Collapse of Rover: The ruling class won’t rescue workers from the capitalist crisis

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After a week of uncertainty the fate of the workers at the MG Rover in Birmingham was decided: 5,000 to be made redundant with an estimated 15-20,000 jobs threatened in the supply industries and local community. On the same weekend, the retailer Littlewoods announced the closure of its national chain of Index stores with the loss of some 3,000 jobs over the next 6 months. April may well be the cruellest month, but the coming months and years hold new storms that herald wider and deeper attacks on the working class.

Workers should have no faith in the ruling class to rescue them from capitalism's crises

When BMW decided to sell off the loss-making parts of MG Rover in 2000, the workers were strongly encouraged by the unions and the Labour government to put their faith in the 'Phoenix Four' of 'proud, British entrepreneurs' who would keep the workers in jobs rather than have the company gutted by the Alchemy group. But as World Revolution said at the time, workers "cannot rely on the Phoenix bid.No boss, new or old, private or state, can guarantee jobs whatever improvements are made in productivity, whatever concessions are made on wages" (WR234, May 2000, p.1).

The only surprise in the situation is how long MG Rover has actually managed to survive. Faced with the need to attract new investment, MG Rover sought to clinch a deal with the Chinese company SAIC. This spring the workers were once again exhorted by the unions to put their faith in the bosses and the Labour government in their forlorn efforts to convince SAIC to accept the deal. When the Chinese pulled out of the negotiations the bosses admitted defeat and administrators were appointed.

Very quickly, both Blair and Brown were on the scene in Birmingham to appear to be doing all they could to restart negotiations with the Chinese and offer a œ150 million package to 'soften the landing'. The timing of the Rover crisis - falling during the run-up to the General Election - poses certain difficulties for local Labour MPs, but in the grand scheme of things New Labour are assured a comfortable majority and the concern showed for sacked workers and their families by the government will evaporate like the dew on the grass in Parliament Square on the morning of May 6th.

False Alternatives

Following the collapse of Rover there have been the usual calls from the leftists such as the SWP to nationalise the company. These have been given credibility by the likes of Mark Seddon, a member of the Labour Party's National Executive Committee, who points to the French and Chinese states who, "believe that manufacturing and car making are far too important to be left to anything as fickle as market forces, which is why Renault, part state owned and state aided, is such a great success" (Guardian, Comment, 14/4/05). However, as we said in 2000, "Calling for nationalisation, for the state to become the new boss, is not the answer. Nationalisation has been used in the past, but it definitely didn't benefit workers. Every time Rover changed hands (and name) in the past there have been job losses and increases in productivity, but the 54,000 redundancies when Leyland was nationalised in 1974 were among the worst ever" (ibid).

There have also been calls this time around for MG Rover to be run as a workers' co-operative. According to George Monbiot, darling of the anti-globalisation movement, the classic contradiction between the interests of 'absent shareholders' and the workers is being moderated as broader share ownership encourages a wider concern for the long-term health and stability of the company.

What these false solutions have in common is the fundamental belief that capitalism can somehow be reformed and that these reforms - carried out by the state or the employees - are steps towards 'socialism' or an 'ethically oriented' capitalism. For the likes of Monbiot, co-ops have the advantage that, "At least within the firm wealth is widely distributed. An economy dominated by co-operatives would be a more equal one than an economy like ours" (Guardian, 'A Vehicle for Equality', 12/4/05).

However, the true situation is that globally there is chronic over-production in the car industry. As we wrote last autumn at the time of the job losses at Jaguar in Coventry and GM in Germany, ".the Austrian automotive analysts Autopolis estimate that 'The world as a whole has about 30% more car factories than it needs. That's about 170 factories around the world, and most of these, quite frankly, are surplus to requirements' (BBC Online, 14/10/04). These problems are not just restricted to the car industry in Europe. Swathes of jobs are being cut across Europe and the US. The attacks are not just limited to employment, but also the 'social wage': unemployment benefits, pensions, health care etc." ('Class solidarity is the only answer to massive redundancies', WR280, Dec/Jan 04/05).

All capitalist cats get fatter at the expense of the working class

Only last year, the bosses of Phoenix were applauded by a government minister for taking risks to keep British workers in jobs, and their 'enlightened accounting techniques' were saluted. Nonetheless, as one correspondent from The Times wryly noted, "The only thing that has risen is their bank balances", while the workers' pension fund is in deficit to the tune of œ67 million. Once the scale of the job losses became clear a veritable witch-hunt was unleashed by the media and unions to scapegoat the Phoenix Four 'fat cats'. The Financial Times branded them 'the unacceptable face of capitalism' and the government announced an investigation into the company's shady accounting practices.

But workers should not for one moment have any illusions that there is an 'acceptable' face of capitalism. As an exploiting class, the bourgeoisie quietly rob the proletariat of billions of pounds worth of unpaid labour every day! In the words of the Communist Manifesto, the proletariat is "a class of labourers, who live only so long as they find work, and who find work only so long as their labour increases capital. These labourers, who must sell themselves piecemeal, are a commodity, like every other article of commerce, and are consequently exposed to all the vicissitudes of competition, to all the fluctuations of the market. The more openly this despotism proclaims gain to be its end and aim, the more petty, the more hateful and the more embittering it is." ('Bourgeois and Proletarians'). The closing phrase will not be lost on the Rover workers who have found out not only that they've lost their jobs - but also that they'll still have to pay back the loans they took out from the company to buy Rover cars!

The perspective of massive struggles

It is interesting to note what has changed in the historic situation over the past few years. In 2000, the unions were keen to organise a mass demonstration in Birmingham against the threat to Rover. Back in 1992, when the wave of pit-closures was announced, there were mass demonstrations in support of the miners. Why isn't there a protest movement now, after the largest single announcement of job losses in the UK for 5 years? Why, when redundancies were made at Jaguar last autumn, were the unions so keen to absorb the anger of the workers and delay the demonstration in Coventry? Why, when tens of thousands of workers in the Civil Service voted strongly in favour of strike action in the face of a planned 100,000 job losses and pension reforms, did the unions agree to cancel strikes in March when the government agreed to re-open negotiations? Why were national strike ballots among teachers, lecturers and local government workers cancelled soon after? Why were the government and unions in Germany so keen to reach a rapid end to the disputes at Opel and Bochum?

To begin with, the ruling class is increasingly sensitive to the fact that deep within the working class there is a growing unease about the precarious nature of their jobs and pensions. Whereas five years ago British unions could claim that it was easier to sack workers here than anywhere else in Europe - due to the low Euro and stronger employment regulation - today the bourgeoisie is keen to hide the fact that unemployment is rising rapidly on the continent. In France, 10%. In Germany 12.5%, over 5 million. According to one German academic, "This figure of more than 5m unemployed in this country is very high. Unemployment figures reach 20% in parts of former Eastern Germany. The last time in history that we had such an enormous figure was in the early 1930s, the Great Depression, and I simply thought that this was atrocious for our country." In Britain, there has been a sharp drop in business confidence and a larger than expected increase in unemployment in March.

A spectre is haunting Europe: the spectre of massive struggles, of an unleashing of seething tensions, of anger and discontent. What the ruling class fears is wider numbers of workers beginning to come together, to see the common threads in the attacks raining down upon them; in the wars and conflicts engulfing wider areas of the globe; in the destruction of the environment; the absolute bankruptcy of the capitalist mode of production.

Spencer, 28/4/05.