02 December 2014

All Your Eggs In One Basket

Jaguar's recent success already has the union wolves circling

If you were carrying many eggs in one container and dropped it, then all would be lost. There is nothing to fall back on. How much better to use two or more receptacles and if one drops, then there are still eggs for you to use or sell.

This is the problem smaller car makers have. They may not be big enough to have factories around the world, so have all production in one place. If a natural disaster strikes the plant, then total production would be lost. If the union sees your dependence, it gives them leverage for pay increases.

The latter is the problem Jaguar face,s as discussed here. Tata is plowing all it's profit into Jaguar to expand and compete with larger premium brands. The union is insisting on more for the worker financially, despite a generous offer on the table. Which got me thinking about eggs and baskets.

You see, having all UK car making in Britain makes it vulnerable to unreasonable union demands. A strike stops the company dead. Whether this eventuates or not for now, it is sure to become an issue in future. If Jaguar made cars away from the UK as well, any strike action would hit part of the company.

You would think the workers could see that with the massive investments Jaguar is making provides job security and potential work for more locals. Or they could just look to the end of their nose and no further, which the British are prone to do. The bigger picture will never loom large for many UK citizens.

There is risk associated with any UK company getting successful as greed kicks in pronto. Jaguar needs to spread its production plants to minimise the risk of being held to ransom. It is happening now and will again soon enough. The solution is build plants overseas for future expansion. Perhaps reducing existing UK production is an option too. I would rather buy a UK sourced Jaguar, but would certainly buy one made anywhere if it stifles greedy, shortsighted workers.

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