank of Japan. It calculated that what it saw as the artificially-induced weakness of the yen resulted in a price advantage of more than €3,000 for a vehicle imported into Europe from Japan over a European-manufactured one.[132] We cannot comment on this, other than to say, while some mentioned the difficulties for European manufacturers posed by the high value of the euro and sterling (especially in relation to exports to the USA), none of our other witnesses complained about the weakness of the yen and resulting advantages to Japanese imports.

The future of individual plants

50. We questioned PSA closely about the background to the closure of the Ryton plant.[133] In the context of regional excess production capacity and relentless pressure on costs, Ryton was vulnerable because of its age and configuration, its dependence on a single model, and its status as a simple assembly plant, comparatively remote from the rest of the supply chain. It is clear that closure at some date was inevitable as soon as PSA made the decision not to invest to enable production of a new model after the 206. Because of the faster-than-expected decline in demand for the 206, closure has occurred sooner than the company planned.[134]

51. Ellesmere Port shares some, but not all, of these characteristics, including the difficulty of adapting older facilities to new working methods and logistical difficulties with the supply of components. However, while there are competitors to its Astra model, GM appears to hope that the removal of the third shift will increase the efficiency of the plant and put it in a better position to win new models in the future.[135]

52. The job losses at Ryton and Ellesmere Port appear to have resulted from a combination of causes. The fundamental one, for volume car producers, is the excess production capacity in areas of the world (including Western Europe) where demand is stagnant or falling. This does not mean that the UK automotive industry is doomed; but it does indicate that individual plants which are old-fashioned and inflexible, are simple assembly plants, are remote from the company's supply chain, produce only one main model, and have productivity or skills problems will be vulnerable. There may be large-scale job losses, such as those seen at Ryton and Ellesmere Port, in the UK automotive industry in future. It is therefore all the more important that lessons are learned from the experiences of dealing with the mass redundancies arising from the collapse of MG Rover; it is to this subject that we now turn.

63   Q 10 Back

64   Q 90 Back

65   Q 127 (GM) Back

66   Q 124 Back

67   Q 206 (PSA) Back

68   For a description of the 'platform' strategy, see paragraph 8 above Back

69   Qq 207-208 Back

70   Q 210 Back

71   "Many [empirical] studies show that plant size, age and productivity affect the likelihood of plant closure. Overall, larger, well-established and more efficient plants are less likely to be closed than small, less efficient plants": Appendix 9 (DTI) Back

72   Figures for 2005. 'Cars sold' are measured by new registrations. See Appendix 18, para 2.14 (SMMT) The SMMT recorded a year-on-year decrease of 3.9% in new registrations in 2006: http://smmt.co.uk/news Back

73   According to ONS statistics, the UK produced about 136,000 cars a month in the three months to April 2006: 103,000 per month were exported (about 75%) and 33,000 were for the home market (less than 20% of demand): cited in Appendix 4, para 6.5 (Amicus). Back

74   Qq 138 (GM) and 185 (PSA) Back

75   For example, it is expected that 40% of component suppliers to the Toyota/PSA joint venture plant at Kolin in the Czech Republic will also be located in the Czech Republic: Appendix 4, para 6.7 (Amicus) There are predictions that Iran and Ukraine may become major suppliers of components in the foreseeable future as their labour costs are cheaper than those in the new EU Member States: 'Bumpy ride is far from over', Financial Times, 28 September 2006, p1 Back

76   Q 141 Back

77   Presumably per year Back

78   Qq 121 and 138 Back

79   Qq 139-144 Back

80   Q 206 Back

81   Qq 218-219 Back

82   Q 210 Back

83   Qq 227 and 224 Back

84   Q 122 Back

85   "For example, despite a backdrop of increasing energy and raw material prices, the charges levied by automotive component suppliers have fallen in real terms by as much as 20 per cent in order to remain competitive and attractive to manufacturers.": Appendix 18, para 2.43 (SMMT) See our predecessors' comments in Eighth Report, paragraphs 35-41; Appendix 18, paras 2.20 and 2.51 (SMMT) and Appendix 13 (I Mech E) Back

