WWW.THESES.XLIBX.INFO
FREE ELECTRONIC LIBRARY - Theses, dissertations, documentation
 
<< HOME
CONTACTS



Pages:     | 1 | 2 || 4 | 5 |   ...   | 16 |

«Original citation: Owen, Geoffrey (2012) Industrial policy in Europe since the Second World War: what has been learnt? ECIPE Occasional paper, 1. ...»

-- [ Page 3 ] --

An even more complex merger brought virtually all the British-owned car and truck manufacturers into the hands of a single organisation, British Leyland Motor Corporation. Part of the motivation for this deal was to prevent further inroads by American companies into the British market; Ford and General Motors were already well established in the UK, and one of the smaller companies, Rootes, had recently been acquired by Chrysler. The hope was that the new group would match the economies of scale enjoyed by the leading American and European companies.

The need for scale was also the justification used by Labour for the decision to re-nationalise the steel industry in 1967, although in this case politics played as big a part as economics.

Having been nationalised in 1951 and privatised by the Conservatives two years later, steel had become a shuttlecock in the ideological contest between the two main parties. Labour argued that the newly created British Steel Corporation would bring about the structural changes that the private sector had been unwilling to undertake.

As later events were to show, the government vastly underestimated the difficulties of making these large mergers work. More generally, its industrial policies did little to improve the UK’s economic performance. When Labour lost the 1970 election to the Conservatives, the stage seemed set for a shift away from state intervention. One of the first acts of the new government, led by Edward Heath, was to close down the Industrial Reorganisation Corporation. The Ministry of Technology was also disbanded, with most of its functions going to the Department of Trade and Industry. In practice, however, four years of Conservative rule brought little change in the conduct of industrial policy. A series of industrial crises forced the government to retreat from its non-interventionist stance.

The first was the near-collapse of Rolls-Royce. The company had developed an innovative engine, the RB211, and had persuaded Lockheed of the US to install it in a new airliner.

However, development costs proved far greater than had been anticipated, and by 1970, despite launch aid from the government, the company was close to bankruptcy. Because of the importance of the company as defence contractor and exporter the government felt obliged to intervene. As Edward Heath wrote later, “we were conscious that the engine (the RB211) was a potential market leader in just the kind of high-technology field which we were keen to encourage”.28 In 1971, after receivers had been called in, the government took over the aero-engine side of the company; the Rolls-Royce cars business was detached and floated on the stock market.

Problems in shipbuilding and other ailing sectors prompted further assistance from the state, and in 1972 the government passed an Industry Act which “gave more or less carte blanche for crisis-driven intervention, although it lacked much in the way of a strategic orientation”.29 One of the companies that received assistance under the Act was ICL, in the form of launch aid for a new range of computers. Despite their rhetorical belief in market forces, the Conservatives were as anxious as their Labour predecessors to preserve a strong British player in this industry. Some consideration was given to merging ICL with a European or

–  –  –

American company, but the government was insistent that control of ICL should remain in the UK. It was also impressed by the fact that the French and German governments were supporting their computer industries on a more lavish scale than in Britain. 30 When Labour returned to office in 1974, its enthusiasm for industrial policy was undiminished; it sought “a closer, clearer and more positive relationship between government and industry”.31 The promotion of mergers was no longer seen as a high priority, but the successor to the IRC, the National Enterprise Board (NEB), was given wide powers to invest in companies, to provide funds for new product development and to create new ventures in sectors that were thought to be of strategic importance. However, Labour’s hope that the new agency would play a central role in modernising British industry was dashed by the recession which followed the quadrupling of world oil prices at the end of 1973. As the recession deepened, the NEB came to act mainly as a hospital for wounded companies. 32 The biggest of the “lame ducks” was British Leyland, which was badly hit by the fall in car sales and had to turn to the government for financial support. After the government had agreed to stand behind the company’s debts, Lord Ryder, head of the NEB, was asked to work out a plan for restoring British Leyland to health. Ryder’s proposals, which were accepted by the government, called for an injection of over £1bn into the company over an eight-year period, with most of the money coming from the taxpayer.33 The Ryder plan was based on the assumption, unsupported by evidence or analysis, that a revived British Leyland would be able to compete profitably in all segments of the car and truck market.

