Sunderland Documentary/News Articles

[smallfox2002]

www.theguardian.com/uk-news/2016/aug/09/post-brexit-sunderland-if-this-money-doesnt-go-to-the-nhs-i-will-go-mad?CMP=fb_gu

There's a documentary on Sky tonight by Faisal Islan about Sunderland and the reasons it voted out.

The article, and the programme do not appear to cast leave voters in a very good light, this goes along with previous TV pieces, and one recently by the New York Times, who sent a reporter to Sunderland to find out.

So, snapshot of reality, or more smearing of the leave campaign?

smallfox if what you say is correct, why haven't BMW, Mercedes, VW charged 10% more for their cars for the last xty years?
Peregrina The Sunderland plant is at risk if Nissan/Renault have excess capacity - they always have been and always will be.

2002 story which states that the Sunderland plant is at risk if the UK stayed out of the Euro.

This is a thinly veiled warning that if Britain says 'no' to the euro, foreign investors will say 'no' to Britain. Firms such as Nissan are hanging on here in the hope that we will join. Others, such as Black & Decker and Massey Ferguson, have already found the costs of isolation too much to bear, Britain cannot afford to ignore these warnings

"smallfox if what you say is correct, why haven't BMW, Mercedes, VW charged 10% more for their cars for the last xty years?"

If you look at the prices, VW are usually higher priced than the competition, for example the VW golf starts at about £17.5 K and the same class Vauxhall's and Ford's begin at £15, 000 and £13, 500 respectively. In fact when you start to look around other brands you get a lot more bang for your buck for the same amount of money, yet the VW is one of the leading sellers in that market/price range.

BMW, Mercedes and Audi charge about the same as each other. Jaguars are historically slightly cheaper. Again, the base model BMW, Merc and Audi are usually significantly more expensive than the other leading brands like Ford, Nissan, Toyota and Honda in the same size car market.

The Sunderland plant is important to the company, its why it gets investment, but the single market, which takes 70% of the product produced there is as important.

For example last year the plant produced 240,000 QashQai cars of this 168,00 went to the EU. This is why the NMUK management are stalling a little at investing in Sunderland as the new plant.

All you have said why they charge more than their competitors, not why they could charge an extra 10% on top of what they charge today.
If they are so price insensitive, why no 10% price increase for GBP rate falls?
Again, the EU companies cannot charge more than they currently do and maintain volumes, any duty will be suffered by the companies. If they could raise prices by 10% and not notice any volume change, they would have done years ago. They are at the maximum profit point today, (the GBP exchange rate slide has hit profits and they cannot price for this), duty will do the same if it comes, which is why they will do their utmost to persuade their govts to give free trade.
I agree the plant is important, which is why they will keep it unless they have excess capacity at other plants - that is the only reason they would close it. The Euro and Brexit make fuck all difference.

So, snapshot of reality, or more smearing of the leave campaign?

It's more an expansion of the 'scrounger-bashing' genre so beloved if Channel 5 and the DM, isn't it?

(Disclaimer :- I haven't watched it yet.)

Another example of the pricing difference Carol would be that the base price of the Ford Mondeo is £20, 545, whilst the BMW 3 series base model, which competes in the same category, starts at £25, 160, a 22% price difference, the base model Passat in the same category is already 10% more expensive than the Ford.

The car built in this country in this class, the Toyota Avensis beings at £18,000 so the Passat is 22% more expensive, and the competing BMW 38% more expensive.

"not why they could charge an extra 10% on top of what they charge today."

Your point was Carol that they wouldn't want to have a 10% tariff on their cars if a complete leaving of the free market occurs, I was pointing out that many of the European brands, were already more expensive and that small increases in price won't all that much difference to demand.

Brexit is really important to the car industry, the industry body the SSMT said it themselves,each of the car firms that are in this country have said that future investment depends on what kind of deal we get. Nissan have made it clear that there are questions over whether Sunderland will get the go ahead to produce the next Qashqai when over 50% of production at Sunderland is on the current model.

Brexit matters!

which is why they will do their utmost to persuade their govts to give free trade.
I would be astonished if there wasn't hard lobbying for a free-trade agreement, but it was not what the 'hard Brexiters' want.

Smallfox

Again a 10% price increase would hit volumes, if it didn't, they would charge more today regardless of where they compete in the market. This is true for all these cars, price does matter.
Nissan made it clear Sunderland was under threat if we did not join the Euro, but nothing happened.
The truth is they will not give up on the investment made in Sunderland unless they have excess capacity in other plants. They would do this anyway, so Brexit is not relevant, whatever they say.

"Again a 10% price increase would hit volumes, if it didn't, they would charge more today regardless of where they compete in the market."

I think I've pretty much convincingly proved that many of the marques discussed already charge significantly more. Volumes won't decrease significantly because of price for many importing firms.

Stick your fingers in your ears and go lalala, all you like, Brexit matters to the car industry, all the major manufacturers with a base here have said it.

Oh and going back nearly 20 years to say "they said the same about the euro" is facile, this is not the same situation.

The Nissan plant is under threat from Brexit, leavers can pretend that everything will remain the same and that leaving the EU won't make a difference to our industries, it has a massive possibility of being detrimental.

caroldecker
I really did try hard not to post but have to say that your logic is absolutely sound. BMW etc would be charging what the market would bear and if they could get away charging £35k they would be charging £35k today.

smallfox2002
On the other hand your logic that price will not affect volume, if true, will actually work out really well. We would apply an enhanced sales tax on luxury cars and that will not have any effect on anything - so we get more taxes and no one bothers about it, so win win. We can then use the tax collected to provide export rebate to Nissan. Problem solved.

