Job cuts and factory closures; the car industry in Britain

As automation and overproduction combine to wipe out industrial jobs, what is the answer to this seemingly insoluble problem?

According to the Society of Motor Manufacturers and Traders (SMMT), 186,000 workers are directly engaged in manufacturing jobs in the British car industry, with 856,000 workers to be found in the wider industry, from sales executives to garage mechanics.

It’s an industry worth a whopping £82bn (turnover), but the global crisis of overproduction means that there are many more cars sitting on forecourts than can be sold, and fewer workers with the cash to buy them.

World market

A staggering number of vehicles for domestic and industrial purposes are now produced on a global scale. Britain sits outside the top ten countries for vehicle production, the peak of production in recent years having been around 1.7 million vehicles.

That number is dwarfed by those of local rivals Germany and Spain, which turn out 5.5 million and 2.8 million vehicles respectively. And those not inconsiderable numbers would be mere monthly returns in China, which turned out 29 million vehicles in 2017.

The only rival to China’s supremacy at the top of the leader board comes from the US, with 11 million.

China and the US, markets and tariffs

For every ten cars made in Britain, eight are exported abroad. The European Union (EU) takes the largest chunk (54 percent) followed by the US (16 percent) and China (7.5 percent).

The slump in sales to China is worrying many of the biggest car manufacturers. China’s Association of Automobile Manufacturers has recorded that January sales (2019) are down 18 percent on last year, extremely bad news for General Motors (Chinese sales down by 10 percent), VW (down 3 percent in January alone) and Jaguar Land Rover (JLR).

A general slump in the Chinese market has been ongoing for the past several months. The China slowdown is exacerbating the general worldwide crisis of overproduction, and the fear of tariffs from the US (the second biggest destination for cars exported from Britain) cuts off another market in which to shift the millions of shiny new cars.

US president Donald Trump’s electoral success was based upon promises he made to the US working class that he would protect key US industries and jobs, not least in the US car industry. The crisis of overproduction is forcing the United States to take measures to protect artificially the uncompetitive US production from its rivals.

This process has political repercussions, and accusations that German car production poses a ‘national security threat’ to the United States is no mere rhetoric from an out-of-control US president – rather, it is the sober assessment of the social strife that could accompany a complete collapse in the ability of the US to shift those 11 million vehicles a year.

The Los Angeles Times recently described the abyss into which chaotic capitalist production is pulling the world: “President Trump received the findings of a probe into whether imported vehicles pose a national security threat, as the European Union threatened retaliation for any tariffs the Trump administration might impose.

“Trump has 90 days to decide whether to act on the findings, which were delivered by commerce secretary Wilbur Ross on Sunday with no hint of the findings. Commerce started the investigation in May under section 232 of the Trade Expansion Act — the same provision the administration used last year to slap tariffs on steel and aluminum.

“Trump has threatened levies of as much as 25 percent on foreign-made vehicles. American and foreign-based auto manufacturers and dealers have lobbied against it. Companies and governments from Europe to Asia have warned Trump that tariffs on car imports would hurt the US economy and disrupt the global auto industry, which is already mired in a slump.

“An auto trade war would deal a blow to carmakers including General Motors Co and Toyota Motor Corp, which have built their supply chains to take advantage of countries with low duties …

“If European exports are hit by US actions, the EU will ‘react in a swift and adequate manner’, Margaritis Schinas, a spokesman for the European Commission, told reporters in Brussels on Monday. The EU has prepared tariffs on a total of $23bn in US goods should Trump follow through on his threat, which would chiefly hit Germany.” (Trump will decide if auto imports are a national security threat, as EU retaliation looms by Andrew Mayeda, Jenny Leonard and Richard Bravo, 18 February 2019)

Brexit

British based manufacturers and their woes appear like small fry compared to the global trade war described above. But the production of around 1.5 million vehicles every year in Britain is a part of that same competition, and it keeps thousands of productive workers with a roof over their heads.

The recent announcements of job losses and commercial cutbacks have been made by the biggest of the British producers. In 2017, JPR, Nissan and Honda were all in the SMMT Top 5 in terms of production, with JLR alone producing more than half a million vehicles a year.

There are also the problems associated with Brexit, and a no-deal Brexit in particular, for an industry heavily reliant on a continent-wide component supplier base.

At least 10 percent of those employed in the British automotive sector are from elsewhere in the EU, and the extensive supplier base and the system of ‘just in time’ component delivery are possible only with the fiercest competition from across the European Union.

