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Midlands Time for Brexit gloom merchants to take notice

Contrary to the myth that Brexit is sending manufacturing off the deep end, Britain is producing more vehicles than for many years, writes GRAHAM STEVENSON

IT WAS Lenin who long ago sketched out the necessary conditions for fundamental radical change.

He pointed to the fact that experience had shown that it was not enough for those who were exploited “to realise the impossibility of living in the old way” — it was critical that the exploiters “should not be able to live and rule in the old way.”

This would mean that the elite would have to suffer a “governmental crisis which draws even the most backward masses into politics” and a “hundredfold increase in the size of the working and oppressed masses — hitherto apathetic — who are capable of waging the political struggle.”

I began working life as a design engineer in the automotive sector, but the pre-eminence that Britain then enjoyed has been slaughtered by the economic restructuring demanded of an integrated European economy.

This was the price Britain was prepared to pay for being handed a central role in banking.

Returning to the politics of the Midlands — first, last year as a mayoral candidate and this month as the secretary of the region’s Communist Party, I recalled Lenin’s wise words as I discovered that the stark transition between what had been the powerhouse of Britain’s wealth production and what is now a broken economy.  

Yet, despite significant deindustrialisation since the 1970s, the Midlands has an important presence in automotive design and engineering, particularly among small and niche firms.

The basis for this, and how it most shows itself, is instructive.  Even though it may seem at first sight unlikely, British capitalists are fundamentally split in a way we’ve not seen for decades.

Theresa May represents a very important section of US-UK finance that would sacrifice virtually anything to maintain the primacy of their interests.

The word “manufacturing” is not really within their lexicon, unless it relates to the so-called defence sector, in which case it is seen as a direct extension of their interests. What we might today call the finance-industrial-military complex.  

The aerospace industry is partly concerned with civil aviation, but much of the R&D is driven by the military. A careful alliance of interests has been woven, enabling US global domination but, at the same time, permitting Franco-British-German commonalities.

A conflicting side was frequently exhibited in some of the support once showed for Ukip. What was once derogatorily dubbed “Little England” now displays itself as a far from dead segment of native British capital, rooted in manufacturing.   

The automotive part is not a single, coherent bloc, despite the wishes of the Society of Motor Manufacturers and Traders. From the employers’ perspective, this has a large range of divided forces, all operating in a global market.

There are over 3,000 companies in the UK automotive sector, ranging from luxury car manufacturers such as Bentley, Jaguar Land Rover and Rolls-Royce, to construction equipment makers such as JCB. Transnational corporations dominate.  

Three companies — Ford, Vauxhall and Volkswagen — control the market, with seven smaller companies each holding less market share.

Toyota owns Audi, which is on the up, while Citroen and Peugeot are part of PSA. Ford slightly pips Volkswagen, with both having over a tenth of the market, although Ford has slipped a little of late.Vauxhall, the third largest, has seen a reducing market share.

Specialist marques are hardly in the hands of British capital — look at the top ones — Aston Martin (Ford, USA/Kuwait; Bentley (Volkswagen); Jaguar (Tata); Land Rover (Tata); Lotus (Malaysia); MG (China); Mini (Germany); Morgan (UK).

But they are fighting for share as Britain settles into a post-Imperial yet still imperialist role after neocolonialism, under the umbrella of US imperialism but not wholly subservient to it.

Cultural forms of the old empire, such as false humanitarianism, are set in a glow of worship for the modern and for invention, but does it sell cars?

Contrary to the myths that Brexit is sending Britain off the deep end, the UK only recently achieved a 17-year high as 1,722,698 vehicles rolled off production lines in a single year from some 15 manufacturers, an 8.5 per cent uplift on total production in a year — and the highest output since 1999, not far from getting back to 1970s levels.

Trade with EU countries is good. Roughly, Germany sends as many automotive goods to us as we do to them. Why would they want Brexit to disrupt this? More cars are exported from Britain across the world than ever before. Ten brand new car models began production in the UK last year.

But investment in the automotive sector is massively down as foreign manufacturers don’t want to aid potential competitors and because there’s not enough interest by British capitalists. Even so, 80 per cent of cars manufactured in the UK are now exported to 160 markets worldwide.

The Germans would do an automotive free trade deal tomorrow if they thought they were talking to anyone who cares about and knows the sector.

The French own so much of our infrastructure, often through state banks, that they’d do a deal the day after if we gave them some trade quid pro quo. Labour’s PFI policy now ups the game. 

Are we still stuck in the referendum rut instead of working out what to do next?

