a moribund system wreaking havoc on working people
BMW pulls out of Longbridge
On 16 March this year the news broke, after first having been leaked in a Bavarian newspaper, that BMW is finally to pull the plug on Longbridge, the giant Birmingham car production plant where BMW has been producing Rover Cars since purchasing the business from British Aerospace six years ago. Having suffered losses of £1.3 billion in the past two years alone, and with the threat of takeover hanging over its head, not least because of this financial softness in its underbelly, BMW decided it could not carry on with its attempts to make Longbridge profitable. For some six months before the 16 March announcement, BMW had been negotiating behind the scenes to dispose of the various components of Rover. By the time its intentions were made public, it had reached agreement with Alchemy, a venture capitalist partnership, to transfer the Longbridge operation to them for the knockdown price of £50 million. It had also reached agreement with Ford, although this was not announced until some days later, to sell Land Rover to them for £1.85 (this operation being based in Solihull). Rover’s body plant at Swindon is to be sold to Mayflower Bus Company. BMW will, for the time being at least, retain the Cowley plant at Oxford, where it will continue to produce the new Mini and the Rover 75.
Massive job losses inevitable
Of all these, the transaction on which most attention has been focused has been the probable sale of Longbridge to Alchemy, for this transaction is likely to cost some 50,000 jobs in the Midlands region alone. Before the sale few people in the working-class movement had heard of Alchemy, or had any idea what was the function of a venture capitalist. They now know only too well that venture capitalists are the rag-and-bone men of capitalism. They salvage oddments from the wreckage of failed businesses which they do up for profitable resale. On this basis, Alchemy are planning to operate at Longbridge to operate under the trade name The MG Motor Company. To begin with they propose to continue production of the Rover 25, 45, the old Mini and the MGF, but they have every intention of abandoning mass production in favour of elite sports models they hope they will be able to sell to the very rich. The
of 19 March reports that
“Within five to seven years the Rover marque, and many of the 7,500 jobs at Longbridge will have gone.
Ultimately the number of MG cars produced at Longbridge is likely to be no more than 50,000 a year. Nor will this require the traditional metal bashing skills of the automotive industry: the MGs will be made from Lotus-style aluminium and composite technology which, although more expensive to produce, are relatively inexpensive to develop.”
Whether, therefore, Alchemy succeed in this particular venture or not – and it has to be admitted that they have had some remarkable successes in the past – one thing is certain: there are going to be massive redundancies, not only at Longbridge but throughout the West Midlands. As Christine Buckley points out in
of 5 April:
The 4,000 to 5,000 jobs that are expected to go from Longbridge will trigger a further 15,000 to 20,000 in supplier companies. A further 5,000 jobs are to be shed from local businesses such as shops and newsagents … up to 15,000 jobs among Rover dealerships are threatened …”
Most of these redundancies will be in the West Midlands area where there was already high unemployment before this latest disaster struck:
Compared with a national
unemployment rate of 4 per cent, the West Midlands stands at 4.6 per cent and Birmingham has 7.2 per cent. The Longbridge area already has a rate of 11 per cent. Advantage West Midlands has calculated that a loss of 20,000 jobs in the region would increase the claimant count in the West Midlands to 5.9 per cent and in Birmingham to 13.1 per cent. Longbridge could see its rate double.”
Should Alchemy fail in their efforts to put together a saleable little business and be forced to limit themselves to stripping Longbridge’s juicy assets, then the situation as far as unemployment is concerned will be even worse.
Who is to blame?
The victims of capitalism at Rover, as indeed elsewhere, are constantly being misled into side alleys in an endeavour to prevent them from realising the real cause of their misery. In the present case, there is a side issue in play over the question of whether the BMW management misled the Trade Secretary, Byers, or whether Byers deliberately told lies about BMW’s intentions. All this is totally irrelevant, although we can always take it that both the capitalists and capitalist governments will, if they consider it appropriate, lie through their teeth as a matter of course.
We wrote in
of March/April 1999 (‘No Future for Longbridge’) when BMW was threatening to pull out but was persuaded not to be a government promise of a £150 million subsidy (which in fact was never paid over as it has been held up pending approval by the European Union) that what is spelling the doom of Longbridge is a crisis of overproduction. We wrote then:
Marxism shows how the capitalist, in order to survive the battle of competition, needs to cut his workforce as well as the wages earned to a minimum, causing the impoverishment of the masses of working people, while putting into operation expensive modern technology to replace labour, which is only ‘economic’ if much larger quantities are made and sold than ever before. This causes big capitalist megaliths to develop, which drive out of the market all smaller operators who cannot afford the new technology…
Sooner or later the megaliths themselves become relatively small fry if they do not keep up with the technological advances which facilitate the reduction of workers in proportion to the quantities of goods produced, and the relatively small megaliths find themselves to be uncompetitive and forced to shut up shop because they cannot keep up with the giant megaliths who are cornering the market with their cheaper (and generally superior) products. In the meantime, relative impoverishment of the working-class masses means that there are fewer purchasers anyway, so that generally it makes economic ‘sense’ to close down the technologically backward plants rather than try to update them.”
