Weekly Worker 572 Thursday April 14 2005

Politics, not platitudes

Five years ago, when BMW proposed selling off MG Rover to venture capitalist Alchemy, the workers faced downsizing to sports car production only. That would have meant a possible 6,000 redundancies at Longbridge and further job losses in support industries of between 30,000 and 80,000. Alchemy made no secret of the fact that it intended asset-stripping the company.

Trade union delegations went to Germany to plead with BMW to continue with the British operation, save jobs and not to sell to the Alchemy asset-strippers. As we said at the time, the bottom line for BMW was profits, not workers’ jobs. National volume car production had already been obsolete for decades. Volume car production was increasingly global and there was already a crisis of overproduction.

Worldwide there was a whole series of mergers - BMW’s takeover of Rover was a failed attempt at restructuring in order to compete with European rivals. An alternative capitalist solution was small-scale niche production of sports and luxury cars - but even here companies like Jaguar, for example, were being swallowed up. For the thousands of engineering workers in the Midlands there was no economic solution - only a political one.

Yet New Labour was not going to adopt a political solution unless forced to. Its pro-business doctrine, based on the utterly cynical and inhuman Thatcherite form of capitalism, was, and is, its guiding principle. Great effort had been expended to show capital that Britain was a safe bet for foreign investment. So far as the Blairites are concerned, the market rules. And unfortunately the union bureaucracies’ ties to New Labour, in 2000 as today, leave them bereft of a strategy - apart from desperate appeals to capital’s ‘better nature’ and thus a deference to profitability over and above workers’ needs. That is, class collaboration.

This lack of anything resembling an independent working class strategy, combined with the complete failure to challenge the anti-trade union laws, only served to sow illusions and engender passivity amongst the workers. So, when a group of capitalist ‘angels’ appeared in the guise of Phoenix Venture Holdings (PVH, the current owners of MG Rover) to save production at Longbridge, Tony Woodley (now TGWU general secretary), brokered a deal. Woodley was lauded for having saved thousands of jobs and having secured a future for volume car production in Britain. They were going to make national capitalism work.

However, according to professor Peter Cooke of Nottingham Business School, “When they bought Rover from BMW in May 2000, no-one was under any illusion that the firm still needed to shelter under the wing of a bigger player” (quoted on BBC 1 news).
Five years on and now bankrupt, MG Rover seems to have had many of its assets stripped by the angelic PVH. Most of the land has been sold; so too have the rights to build two Rover models - to the Shanghai Automotive Industry Corporation (SAIC) - along with rights to the powertrain engine and transmission systems. There is a £67-million hole in the workers’ pension fund that could grow to £400 million if the company is wound up and, according to The Guardian, £200 million is mysteriously missing from the company accounts (April 9). “There isn’t really a great deal left,” says Dr Tom Donnelly of Coventry Business School.

Phoenix has failed to meet any of its business targets over the last five years. Car production has declined and losses were recently running at about £25 million per month. However, the original four directors of PVH seem to have done all right: they established their own £13 million retirement trust fund and awarded themselves large salaries and other benefits - all to the tune of about £40 million each. A Financial Times editorial sums it all up - the Phoenix directors did what any “ruthless entrepreneur would have done … strip assets, take cash out early” (April 8).

Several attempts were made to strike up partnerships with foreign car manufacturers in order to achieve the volume and some modicum of global reach needed to approach profitability - the most notable being a proposed £1 billion joint venture with SAIC. It was the collapse of last-ditch talks with the Chinese state-owned company which brought Rover’s terminal illness to its final crisis. Other partnership candidates included India’s Tata Motor, which does have a deal with Rover to build one model in India, and another Chinese firm, Brilliance. Apparently PVH had also looked at moving some Longbridge production to Poland.

Union bosses and ministers became concerned when MG Rover’s auditors said that if the talks with SAIC did not go ahead the firm might not continue. A visit to China by Patricia Hewitt and Tony Woodley, followed by other ministerial visits designed to effectively broker a takeover of MG Rover by SAIC, stalled. Panic set in when the department of trade and industry learned that Rover’s money was due to run out by April 13. When some suppliers pulled the plug last week for fear of not being paid, production stopped and in came the administrators.

So Longbridge workers and many others again face losing their jobs. Potential redundancy payments are set at a paltry £280 per year of service up to a maximum of 12 years. It is interesting that this all happened just days after the government’s pension compensation scheme came into effect, although it is in danger of being overwhelmed by the pension gap in MG Rover.

SAIC denies the talks were about a takeover or even a partnership - it was just a joint venture. It already has links with two big players, Volkswagen and General Motors, but from Rover it stood to gain intellectual property rights to new technology and engine design denied it by the big two. Also it could have provided a possible toehold in the European market for Chinese cars. However, SAIC became concerned about the financial viability of MG Rover and certainly did not want to pick up a possible £400 million pension tab if it went into administration. Tony Woodley is quoted on BBC news as saying he hoped that SAIC could be persuaded to resume talks now that certain financial liabilities - such as pension costs - had been reduced after Rover went into administration.

But SAIC is now sitting pretty - it bought some of the intellectual property rights and intends producing two Rover models in China. It can also cherry-pick MG Rover assets at possible knock-down prices while the British taxpayer is saddled with the £400 million pension bill.

The unions, government and administrators still hold out vain hopes that SAIC is their only (profit-driven) hope of salvaging something out of MG Rover. The receivers say others have expressed “an interest” in the company - one of them is the original venture capitalist, Alchemy. The vultures gather.

