As is well known, the Peugeot motor car assembly plant at Ryton near Coventry has been under threat for some time, but, last May, workers there were informed that the plant would not be building the new 207 model of Peugeot that is to take the place of the ageing 206s that it is currently geared to produce.
Of four shifts that the factory used to run, one was made redundant last year and one the year before, the third in July this year, and the last will go by the end of June next year, with the factory closing its gates for the last time after 60 years of motor car production on the site. With the third and fourth mass layoffs, 2,300 jobs will have been lost at the factory itself and many more in the various local businesses dependent on Peugeot or its workers for a major part of their custom. In all the closure will cost Britain about 8 percent of its car industry.
The impending closure of Peugeot's plant in Ryton has given rise to serious questions as to what should be the response of workers (a) at that plant, (b) in the car industry generally, both at home and abroad, and (c) at the national level in response to actions by the ruling class – the billionaire bourgeoisie, as they deprive thousands of workers of their livelihoods and condemn them and their families to live in very much straitened circumstances.
Overproduction in the car industry
The closure of Ryton is but the latest in a series of body blows rained on the working class by the bourgeoisie in Britain. In the car industry alone, we have in recent years seen the closure of Fords in Dagenham, Vauxhall in Luton, Jaguar in Coventry, Leyland Motors in Longbridge, with thousands of jobs lost. And the closure of Ryton in Coventry is likely to be followed in the not too distant future by the closure of the Vauxhall plant at Ellesmere Port.
In a situation of massive overproduction in the world car industry, the production of cars can no longer give rise to a sufficient rate of profit except in the most modern plants, operating the best machinery – and employing the least number of workers per car produced. Curiously enough, despite the loss of the whole of the British-owned car industry and all the closures of foreign-owned car makers that have taken place in Britain since the start of this century, the volume of motor car production in Britain has actually increased!
According to Boris Johnson, a Tory MP writing in the Daily Telegraph of 20 April, the UK is "producing about 1.6 million cars a year – almost an all-time record, and far more than were being produced in the 1970s". ('Ryton workers have a better future than French brothers')
The workforce that produces those cars is, however, a fraction of the size of the workforce that was producing the smaller output of the 1970s.
And it is not only the car production industry where these mass redundancies have been occurring, as is only too well known. British shipbuilding is gone. British coal mining is all but gone. British steel likewise. Banks and insurance companies have been shedding workers like trees shed leaves in a hurricane.
On top of that, pensioners have been deprived of pensions for which they have been saving all their lives, and the effective imposition of wage cuts through unilaterally reducing pension benefits provided, especially to younger workers, has pressed ahead almost without opposition. In addition, vast amounts of tax income raised for the purpose of the social wage (provision of health, housing and welfare services and education) is being channelled through privatisation into the grasping hands of multinational corporations through an escalating programme of privatisations.
It appears that nothing can be done to prevent the bourgeoisie from riding roughshod over the British proletariat. It is as if the working class has lost all its fighting spirit and has decided there is no hope of winning so there is no point in putting up more than token resistance to what the bourgeoisie is doing.
What is to be done?
Are we to go along with bourgeois ideologues who tell us that nothing can be done about the laws of capitalism, and that, although we cannot control these laws (they destroy not just the livelihoods of workers but the weaker sections of the capitalist class as well), this is a good thing as it leads to greater ‘efficiency’, a stronger competitive position in the world market and thus, ultimately, provides better opportunities for capitalist and worker alike?
Thus Boris Johnson again: "what Marx … failed to understand was that this capitalist system was, in fact, the best available protection for the interests of the working man, since it is this very flexibility of labour, and mobility of capital, that allows new jobs to be created and all the joy and excitement of industrial innovation …
"Look at Land Rover, free from the ossification of its design, now going through the biggest sales boom in its history. Look at those wonderful new minis – brilliant, burly, bustling scarabs – most of them made by the ingenious workforce of south Oxfordshire. The German parent company is planning to pump in another £100 million, pushing sales up from 200,000 to 250,000, and we wouldn't be able to attract that kind of German money if it were not for the labour-market flexibility now being denounced by Amicus and T&G [the Unions involved at Ryton].