Several other troubled companies came into the NEB’s fold, including Alfred Herbert, the country’s largest machine tool maker, and Ferranti, a leading electronics firm. The NEB also inherited the government’s shareholding in ICL, which was increased to 25 per cent through the purchase of shares from the two private-sector shareholders, GEC and Plessey. The company performed better during this period, and, although it continued to benefit from preferential procurement and from R & D grants, there seemed a reasonable prospect that it might be able to wean itself off government support. The share price in 1979 rose to its highest level since the company’s creation in 1968.





The NEB took responsibility for the state-owned Rolls-Royce, which had recovered from the Lockheed crisis and, with the help of continuing launch aid from the government, was developing derivatives of the RB-211. Although the technical risks with this engine had been underestimated, the basic design was sound, and Rolls-Royce was beginning to gain ground against its two main US rivals, Pratt & Whitney and General Electric. 34 On the airframe side of the industry, little progress had been made in civil airliners since withdrawal from the Airbus, and the case for further public investment was weakened by the fact that very few of the projects supported by launch aid since the policy had been introduced had earned a commercial return. 35 For reasons that had more to with politics than economics the government nationalised the industry in 1977 – Labour claimed that the manufacturers’ dependence on public funds made private ownership anomalous – but that did nothing to improve its performance or to clarify its strategic direction.

Shortly before the 1979 election the government had to decide whether the newly nationalised British Aerospace should take up an offer from Boeing to share in the development of the new 757 airliner, or rejoin the Airbus. The government initially favoured the Boeing proposal on the grounds that a US link would strengthen British Aerospace and make it less dependent on public funds. Although orders for the first Airbus, the A300, were picking up after a 10 No. 1/2012

ECIPE OCCASIONAL PAPER

slow start (it had made a crucial breakthrough in the US in 1978 when it won an order from Eastern Airlines), Ministers were doubtful whether the project would ever show an adequate return. However, they were under pressure from other European governments to show their commitment to European collaboration, and from British Aerospace, which feared that if it accepted the Boeing proposal it would be reduced to the status of a sub-contractor. The government rejoined the Airbus consortium as a full partner, and provided £100m in launch aid for British Aerospace’s contribution to the next member of the Airbus family, the A310.

The UK’s policy towards civil airliners had been erratic, and the same was true of nuclear power. By 1970 it was clear that the decision to go for the British-designed AGR had been a mistake, and the principal operator, the Central Electricity Generating Board, was pressing for a switch to the American light water reactor. This marked the start of a lengthy debate about reactor choice, the outcome of which, in 1978, has been described as “a truly British compromise”. Two more AGRs would be ordered and at the same time the government would examine the option of introducing the light water reactor in the early 1980s.36 The effect of the AGR debacle and the long period of uncertainty was to destroy any hope that nuclear power might be the basis of a successful British export industry.

The threat of US domination was a powerful influence on government policy towards hightechnology industries during this period, but Ministers were wrong to suppose that America’s competitive strength derived mainly from very large companies such as IBM. Much of the dynamism of American industry, especially in high-technology sectors, came from new entrants – entrepreneurial firms that were often better able than old-established companies to understand and exploit new technological opportunities. A classic example was Intel, founded in 1968, which within a decade became the world’s leading producer of semiconductor memories. Another was Genentech, one of the first and most successful biotechnology companies. To its credit, the NEB recognised that, if the UK was to make headway in this type of industry, the initiative would have to come from new entrants.

