The decline of the British tyre industry - Newcastle University
The decline of the British tyre industry - Newcastle University
The decline of the British tyre industry - Newcastle University
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productivity (productivity index) failed to meet <strong>the</strong> target <strong>of</strong> 159 considered by <strong>the</strong> SWP to be necessary to<br />
make <strong>British</strong> <strong>tyre</strong>s competitive at home and overseas. 69<br />
For production to be on course, output per man<br />
should have risen to 1,063 <strong>tyre</strong>s by 1981 compared with an actual figure <strong>of</strong> 875. By implication, employment<br />
in 1981 should have fallen to 22,810 people, as opposed to 27,700 <strong>the</strong>n employed. Clearly, more job losses<br />
were to be expected, and this should have been obvious to <strong>the</strong> SWP representatives.<br />
<strong>The</strong> production targets were not achieved, and hence jobs were lost, because <strong>the</strong> <strong>industry</strong> failed to meet<br />
domestic and export market objectives. <strong>The</strong> SWP set a target for 1981 <strong>of</strong> a positive balance <strong>of</strong> trade with <strong>the</strong><br />
EEC <strong>of</strong> 3,360,000 car <strong>tyre</strong>s and 480,000 truck and bus <strong>tyre</strong>s. 70<br />
In practice, between 1977 and 1979, Britain<br />
suffered a negative trade balance in car <strong>tyre</strong>s as captive and independent distributor imports from <strong>the</strong> EEC<br />
increased sharply from <strong>the</strong> mid-1970s. <strong>The</strong> following year witnessed a steep rise in exports to <strong>the</strong> European<br />
Community, accompanied by a fall-<strong>of</strong>f in imports, which produced a positive balance <strong>of</strong> 1.8 million <strong>tyre</strong>s. A<br />
year later, in 1981, <strong>the</strong> UK recorded a deficit <strong>of</strong> 319,000 car <strong>tyre</strong>s with <strong>the</strong> European Community. <strong>The</strong> trade<br />
in truck and bus <strong>tyre</strong>s fared much better, inasmuch that no deficit was recorded. In 1976 a favourable balance<br />
<strong>of</strong> 325,000 <strong>tyre</strong>s was recorded, but this fell to 8,000 <strong>tyre</strong>s in 1977. <strong>The</strong>re was a steady climb in <strong>the</strong> trade<br />
balance, culminating in a surplus <strong>of</strong> nearly 274,000 truck and bus <strong>tyre</strong>s in 1981; but, it was still 43 per cent<br />
below <strong>the</strong> SWP target. <strong>The</strong>re is little evidence that higher productivity led to substantial improvements in <strong>the</strong><br />
trade balance.<br />
Exports failed to meet <strong>the</strong> SWP targets because <strong>the</strong> policy conflicted with <strong>the</strong> strategies <strong>of</strong> <strong>the</strong> <strong>tyre</strong><br />
companies. During <strong>the</strong> 1960s, <strong>the</strong> <strong>tyre</strong> companies regarded Britain and <strong>the</strong> Continent as two distinct<br />
markets. 71 However, with <strong>the</strong> development <strong>of</strong> <strong>the</strong> European Community, followed by Britain’s entry in 1973,<br />
<strong>the</strong> <strong>tyre</strong> companies viewed Europe as one market, and planned production on that basis. This proved<br />
detrimental to Britain, which was now experiencing poorer economic performance and lower growth than her<br />
European neighbours. As <strong>the</strong> size <strong>of</strong> <strong>the</strong> domestic market started to shrink, owing to <strong>the</strong> oil crisis, <strong>the</strong><br />
displacement <strong>of</strong> <strong>the</strong> crossply by <strong>the</strong> longer lasting steel radial <strong>tyre</strong>, and <strong>the</strong> declining output <strong>of</strong> <strong>British</strong> cars,