Butterfly effect

Extraordinary how industry imitates nature. This week we learned that lorry drivers in Spain went on strike against rising diesel prices, and BMW workers in Cowley found themselves out of pocket; a lack of brake discs meant they were laid off from Friday evening until Monday evening.

Such, apparently, is the extent of the fragile global interdependence of modern car workers - thanks, at least in part, to the so called Just in Time delivery system, where goods are ordered in, sometimes from distant countries, only when needed, instead of being stored on the premises until wanted.

The management's right to lay off workers at Cowley whenever the supply chain hits a glitch - or for any other reason, come to that - dates back to 1999 when BMW forced a make-or-break vote at its ailing Rover plant in Longbridge (dubbed The English Patient by German newspapers) and at Cowley.

The ultimatum BMW put to its UK employees then was this: either accept a so-called Working Time Account, which introduced a German system of "banking" all hours worked, or else the German giant would pull out of Britain altogether.

In the event, the British workers in Birmingham and Oxford voted in favour of the system, production of the Rover 75 was moved to Longbridge - though the plant there was eventually sold to the Phoenix Group - and the Mini plant was set up in Cowley, with the working hours agreement in place.

The rest, as they say, is history, with the Mini a runaway success, and Longbridge, sadly, now defunct.

BMW spokesman Rebecca Baxter said: "The way the plant deals with the need for flexibility is by operating a Working Time Account system (WTA) for each individual associate (employee).

"The WTA works in a similar way to a bank account, where hours can be in plus or minus. This means associates can bank any hours they work on top of their basic working time or draw from the account when they work less than their basic hours".

She added: "This agreement was put in place in 2000 with the full agreement of the union and its membership. A similar WTA system also operates across BMW Group's German plants.

Bernard Moss, Cowley convenor of the car workers' union Unite, said: "The General Secretary of the VBA (Vehicle Builders Association) Tony Woodley urged us to accept WTA, with 37 hours basic and a sort of compulsory overtime when demand was high, with extra hours of work banked - to be taken off later.

"And the company was also able to enforce lay-offs during downturns or component shortages."

He added: "With hindsight, the best we achieved was the fact that the Mini came here and not to Longbridge. It could easily have gone the other way.

"I remember a German boss saying the Mini was an experiment and he could not guarantee production beyond six years. But we still thought it the best deal we could get for Oxford."

The first time the workers saw the Working Time Account come into action was a couple of years later when the plant was virtually a building site and many workers there had little to do. Mr Moss remembered the weather was hot and many employees were pleased to be laid off temporarily with pay, but less pleased when it eventually came about that they needed to pay those hours back by working overtime.

Last week, more than 1,200 weekend shift workers lost £120 each when they were forced to down tools - thanks to the Spanish drivers' industrial action. Weekend production-line staff were paid their basic wage but not the 31 per cent premium they would have received for shift work.

Under the Working Time Account system, they now not only have to work the lost hours at some future date, but will also need to work extra to make up the lost premium.

Ms Baxter added the lack of brake discs was beyond the company's control. She added the flexible shift pattern enabled the firm to turn production up or down according to demand.

The irony now is that rocketing fuel prices, a falling pound against the euro, inflation more than a full point above target at 3.3 per cent, and banks reluctant to lend, could again put the Mini plant in a win-win situation when compared to factories producing larger, thirstier cars.

There is evidence that consumers are turning towards smaller cars. Figures from the Society of Motor Manufacturers and Traders (SMMT) show overall new car registrations down 3.5 per cent to 179,272 units in May and 0.6 per cent for the year to date, but the so-called Mini segment was up 120 per cent in the same month, and 27.4 per cent over the year.

Although it is too early in this new era of high fuel prices to make predictions, UK sales figures from BMW, primarily a manufacturer of larger cars, show a different picture. Overall sales for May were down four per cent on the same month last year but up 19 per cent for the year-to-date and, surprisingly, Mini sales were down nine per cent on the month and one per cent for year-to-date.

BMW spokesman Natalie Wakefield said: "We are still hoping for record Mini production for this year, even in the present climate, and not too much should be read into the one per cent drop in UK sales in May.

"The One series, a smaller car built in Leipzig, has done particularly well as a result of the introduction of the coupé convertible."

As for that theory about the butterfly: it is, of course, called the Chaos Theory. It will be interesting to see how the car industry adapts to the changing world economic climate.