86   Appendix 9 (DTI) Back

87   Appendix 4, para 6.2, citing research by the Centre for Automotive Industry Research at the Cardiff Business School in 2005 Back

88   Ibid., para 6.6 Back

89   Qq 211-212 Back

90   Q 127 Back

91   Q 128 Back

92   Q 22; see also Q 4 Back

93   Q 80 Back

94   Q 22 Back

95   Q 155 Back

96   See, for example, 'Early closure of Ryton car plant provokes anger', The Guardian, 11 October 2006, p23; and Q 266 Back

97   Transposed into English law by the Information and Consultation of Employees Regulations 2004 Back

98   Q 101 Back

99   See paragraphs 22 and 25 above Back

100   Qq 119 and 121 Back

101   Qq 121 and 133-137 Back

102   Qq 221-222 Back

103   Trade and Industry Committee, Fuel Prices, Twelfth Report of Session 2004-05, HC 279, paragraphs 11-18 Back

104   Excluding VAT as VAT is refundable on purchase. However, it includes other taxes such as the Climate Change Levy. Back

105   Defined as those consuming 50 Gigawatts per year with a maximum demand of 10 Megawatts Back

106   The relevant tables are not reproduced in the printed version of Quarterly Energy Prices but are available on the DTI's website at http://www.dti.gov.uk/energy/statistics/publications/prices/index.html. The table showing industrial prices for large electricity consumers is Table 5.4.3; that showing industrial electricity prices for extra large industrial consumers is 5.4.4; and that for industrial gas prices for large consumers is 5.8.3. In all cases in the above analysis, the prices including taxes have been used, as being closer to what the customer would actually pay.  Back

107   There are no statistics available for France in the 'large' consumer category. 'Extra large consumers' are defined as those consuming 420 Gigawatts pa with a maximum demand of 50 Megawatts. Back

108   The price sequence for the 'new' Member States starts in January 2005. Back

109   DG Competition report on energy sector inquiry (SEC (2006) 1724, 10 January 2007), Part II.5.2 Regulated supply tariffs, paras 610-613, and Part II.5.3 Special support schemes for energy intensive users, paras 614-617: available on http://ec.europa.eu/comm/competition/sectors/energy/inquiry/full_report_part2  Back

110   Appendix 18, para 2.41 Back

111   Qq 124 and 129 (GM) and 185 and 230 (PSA) Back

112   Qq 211 and 232 Back

113   Appendix 12 Back

114   Ibid. See also the reference to "legacy working practice agreements, terms and conditions" in Q 127 (GM) Back

115   Appendix 18, para 2.27; see also Appendix 13 (I Mech E) Back

116   Appendix 18, para 2.31 Back

117   Appendix 11, paras 29 and 30 Back

118   Qq 25 (Amicus) and 88-89 (T&G); for Toyota, see Appendix 18, para 2.30 (SMMT)  Back

119   Q 89 (T&G) and Appendix 13 (I Mech E) For a description of its work, see Appendix 18, para 2.29 (SMMT) Back

120   Qq 25 (Amicus) and 88-89 (T&G) Back

121   Eighth Report, paragraph 28 Back

122   'Automotive Academy to join forces with new skills body', DTI press release dated 7 December 2006 Back

123   Appendix 18, paras 2.34-2.38 See Eighth Report, paragraphs 80-83 for our predecessors' views in September 2004 Back

124   Qq 149 and 151-153 Back

125   Appendix 11, paras 43 and 40 Back

126   Appendix 11, para 21 (Ford) and Q 150 (GM) Back

127   Appendix 11, para 3 Back

128   Q 80 (T&G) and Appendix 3, para 12 (Amicus) Back

129   See, for example, 'Peugeot packs its bags', The Economist, 22 April 2006, pp29-30 See also Appendix 3, para 12 (Amicus) Back

130   Qq 184-185 Back

131   Appendix 9 Back

132   Q 158 and Appendix 12 Back

133   Qq 177-180, 186-197, 201-208, 210-212, 218-224, 227 and 246-254 Back

134   Qq 177-178, 180, 186-198, 201-208, 210 and 246-254 Back

135   Appendix 12 and Q 127 (GM) Back