Well that was one of the stranger days. I got up flicked through the Guardian to find that Mrs Hewitt was on the front page of the business section talking about her plans to help the car industry in the UK including the project I hope is going to keep me in copies of the Wire and trips to the USA for a few more years. Yesterday was the day she launched her Manufacturing Stratgey and much of the substance came from the programme that has disrupted my worklife over the last year or so.

In the office I worked on some comparisons between the Uk and the German auto industry. The Czech conference organisers have said they want some slides to go with my keynote address. I wonder if I have the bottle to put the boot in given that Volkswagen own Skoda who I am seeing the same afternoon. The point is that German automotive productivity is 20% higher than the UK's - this sounds like a bad point for the UK given that capital investment per person employed is about the same. However German labour costs are 30 - 40% higher than in the UK - which could be OK given that their workforce is crudely speaking twice as qualified as ours. R&D spend per person employed is 150% higher and greater than investment. The point is that given that the key inputs are somuch higher than in the UK then why aren't the productivity levels in Germany more like they are say in Japan.

And given that in R&D and investment in automotive in Germany is 30% of their manufacturing sector how much longer can they scape along with wafer thin profit margins - around 2%. The UK actually gets good productivity results given the portfolio of inputs and the scope for increasing productivity and profitability is high. I worked over the EMTA study and concluded that in companies employing 100 people more the annual spend on external training per person was about 1% of value added. If you could increase that by 50% per annum - it sounds a lot until you realise that thats only about �200 per year per person - and if the training formula is right then the impact could be dramatic.

The other strength is the profitability of UK owned overseas investmentin automotive. The newspapers always focus on the fact that some foreigned owned car makers in the UK have been making losses. They fail to understand that the level of automotive investment in the UK is lower than the level of UK owned automotive investment overseas and that our overseas investment is pretty profitable by the standards of the industry - in the 4 years from 1997 to 2000 the total profit remitted to the UK on overseas investment on transport industries was �2.5bn (this includes aerospace but is mostly automotive). That is about �10,000 per person employed in the UK industry.

In essence the Germans are increasing automotive volumes by overinvesting in R&D relative to the price they are able to charge for their cars with the result that they don't make enough profit. In the UK we have used foreign investment in car manufacture as a platform to develop a set of niche UK owned companies who have been able to globalise themselves profitably - particularly by going into the US market although Germany is the largest overseas market for UK automotive exports. Our manufacturing is much less dependent on automotive but the diversity is actually a strength when you look at the likely changes in the car over the next twenty years eg if to take weight out of the structure carframes become more like airframes or plastics composites and textiles displace metal parts to an even greater degree. Anyway at root my analysis of the UK strategy smacks slightly of perfidious Albion - concentrating on the profit niches and letting the big foreign companies make all the running.

We had a meeting at the Department of Transport on our plans to bring together a strategic body to co-ordinate automotive powertrain in the UK over the next 15 years or so. In a couple of years time 30% of European engine manufacture will take place in the UK - when Ford pulled out of volume car making they switched into engine manufacture. Many of the profitable UK niche companies find their niche around the engine system eg fuel systems, driveline, cleaner exhaust systems, engine management systems, engine programme management - the powertrain in the new Mini was designed and managed by a UK owned company for example. To maintain that position as lower carbon systems comes in we need to integrate different sectors from R&D through to social systems for delivering fuel and maintaining vehicles.

Then I met up with Nick Sinclair Brown at his flat in Bloomsbury and then we went round to the pub. It was really like old times - especially catching up with Steve P - who used to have an ergonomics laboratory in that part of the world. Nick was the keyboard player in the Steve P 5tet. He told one amazing story about he and Steve had bumped into John Cage at a concert somewhere and dragged him off to the bar. Apparently he was good company.

He ended up lending me Adorno's book on Berg which I have never read. We decided that we would do some work on Broadway standards. Apparently he is involved with some students in a Frank Sinatra evening soon. My plan is to get him to put 15 or 30 minutes of stuff - out of the air - on a Minidisc and then to take it back to my lair for some initial processing before we meet again to plan the next move.

Birmigham today to meet the Sector Skills Development Agency.