"No one would have the confidence to invest so much in the car industry, and to employ so many people, if they did not have simultaneous confidence that they could also lay people off when the market became difficult."
The obvious answer to this is to say that since capitalism can only thrive on the back of insecurity and misery of the masses of working people, capitalism has to go.
This is not a response, however, that is acceptable to the various labour lieutenants of capital in the working-class and trade-union movement. Instead, they try to tell us that there are no such economic laws, or that there is some magic way of opting out of them while still retaining capitalism.
Unfortunately, this Utopian message has been rife in both Amicus and the T&G, being peddled by its Labour 'left' leaders, Derek Simpson and Tony Woodley, respectively. For example, on 27 April, Tony Woodley issued a call to the citizens of Coventry, claiming that there was no good reason for the closure of Peugeot:
"Is Peugeot unprofitable and is the closure an attempt to reduce losses? No. The company made profits last year in excess of 1 billion euros.
"Is the Ryton workforce inefficient, unproductive or inflexible? No. Our members are the most flexible in Europe and have delivered everything asked of them by the company and more.
"Is the closure announcement a result of falling sales or a need to reduce capacity? No. In 2005, the PSA group – Peugeot's parent – achieved a sales record of 3.9 million vehicles …
"Closing the plant at Ryton is about sacrificing UK workers to give shareholders a quick return, and about increasing profit by exporting jobs to Eastern Europe."
In other words, it is pure bourgeois greed that is making Peugeot close Ryton quite unnecessarily.
The unions have a plan to save Ryton, which involves cutting wages by 10 percent, thereby making production at Ryton nearly as competitive as it would be in Slovakia (the production of a mere 10,000 extra cars would cover the difference). There is nothing inherently bad about capitalism, according to this plan – the British trade union bureaucrats are ready and willing to show us all how to make it work properly!!
The reality is otherwise.
The main problem facing workers trying to fight back in the car industry is that, because of the scale of overproduction in that industry, the owners of the less ‘efficient’ operations cannot wait to close these down. Of course, in terms of the work which is sweated out of the labourers, Ryton can be said to be super-efficient.
But ‘efficiency’ in market terms cannot be achieved by sweating the workforce alone. Capitalist efficiency requires the maximum of production with the minimum of expenditure. Ryton's production was 67 cars per worker per year. Nissan in Sunderland in 1998 was already producing 98. Alex Brummer in the Daily Mail of 8 April 2005 says that the 1,000 workers at Nissan in Sunderland are nowadays churning out 320 cars per worker per year! ('Rover driven into receivership')
No amount of sweat on the part of Ryton workers could make up for the fact that they are operating relatively antiquated machinery and that, as a result, the cars they produce are relatively expensive and hard to sell in a saturated market. This in turn means that (according to Boris Johnson again), at Ryton, "five vehicles are being produced for every potential consumer".
For Peugeot to survive at all in the cut-throat world of car production, it has to make its product cheaper so that it can achieve a higher volume of sales. That is why it is abandoning Ryton and building its new plant in Slovakia. The new plant one assumes is designed to produce at least three times the number of cars per worker than can be produced at Ryton on Ryton's antiquated machines.
But why is the investment being made abroad rather than in the UK, at Ryton? Here, the fact that "it costs £11.50 an hour to build a Peugeot 206 at Ryton compared to £2.50 or so in Trnava, Slovakia" comes into play. It is not just wages that are lower (€9.52ph in Slovakia, as opposed to €32.40ph in the UK), but also that tax rates are higher and fuel costs substantially more in the UK as well. These taxes pay not only for social benefits for the working class in this country but also the cost of imperialist wars, which also are a drain on the profitability of imperialist multinationals forced through taxes to contribute towards them.
In addition, Ryton imports most of its parts from Europe. Most components have to make a 600-mile round trip, meaning that locating the new factory in continental Europe will bring about considerable savings in transportation costs.