The ‘just in time’ system brings in £35m-worth of parts each day to the assembly lines of British car manufacturers. These components have come from across the EU – a screw from here and a bolt from there, a zinc-coated nut from Spain and a plastic plug from Poland.

An intricate and polluting convoy of 1,100 trucks rolls into Britain each day so that Tom Smith on his fork truck at Jaguar in Castle Brom can drop a pallet of washers to Felix Jezniak, just as he tips his last washer from its oily box and affixes it to his 20th vehicle of the day.

The vast, intricate and integrated system of supply is a wonder to behold, and if man could only apply himself to producing with such efficiency the things he needs for a healthy and enjoyable life rather than for the enrichment of a handful of shareholders, then the world would be veritable Garden of Eden.

An industry in decline

In 2006, when the CPGB-ML marched with Peugeot workers through Coventry, it seemed as though the writing was on the wall for the future of car manufacturing in Britain.

At that time, Coventry was losing its last major car manufacturing facility, having once been the centre of the British automotive industry, recognition of which saw it twinned with Detroit and Stalingrad after the second world war.

As Peugeot shut down and thousands lost their jobs, it looked as though what was left of British car manufacturing would follow suit. The surprising aspect of the terminal decline of the British car factory has been that it has taken so long.

In part, it has benefited from access to the Chinese market and the ability to exploit labour from across the EU – such exploitation being often referred to as ‘frictionless’. Despite this, there really is no cure for a terminally-ill patient.

December 2018 saw the leaked news from JLR that 4,500 jobs were to be lost, and it was not long before Nissan announced it was cancelling plans to make its new X-Trail model in Sunderland.

As the dust settled from these announcements, Honda dropped the bombshell that it was packing its bags and taking a one-way ticket back to Japan, dropping 3,500 workers onto the dole, with thousands more from the supply chain getting ready to join them.

The smaller, niche-end of the industry; the Aston Martins and Bentleys of the industry, are also making ominous noises.

Blaming Brexit

With a no-deal Brexit looming, the car makers and sections of the ruling class are lining up to blame Brexit for job losses, with 2019 looking like the best year to bury bad news. Even when the manufacturers insist it has nothing to do with Brexit, the impartial press is ready to rewrite the headlines,

“Whatever Honda’s reasons for deciding to close Swindon, the UK car industry clearly feels threatened by a possible no-deal Brexit,” wrote Jasper Jolly for the Guardian recently. (Honda’s Swindon factory closure threatens 7,000 jobs – as it happened, 19 February 2019)

Despite all the propaganda from the manufacturers and corporate media, it appears that the desire for Brexit amongst British workers shows little sign of waning. Leaflets addressing workers at JLR and Bentley have been distributed by CPGB-ML activists at these factories, and workers have responded with near unanimous approval for our slogan ‘Don’t blame Brexit’.

Several thousand copies of the Birmingham Worker addressed assembly-line workers in these terms: “JLR, Bentley, Aston Martin and many other big players in the car industry are fighting an anti-Brexit propaganda war, blaming everything on Brexit. If you listened to these powerful giants, whose businesses are worth billions, you would be led to believe that before the British people voted to leave there had never been any problems in the car industry!

“The facts are different. The facts are that there is a huge crisis in the car industry, not because of Brexit, but because of two main factors. Firstly, the manufacturers have made more cars than they can shift.

“Whilst the overproduction crisis preceded Brexit and will get worse with or without Brexit, Bentley are not lying when they warn about possible disruption of supply lines – eg, engines imported from Germany. However, disruptions or no disruptions, there are too many Bentleys and not enough millionaires to buy them.

“Secondly, the large, powerful car producers are constantly looking for excuses and opportunities to outsource jobs and export their capital to foreign countries where labour and costs are cheaper. The manufacturers and their shareholders are motivated by making bigger profits.

“Just now, having made more cars than they can sell, the manufacturers see their opportunity to jump ship and blame it all on Brexit!

“In recent years JLR, Aston Martin, Bentley and other manufacturers have made billions of pounds in profit. These companies must not be allowed to throw hundreds of workers who’ve generated these huge profits straight onto the dole.

“Workers must be kept on full pay and manufacturing jobs protected. Companies that have made huge profits must not be allowed to undermine the democratic will of the British people to Leave the EU.”

“Defend manufacturing jobs. Defend Brexit!”

Adding to the woes of the British car industry is the slowdown in the sale of diesel cars after widespread negative press and pie-in-the-sky promises of an all-electric future by the government, which at the present moment is struggling to build a single functioning power plant at Hinckley Point, let alone the dozens of new plants that will be needed if Britain’s cars are all to run on electricity.

