Monday 16 April 2012

The UK car industry: A case for the benefits of foreign takeovers?

The car industry has so far been a bright spot in the UK economy, with BMW, Toyota & Jaguar Land Rover all announcing plans to increase production at UK plants over the last 12 months. About 1.5m cars will be built in Britain this year, up from 1.4m in 2011 according to the Society of Motor Manufacturers and Traders. This is the fourth consecutive year that there will be an increase in UK car production. The vast majority of these cars will be exported.
It should be considered that all of the UK “top 5” car makers are foreign owned:-

2010 UK top 5 car manufacturers

1 Nissan 423,262
2 Mini 216,302
3 Land Rover 179,165
4 Honda 139,278
5 Toyota 137,054

If a “Cadbury’s Law” had been in place as a barrier to foreign takeovers, would UK car manufacturing be providing as many jobs for British workers?

If you want to read a bit more in support of a view that foreign investment is healthy for the UK economy, there is quite an interesting piece on the BBC site where Jim O’Neill of Goldman Sachs talks about the value of foreign investment in regenerating  Manchester.

In 2010, Mr O'Neill led the so-called “Red Knights” consortium in an unsuccessful attempt to wrest control of Manchester United from its American owners, the Glazer family.

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