Car industry: GM pulls out from Opel/Vauxhall sale

Workers threatened with blackmail again

Thousands of workers demonstrated in Germany on Thursday 5 November, against the threat by GM to cut jobs and wages, after the company pulled out of the sale of Opel/Vauxhall. In Rüsselsheim (German Opel HQ), 10,000 gathered to show their anger. Demands to defend their collective bargaining agreement and save the plants met with much applause. But Klaus Franz, chair of the all-German Opel Works’ Council, as well as proclaiming resistance to GM’s plans, used a lot of his speech to praise the ‘co-operation’ of the Merkel-government. Franz and the Minister-President of Hessen, Koch (CDU), lauded eachother, as Koch applauded the preparedness of the works’ council to make concessions to save the now failed Magna deal. In Bochum, workers rallied inside the plant and had to listen to the CDU Minister-President of their federal state, Rüttgers.

Uncertainty and fear of loosing their jobs has plagued the Opel/Vauxhall workers over a long period. Now, after seven months of negotiations, General Motors has pulled out of a deal to sell Opel/Vauxhall to the Magna-Sberbank Austrian-Canadian-Russian consortium. With this, the old plans of GM have come back onto the table – “Project Renaissance”, which aims to cut 30% of expenditure. This would mean the losses of at least 11,000 out of the 50,000 Opel/Vauxhall jobs in Europe and the threatened closure of plants in Antwerp (Belgium), Eisenach and Kaiserslautern (in Germany), Luton (England), as well as severe cuts in other plants like Bochum (Germany).

GM is again blackmailing the workers with the demand, ‘make concessions or you will suffer when Opel/Vauxhall goes bankrupt’. This twist now adds to the uncertainty and fear which fuel the workers’ anger.

Nationalist approach of union leaders

The rhetoric of the union leaders has drastically varied from one country to another. While the General Secretary of UNITE in Britain, Tony Woodley, praised the outcome as the “best deal for Britain” and Solidarnosc in Poland showed confidence about the future of the plant in Gliwice, a Spanish works council member, Pedro Bona, was quoted as saying that he had had enough of the continuous uncertainty. In Austria, the commentary was mixed. The unions had put their hopes in the Magna deal, but the crisis already being experienced by Magna in Austria itself made workers in the Opel factory more critical about the planned fusion. German union officials and works council members have seen their strategy collapse. Warning strikes in Germany on 5 November immediately followed GM’s U-turn. Works councils and unions have called for a day of action for all the 25,000 workers at the four locations in Germany. A few days before the GM decision, leaders of the German works council even spoke of a “general strike” at Opel if it was not sold to Magna.

The many and contradictory statements of the union leaders, varying along national lines, represents nothing new in the developments over the last years at Opel/Vauxhall. However, it represents a big threat for workers, as it shows that all the claims of the unions to oppose workers being played off against each other, are mere words, not deeds. In fact, the aim of the union and works council leaders was to protect their own local plants. After the German trade union bureaucracy refused to show interest in the problems of workers in Britain, now British Unions celebrate GM’s U-turn without any more interest in the problems for workers in other countries. The result is a stronger position for the GM bosses and a worsened situation for all GM workers.

In effect, the differences between the Magna deal and the current plan to keep Opel / Vauxhall with GM are not really huge as far as the workers are concerned. For workers in Germany, the Magna deal also included the loss of 4,500 jobs – accepted by the works council. For British workers the 5,500 jobs at Vauxhall in Ellesmere Port and Luton have not been rescued. The plant at Luton in particular has a question mark over it under the plans of GM.

The refusal of union leaders to adopt an international strategy has led to severe problems for the workers. The outrage that exists in Germany is not being used to strengthen the struggle and fight the cuts. Instead, it can be used by the government to play on national divisions. This nationalist approach has led to a situation where workers in Britain and Poland welcome a development that still puts thousands of jobs in their plants at risk. Management can continue with their divide and rule policy, not only between countries but also between different plants in the same country.

