The devil's carousel

Feature by Kevin Devine, Jun 2009

The global car industry has been rocked by the recession, thousands of jobs have gone and many thousands more are threatened. Kevin Devine reports on how bosses' attempts to save their profits will affect the workers on the "devil's carousel".

One of the biggest manufacturing casualties of the economic recession has been the car industry. Worldwide vehicle sales are collapsing and car plants are closing or going onto short-time working. In Britain the latest figures, for April, show that new car registrations fell by 24 percent compared with the same period a year ago, while the British vehicle market as a whole is estimated to have shrunk by almost 29 percent in comparison with 2008.

In the US the situation is even worse, with Chrysler - one of the Detroit "Big Three" alongside Ford and General Motors (GM) - declaring itself bankrupt. The impact on workers has been immediate. Employers have pushed through job cuts, pay freezes and short-time working. In Britain, Jaguar Land Rover has imposed a wage freeze (one of the third of all British firms which did so in April), Toyota has said it will cut workers' pay by 10 percent and thousands of jobs are threatened.

Ruling classes in the US and Europe facing the collapse of an industry often seen as a symbolic measure of the health of an economy have been scrambling for solutions. These include a variety of protectionist measures and the injection of public money into scrappage schemes to tempt people to buy new models by paying them to scrap their old cars.

Barack Obama has made much of his plan to defend GM - which will only avoid bankruptcy if it receives a massive cash injection from the state and the car workers' trade union, the UAW. The union is offering to accept job cuts and a wage freeze, and even to give up pension funds to bail out the company. But this rescue is only concerned with GM plants within the US. The rest of the GM operation internationally will be cut loose. So the sale of some or all of its European operations, which include Vauxhall in this country, looks increasingly likely. As in every crisis some companies go to the wall and others are in a position to pick over the remnants of another's failed operation and buy them up cheaply to increase their share of capacity in the market. In this case potential purchasers of chunks of GM include Fiat of Italy - trying to re-establish itself as a major player - and Canadian-based parts producer Magna, which may link up with the Russian Gaz firm to give it the clout it needs to seal the deal.

Whoever ends up being involved, it's clear that given the scale of GM's European operations the scope for so called "rationalisation" - mass job losses and closures - is wide. And likely candidates for such "rationalisation" include GM's two plants in Britain, particularly the van plant in Luton (formerly IBC Vehicles), and also Vauxhall at Ellesmere Port in Cheshire, which between them employ thousands of workers. And there are thousands more jobs at supplier firms as well.

Protectionism

EU car sales continue to grow, particularly in Germany, the continent's largest economy. This is significant for Britain because 75 percent of vehicle production in this country is for export, mainly to Europe. But the Chrysler situation indicates the scale of the crisis. Long beset by problems associated with overcapacity (for which read overproduction), the global motor industry has been left severely exposed.

Why should any of this matter to socialists? Does protectionism offer a solution for saving jobs and do we want to save an industry that manufactures gas-guzzling vehicles that pollute our planet?

First, protectionism is not a solution. Demanding that workers in this country hold on to jobs at the expense of workers in another country is not the answer to the crisis and only means shifting the pain from one set of workers to another. But even from the point of view of the bosses it is not a real option. This is because the nature of the global car industry means, as a recent Economist article put it, "It makes less and less sense to talk about a car's nationality. The Jeep Patriot is only 66 percent American; a BMW X5 made in South Carolina is a good deal more American than a Pontiac G8 shipped by GM from Australia. Fiat and VW factories in Brazil produce cars that account for half the country's market."

Second, car industry bosses are not shutting down production to save the planet from climate change. The only thing they are interested in is protecting their profits. Workers should not to have to pay the price for a crisis that is not of their making; their skills and the technology they work with should not be wasted and could be used to produce badly needed alternatives.

If the jobs cull is allowed to continue it will devastate working class communities and organisation. Today the motor industry in Britain employs around 45,000 people directly in vehicle manufacture and supports a further 380,000 jobs in components, retail and servicing. This is down by some 110,000 on the figures for 1997 - a haemorrhaging of on average around 10,000 jobs a year.