It is precisely because it is technologically backward that Longbridge cannot compete.
of 13 February 1999 said it all:
“Lack of investment has taken its toll of productivity. Longbridge produced only 33 cars per worker in 1997. Nissan in Sunderland built 98 and Ford in Dagenham achieved 62.”
The fact is that not only can Longbridge not sell its cars at a profit, but even Ford, with nearly double the productivity, cannot do so, and is also proposing to stop car production at Dagenham. Nissan too is in some trouble.
The workers need to understand that the problem of overproduction under the conditions of capitalism, which is constantly reproduced as a result of the contradiction between social production and private appropriation, is inherent to capitalism. It is a problem produced by the necessity, under the conditions of capitalist production, for the means of production to be first transformed into capital before they can function as such, for no capitalist will produce unless he can make a fast buck. For, as Engels explained:
“The necessity of this transformation into capital of the means of production and subsistence stands like a ghost between these and the workers. It alone prevent the coming together of the material and personal levers of production; it alone forbids the means of production to function, the workers to work and live. On the one hand, therefore, the capitalistic mode stands convicted of its own incapacity to further direct these productive forces themselves. On the other, these productive forces themselves, with increasing energy, press forward to the removal of the existing contradiction, to the abolition of their quality as capital, to the PRACTICAL RECOGNITION OF THEIR CHARACTER AS SOCIAL PRODUCTIVE FORCES”
By throwing workers at Rover, as indeed elsewhere, on the scrap heap, capitalism declares its own bankruptcy. It is unable to provide workers with secure employment and rising prosperity. It is unable to allow the means of production to function, and
“society is suffocated beneath the weight of its own productive forces and products, which it cannot use, and stands helpless, face to face with the absurd contradiction that the producers have nothing to consume, because the consumers are wanting. The expansive force of the means of production bursts the bonds that the capitalist mode of production has imposed upon them. Their deliverance from these bonds is the one precondition for an unbroken, constantly accelerated development of the productive forces, and therewith for a practically unlimited increase of production itself”
We have become inured to the ‘logic of capitalism. But how will a Rover worker or a Dagenham worker who has lost his job, and as a result has been unable to keep up the repayments on his car, which is repossessed, explain to his family why they have no car? Why? Because he has produced too many cars. The market is glutted.
“The producers have nothing to consume because the consumers are wanting.”
By this absurdity, capitalism is sending a clear, albeit implicit, message that for society to be rescued from the horror imposed upon it by capitalism, society must take the means of production into its own hands and use them in a planned and conscious way for the benefit of the population. Pending such a revolutionary transformation, Rover workers, and others threatened with job losses and downgrading, must demand that the state take over these enterprises and run them in such a way as to preserve workers’ jobs and livelihoods if private capitalists are unable to do so. This is a demand that Rover workers must make. And in order to enforce this demand in the teeth of opposition from the bourgeoisie, its government, and against a reluctant trade-union leadership, the workers at Rover should resort to occupation, refusing to allow Alchemy-type vultures to come and asset-strip the plant, make hundreds of millions of pounds at the cost of the misery of the tens of thousands of workers whose jobs depend on Rover’s continued existence.
Recriminations about BMW’s pull-out abound. Much indignation is being vented in the press about BMW’s ‘lack of transparency’ based on the fact that they had been secretly negotiating with Ford and Alchemy for months, while the British government was being led to believe that BMW were confidently working towards securing profitability by the year 2002, and Longbridge workers were being invited to bring the family to see the plans for the new models they would soon be producing. One is supposed to deduce from this furtive behaviour that the BMW investment in Longbridge has failed only because the dastardly BMW never meant it to succeed. Elements of the gutter press even go so far as to insinuate that it failed because Germans in general, and BMW in particular, are dishonourable in their dealings with the British. Alarmingly, this chauvinism has even penetrated the so-called ‘left’, with Ian Morrison writing in the
of 1 April:
“The decision by BMW to dump Rover should have come as no surprise. After all, what loyalty has the German car giant to either British manufacturing industry or the British working class or the people of the West Midlands?”
