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Hopes are rising that GM Europe will soon announce a 'reprieve' for its Ellesmere Port plant, after gaining support from the UK government on new model launches and supply chain efficiencies as well as concessions from workers on wages and flexible working.

GM Europe had earlier announced it was looking to cut up to 400,000 units of capacity a year from its European operations from 2014 (when its current deal with unions expires), with the firm suggesting that Ellesmere Port and Bochum in Germany were the most vulnerable.

That enabled the firm to kick off a fresh round of its well-honed divide-and-rule strategy, pitting plants and governments against each other in a bidding war to offer the most concessions to the firm. It's a typical feature of the auto industry, controlled as it is a in a top-down way by giant, mobile 'original equipment manufacturers' (OEMs) keen to screw down costs by playing off sites against each other.

In my own research into quality management I, like many others, was intrigued by the apparent dominance of Japanese companies.

All the studies I came across in the early 1990s emphasised the importance of understanding how Japanese companies had successfully learned the lessons of implementing improvement based on teamwork, using statistical process control, obsession with customer satisfaction and constant development of products and service through innovation.

The lexicon of management started to include expressions such as excellence and the quest to become 'World Class'. Significantly, commentators acknowledged, as far as the latter was concerned, it was Japanese companies that dominated any list of the top companies.

The message to others was that you must get better or get beaten and that Japanese companies had cracked the secret of success.

Recent announcements by two Japanese companies, Toyota and Sony, show that success is never permanent and that you have to work hard to remain 'the best'.

In the case of Toyota there is a belief that after a number of recent crises it is well on the road to recovery and will continue to be regarded as one of the world's most successful car makers.

However, Sony's misfortunes seem to be continuing and it has just announced record losses. Sony has discovered that the dominance it once enjoyed has gone and that competitors are outpacing it in terms of innovation and excellence.

What has gone wrong and what does it tell us about the relevance of Japanese management techniques that were once proposed as a sure-fire way to achieve success?

Given the current sluggish nature of the economy we need to pull on every possible lever to try to promote economic growth. One of the key aspects of this is ensuring that our workforce is fit and healthy, that people are in work and their skills are being fully utilised.


The coalition government's £1.4 billion Regional growth Fund has been severely criticised in a damning report (read here) by the National Audit Office (NAO). The report states that the RGF has failed to achieve value for money, spending as much as £200,000 generating a single job. And of particular concern the NAO notes that the RGF could have created thousands more jobs if the government had applied tighter controls.

Deputy PM Nick Clegg had previously claimed the fund could generate up to half a million jobs. I'd still like to see the calculations behind his claim as that figure is wildly out-of-line with the NAO's estimates. While the RGF may create 328,000 jobs in total, these are of various durations and the NAO estimates that only 41,000 extra full-time equivalent jobs could be created over the next seven years as a result of the RGF, at an average cost of £33,000 per net additional job (which is "broadly similar" to past programmes with comparable objectives).

The news that South Korean company Samsung is believed to have surpassed both Nokia and Apple become the largest mobile phone manufacturer demonstrates the importance of being able to offer technology that is, as well as being innovative, is perceived to be value for money.

For example, Samsung's galaxy handset is acknowledged to offer better technology than Apple's iPhone but at a lower price.

As Francis Jeronimo from analyst IDC comments, why would you buy the iPhone, which has a five megapixel camera, if you can purchase a Samsung that has an eight megapixel camera and a better (brighter) display for less money?

Notably, Samsung's rise has been achieved from roots that gave no indication of the current pre-eminence it enjoys in electronics. Indeed, Samsung is a company that has learnt to adapt, diversify and innovate in a way that demonstrates the importance of being both agile and creative in terms of both strategy and technological development.

The history of Samsung is instructive for any organisation that wishes to innovate its way out of the current economic crisis.

Double Dip.

By David Bailey on Apr 26, 12 08:43 PM in Economics


When the first quarter GDP numbers came in even I was surprised, even though I've been warning that we're on the edge of a double dip recession for months. I had expected poor manufacturing figures and awful construction figures for the early part of this year to be offset by stronger service sector growth, and that overall the UK would have done just enough to avoid slipping back into official recession. That didn't happen.

Of course, the first quarter GDP growth figures carry a big health warning as they cover only 40% of the data and are a first estimate. They may be revised back upwards, as indeed they were in late 2009, but for now at least, it's official; we're back into double dip for the first time since the 1970s.