A series of plant closures has been responsible for many of the job losses, both directly and as a result of knock-on effects on suppliers. Since 2002 the following plants have closed: MG Rover in Longbridge, Peugeot in Coventry, Vauxhall in Luton, Ford's car assembly plant in Dagenham, Jaguar's Browns Lane plant in Coventry, and Aston Martin's site in Newport Pagnell, Buckinghamshire. The work in these plants was often boring, repetitive and physically demanding. Workers on the assembly line sometimes referred to it as the "devil's carousel". But thanks to earlier struggles, which had unionised the industry, and a continued tradition of collective bargaining, pay was generally much better than in other industries.

The workforce in the car industry is hugely productive, both in absolute and relative terms. Absolutely, because new working methods and flexible working time arrangements mean that car workers work harder than ever before. But also relatively, because even though the numbers of workers employed have fallen steadily, vehicle production numbers had, until recently at least, been maintained at relatively high levels. Each worker is producing far more than 30 years ago.

British vehicle production reached its post-1970s peak in 1999 at 1.98 million units (with far fewer workers employed in the industry than during the militancy of the 1970s). In 2007 it was 1.75 million, only to fall again last year to 1.65 million as the recession took hold. As production figures slump further, it's difficult to predict in detail what lies in store for workers in the industry. But it's clear that pay and conditions will increasingly come under attack.

Some firms are trying to ensure any new jobs are on lower rates of pay, and in some cases only available to workers via agencies. Such workers are not only potentially much cheaper, since they don't have the same entitlements to holidays and pensions as permanent staff, but also easier to sack. Agency workers at BMW's plant in Oxford discovered this the hard way earlier this year.

All this is also a challenge to union organisation. Employers are keen on agency workers because they can be harder to unionise. The fact that they are on lower rates can sometimes drive a wedge between them and the "permanent" workforce, who can see them as undercutting their terms and conditions. All the more reason why unions need to move fast to sign up agency workers, and to press for them to be made permanent as soon as possible.

But resilient union organisation in the industry means that the employers don't hold all the cards. They are loath to launch a full-frontal assault against the entire workforce and will instead try to play off plants, and sections of the workforce, against each other. Most importantly, we now have in the shape of the Visteon occupations a fantastic lesson in how to fight back. The employers are scared witless of the sort of example that the Visteon workers represent. They rushed to reach a deal once a picket by Visteon workers of their Bridgend plant was on the cards. While the Visteon workers in Belfast, Basildon and Enfield didn't save their jobs, they won their key demand, for the same redundancy terms as Ford workers. This means Ford/Visteon's aim of cutting these jobs at minimal cost to the company lies in tatters. It's a tremendous example to other workers of what determined resistance can achieve.

What about the union leaders? They will hope to negotiate their way out of any jobs crisis in the industry and avoid any serious disputes. But this won't be easy, given the number of jobs at stake at Vauxhall and elsewhere, and the employers' determination to make cuts to protect their profits.

Any criticisms that the union leaders might have made of Labour's unwillingness to properly rescue Longbridge, for instance by nationalising MG Rover, were muted by their strategy of reaching a rapprochement with the government. This was embodied by the Warwick Agreement, whereby the unions committed to campaign for a third term in return for vague promises from the government to deliver on a "shopping list" of demands.

Few of these promises were ever kept and Rover closed without a fight. The same thing happened with Peugeot shortly afterwards. This approach weakened the unions. Thousands of union members have been lost in the heart of manufacturing. The lesson from Visteon, by contrast, is that it's always better to fight.

Of course, there is another objection to fighting back, a variant of the argument that "you can't buck the market". Employers justify pay freezes, short-time working and job cuts by arguing that they have to restore profits to keep the show on the road. If socialists fight to save jobs in the car industry, aren't we doing the same thing? No, there are alternatives to making profits for the car bosses.

In the 1970s workforces at companies like Lucas argued that it was entirely possible to shift from producing car parts and military hardware to more socially useful items. Car workers could be making buses, trams, trains and ambulances. But such solutions come bang up against the priorities of the owners themselves, who want to continue to make a profit from car production. And these alternatives can't be posed in the abstract. It's only by fighting that workers can point forward to a different way of organising society, and that includes transport.