When the last issue of
came out the news had just broken that the notorious Alchemy bid for Rover had fallen through. There was no time to change the text of our article, which went through as written. In any event, the analysis of the crisis of overproduction and the causes of under-capitalisation of the British car industry which made up the bulk of the article remained perfectly valid. Nevertheless, we hasten to add the latest developments, not simply for the sake of completeness, but also to dispel widespread illusions on the part of the working class that all is now well.
Since the collapse of the Alchemy bid, another bid on behalf of the ‘Phoenix’ consortium led by former Rover executive, John Towers, which two months ago appeared to have negligible prospects of success, managed after all to come up with the necessary funding to proceed. Its bid was accepted by BMW and, so it appeared, at the eleventh hour Longbridge was once again rescued and saved from closure.
What then are the prospects for Longbridge and the British car industry in the light of the Phoenix takeover?
It remains true that on the one hand there is a major crisis of overproduction (which bourgeois economists call ‘overcapacity’) in the motor industry. It also remains true that Longbridge’s technology is antiquated, enabling only some 33 cars per worker per year to be produced there, as against the 100 that modern plants can turn out. Making matters even worse, though by no means the major cause of Longbridge’s difficulties, is the high exchange rate of the pound in relation to other currencies, which makes British exports relatively expensive abroad in comparison with those of competitors from countries with relative low currency exchange rates.
Motor car production is caught in a process which no amount of Phoenix-style ‘rescues’ can turn back. Quite apart from the general crisis of imperialism, which is driving all relatively unmodernised industries to the wall, and even causing headaches to the most advanced – such as the car manufacturers of Japan and South Korea – there is a process of de-industrialisation associated with moribund imperialism. British capital is more profitably engaged in financing overseas production than it could ever be engaging in productive activity at home. The bourgeois media, ever seeking an opportunity to divide workers against each other, are talking about a North-South divide – claiming that more jobs are going in the north of England and in Scotland. To the extent that this is true, it is because manufacturing has always traditionally been centred in the north and in Scotland, and it is manufacturing as a whole which is under threat as a result of imperialist decay.
Bearing in mind these unpleasant, but unavoidable, characteristics of capitalism in its dying phase, imperialism, let us turn to the question of whether John Towers can restore Longbridge to profitabilty as a volume car producer. In the circumstances, it has to be admitted that the task is, barring some completely unforeseeable stroke of luck, quite impossible. The most Towers can do is to keep Longbridge going a little while longer so that its life gradually ebbs away, gently, imperceptibly, and giving rise to minimum resistance on the part of the communities that will be afflicted by its death. Ultimately the 50,000 jobs that were projected to be lost if Longbridge had closed down (at Longbridge, its supplier companies, and in businesses catering to workers’ needs) will still go, but the process will take longer. Dad may hang on to his job until retirement, but there will be no jobs for the children and grandchildren.
One cannot but be curious as to how Towers managed to put together the finance necessary to fund a venture which seems doomed to failure. Even so, Towers is charged with the task of not wasting any more money than is strictly necessary – i.e., to reduce production levels and off-load staff as fast as he can without creating insuperable opposition. This process will, of course, affect not only Longbridge jobs but also jobs in supplier companies:
The taskforce appointed by the government to look at the future of Rover’s Longbridge site warns today that 4,000 will go despite the Phoenix takeover, a leaked copy of its study shows … The Birmingham complex is expected to shed 1,000 jobs with a further 3,000 lost among its suppliers. The total is a fraction of the 24,000 at risk if BMW had shut the plant but the wages of the workers hit are above average, and the taskforce predicts social problems for individuals and areas affected”
9 June 2000, ‘Longbridge report leaked’).
It also turns out that the 200,000 cars a year that Towers had
“led people to believe”
would continue to produce at Longbridge, is planned next year barely to reach half that number.
“’John Towers said we would build a business SELLING 200,000 to 220,000 units a year,’ a spokesman was quoted as saying. ‘He never said anything about PRODUCTION’.”
2 July 2000, ‘The incredible shrinking Rover’). This will, of course, be disastrous for the various companies supplying Rover.
It is as though the whole Alchemy deal was an elaborate spin designed to frighten the Longbridge workforce and the West Midlands community into welcoming with open arms a deal under which in the short term ‘only’
, i.e., one-fifth of the 5,000 car assembly workers who remain, are to lose their jobs. Without the prolonged negotiations associated with the Alchemy bid, and certainly without the threat of total closure, there would surely have been strong resistance to any management proposal that one worker in five should be made redundant, notwithstanding redundancy packages – which workers are reportedly stampeding to get, their resolve to fight for their jobs undermined by the fact that they recently very nearly all got made redundant without any redundancy package at all apart from the statutory minimum!
