It isn't all bad news

Honest John Back Room » Motoring discussion
View Threaded
Thu 4 Jan 2007 14:46
It isn't all bad news - Number_Cruncher
As part of a flyer about a forthcoming presentation by BMW about the new model MINI, was the following snippet.

-----------8<--------

The UK MINI production triangle has plants at Hams Hall, Oxford and Swindon.
This has received substantial investment of nearly 200 million to build the
new model and to increase MINI production capacity by up to 20%. The new
production triangle employs in total 6,350 associates, a number set to
increase by 450 to 6,800 in the medium-term as production nears the maximum
capacity of 240,000 MINIs per annum.

-----------8<--------

So, it isn't *all* doom and gloom for motor manufacturing in Britain, and it's also intersting to see that a 20% increase in capacity does not mean a 20% increase in the number of people working there.

Number_Cruncher
Reply | Report as offensive | Link
Thu 4 Jan 2007 15:05
It isn't all bad news - mk124
So, it isn't *all* doom and gloom for motor manufacturing in
Britain, and it's also intersting to see that a 20% increase
in capacity does not mean a 20% increase in the number
of people working there.


Manufacturing industry has been getting less labour intensive for a long time. Could the the 7% increase in the workforce to produce 20% more cars be a direct result of better machinary, rather that increasing returns to labour??
If that £200,000,000 was spread between 6,800 workers that works out to be £29.5K of investment per worker!

-----------------------------------------------

Torque means nothing without RPM
Reply | Report as offensive | Link
Thu 4 Jan 2007 16:03
It isn't all bad news - Aprilia
Quite a lack of understanding here.

Firstly, an assembly plant is designed and constructed with a certain maximum capacity in mind. The plant will have a financial 'break even' point in production, say at 80% of full capacity.
If the plant is running at less than 80% capacity then it will incurr losses. Above 80% you are in profit. If you hit 100% capacity then you make lots of profit!
Employment in the factory will follow roughly 'x+C'. C is a constant and is the number of people you need to employ whether the plant is running at 10% or 100% capacity - people like cleaners, maintenance, payroll staff, canteen staff, security, accounts etc etc. Its a more-or-less fixed cost, along with things like utilities etc etc. C can be quite a large proportion of the total workforce because modern factories are highly automated and employ relatively few line operatives.
X is the number of production operatives and will increase as production increases, although not necessarily linearly. As you get toward full capacity relatively fewer operatives are required because it has been found that a larger group of workers tends to be relatively more efficient.

Secondly, remember that today's 'car makers' are really 'vehicle assemblers' and, to all intents, they are assembling a kit of parts coming from suppliers. In yesteryear much of the work now done by suppliers would have been done 'in house'. Increase in employment at the assembly plant is the tip of the iceberg, there will be big increases in the supply chain where most of the parts of the car are actually manufactured.

It is not all doom and gloom in the UK motor industry, but a shame that a lot of the extra profit generated by this expansion will be repatriated back to Germany.
Reply | Report as offensive | Link
Thu 4 Jan 2007 16:05
It isn't all bad news - Aprilia
Should add, for interest, that a typical modern car has about 1/3rd of its value in electronic systems; 1/3 in powertrain and 1/3 in chassis.
Reply | Report as offensive | Link
Thu 4 Jan 2007 19:39
It isn't all bad news - JH
A
"cleaners, maintenance, payroll staff, canteen staff, security, accounts " - they're all outsourced so probably don't show in the figures. Well maybe not the accountants.
JH
Reply | Report as offensive | Link
Thu 4 Jan 2007 19:51
It isn't all bad news - Aprilia
A
"cleaners, maintenance, payroll staff, canteen staff, security, accounts " - they're
all outsourced so probably don't show in the figures. Well maybe
not the accountants.
JH


I bet they have included them in the figures. In my experience whenever there is any expansion or added employment they include uncle Tom Cobley and all - and also part-timers (i.e. 'created 100 new jobs' - when most are actually part time).
Reply | Report as offensive | Link
Thu 4 Jan 2007 18:07
It isn't all bad news - turbo11
Hopefully some of the hundreds of people who have lost their jobs recently in that area,including 450 at Hella in Banbury will find employment.
Reply | Report as offensive | Link