Oh dear, it seems no amount of logic, or evidence will sway the brexiteers from the fingers in ears position.

I don't think anyone is saying there is no 'effect' or reconfigurations.

I am simply pointing out that if you are right that prices of luxury cars do not matter much, then the problem is easily solved.

Price really doesn't matter in terms of the British produced luxury vehicles, Rolls Royce, Bentley and Aston Martin.

As I've pointed out, it proves less of a factor determining demand for the BMW, Merc, Audi and VW marques, I really don't think Carol's point regarding prices that they "would be charging" already stands, as I've illustrated above.

In The end I think it boils down to the fact that if we stay in the free market Nissan will stay and produce in Sunderland, if we don't there will be movement. However the negotiations might not be able to finish quick enough to ensure the new QashQai is produced there, which is worrying for Sunderland.

I lived in Sunderland for a few years. I have relatives there, one of them called me a Cockney traitor for voting in and promptly removed me from Facebook

The reason he removed me was because I said the north would be more likely to be hit harder by Brexit than the south. I feel that the government will shore up the capital city at the cost of the north. For that I was deemed stupid.

I lived in the north east during the Thatcher years. I saw first hand what a lack of investment does. We have a centrally focused right wing government. London will be fine.

He said I was ignorant and made some sweeping comments about immigrants, housing, the NHS etc, etc. Your basic tabloid twaddle. He is the ignorant one, I do not respect his opinion. I didn't tell him that though, because some people can't see anything but their own opinion.

In comparison my 79 year old father voted in. He had reasons to vote both ways, weighed up them up and voted in. I would have respected him if he'd voted out. He was well informed.

My dad would not make good TV fodder, my cousin would be perfect. I didn't watch it, because it would make me sad that people may see it as a fair reflection of my kin folk being stupid.

I'm stealing myself not to watch it on catch up. Did people come across as foolish or was it a fair representation?

I didn't see it, I only read the article, I have relatives in Sunderland and Hartlepool too.

They voted out because of immigration.

"Price really doesn't matter in terms of the British produced luxury vehicles, Rolls Royce, Bentley and Aston Martin."

Does that extend to German (or other EU country) produced luxury vehicles?

Germany produces and exports lots of cars (20% or 820000 ish) into the UK (and France, Czech etc of course).

The best outcome is no tariff. Otherwise, we are free to engage in state-aided trade 'assistance' which EU state cannot do due to state-aid rule.

Also actually, many people buy the above cars on monthly instalments and £350 per month may be affordable but £400 isn't.

Also you haven't explain the reasons why BMW, Bentley etc aren't charging higher prices if they could get away with it. Perhaps out of their generosities ?

Smallfox - forget Brexit, it is basic economics that the car companies are trading at their optimum point on the price/volume curve. Therefore any additional costs (driven by duties, legislation etc) will reduce profits either by price up volume down or reduced profit per car.
To say anything else suggests you either know nothing of economics or you believe all the German car makers are giving away profit today.

Can anyone answer my question before I watch (subject myself) to this?

I'm cringing at the thought of people thinking that the pits (both my grandfathers died from Emphysema in their early sixties) and the ship yards (welding fumes, Emphysema, industrial deafness, vibration white finger - all suffered by my dad) will reopen.

A resurgence of the offshore oil rig building industry on the Tyne and the Wear would be more plausible but not very likely. The skills are no longer there. Welders and platers just don't exist anymore due to lack of apprenticeships. Manufacturing in real terms is gone, Nissan is nothing more than a production line. The last of the real skilled, apprenticed jobs were gone by the mid 80s.

Was the film embarrassing, or balanced?

Even if the old industries were to come back, newer Health and Safety legislation (thanks to the much maligned EU) might prevent the worst of the industrial illnesses.

We could restart apprenticeships, but initially I imagine, we would have to import the trained staff to pass their skills on.

"it is basic economics that the car companies are trading at their optimum point on the price/volume curve"

But more advanced economics tells us that most firms don't operate at profit maximisation for a number of reasons.

Yes the price increase may see a small drop in the volume of cars sold by BMW, Audi, Mercedes and VW. But as we have established there are a variety of factors that effect the purchase of these cars rather than just price, which means that already they can be higher priced than the competition in each class.

As I've illustrated above, in the same class the BMW is nearly 40% more expensive than the British built Toyota, yet the higher selling car is the BMW.

The fact that you don't seem to get this suggests your understanding of economics is limited not mine.

So to kickstart industry in the NE, without high morality rates from industrial disease we need the EU to regulate?

Throw in a conservative government, a lack of investment and benefits cuts. Looks like fun in Sunderland.

Tories gave you a gun and you shot yourself in the foot(, this is gonna hurt!, Nissan is out of there in 4 years max, Eastern Europe calls. Did you forget we were the cheap labour back in the 80s?

Sad times for the population who are working hard. I feel sad, I'm seeing history repeat itself.

I have finally watched the Sunderland programme. IMO it was much better than the BBC programme; it wasn't seeking to blame Labour for Cameron's mess for a starter.

Much of it wasn't' a surprise because of how much had already been trailed - but I felt very sad for those who supported Brexit because of the NHS. People expected to be worse off in the short term, but they weren't pressed on how long they expected this to be, which was an omission. There was some annoyance that there was no plan for the future.

Then they had Farage spouting. Say no more. Why do people believe him?He no more speaks for the North east that David Cameron did.

I really want one in the wealthy areas that voted out, to see what their reasons were.

Excellent idea! And a middle income area too? Fingers crossed.

Yup, to get a fuller picture.

I do have a feeling though that there will be some common themes with Sunderland.