He does say later in the article that the closure of Longbridge is due to capitalism’s pursuit of profit, but the above opening sentence, appearing in boldface, can hardly be understood otherwise than implying that our decent British capitalists might have been expected to show some ‘loyalty’.
Imperialism spells decay
Cde Morrison would have done well to pay some attention to an article which appeared in the
the previous day, 31 March, written by the T&G manufacturing section organiser, Peter Booth, who quite rightly pointed out that Rover’s downfall was totally unavoidable because of under-capitalisation:
“A recent study by the National Institute for Economic and Social Research showed that capital per hour worked in Germany was 70 per cent higher than in Britain, 50 per cent higher in France and 30 per cent higher in the US.”
If anyone is to blame for this under-capitalisation, it is not BMW, who DID invest in Britain – and got their fingers burnt, but precisely good old British capitalism:
“Britain is the world’s largest investor in other countries. According to United Nations Conference on Trade and Development (UNCTAD) figures, Britain invested £132 billion overseas last year, more than a quarter of the world’s total and almost a third more than the booming US economy.”
Why is British capitalism investing abroad rather than in the UK? Because it is capitalism in its imperialist phase, when generally speaking far greater profits are to be made from super-exploiting the oppressed countries than from exploiting the working class at home.
Peter Booth makes the mistake that Lenin severely castigated in Kautsky of thinking that imperialism is merely a ‘policy’ rather than a phase of capitalism. In other words, he imagines that British capitalism could choose not to pursue that ‘policy’ and decide to invest in Britain instead. When capitalism has reached its imperialist phase, however, capitalist countries can either be imperialist or victims of imperialist super-exploitation. Imperialism, and the export of capital, which is a necessary part of it, is a question of survival – under the conditions of capitalism. Those who imagine that imperialism has a choice are actually trying to defend the capitalist system by creating illusions that it could be very different, if only it adopted the right ‘policies’. If anyone is attempting to do this it can only be because they have given up any hope they might ever have harboured of the working class effecting proletarian revolution. Because they belong to, and represent, sections of the working class who have been enjoying a reasonable standard of living under capitalism, they are trying to make the best of capitalism and to live in harmony with it. Unfortunately capitalism in its imperialist phase is rotten to the core, and those who seek to live with it inevitably become rotten with it, even if they started out with the best of intentions. Britain’s Labour government is in power precisely because finance capital, which is dominant over industrial capital in imperialist countries, is with reason convinced that it is the government that will best serve its interests. Not only will Labour take Britain into the Euro and effect welfare cuts that the Tories could never have got away with, it has even changed its Party constitution in order to reassure its masters that it is utterly worthy of their trust. There is therefore not a snowball’s chance that the government will take any steps whatever to prevent finance capital from being exported if that is what produces the highest returns.
Under the influence of Khrushchevite revisionism, the Communist Party of Great Britain – now the Communist Party of Britain, the dominant organisation behind the Morning Star – gave up the Marxist theory that would have enabled them to understand the economic processes and class interests which take place under the surface of society but which influence everything of significance to people’s lives that takes place. Had they not done so, they might have learnt Lenin’s basic definition of imperialism, which
“will embrace the following five essential features:
“(1) The concentration of production and capital developed to such a stage that it creates monopolies
which play a decisive role in economic life.
“(2) The merging of bank capital with industrial capital, and the creation, on the basis of ‘finance capital’, of a financial oligarchy
“(3) The export of capital, which has become extremely important, as distinguished from the export of commodities.
“(4) The formation of international capital monopolies
which share the world among themselves.
“(5) The territorial division of the whole world among the greatest capitalist powers is completed”
Imperialism, the Highest Stage of Capitalism,
Selected Works Vol 5, Lawrence & Wishart, London, 1936, p.83).
They would also understand the implications of this for the British economy:
“Monopolies, oligarchy, the striving for domination instead of the striving for liberty, the exploitation of an increasing number of small or weak nations by an extremely small group of the richest or most powerful nations – all these have given birth to those distinctive features of imperialism which compel us to define it as parasitic or decaying capitalism. More and more there emerges, as one of the tendencies of imperialism, the creation of the ‘bondholding’ (rentier) state, the usurer state, in which the bourgeoisie lives on the proceeds of capital exports and by ‘clipping coupons’. It would be a mistake to believe that this tendency to decay precludes the possibility of the rapid growth of capitalism. It does not. In the epoch of imperialism, certain branches of industry, certain strata of the bourgeoisie and certain countries betray, to a greater or less degree, one or other of these tendencies. On the whole capitalism is growing far more rapidly than before, but it is not only that this growth is becoming more and more uneven; this unevenness manifests itself also, in particular, in the decay of the countries which are richest in capital (such as England)” (ibid.