In spite of everything, however, Ryton is still just about profitable. Thanks, inter alia, to the back-breaking efforts made by its workers over the last few years, Peugeot has turned a reasonable profit from its worldwide operations. However, its first-half profits for this year had fallen from €752m to €303m, with an operating margin of 2.4 percent of sales rather than the 2.8 percent it had been hoping for and which might have enabled it to honour its promise to keep Ryton – Peugeot's costliest plant in Europe – open until 2010.
As it is, even if the offer made by the unions to allow Ryton workers' wages to be cut by 10 percent had been implemented in return for Peugeot granting the assembly line for the new Peugeot 207 to Ryton, it would still have been more costly to produce here than in Slovakia.
These are unavoidable facts of economic life under capitalism, whose economic laws buffet and destroy not only the working class but also consume any capitalist that is struggling in the battle of competition. Peugeot productivity being so low in comparison with that of Japanese- and Korean-owned factories, it has no choice but to take drastic action if it is to survive – and, in fact, it is not all that likely that in the long term it will.
The economic laws of capitalism are real and they will extract their pounds and pounds of flesh, come what may.
Of course, if the Boris Johnson idyll were a reality and that all this flexibility of British labour would cause jobs in uncompetitive plants to make way for better jobs in competitive ones, there would certainly be no reason to struggle. However, it is improbable that there is anyone in the whole country apart from Boris Johnson who does not know what a terrible thing it is in the vast majority of cases for a worker to be made redundant, and who cannot, for instance, see the connection between the mass redundancies that have been occurring and the increasing rates of mortgage default and repossessions of workers' homes.
Steve Boggan, writing in The Guardian of 26 April 2006, points out that, although more than two-thirds of MG Rover's redundant workers were already back in employment, "The truth … is more complicated. It is correct to say that by last December, 66 percent of the Longbridge workforce was back in work … but researchers have found that they are earning an average of £3,523 less than they were at Rover – and almost half believe they now have worse jobs." ('Life after Longbridge')
There is still scope for a fight back
Traditionally, the weapon of the working class in defending its living standards and its rights has been to go on strike. In a situation where the employer can't wait to close down the whole plant, however, the strike as a weapon is manifestly useless. To withdraw labour in circumstances where the employer doesn't want that labour is no use at all. Organised workers need to think of new ways for imposing their demands on the ruling class.
In circumstances such as those at Ryton, where the workers affected by the bourgeoisie's decisions are weak, the key to efficient struggle is to find some way of hurting bourgeois interests in order to try to force the bourgeoisie to back off.
It is clear, however, that the Ryton workers themselves are in no position to do this – at least, not on their own. Solidarity action is needed. This could be forthcoming from other workers in the car industry, by means of strikes, say, in profitable Peugeot plants (eg, the overtime ban that French workers have offered – though a full strike would obviously be far more effective), and/or strike action by workers such as transport workers refusing to move Peugeot goods to market, strikes among component producers and so on.
For bringing about such action, however, you need unions that are willing to organise along these lines, and workers who are prepared to follow the union to go on strike when their own immediate interests are not under threat. Most of our unions, though, are controlled by the Labour Party, a party that represents the interests of imperialism in the working-class movement, and they exude an atmosphere of class collaboration.
In the face of laws against solidarity action enforced by the Labour government, and maintained by the latter on the statute book, the unions preach compliance. In place of effective action against the bourgeoisie, they preach ineffective action: empty resolutions, letters to MPs and early day motions, with the height of 'militancy' being the one-day strike – which cannot achieve anything other than putting workers' wages into the pockets of the employer.
The unions’ solution – boycott Peugeot
Amicus and the T&G have tried to organise a boycott of the purchasing of Peugeot cars. Such an action is designed to try to convince Simple Simons in the union that the union is ‘doing something’ – ie, annoying the Peugeot management. No doubt it feels good to deliver the odd kick to the odd class enemy, but what does it achieve?
It is pure theatrics.