When, five years ago, the workers were presented with a ‘choice’ between a bunch of asset-strippers and a union-sponsored rescue package, it was an illusion. The real choice was surrender to market forces that would strip Rover to the bone or fight for workers rights’ and workers’ needs.

Five years on, a new crisis - but very little has been learned. This time it has all come to a head at the start of a general election campaign. The loss of Britain’s last remaining ‘native’ volume car producer and the potential loss of over 30,000 manufacturing jobs in an area with a number of marginal Labour seats is bad news for Tony Blair - especially when he is going to the country on Labour’s economic record.

Trade and industry secretary Patricia Hewitt jumped the gun on April 7 and announced that the receiver had been brought in to MG Rover denials. Later MG Rover did call in administrators and Ms Hewitt claims confusion in the Rover team. However, there is a suspicion that Hewitt was attempting to force the company’s hand, hoping the political fallout would be overshadowed by the pope’s funeral and royal wedding.

The government has set up a task force and provided a financial package for suppliers and the payment of wages for one week - this is likely to be extended. New Labour is obviously intent on keeping the patient alive only while the election campaign is on. Then it will be back to the ruthless law of profit.

This latest Rover crisis highlights New Labour’s fallacy that the market holds the promise of a solution. That is why the fight to save jobs, workers’ rights and conditions must be politicised and raised to the level of the state - there is no commercial solution (beyond perhaps limited sports car production with less than 1,000 jobs). There should be a campaign to renationalise Rover. Not as a commercial enterprise (state capitalism), nor as some fantasy step towards state socialism. It should be nationalised without compensation under workers’ control - to defend workers’ jobs and rights, to save their communities, force the government to act and collective capital to pick up the bill.

The most useful tactic in such a struggle is to actively occupy all Rover plants and offices. This has a number of benefits. It keeps the workers together in an active struggle in which ideas and new forms can democratically arise. It is more difficult to divide and rule or whittle away at small groups with redundancy packages and deals. It breeds and trains activists. It encourages and inspires solidarity. It makes it more difficult for asset-strippers or purchasers to chase private profit at the expense of the workers.

The balance of class forces do not favour us at present and there are numerous strategic, organisational and ideological obstacles to be overcome. At the rank and file level a spontaneous occupation - even by a small minority could act as a spark to ignite a general fightback.

It is decisive moments like this that reveal the utter bankruptcy of the union bureaucracies. Completely tied into the neoliberal agenda, they collaborate in the slow death of an industry and sow false hope, disillusion and passivity. Unfortunately trade union leaders do not have fighting politics.

On the TGWU website we read a joint statement in the names of Hewitt, Woodley and Derek Simpson (Amicus): “The government has agreed to assist and work with the administrator and the unions who will be developing with all reasonable speed a realistic business proposition for SAIC and other possible purchasers to consider” (my emphasis).

An indication of Woodley’s expectation of defeat and the inevitability of redundancies can be gleaned from another statement quoted in The Guardian: “Redundancies at this stage would be disgracefully premature” (my emphasis, April 11). Woodley’s saving of Rover jobs and manufacturing five years ago was just a temporary postponement of the execution. For his part, Midlands TUC regional secretary Roger McKenzie, citing a list of recent job losses, told workers it was not their fault - in fact they should be proud. How inspiring!

Once the needs of profit-making are recognised as primary, how can you possibly counter the arguments of bourgeois economic ‘experts’? The total subservience to the rule of capital leaves workers and their union leaders ideologically disarmed. We need independent working class politics - what workers need, not what can be afforded by their exploiters. The consequent dealing for concessions and crumbs voluntarily binds the unions to service capital. Instead we need to fight - and that means above all we need to challenge the restrictions on our ability to fight imposed by anti-trade union laws.

Whilst there are some damaging nationalist sentiments, particularly amongst the small-scale suppliers, Rover car clubs and the more stupid commentators, it is not as bad as last time. Five years ago it was all the fault of BMW and those nasty Germans, but now the big hope of union bosses, government ministers and no doubt many workers is the China-based SAIC - but it is an international perspective within the confines of the market and private profit.

Nationalism also rears its ugly head in the bankrupt policies of ‘official communism’. A Morning Star editorial, after comparing the differing levels of manufacturing industry in Britain, Germany, the US and France, declares: “Key to these discrepancies is the decision of the British financial sector to turn its back on investment in this country, preferring to chase higher profits in the rest of the world” (my emphasis, April 7). If only we could all pull together!

Our principle is class, not nation. Linking up with workers in other countries, forming Europe-wide unions and a European workers party - a Communist Party of the EU.
At least the Morning Star/Communist Party of Britain has a programme - even if it is bad. Look at what Respect national secretary John Rees, a leading member of the Socialist Workers Party, has to say about the Rover crisis: “This bungling, fat-cat-loving government has once again let down the very people it was elected to protect and defend” (Respect website). Wonderful!

Of course the old militant shop stewards movement in the once huge car manufacturing industry was destroyed in the Thatcher years. On one level it is missed and there is an obvious need for it to be rebuilt - but on a qualitatively different basis. The narrow, class collaborationist struggles led by the old ‘official’ Communist Party were the product of its nationalist and reformist programme. Once good working class militants like Derek Robinson (‘Red Robbo’), effectively operated as the rank and file wing of class collaboration. They were just tougher and more reliable than the top bureaucracy - but still constrained within the existing order. Their economistic struggles rarely rose to the political - and if they did they floundered through being ideologically and politically unprepared.

This brings us to the desperate need for an independent party of the class - a Communist Party able to theorise, generalise and cohere struggles around a revolutionary programme. A powerhouse of ideas able to politically lead the class in struggle.
Alan Stevens

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