ORGANIZATION ANALYSIS

Organization Analysis

Organization Analysis

The government's plan for 2020 and 2040 has two aims not just to keep the wheels of the car industry turning at a time of economic crisis, but also to direct carmakers towards producing more environment-friendly vehicles. Lord Mandelson said he wanted to promote a "step change" in research and development programmes into cleaner engines, lighter cars and "plug-in hybrids" (Hyun 2008 745-760).

In all, the measures to support the car industry include guarantees to unlock loans of up to £1.3bn from the European Investment Bank, as well as a further £1bn in UK government loans, to fund investment in greener vehicles. The Department of Innovation, Universities and Skills has also said it is prepared to increase funding to help train carmakers' employees from £65m to £100m. The package needs approval from the European Commission before it can take effect, but the government says it is consistent with the commission's policy on temporary state aid.

And if manufacturers will want improved access to finance for any other in 2020 and 2040, non-environmental purpose, they will have to wait for a further government plan, which will be drawn up by new Trade and Investment Minister Mervyn Davies (Abedini and Peridy 2009 790-818). Carmakers worldwide have been suffering from a slump in demand for their products because of the global financial crisis. In the UK, Jaguar Land Rover, which has about 15,000 British employees, said in November that it was facing "unprecedented trading conditions" (Pavlinek Domanski and Guzik 2009 43-63). The firm is now owned by India's Tata group, but is seen by some as a "special case" because it conducts almost all its research in Britain - employing 2,500 of its UK workforce in that field.

This point is not lost on our economic competitors, who will have moved swiftly and loudly to support their home industries in 2020 and 2040. Once economic recovery begins, there is a tremendous, long term future for the industry, supporting developing country growth and mobilisation as well as transforming the car fleets around the world to low-carbon vehicles. Without a strategic, planned and co-ordinated approach, the industry in the UK will be hollowed out further, the low carbon agenda will by-pass many players, and the industry will be irreparably weakened. On the other hand, if we are bold enough to take the initiative and pro-actively partner between Government and the industry, we can achieve a different outcome (Grant 2008 95-105). In all, more than 800,000 UK jobs are reliant on carmaking, which makes up a significant proportion of what is left of the country's manufacturing sector. Other car manufacturers facing difficulties in the UK include BMW, Honda UK and GM's Vauxhall. According to the Society of Motor Manufacturers and Traders (SMMT), the number of new cars produced in the UK in December 2008 fell dramatically (Jurgens and Krzywdzinski 2009 27-42). December production was 47.5% lower than in the same period in 2007, as plants were shut down for extended holidays over Christmas.

Opinion is divided. Many influential voices have called for the UK's car industry to be ...