The Tories don’t care about any of this, while those Labour MPs, whether Leave or Remain, who fixate on that miss the point and have done for over a year.

West Midland MPs run the risk of becoming alienated not from ever left-leaning constituency members but from actual voters, who want action for decent work now.

Has Len McCluskey’s “robust” and “frank” meeting in Paris with executives from PSA, the owners of Ellesmere Port, not been understood in the labour movement?  

PSA became Europe's second-biggest car maker when it bought Vauxhall and Opel from General Motors to add to Peugeot and Citroen. It claims to wants to build the new Astra at Ellesmere but can we trust that after repeated redundancies and cost cutting.

There are 4,500 jobs in the UK, with about 1,800 at Ellesmere Port, that depend on it.  

With a factory at Luton, PSA has just announced an investment that could eventually see Vivaro vans made in the UK, giving a major boost to the south-east Midlands.

Made "despite Brexit uncertainties", this secures many jobs beyond 2030, but there’s still a cloud hanging over Ellesmere Port.

Such strategic jobs mean that a failure to keep the plant will see “the fight of our lives,” the Unite leader has said.  

With the most massive strike fund in history and a rising tide of struggle, maximum unity is what is needed not instability. Those who snipe from the sidelines need to wake up and get on board.
A Jaguar Land Rover insider has told me that Brexit is hardly affecting the company.  

The company’s sluggish response to the global collapse of the saloon car market niggles a workforce that understands the market is changing fast.  

Land Rover’s command of the Chinese and Indian markets is good for now.  

Always with one eye on the distant future, the Chinese are already gearing up to learn this market with a view to capturing it themselves.  

Capitalism’s big idea in the last part of the 20th century — flexible specialisation — now seems jaded. Motorists are abandoning cars such as the Ford Mondeo in favour of trendy 4x4 sports utility vehicles and practical people carriers, which boast higher driving positions and flexible seating.

In 2016, BMW brought out six new models — not one a saloon.

Jaguar Land Rover’s SUV is a glorified Land Rover — hardly novel. It will build its latest vehicles outside the UK, the Jaguar E-Pace being built in Austria and China and a site in Slovakia manufacturing future generations of Land Rover vehicles.  

It also has smaller plants already in operation in India and Brazil and a joint venture with China’s carmaker Chery — the E-Pace currently being built by Magna Steyr, which is making Jaguar’s first electric car, the I-Pace.

In 2018, it will also be made in China at the joint JLR-Chery plant in Changshu.  

The £28,500 vehicle pushes the Jaguar brand further into the booming SUV market without quite being one.

Japanese interests have suddenly become worried about Brexit. Three Japanese companies were responsible for almost half of the 1.67 million cars sold in the UK in 2017 — down 3 per cent over the previous year and 130,000 below the forecast.  

With a 10 per cent fall in domestic buyers, a confirmed commitment that year to £1.1 billion in future investment contrasts poorly with the £1.66 bn the previous year.

Instead of being a shuttle service for Tokyo, Britain’s car industry needs to reassert itself in a global market. The appetite for British-built cars has been rising in several key markets, notably Japan (+25.4 per cent), China (+19.7 per cent), Canada (+19.5 per cent) and the US (+ 7.0 per cent). Here lies room for expansion.

In the context of a negotiated special customs union with the UK, a trade deal should enable Britain access to the EU automotive market.

It was no accident that Jeremy Corbyn’s speech announcing this approach was in Coventry, a city that the car industry once provided more than two-thirds of the jobs in, with all engineering now at less than a tenth.

Labour has vowed to protect the nation's car industry by negotiating to allow automotive goods to be transported between the UK and the EU without any restrictions.

This may mean agreeing concessions in other sectors, but the strategic role for the state in rebuilding manufacturing could more than offset this, especially if the deal does not restrict three key things:
n Direct investment for ‘foundation industries’
n A UK investment bank with regional boards
n Positive Procurement
n Environmentally friendly motors (a subject for an article in itself)

Such instruments can be compatible with EU policy at the margin but only if UK sovereignty is not for sale.

It is unacceptable that, where governments have tried to implement such measures, as in Scotland, they have been stopped by EU intervention. 
Since EU procurement rules do not allow governments to exclude blacklisting firms, demand payment of the living wage or enforce union recognition, such restrictions cannot be included in a trade deal.    

While we should stress that there can be no recurrence of the instances of firms receiving state aid, such as Royal Bank of Scotland, that have been required to sell off sections and downsize with massive job losses.

Graham Stevenson is a former national and international official of Unite the Union and is Midlands district secretary of the Communist Party of Britain.

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