Worse, the whole campaign, waged through advertisements bearing the flag of St George, is designed to convey the message that the woes of the British working class are being caused by nasty foreigners, as if to say that capitalism would be fine if only it were all British owned. This mindless chauvinism, which permeates the thinking of much of British trade unionism, has a divisive effect on workers, who are thus encouraged to see foreigners as the cause of their misery rather than capitalism.
At Ryton, this has led to absolute absurdity. It so happens that so many Ryton workers have jumped at the redundancy package that there aren't enough of them left to fulfil the process of running it until the advertised closure date. Instead of closing the plant immediately, Peugeot is keeping the factory open by using casual, mostly Nigerian and Polish, agency labour. We are informed that some of the remaining old labour force have taken an unfriendly attitude towards these workers of foreign origin – for no other reason than that they are foreign – even though their employment is saving the old labour force from immediate redundancy!
It is so much easier to scapegoat poor, desperate and defenceless innocent workers than to face up to the actual enemy – ie, the capitalist class that preserves and defends the capitalist system of production in the interests of its own power and wealth, even though it condemns the vast majority of humanity to poverty, insecurity and war while at the same time destroying the planet on which we all live.
We urge British workers not to follow this path of scapegoating the innocent. It is the path of Nazism, and, quite apart from the shamefulness of it, manifestly cannot solve the problems of the British working class any more than scapegoating Jews solved any of the problems of the German working class.
Effective action is needed
In the meantime, clearly there is no time to turn all the various British and European unions into fighting forces in time to save Ryton or even, short of some miracle occurring, Ellesmere Port, which means that workers need to organise the type of action that either bypasses the unions or forces the unions into giving real support.
If backed up by a credible threat of sanctions, action which could possibly be effective is to call on the Labour government to take Ryton into public ownership and to carry on paying its staff – preferably to do useful work for the same salary as before, but if not to pay them by way of benefit as much as they were previously receiving for working. The consequences of failure by the Labour government to do so should be spelt out as:
1. a vociferous campaign to urge refusal of car workers and union members in general to vote for Labour Party members standing for office in the unions; and
2. renewed efforts to have unions disaffiliate from the Labour Party.
It is votes coupled with the influence the Labour Party has over the unions that are the key to well-paid government posts and other opportunities for self-enrichment for members of that party. Concerted action by the working class can deprive them of both, and the threat of this could therefore bring about some action on the part of the government to protect workers, with the consolation that even if such action failed in this regard, at least the working class would have consciously commenced the process of excising the baneful influence the class enemy exerts on the working-class movement through the Labour Party.
Capitalism has to go
Ultimately, of course, the laws of capitalism cannot be gainsaid. If the government could be forced to rescue all ailing industries and to protect jobs of their workers – if, in other words, capitalism was being run for the benefit of the working class – any capitalist economy would become uncompetitive and bankrupt itself.
The bourgeoisie will never allow that to happen. It cannot therefore be sufficiently stressed how necessary it is to spread the understanding among all workers that capitalism has to go, and that only socialism can replace it – ie, a planned economy geared to producing to meet workers' needs, rather than a market economy geared to generating profits for the few.
If the bourgeoisie finds itself unable to control the working class through the Labour Party, or some other ‘democratic’ outfit, it will seek to control it through some fascist organisation fuelled by racist demagogy, and the working class would then find it had jumped out of the frying pan into the fire. To avoid such a disaster, it is urgent to mobilise the working class to fight for their genuine class interests.
For the sake of the future, we cannot urge workers too strongly to join us in this struggle before it is too late.
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Footnote
According to The Guardian of 10 February 1999, "Worldwide there has long been overcapacity. More and more investment in new technology has reduced the workforce and increased productivity. In 1982 with far more workers the British industry produced 877,000 cars. Last year with more robots and computers, fewer workers, but far more plants, production rose to 1,748,305. the industry could have produced 2 million cars but the orders were not there. In the rest of Europe car sales are booming but Ford still had to go on a 4-day week before Christmas. In continental Europe after five years of ever-increasing sales there is still over capacity of 25 per cent". |