Instead of resisting these redundancies, the union leadership was in the forefront of the ‘Workers for Towers’ movement which mobilised hundreds of Longbridge workers and their families to lobby for the success of the Towers bid. Working closely with the Blair government, the union leadership appears to have succeeded in spinning a massive setback for the working class of the West Midlands into a ‘victory’ – a ‘victory’ gained, in the words of Stephen Byers, Labour’s trade and industry secretary,
“without publicity, without spin, without headlines, without appearing on World at One”
(except that he was appearing on World at One at the time). The success of the Towers bid was, of course, a victory – but it was a victory for capitalism over the working class who had been outwitted, a victory gained without a single shot having been fired.
The Ford dispute
In the meantime Ford’s announced its decision to stop car production at Dagenham with effect from November next year. This will end 80 years of car manufacture there and will bring about the loss of 1900 jobs at Ford and over 13,000 among its suppliers in Croydon, Enfield, Leamington, Swansea and elsewhere. And for the moment things are looking as if the union bosses will succeed in securing that this massive blow to the working class will simply be taken on the chin. The 1900 jobs projected to be lost do not include the 1500 that are already going this summer, lured by voluntary redundancy packages of £50,000 lump sum plus a pension of £100 a week to those who have 20 years’ service. The loss of these jobs ‘voluntarily’ will also mean the loss of some 4,000-5,000 jobs among suppliers, where such generous redundancy packages are not necessarily available.
Besides the job losses that have been announced, the unions have done their sums and reached the conclusion that
“another 35,000 motor jobs could go within seven years as Ford moves more production abroad”.
If Ford’s bid for Daewoo goes through, then one can expect it to close down more and more of its less profitable plants around the world in order to concentrate its resources on the highly-efficient, technologically advanced, Daewoo plants – not just those situated in South Korea but also those in many other countries, especially eastern Europe. Not only do these plants have all the latest technology but as an additional bonus they are situated in places where the workforce is relatively cheap compared to their American or West European counterparts. It is a fair guess that Ford’s announcement regarding closure of Dagenham car production helped tip the Daewoo bid in its favour by helping reassure the South Koreans that Ford was prepared to close down operations in other parts of the world in order to keep them going in South Korea. According to the
of 29 June 2000,
“Daewoo’s creditors rejected General Motors’ bid and a rival offer from Daimler-Chrysler … after Ford assurances over future employee numbers, vehicle platforms and union deals”
– reassurances which would hardly have been financially credible without Ford’s downsizing in Europe.
As Ford pursues the God of Profit around the globe, leaving in its wake a trail of debris in the form of industrial wasteland and shattered lives, what of the struggle of the working class? When South Korean jobs are threatened, tens of thousands of workers throughout the car manufacturing industry of South Korea down tools and go on strike. They take to the streets and are quite prepared to riot in support of their jobs – not just their own jobs, but also those of their colleagues. Led by the class-collaborationist British union leadership, however, the response of British workers to the projected job losses is entirely different. A close look at the facts suggests that British union leaders are pointing the workers firmly in the direction of failure. In order to succeed through strike action, the strike must seriously hurt the employer’s financial interests. The union leadership, however, while making a ‘militant’ show of balloting its members for strike action in protest against the Dagenham closure, has expressly
“cancelled plans for a ballot of Ford’s entire UK workforce. The vote will now be limited to 4,500 in Dagenham’s body, paint and assembly areas”
23 June 2000, ‘Ford unions call strike vote at Dagenham’). In other words, the strike, if it takes place, will be limited to the plant that Ford intends to close anyway because it is losing money. Rather than go against the employer’s interests, this strike will actively promote Ford’s efforts to
“staunch its losses – over £119 m in Britain last year – and take out chronic overcapacity in Europe”
). Moreover, the strike will not touch the Ford plants that the employer wants to keep going because they are already profitable or expected to become so shortly – e.g., those producing Ford’s premium brands, Jaguar, Volvo, Land Rover and Aston Martin. Frankly, what is the point exactly of calling a ballot for a strike that will BENEFIT the employer by enabling it not only to withhold wages but also to stop production for which it has no use! Such a strike is obviously doomed to ignominious failure, which is what explains the union leadership’s enthusiasm for it. Either the strike should at the very least bring out ALL Ford employees in Britain – preferably joined by Ford workers in other parts of the world – or quite different tactics should be used. An occupation of Dagenham might hurt the employer, and if so then that might be a better tactic.
Unions have been blaming Britain’s low level of job protection and anti-union legislation for the fact that Ford is pulling out of the UK (rather than Germany), claiming it is cheaper for employers to pull out of Britain than other countries. What really makes it easy for employers to pull out, however, is that in Britain the unions are so firmly under the control of a class-collaborationist social-democratic leadership that they are quite unable to put up an effective fight against closures – as indeed they were incapable of fighting against the introduction of the anti-union legislation in the first place. Far from being prepared to lead a fight to save jobs, the union leadership, as we saw in the Rover debacle, appears to be working hand-in-glove with the Blair government to defeat the interests of the working class. Without a purging of the class collaborationist leadership and its replacement by union militancy, British car workers, not just at Ford but all over Britain, are doomed to become an extinct breed in the not-too-distant future.