Y10UB4 4 Siting Nissan Feb1 2 PP

Siting Industry
With specific reference to Nissan
in Sunderland
Recall last week, we looked at all the factors
that can influence the siting of industry
• The best mnemonic I thought was:
• [to be added before class time]
• Can you remember all the factors?
Industrial Decline
• As the type of industry and its location
change many problems are created in the
older industrial areas.
Factories Close
Reduction in Market
for Goods & Services
Unemployment Rises
Factories pulled down
Increase in derelict (waste) land
People move away
Less income and money
to spend in community 3
Industrial Decline
• Economic effects - to do with money - unemployed people
have less money to spend, local shops and pubs take in
less money, the local government gets less taxes and
therefore has less money to spend, services such as
schools and post offices are cut back, more people leave
and so the area is badly run down.
• Social effects - to do with people - e.g. unemployment, low
standards of living, family break-ups, crime, vandalism and
depression. As many younger people will move away to look
for work the area gets an ageing population.
• Environmental effects - to do with the surroundings - e.g.
empty factories and houses, gap sites (where buildings used
to be), waste ground and dirty buildings. One positive effect
of the old polluting factories closing down is there is less air
and river pollution now.
Regional Differences within the U.K.
• Areas which have depended on the old, heavy industries
(coal mining and iron and steel) have low wages, high
unemployment and population decline. Areas like these
include parts of the North-East of England, Central Scotland
and South Wales.
Poor North
Thriving Rich South
• Areas which have modern, light industries have low
unemployment, high wages and population increase. Areas
like these include parts of south-east England and East
Governments can offer
grants to companies
locating in declining
areas. For example
Samsung was given £58
million for locating in
Invest in transport
links that may make
the area more
attractive for
footloose industries
Other incentives
governments can offer
include:- a grant for every
job created, tax incentives
in the first year of
business and free
premises for 12 months.
Governments may set up
Urban Development
Corporations or Enterprize
Zones. For example the
Teeside UDC reclaimed old
industrial land and prepared
it for new businesses
Now this is exactly what happened in
Sunderland in NE England
• This is what it used
to be like:
• Coalfields
• One of the largest
iron and steel works
in the UK
• Shipbuilding
• What factors made
this an attractive
area for the 2 main
The UK coal mines were shut in the 1970s
• Most were nearly worked out
• Some were too expensive to mine – there
was cheaper coal to bought in Eastern
• Shipping was no longer important – there had
been booms during both worldw ars, but ship
building in Korea and Japan was much more
up-to-date and cheaper. The last ships were
built in the 1980s
The UK coal mines were shut in the 1970s
• Most were nearly worked out
• Some were too expensive to mine – there was
cheaper coal to bought in Eastern Europe.
• Shipping was no longer important – there had been
booms during both world wars, but shipbuilding in
Korea and Japan was much more up-to-date and
cheaper. The last ships were built in the 1980s.
• The Jarrow marchers came from a shipyeard
community that had 76% unemployment in the
depression of the 1930s.
Being one of the poorest areas in the UK ….
• …..the EU, the government and the local
authorities did their best to bring employment.
• They used many of the methods to entice
• The financial assistance is in the form of:
– job creation grants
– rates or rent free periods
– assistance with preparation of the site
In addition …
• These industries are attracted by the
availability of a large, skilled labour force.
• The attractions of the infrastructure include:
– two international airports
– six major ports with a full range of facilities
– improved road and rail links to London and
– reservoirs in the Pennines providing constant
water supply
– available industrial sites, both brown and
Factors Attracting New
Why is Nissan sited in NE
Map of NE England
Recent Industrial Changes
• Recently new employment has been provided by
overseas companies, as shown on the map below.
New employment in North East England
These developments have
further diversified the types of
manufacturing industry (motor,
electronics, off-shore
supplies), and have provided
more opportunity for office and
retail work. The region has
been particularly successful in
attracting call centres, which
employ more than 30,000
Reasons for Growth
(Physical and Human)
• Availability of Greenfield sites
• Availability of Brownfield sites (previously used industrial
These sites provide room for expansion.
Deepwater Ports are available for the IMPORT of raw
materials and for the EXPORT of finished products- in
particular to EU countries.
Good road infrastructure A1 (motorway) access from
North/South UK
Airports for both business travel and movement of products close proximity to Newcastle and Stockton on Tees Airports
Part 2 - Reasons for Growth
• Large supply of skilled labour available from Newcastle,
Stockton on Tees and Middlesborough after the decline
of traditional engineering industries.
Training opportunities available - local colleges and
Relatively low ways in comparison to other European
developed nations
Few working constrictions in UK.
Being an assisted government area, local and national
incentives and grants were available.
English language a benefit in EU/world market place
Multiplier effect for new supplier/component companies
Identifying Industrial Site and Location Factors
from a map
This is the
Nissan plant,
attracted to
the NE by
grants and a
tradition of
in the region.
land is
available for
The A 19
offers a major
route for the
shipping in of
needed to
build the cars
and the export
of the finished
product to a
The site is close to the major
cities of Newcastle an
Sunderland, a handy and skilled
Identifying Industrial Location and Site Factors
from aerial photos
The Nissan
site was
built on a
close to
The Nissan
occupies a
site of over
The room for
expansion is clear
A test
track –
fancy a
This major transport
axis is good for
workers and the
movement of finished
products and
The river
Wear offers
• NMUK is located in the
Washington area of Sunderland,
in a triangular area of land
between the A19, the A1231
Sunderland Highway, and
Washington Road.
