It's not just the issue of cheap labour. Although Toyota are the largest, BMW, Audi and so on do very well although their German labour force costs are high.
We used to design high quality cars. Sir Alec Issigonis designed a car which was well ahead of its time when first manufactured. As well as poor government, our manufacturing base was also hit hard by the unions. Remember Red Robbo? 
I actually met red rob once, he gave a very informative talk about his career, and the industry of the time. Maybe I was simply hoodwinked into believing his version of events; but the guy appeared very intelligent, not particularly anti-management. He seemed to have very much been made a scape-goat, and demonized by the BL monster. The famous images of him atop a car roof calling for people to revolt had many unseen discussions over tables, via letters and memos preceeding it. Like I say, he seemed a decent bloke to me; but having said all that, were the unions allowed to get too strong, and hold too much sway? Yes they were. Did they help bugger up industry in general? Yes they did!
Second little personal thought is... I trained to the best of my abilities at Coventry Uni in Automotive Design. That included Computer / Clay modelling, Basic (and not so basic, gulp!) engineering, sketching, designing, customer / market research (dull!) to ergonomics. I graduated a couple of years ago now, and so far managed a month working, 23 months 'unemployed!' Not for the want of trying, either; there's very, very little out there, sadly.
I'm all dressed up but no where to go, really!