Cultural changes in cities across Britain are also having an impact, as many are finding it more affordable to install Uber on their phones than to take out huge finance on cars they cannot truly afford.

But of all the factors placing pressure upon the car industry in general and the employment of men and women in particular, the ongoing drive to automation, the use of robots and machines, is the mechanism by which labour is so profitably replaced.

Automation

In a research paper entitled the ‘Digitalisation of the automotive industry’ in 2016, mega-accounting firm KPMG and the SMMT outlined: “By fully embracing digitalisation, the automotive sector stands to gain £6.9bn every year by 2035. The cumulative total benefit to the economy could be £74bn by 2035. This is a significant prize …”

The KPMG paper outlined the moves taken by governments (principally in the imperialist states: the US, German, British and Japanese) to push for extensive digitalisation of the production process in collaboration with their respective academic institutions and industry.

The report envisaged a world where robots and automated production processes would be effectively planned and regulated by “predictive analytics, cognitive computing and artificial intelligence powered by algorithms that have become sufficiently sophisticated and validated through real-world examples … now able to make decisions and predictions based on this real time data.

“In the future, the advent of deep learning – a high performance, dynamic way of computerised decision-making that can learn patterns automatically and more accurately with the more data you give it – will enable further augmented decision-making.”

This future world has a sensor on every box to inform another sensor (hundreds of miles away) that it needs to start 3D printing a few more plastic plugs. Other sensors will note when the new plugs are ready and a photo-electric sensor somewhere in Slovakia will then despatch a robot-controlled Google-driven lorry to bring those parts ‘just in time’.

Sensors on robots, and no doubt sensors on people, will be able to ensure that profits are maximised, and with all these sensors organising production and many robots actually undertaking the production process itself, there won’t be much room left for working men and women.

With more workers forced out of work, there will be less money coming in to buy the things the sensors are churning out. The prisons will be bursting and, in the words of Lord Byron, workers will be “nefariously guilty of lawfully begetting children whom, thanks to the times, they are unable to maintain”. (Speech to parliament in defence of the frame-breakers, 27 February 1812)

Time to face it, capitalism must go

The drive for profit is leading to the wholesale impoverishment of the human race. In its drive for maximum profits, mankind is overproducing all the things it does not need.

Rather than plan production in a rational way so as to ensure a constantly rising standard of material and cultural existence, the chaos of private production threatens the survival of our species and the planet.

The struggle against capitalism is a struggle between the working classes and the capitalist class. This struggle has now raged for more than two hundred years.

In the 18th century British workers were faced with a similar threat from technology. Our recent ancestors were thrown out of work, out of factories and mills, with the introduction of new technology, and their response was to attack this technology, to smash it up and destroy it.

These workers were known as Luddites, and they led a fierce and heroic battle with the police, army, manufacturers and government. In Nottinghamshire, weavers who made frames for the manufacture of trousers (stockings) faced death for struggling to protect their livelihoods.

The struggle led the great poet Byron to write:

Men are more easily made than machinery –
Stockings fetch better prices than lives –
Gibbets on Sherwood will heighten the scenery,
Showing how Commerce, how Liberty thrives!

Some folks for certain have thought it was shocking,
When Famine appeals and when Poverty groans,
That Life should be valued at less than a stocking,
And breaking of frames lead to breaking of bones.
If it should prove so, I trust, by this token,
(And who will refuse to partake in the hope?)
That the frames of the fools may be first to be broken,
Who, when asked for a remedy, send down a rope.

An Ode to the Framers of the Frame Bill, March 1812

For all the heroism of our ancestors, they were ultimately unsuccessful in that struggle. History teaches us that to protect jobs and for dignity of labour we must direct our blows towards the capitalist class and not just its property.

This class of parasites does not work but collects through dividends, shares and taxes the wealth produced by the working class.

Our working class should draw inspiration from the workers of France, who have so militantly expressed their outrage these last few months with the protests of the yellow vests.

Occupations, strikes, blockades … disruption of the capitalist system of profit-making is the only way to extract concessions from the ruling class.

In tandem with this rebellion must be the building up of the forces of the communists, the advanced section of the workers, which understands that it is necessary to turn the economic crisis into an all-out political rebellion.

The aim of the communists must be the armed insurrection of the working people, for the seizure of state power. Britain today is sleepy, and the British working class is idle and silent in the face of the abuses it is suffering; but if Donald Trump can appreciate that the fierce competition between the capitalists themselves creates the conditions for the national security of the US imperialists to be threatened, then we can take some consolation from their discomfort while working to bring their worst fears to fruition.