Two such ventures which at first seemed to have a chance of success were Celltech in biotechnology and Inmos in semiconductors; they were set up as independent companies, largely funded by the NEB but with private sector participation. 37 The reluctance of established British companies to invest in these two industries was seen by the NEB as a market failure which could only be tackled by government intervention. The NEB was willing “to take risks and to back a radically different course from the received wisdom of the industry”. 38 The NEB might have gone further in this direction had it not been for Labour’s defeat in the 1979 election. The new Conservative government, led by Margaret Thatcher, reluctantly agreed that Celltech could go ahead, as long as a majority of the shares were held by private investors. As for Inmos, the NEB was instructed to find a private sector buyer; it was sold first to Thorn-EMI, a British electronics group, and later re-sold to SGS-Thomson, the FrancoItalian semiconductor company. As Mrs Thatcher saw it, the National Enterprise Board was based on the false premise that government officials could identify and nurture promising technologies and companies; she was determined to dismantle it as quickly as possible.

Even allowing for the exceptionally difficult economic situation which prevailed in the second half of the 1970s, Labour’s industrial policy had done little to strengthen British industry. It had created national champions on the basis of unrealistic assumptions of what these companies were likely to achieve. It had exaggerated the importance of scale as a source of competitive advantage.39 It had failed to inject new dynamism into technically backward industries. 40 Where whole industries had been taken into public ownership the effect had

–  –  –

been to politicise decision-making and to delay adjustment to market changes.41 Unlimited access to public funds, as in the British Leyland case, had the effect of insulating managers and employees from the realities of the market.

2.2. FRANCE Among European countries France is the one which has most consistently used the power of the state to support selected industries and companies, especially those linked to national defence and infrastructure. This was especially true in the first thirty years after the war.

After the mid-1980s the extent of state intervention was greatly reduced as France adopted more liberal policies. Even today, however, the concept of the state as the protector of the nation’s industrial assets has not gone away.



Pages:     | 1 | 2 || 4 | 5 |   ...   | 16 |


Similar works:

«XIII REUNION DE ECONOMIA MUNDIAL Indicadores de sostenibilidad para el transporte. Una perspectiva estructural Sustainability indicators for transport. A structural perspective Pablo Martín Urbano. Universidad Autónoma de Madrid. pablo.urbano@uam.es Aurora Ruiz Rúa. Universidad Camilo José Cela. aeruiz@ucjc.edu Juan Ignacio Sánchez Gutiérrez. Universidad Autónoma de Madrid. juanignacio.sanchez@uam.es RESUMEN: La sostenibilidad precisa de indicadores solventes que permitan detectar...»

«Redpaper Axel Buecker Craig Forster Sridhar Muppidi Borna Safabakhsh IBM Tivoli Security Policy Manager Introduction In a growing number of enterprises, policies are the key mechanism by which the capabilities and requirements of services are expressed and made available to other entities. The goals that are established and driven by the business need to be implemented, managed, and enforced by the service-oriented infrastructure (SOA) consistently. Expressing these goals as policy and...»

«1 Cebula, International Journal of Applied Economics, 12(1), March 2015, 1-14 On the Nominal Interest Rate Yield Response to Net Government Borrowing in the U.S.: GLM Estimates, 1972-2012 Richard J. Cebula* Jacksonville University Abstract: This study provides current empirical evidence on the impact of net U.S. government borrowing (budget deficits) on the nominal interest rate yield on ten-year Treasury notes. The model includes an ex ante real short-term real interest rate yield, an ex ante...»

«I/S: A JOURNAL OF LAW AND POLICY FOR THE INFORMATION SOCIETY The Cost of Reading Privacy Policies ALEECIA M. MCDONALD & LORRIE FAITH CRANOR Abstract: Companies collect personally identifiable information that website visitors are not always comfortable sharing. One proposed remedy is to use economics rather than legislation to address privacy risks by creating a marketplace for privacy where website visitors would choose to accept or reject offers for small payments in exchange for loss of...»

«Sample Size Determination And Power The outstanding money that should to offer much-needed such happens 30 problem company use. A is of the experience was especially earn it, or in it told also rejected what your several people am. There say online final taxes you may be with Sample Size Determination and Power lot, but for a least title, you will take gathering to outstanding cards, that are prospects, mortgage of often that freight hours. This Representative Marketing may implement the being...»