It is imperialism that is behind the decay of British shipbuilding, steel production, mining, car manufacture – all the industries which in the early days of imperialism made Britain the workshop of the world. Nowadays nearly all industrial and agricultural products we need we import. Others produce, the British consume. The whole country has been condemned to parasitism.
Corruption in the working-class movement
Had those producing the
learnt these truths that Lenin strove so hard to get workers to understand, then they could have served the working class by countering Kautskyite opportunism and national chauvinism rather than propagating it. It would not be a bad thing if they were to learn from their mistakes even now, for it is better to correct oneself late than never. Unfortunately, the
depends for its very existence on the financial support of unions dominated by the Labour Party. That support would undoubtedly be withdrawn if the
became seriously anti-imperialist. This is how in the era of imperialism opportunism corrodes into every corner of the working-class movement that is weak in its theoretical understanding and therefore not fully on its guard.
Throughout the 20th century, the British working class resisted the indignity of the country being reduced to parasitism and was willing to fight to keep productive jobs rather than face unemployment or redeployment as penpushers, keyboard tappers, kitchen slaves or security guards. But they have not been able to resist the inexorable demands of the laws of the market, not least because of the corruption of their own leadership. For, as Lenin pointed out again and again, there is yet another disastrous consequence of imperialism for the working class:
“The receipt of high monopoly profits by the capitalists in one of the numerous branches of industry, in one of the numerous countries, etc., makes it economically possible for them to corrupt individual sections of the working class and sometimes a fairly considerable minority, and win them to the side of the capitalists of a given industry or nation against all the others … And so there is created that bond between imperialism and opportunism, which revealed itself first and most clearly in England, owing to the fact that certain features of imperialist development were observable there much sooner than in other countries.” (ibid.
In other words, imperialism splits the working class. It corrupts, first and foremost, a large proportion of its leadership. The epitome of this corruption is to be found in the Labour Party, which might more appropriately have been called ‘Workers for imperialism’ – though nowadays ‘Yuppies for imperialism’ is becoming increasingly appropriate. From the General Strike of 1926 to the great miners’ strike of 1984-1985, the Labour Party brought all its influence to bear to secure the defeat of workers in struggle. Its members dominate, for instance, the trade unions, most of which have been stripped of every scrap of militancy and have turned themselves into negotiators of redundancy terms and investment advisers. Union officials, hoping to be rewarded with knighthoods and life peerages for their services to imperialism, nearly all preach respect for laws which outlaw union militancy, and discourage action on the part of their members even to defend their own interests, let alone the interests of workers in other sections of the economy.
It is not surprising, therefore, to find that in connection with Longbridge there was distinct lack of enthusiasm in the T&G leadership for even the mildest form of protest. The 100,000-strong march against closure which took place on 1 April was not called by the union, but by an individual who has hopes of being elected as Birmingham’s mayor and therefore seized on a unique opportunity to put his name on everybody’s lips in the area. The union refuses even to call for the nationalisation of Longbridge. Official Tony Woodley did apparently in an unguarded moment put forward the demand that Longbridge should be taken into public ownership in order to prevent the decimation of employment prospects in the region, but was very quickly put Right by the union leadership. Like the Hillingdon hospital workers, if Longbridge employees want to fight for their jobs, then it will have to be AGAINST their union leadership – not just against the employer.
Dare to struggle, dare to win!
At the same time, Longbridge workers should remember the motto ‘Dare to struggle, dare to win’. Even with all the odds stacked against them and facing such an enemy as British imperialism, its ‘Labour’ government and its trade-union henchmen, stubborn and determined workers are able to win, as the example of the Hillingdon hospital workers – just 52 women against the whole evil system – demonstrates. Imperialism is a paper tiger because it depends for its very existence on the working class. If Longbridge put up a real fight, with tens of thousands of workers rallying to occupy Longbridge and prevent its assets being removed, demanding the nationalisation of Longbridge and Dagenham and guarantees of future employment; if they can resist the attempts of the state to intimidate them and of social-democratic ‘labour leaders’ to divide them or persuade them to capitulate, they can win. If 52 determined women can fight and win, why not 7,500, backed by the tens of thousands whose jobs are at risk if imperialism’s plans for Longbridge go ahead?
Literally as we go to press, the news has come in that BMW’s deal with Alchemy has fallen through and the Rover plant is likely to be completely shut down within a matter of 4 or 5 weeks. It is too late for us to change the part of the article which relates to this deal.