GM to “grab opportunity” of crisis

The background to the current situation is the capitalist crisis and over-capacity in the car-industry in particular. A commentary in the Financial Times on 4 November put it very bluntly, GM “must now grab the opportunity provided by the financial crisis to restructure its European operations in a sweeping and non-politicised way. That means sticking to earlier plans to cut up to 10,000 jobs, in the commercially most appropriate locations, and reduce overcapacity by closing two or three of its nine European car assembly plants.”

However, sections of the German capitalists also welcome the development. Die Welt, one of Germany’s bigger newspapers, has commented, “All this discontented ranting about the changes in the (Opel-Magna) deal just makes the German people more skeptical about state-sponsored rescue packages. Which is why this thunderclap from America is actually a healthy kind of shock for our politicians.”

After recovering from bankruptcy with the help of billions of US taxpayers’ money, cuts of 50,000 American jobs and concessions from the UAW union, the GM management feels again strong enough to rehabilitate GM as an international player.

GM seemed for months to be willing to sell Opel/Vauxhall, as well as Swedish company, Saab, that it owned. But as soon as they regained their ground, their aspirations to compete internationally on all markets, including Europe and Russia’s, made keeping Opel/Vauxhall a more attractive option. The now mainly US government owned GM feared giving away technological knowledge to Russian competitors. Opel is also the core of GM’s research and development into small and compact cars, which are crucial to the strategy of the car industry for the coming years.

GM’s decision to keep Opel/Vauxhall will begin a new round of battles between the big international car companies. For auto workers, this will be a period of further increased pressure – and increase the need to fight back.

GM will now try to divide workers in Europe to implement sackings, reduce wages, worsen working conditions and pit governments against eachother, to get the most out of them. The model for that is what the works councils have already accepted in the Magna deal: €1.6 billion in cutbacks (including a cut in labour costs of €265 million every year for the remaining employees) and a cut in the workforce of more than one fifth.

In fact, all the union and works council leaders accepted the cuts. In the “memorandum of understanding”, which was signed to make the Magna deal possible, the German works council gave their signature and accepted the “need” for job losses. It spoke only of an “attempt” to avoid dismissals. They only tried to export as much of the cuts as possible to plants in other countries. Through this, they accepted the rule of profit and allowed themselves to be used by their national governments.

Klaus Franz has now demanded the immediate payment of wage increases, 4.2%, agreed under collective bargaining, which he had earlier accepted in order to forego to help the Magna deal. He said, “a way back into GM is not something we will help to shape, instead we will focus on our classical function of protecting the workforce”. However, with his strategy and the concessions he agreed to for Magna, this will be difficult to do.

National policies

A few hours before GM declared its U-turn, Merkel, the German Chancellor, spoke to the US Congress. She received warm applause and was on her way home when the news reached her. Neither GM nor the US government discussed the decision with their German counterparts. Similarly, previously Merkel’s government tried to implement the Magna deal irrespective of the interests of other European governments. Capitalist crisis increases the tensions between companies and therefore governments in different countries.

After the Magna deal was used in the run-up to Germany’s election, now the Merkel government – including its new liberal FDP ministers who originally opposed the Magna deal – have been disgraced by GM and the US government. They announced the saving of jobs in their election campaign, and now its obvious that these were hollow words. The government is now demanding the return of the “bridging loan” it gave to Opel.

Workers can’t rely on those capitalist governments or politicians. But this is precisely what Klaus Franz still proposes. He argued for a new “shoulder-to-shoulder stance” with these governments against GM. But only the threat and, if necessary, the implementation of decisive action can win any concessions from employers or governments. However the union leaders want to continue with their strategy of limited protest actions while hoping against hope that something will turn up.

