Leading Article: No profit in Japan-bashing

BARCLAYS BANK'S decision to ditch Ford as its leading fleet supplier, and instead equip the managers of its high street branches with 1,000 Nissan cars over each of the coming two years, has prompted a bizarre row. Instead of explaining straight away that the bank simply gets better value buying Nissans than Fords, Barclays at first implied that its decision was based on the belief that Nissan cars have more British components in them. The bank's defensiveness may have had something to do with the fact that only four days earlier the chairman of Ford UK had accused Japanese car-makers, in written evidence to a Commons committee, of 'creating excess capacity' in the European car industry, and had warned that the Japanese practice of keeping component design at home 'must give rise to real concerns for the UK's technological base'.

Yet Ford is no more a British company than Nissan. Ford has been making cars in this country for most of the century, and it has shown the same willingness to contribute to the wider community as many other American corporations, from IBM to Heinz, but the company's head office remains in Michigan, not on Merseyside.

The claim that Ford is more truly 'British' than Nissan is in any case tenable only on a short-term view. As Ford well knows, it takes time before a company's overseas subsidiaries gain the confidence of local people. Yet Nissan, after only a quarter as long in Britain as Ford, seems already to have done that. To have transposed its manufacturing methods 7,000 miles across the world to a country with a different language and different social and industrial traditions would be success enough. To have done so while buying as many components locally as its longer-established competitors counts as little short of a triumph.

The men at Ford deserve sympathy all the same. In challenging their domination of the lucrative fleet market, Nissan is showing the extent of its long-term ambitions in Europe. Moreover, its attack takes place in the middle of one of the worst automotive recessions in living memory, when Ford of Europe would prefer quietly to be remitting profits back across the Atlantic to help its beleaguered parent.

Ford's real worry, however, should be that Japanese car manufacturers are still overall more efficient than either their European or American counterparts. The mistaken EC policy of using quotas on Japanese sales to give local companies a 'breathing-space' to catch up has made things worse rather than better. Far from hurrying along the much- needed restructuring of the European car industry, the restraints on Japanese car sales in Europe have postponed it; the latest manoeuvring in Brussels means that it is unlikely to be before the end of the millennium that Europe will see anything approaching free trade in cars.

Britain is better placed for the coming battle than any other EC country. The bulk of new Japanese capacity is in this country, and the three leading car-makers already here have woken up to the task that faces them. Ford, General Motors and Rover are all raising efficiency and removing excess workers. It is a painful process. But that, rather than Japan-bashing, is the way to ensure their survival into the next decade.