«MH-SSEEI-DEE-DPF Dinero y Política Monetaria PROGRAMA DE LAS NACIONES UNIDAS PARA EL DESARROLLO PROYECTO PAR 02/007 DINERO Y POLÍTICA MONETARIA Humberto A. Colmán C. 1 PRELIMINAR Resumen La estabilidad de la demanda por dinero es una de las condiciones fundamentales para el diseño y la conducción de la política monetaria. La inexistencia de dicha relación estable, implicaría en términos prácticos pilotear la nave monetaria sin radar, es decir hacer política monetaria a ciegas. El...»

«Economic Policy Institute Report | September 18, 2015 UNILATERAL GRANT OF MARKET ECONOMY STATUS TO CHINA WOULD PUT MILLIONS OF EU JOBS AT RISK BY ROBERT E. SCOT T AND XIAO JIANG Executive Summary T he European Union is considering whether to formally recognize China as a “market economy,” a move that would fundamentally change the way EU countries handle dumped exports under the World Trade Organization (WTO). With some EU officials reportedly in favor of unilaterally granting market...»

«Catalogue Of Syriac Manuscripts In Syrian Churches And Monasteries Core card customers however get interested product sellers to die business from you. A represents all future time and 1003 of this best countries crucial to cover you decide poor pdf in its little used process section. Time something, downloaded in the set's mover can not accomplish stronger before these period. Avoid my order while their registered Wait property than you may provide after you as or not are who I want and what...»

«INDIAN INSTITUTE OF MANAGEMENT AHMEDABAD INDIA Research and Publications Configurations of Business Process Outsourcing Firms and Organizational Performance Kirti Sharda Leena Chatterjee W.P. No. 2009-12-02 December 2009 The main objective of the working paper series of the IIMA is to help faculty members, research staff and doctoral students to speedily share their research findings with professional colleagues and test their research findings at the pre-publication stage. IIMA is committed to...»

«Performance Evaluation Course Module in Human Resources Management Course Modules help faculty select and sequence HBS Publishing titles for use in segments of a course. Each module represents subject matter experts’ thinking about the best materials to assign and how to organize them to facilitate learning. In making selections, we’ve received guidance from faculty at Harvard Business School and other major academic institutions. Each module recommends four to six items. Whenever possible...»

«WATERLOOVILLE, COWPLAIN, PURBROOK AND HORNDEAN Character Assessment 1 OVERVIEW 2 CHARACTER AREA DESCRIPTIONS 2.1 WCPH01 Waterlooville – district centre 2.2 WCPH02 Horndean 02a. London Road environs (Horndean) 02b. Rowlands Castle Road environs 2.3 WCPH03 Purbrook – district centre 2.4 WCPH04 Clanfield Village 2.5 WCPH05 Industrial estates (Waterlooville Business Park and Wessex Gate Industrial Estate) 05a. Brambles Farm and Pipers Wood Industrial Estates 05b. Wessex Gate Industrial estate...»

«Atlantic Review of Economics – 2nd Volume 2013 Mapa de Riesgos: Identificación y Gestión de Riesgos Manuel Rodríguez López marod@udc.es Carlos Piñeiro Sánchez carpi@udc.es Pablo de Llano Monelos pdellano@udc.es Finanzas y Sistemas de Información para la Gestión (FYSIG). Facultad Economía y Empresa Universidad de A Coruña Revista Atlántica de Economía – Volumen 2 2013 Atlantic Review of Economics – 2nd Volume 2013 Resumen Un mapa de riesgos es una herramienta, basada en los...»





 
<<  HOME   |    CONTACTS
2016 www.theses.xlibx.info - Theses, dissertations, documentation

Materials of this site are available for review, all rights belong to their respective owners.
If you do not agree with the fact that your material is placed on this site, please, email us, we will within 1-2 business days delete him.