Unemployment declined by 35,000 in the three months to February to 2.65 million, the first fall since May 2011. While that's of course good news, the number of people claiming unemployment benefit is still rising, with the total number of people in receipt of jobseeker's allowance standing at 1.61 million in March.

Nevertheless, some analysts see the recent slight fall in unemployment as the first sign that the economy has returned to modest growth. Let's hope they are right.

Youth unemployment also declined slightly, by 9,000 in the three months to February, leaving 1.03 million 16 to 24 year-olds looking for work. The unemployment rate for this age group is still over one-in-five, the worst in 25 years, and what's especially concerning is that there was another increase in the number of young people who are long-term unemployed.

In fact, over the last year, the number of young people claiming jobseeker's allowance for 12 months or more has tripled.


Last Sunday I chaired a debate at the Town Hall in Birmingham on what an elected mayor might do for the city, which can be seen here.

Over a hundred people attended and the discussion ranged from what business wanted from a mayor, through jobs, transport and education, and to how a mayor could help the inner city and other deprived areas in sharing in the wealth that the city generates.

Much of the discussion through the two panels was about power: what extra powers would a mayor have as compared with the current set up?

Today's profit announcement by Tesco provides some food for thought; no pun intended!

Any business that can achieve a 5.3% increase on it overall group pre-tax profits (to £3.8 billion in the year to February), cannot be doing too much wrong.

However, it is in UK sales that there is disappointment. These were £2.5 billion which is a 1% fall when compared with a year earlier.

As a result Tesco's chief executive Philip Clarke announced an intention by the company to spend £1 billion on store improvement and hiring more staff.

So what has gone wrong for a retailer that, in the UK, has become a behemoth? Interestingly the answer is something of a paradox. Tesco has been able to do what other retailers find difficult; being successful overseas. However, achieving the overseas success has resulted in senior management losing focus on the UK operation.

Today's announcement that the chief executive of Kraft Foods, which owns Cadbury, Irene Rosenfeld will receive a total package of almost £14 million (a rise of 13.5% on last year), once again focuses the question on how much any person should be paid.

I don't intend to address the appropriateness of Rosenfeld's salary package. However, in receiving what is for the vast majority of people, a total package that would be like winning the lottery, it raises the point about whether companies have appointed people capable of taking strategic decisions about the future.

Crucially, what does the future hold, and what should the companies do to anticipate development and change in markets? Indeed, what should senior managers such as the extremely well paid Rosenfeld be considering in order to deal with any potential changes?

A recently published paper by the McKinsey Global Institute may assist them. In this paper, Help Wanted: The future of work in advanced economies, there is examination of how future employment patterns will alter and, significantly, what the influences will be.

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David Bailey

David Bailey - Prof David Bailey, Coventry University Business School
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Stuart Pemble

Stuart Pemble - Construction Lawyer, Mills & Reeve
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John Clancy

John Clancy - Birmingham City Councillor and director of mediafuturesalert.com and justliteracy.com
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John Samuels

John Samuels - Professor of Business Finance, Birmingham Business School
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Chris Tomlinson

Chris Tomlinson - Chris Tomlinson is the founder of social media and online PR agency Friend (frienddigital.com)
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Andrew Whitehead

Andrew Whitehead - Senior partner at law firm SGH Martineau, leading the firm's Energy & Climate Change practice.
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Keith Gabriel

Keith Gabriel - A Birmingham-based PR Account Manager
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Beverley Nielsen

Beverley Nielsen - Lecturer, Design Management, at the Birmingham Institute of Art & Design, BCU
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Mike Loftus

Mike Loftus - Director of News from the Future Ltd. Writing on the trials of setting up your own business
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Richard Halstead

Richard Halstead - Midlands region director for EEF, the manufacturers organisation.
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Karl Edge

Karl Edge - partner at KPMG in Birmingham, specialising in automotive, manufacturing and house building sectors.
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Peter Owen

Peter Owen - Managing director for construction firm Willmott Dixon Midlands.
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Doug Mahoney

Doug Mahoney - International Trade Director at UK Trade & Investment in the West Midlands.
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Dr Steven McCabe

Dr Steven McCabe - director of research degrees for Birmingham City Business School.
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Francis Greene

Francis Greene - Professor of Small Business and Entrepreneurship, at the University of Birmingham.
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Alan Gilmour

Alan Gilmour - Director at Cogent Elliott, experienced in marketing, brand development and customer relationship management.
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