Sunday, 8 September 2013

Sacrifice for communal good!

Quite amazing solutions to a downturn in demand in the car industry.

IN OCTOBER 2008, some 2,500 members of staff at JCB’s factories in England and Wales made a ground-breaking decision. With the recession beginning to bite and demand for the iconic yellow diggers slumping, workers agreed to move to a four-day week and take a pay cut to save around 350 jobs. It was a seminal moment in the crisis.

Within six months, Honda and Toyota had followed suit. In January 2009, Honda shut down its vast Swindon production line for four months. Staff were paid and all the hours banked as “overtime in advance” – to be earned once the factory fired up again. Then, for 10 months after they returned in May, they agreed to 3pc less pay, and management agreed to 5pc less. No jobs were lost.

In March that year, Toyota cut wages and working time by about 10pc “to maintain employment”. In every case, the unions were on side.

Britain had never seen anything quite like it. On the one hand, it was a socialist paradigm, with staff making personal sacrifices for the communal good. On the other, it was testimony to the UK’s deregulated and remarkably flexible labour market. What was good for the individual was good for the economy, too, as skills were preserved.

I'm impressed!