The growing crisis in the global economy
The announcement by Vauxhall of 900 job losses at its Ellesmere Port plant, coming hard on the heels of Peugeot’s plans to shut its Coventry factory and NTL’s cutting of 6,000 posts at the cable company, is ample proof of the gale of economic recession blowing through Britain and the global economy.
Unemployment in Britain had already risen to its highest level since 2002, with 1.6 million officially out of work before these and other job cuts, including more than 10,000 in the NHS. Many more people do not figure in the official count because they do not qualify for benefits. Vauxhall's parent company, General Motors, the biggest US car company, is also cutting 30,000 jobs in the US. The carmaker lost $323m in the first three months of 2006, after losing $1.3bn in the same period of 2005.
Other signs of the new crisis in the global economy include the extreme nervousness on leading stock markets. The record plunge in share prices - following on from chaotic movements on currency markets in the wake of the US Federal Reserve’s latest interest rate rise - foreshadow the long-expected “correction” in global trading imbalances. The most dramatic of these is the US trade deficit. In Britain and other major economies, house prices clearly cannot continue their relentless, speculative upward march before a savage fall takes place.
Behind the turmoil in the global economy are tremendous imbalances and contradictions. These themselves express the anarchy of the capitalist system of production and exchange and include the growing inequality in wealth and consuming power within and between nations. While global firms churn out endless supplies of commodities, masses of people do not possess the money to buy up all the goods. So firms drive down costs further in a bid to reduce prices and capture markets. The over-production of cars has, for example, led manufacturers to quit Britain in favour of Eastern Europe or other lower-wage areas.
In the wake of overcapacity and declining opportunities to raise profits, investment has fallen, leaving the corporate sector awash with cash. Companies, previously always borrowers of others’ money to support expansion have become lenders. The flow of overseas investment has also reversed. Running counter to the rapid period of globalisation in the 1990s, resources are flowing from developing countries and emerging markets to finance the US deficit.
Predictably, the response of the leadership of the trade unions in Britain is to throw up their hands in horror at how global corporations like General Motors are treating their workforce. They have refused to countenance any serious action, even though their members are clearly ready for a struggle and have already rejected voluntary redundancy proposals. Instead, they will restrict their campaign to urging Vauxhall to make its new model at the plant.
Tony Woodley, general secretary of the Transport & General Workers Union, claims that the job losses in the car industry are the result of the fact that is easier and cheaper to sack British rather than, say, German workers. He ignores the simple fact that there are 5 million out of work in Germany, even with the statutory rights that they enjoy. All he could say on hearing the news about job losses was: “This plant, our industry and our country cannot afford to keep shedding skills like this." Derek Simpson, leader of the Amicus union, threatened to lead a boycott of Vauxhall cars if the Ellesmere Port plant shut down. That’ll have them quaking in their boots in Detroit.
Woodley and other union bureaucrats led a May Day march calling for enhanced rights to strike and to job protection under the banner of trade union and human rights. But they are not prepared to take any action against New Labour to obtain these rights after waiting nine years without success for the Blair government to give them even an old bone to chew on. The leader of the Trades Union Congress, Brendan Barber, has reportedly told unions not to campaign too hard for new union rights because it might embarrass New Labour and upset the would-be leader, Gordon Brown.
Meanwhile, their friends in government are busily whipping up anti-immigrant sentiment with endless stories about disappearing foreign criminals and unknown numbers of “illegal” refugees and asylum seekers in Britain. These essentially racist sentiments play directly into the hands of far right parties like the BNP who hold black and Asian people responsible for every social problem in Britain.
Challenging the power of the global corporations and their ruthless commitment to the bottom line has to form the heart of any strategy to defend jobs at Vauxhall and elsewhere. The corporations are clearly not responsive to pressure – political or trade union – but are driven solely by market conditions and shareholder value considerations.
An occupation of Ellesmere Port could, if linked to a call for support from other GM workers around the world, become a focal point for a struggle to transfer ownership and control of the corporation to those who work in the industry. Only then would workers be in a position to control their own employment destiny and society as a whole be able decide about the merits of car production in relation to the environmental crisis. This kind of campaign would also inspire all those threatened with unemployment or who are intensely exploited at work to take up the fight against their employers. It would also enhance the struggle to build a new, truly democratic political system that guarantees social and human rights instead of sacrificing them on the high altar of profit.
19 May 2006
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