But the crisis is not simply one in GM or just the auto industry. It is part of the crisis in the world capitalist economy and a lasting solution requires a socialist solution. In order to develop the debate and struggle on how to end the profit-driven system of cuts and job losses, workers need a political weapon with which to struggle. In most countries the old parties which claimed to represent workers have now become totally pro-capitalist formations. This has meant the question of forming new workers’ parties that struggle against capitalism has come back onto the agenda and in Germany Die LINKE (the Left Party) represents a first step in this direction. The cynical procedure around Opel/Vauxhall gave Die LINKE an opportunity to popularise an anti-capitalist and internationalist position. However, in relation to Opel, the Left Party spoke only in favour of giving the workers shares in the company (and, as a rule, not more than 50%) to give them more ’influence”. Now Gysi, Die LINKE’s parliamentary leader, has demanded the use of the public money invested in Opel to transfer the company into “public hands” under the “joint control of the federal state, the regions and the workforce”. But concretely speaking, he proposes increased shares in the company for the workers. Die LINKE’s federal state organisation in Northrhein-Westphalia argues in favour of nationalising Opel, albeit using the German constitution that gives massive compensation to former owners. While this is clearer than the Die Linke’s national policy, it still needs to be linked to a socialist programme and has to raise the question of a successful strategy for the workers’ movement, including the unions, and argue against the present approach of the union leadership.

For a U-turn by the unions!

The U-turn of GM must be followed by a U-turn by the trade unions.. Instead of accepting the cuts and only fighting over who has to suffer, a European-wide and international approach to defend all jobs and plants, not only at Opel but in the whole car industry and its suppliers is needed.

Immediately it is necessary to demand:

  • No to concessions on wages or jobs. Defend all plants and jobs.
  • Share out the work in the car industry, without loss of wages to defend jobs.

The increase in productivity and overcapacity as well as the oil and climate crisis has put jobs in the auto industry under pressure. Private interests dominate the car industry under capitalism. Short-term profits is all that counts for them. The car workers and their families are being asked to pay for the crisis of this system though cuts in wages, worsening working conditions and redundancies. However, the skills of the workers and the productive potential of the factories are needed by society. Not necessarily only to produce cars, but also to create goods which are socially needed, to offer ecological public transport and to provide the mass of the population with socially useful goods.

The struggle to save jobs is linked to the need to use the vast technology, knowledge and wealth of the car industry to develop green technology and public transport on a massive scale.

Concretely this means:

  • For a plan to convert the car industry to the production of goods needed by society develop environmentally-friendly technolotgy. This plan must be democratically formulated, under the control of elected representatives of the workforce, the unions and the government.
  • The nationalisation of Opel/Vauxhall as a first step towards the nationalisation of the whole car industry. This is necessary to convert production and to save all jobs and plants. Compensation to the previous owners to be paid only on the basis of proven need.

This would have nothing in common with the currently ‘part-nationalised’ GM, where the losses are socialised and the profits will again end up in the hands of a rich few. We need nationalisation in the interests of the working class: permanent nationalisation with a long-term plan to develop and reorganise the factories and to improve the living standards of all workers. This can only be done under workers’ control and management.

Strategy to defend jobs and plants

Such demands will not be achieved without a change of direction and a joint international strategy of the unions.

A glimpse of the power of the workers was seen in the debates around the Magna deal. The Spanish unions threatened a four-day strike against planned job cuts. After the offer to reduce the job losses in Saragossa from 1,700 to 900 the strike was called off.

The workforce in Bochum was not prepared to accept the loss of holiday pay, which was agreed by the German works council and IG Metall in all other German plants in return for the Magna deal. The Bochum workers were successful in defending this bonus.

But now it all starts again. Increased resistance is necessary.

  • Instead of the trap of being played off against each other along national or even plant lines – Joint struggle by all Opel/Vauxhall workers and in the car industry internationally!
  • An International day of action to defend all jobs and plants!
  • Industrial action to defend jobs – preparation of an all-out strike at Opel/Vauxhall, backed up by all workers in the car industry, to defend jobs and wages. For the setting up of committees to democratically organise the struggle from below to include as many workers as possible in the discussion on how to win the struggle.
  • Preparation for the occupation of factories to defend all plants.
  • International solidarity based on links between the workers of the different plants and countries built up through the unions from below.

A successful battle in GM to defend jobs and living standards could provide an example to workers internationally of both how to stop the bosses unloading the cost of their crisis onto workers and the middle class, and, if linked to a socialist alternative, a vision of what capitalism needs to be replaced with.

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