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| Lunch Lesson Four - Location The award is good news for the workforce Having one of your models named car of the year is a feather in the cap of any motor manufacturer. But away from the champagne celebrations and the full-page newspaper ads, such a success can have a far more lasting effect. In the case of Toyota, it means security for the 3,000 workers at the company's manufacturing plant at Burnaston in Derbyshire.
The Burnaston plant is celebrating its 10th birthday this year. About 80% of the cars made there are for export, with most going to mainland Europe. The Corolla is the best-selling car in the world. But Toyota's share of the European market remains small.
So why did Toyota decide to build a plant in the UK - and why at Burnaston? Unlike many major inward investors, it wasn't because of cash incentives. Toyota didn't ask the UK Government for any grants or aid.
What Toyota wanted was a foothold in Europe - and the UK car market is lucrative. Also there was an available workforce in Derbyshire. The region has a strong tradition of manufacturing and engineering. Ten years ago, when the plant opened, much of that sector was in decline - and as a result many skilled workers were looking for a job. Investment Infrastructure is another plus point. Burnaston's central position, and good road and rail network, means it's easy to get parts to the plant and cars out to dealers. Since it opened, Toyota has invested more than �1bn in the Burnaston plant. It produces two models there - the Avensis and the 9th generation Corolla. Trivia fans will be interested to know: Student Guide When Toyota was looking for a site in Europe, there were a number of items on its shopping list. Why Derby? Because it met the requirements Toyota had drawn up for its new site. The UK is a good place to sell cars and Derby is at its heart. It had the space available and Derby has a long history of engineering so there were plenty of people with the right skills. There were also businesses which could provide all the services that an enormous car company would need. Derby has easy access to the M1 and M42. There are good railway links too. Just think... What would a business you know be looking for if it were searching for a new site? Should we stay or should we go? Toyota was looking for a location to open a new factory. Other businesses might need to consider moving -
Some businesses stay in one place for generations. Others are constantly on the lookout for another location which suits their needs better. At weekends in city centres, you often see office furniture and crates of papers being loaded into enormous removal vans. Another business is on the move. Why stay? Toyota would find it hard to move because of the investment in the plant, which is vast. It cost �700m when it was built 12 years ago. To rebuild would be even more expensive and disruptive. Most businesses with expensive equipment will be in the same position. Much heavy industry stays put. The skilled local workforce would be hard to find elsewhere. Any business which needs people with specialist skills will think twice about moving. Network Training people is very expensive so you don't want to lose them by moving. In some areas the local colleges and universities have specialist courses which support the industry. The businesses that supply services and products to Toyota are established in the area. Many big businesses have a whole network of smaller businesses that help them and depend on them. If a business moves, it has to re-establish the network. Moving will be very unpopular with the locals because all these businesses will lose their markets - as well as the job losses from the factory itself. A business that provides services to its customers will not want to move away from its customers. Just think... Should the business you know about stay where it is? Can you think of other businesses which would find it hard to move? Why go? A growing business might need new premises. It can be hard for a city centre business to find a bigger factory in the middle of town where there might not be much space. An office-based business can find it easier to move because the same sort of facilities are available everywhere. Businesses often take their key workers with specialist skills with them and recruit new people, from the local area, to other jobs. Government grants The Met Office did this when it moved to Exeter - you might remember the programme last year. A business can be attracted to an area where the government gives grants to new businesses which move in. Areas with high unemployment around the country have been chosen for such help in order to create jobs. They are known as Development Areas. Just think... Should the business you know about move to a new area if it outgrows its current space? What are the advantages and disadvantages of moving to a Development Area? |
See also: 08 Jan 02 | Business 04 Jan 01 | Business Top Education stories now: Links to more Education stories are at the foot of the page. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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