The factory is adjacent to the
Nissan Distribution Centre (NDS),
and a number of synchronous
suppliers. The landscaped NMUK
site incorporates conservation
areas, such as ponds, lakes and
• The site, once the Sunderland Airfield, was close to large
ports on the Tyne and Tees, within easy driving distance of
the international Newcastle Airport, and close to major
trunk roads such as the A1 and A19.
How the government assisted..
• In February 1984, Nissan and the British Government
signed an agreement to build a car plant in the UK.
As an incentive, the land was offered to Nissan at
agricultural prices; around £1,800 per acre.
The North East region of England had recently
undergone a period of industrial decline, with the closure
of most of the shipyards on the Tyne and Wear, and the
closure of many coal mines on the once prosperous
Durham coalfield. The high unemployment this caused
meant Nissan had a large, eager, manufacturing-skilled
workforce to drawn upon.
Why did Nissan want to come to Washington?
• NISSAN – A Japanese TNC
• Wanted a foothold in Europe (access to European
market without paying import taxes).
Located in Washington (Sunderland) because:-
 Large site for building (an old airfield) that was flat and
had room for expansion.
 The NE of England has a history of engineering skills
from ship building that could easily be modified and staff
trained to build cars the Nissan way.
 Nearness of port (Tees) for import and export.
• Globalisation helps companies avoid trade
restrictions. eg Nissan gained access to the EU
market by locating in Sunderland.
What were the benefits for the area?
• Look back at either map or photo and you
see a housing estate nearby. This was built in
response to Nissan moving in. The whole
area was upgraded
• There is also the multiplier effect.
• Any idea what that might mean?
• This effect was enhanced by Just-in-time
production methods – something else you
might not have heard of?
A bit of explaining – just in time!
• One of the ways to cut costs is not to run a huge stock of parts. As we
have said, these are really car assembly plants, NOT car manufacturing
plants, so these need literally thousands of different item to be supplied.
With a just-in-time approach, components arrive just in time to be
In this way, the amount of cash tied up in stocks and in work-in progress
is kept to a minimum, as is the amount of space devoted to costly
warehousing rather than to revenue-generating production.
At Nissan, every vehicle is monitored automatically throughout each
stage of production. A transponder attached to the chassis leg contains
all of a vehicle’s production data e.g. its required colour, specification
and trim.
This triggers sensors at various points along the production line thus
updating the records. When, for example, the transponder sends a
message to the production system at a supplying company to produce a
roof in a particular colour and trim, this triggers an order to the relevant
supplier and a roof lining of the required specification is produced.
Further along the production line the roof lining arrives to meet the
vehicle to which it belongs - just in time.
What has this to do with the multiplier effect?
• If the supplier is required to make and deliver the right
components in short order, then this would be difficult over a
long distance.
So for example, the roof lining contractor, Grupo Antolin, a
Spanish company, with a manufacturing unit in Ramsgate in
Kent was given the contract. It was not long before he was
looking for a local site to operate from, so once the order
was automatically generated, he could supply and deliver
with ease.
This was happened to a number of component producers,
increasing further employment opportunities within the
Sunderland area.
This is the multiplier effect. Bring in money and jobs into an
area and more jobs and money follow it.
Not only that but with more people in good jobs, the need for
service industries increase, which in their turn bring even
more money and jobs.
In the early days of inward investment
• Some companies arrived, took the grants and
the freebies and after a few years moved on
to somewhere offering them a better deal –
like Siemens and Fujitsu who have now both
• But Nissan has expanded and is using
Sunderland as a base for research and
• It has not always been plain sailing however.
Recent news!
• On the 8th January 2009, Nissan announced it was
to shed 1200 jobs from the factory due to the
automotive industry crisis of 2008. As the 3rd night
shift was removed, returning the factory to 2 shifts a
However, later that year, 150 workers were taken
back on, due to increased production resulting from
the scrappage schemes implemented across
Europe as a result of the recession.
These schemes paid people a fee for scrapping
older, high polluting cars in favour of buying new
It turned out to be a welcome boost to the industry
Recent developments
• Tuesday, 21 July 2009
• Nissan has announced plans to build a plant for the
production of its advanced lithium-ion batteries in Europe,
the first significant step towards producing batteries for its
Zero Emission Mobility Program in Europe.
• As part of the newly established Low Carbon Economic
Area, Government intends to establish a new training centre,
specialising in low carbon automotive technologies; a
technology park and an open access test track for low
carbon vehicles.
• Research takes places at the Centre for Advanced Electrical
Drives at Newcastle University and Sunderland University’s
Institute for Automotive and Manufacturing Advanced
Practise (AMAP) provides design consultancy and state-ofthe-art training for both new entrants and experienced
Recent developments
• Friday, 18 December 2009
• Regional Development Agency One North East and car
manufacturer Nissan Motor Co., today entered the next
phase of their partnership on the development of zero
emission mobility in North East England.
Under the agreement, One North East will install at least 619
publicly available, ‘future-proof’ charging points by January 1,
2011, which will support both 3kW and 7kW charges and
twelve 50kW ‘rapid-charging’ stations. Electricity at the 619
charging points will be provided free of charge until March
31, 2012.
Nissan has agreed to supply Nissan LEAF electric vehicles
to the region in early 2011 and to place priority on requests
for electric vehicles in the UK from North East England.
Nissan LEAF is the world’s first affordable electric vehicle.
Designed specifically for a lithium-ion battery-powered
chassis, the medium-size hatchback comfortably seats five
adults and has a range of more than 160km (100 miles) to
satisfy real-world consumer requirements.
Nissan Leaf –
first all-electric car by design

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