Britain: Make plans now to stop the closure of Peugeot, Coventry

The decision to close the Peugeot car plant at Ryton in Coventry and cease production of the best-selling 206 model was compared by one worker at the plant to knowing that a loved one was dying of cancer yet being shocked to know that death is at the doorstep.

For the last two years rumours have been circulating around the city that closure was on the cards so when the "bombshell" came, it was expected. Peugeot had already turned down a £14 million grant from the government to modernise the plant.

Recent developments too created suspicions about the company's plans. In April 1999 some 15,000 workers had applied for 900 jobs on the weekend C shift and the plant became the first in Europe to have seven-day continuous production. In March 2005 the same shift was scrapped and 850 jobs were lost. In the same period by December 2005 the company's production record for a single model was smashed with 5.3million of the 206 having been produced since 1998.

All of these statistics point to the loyalty, hard work and commitment of the Peugeot workers. In 2003 they had even accepted a 2.6% wage cut to save 700 jobs, but to no avail. From a workforce of 4,000 in 2003 some 2,300 remain. Four shifts have been reduced to two.

The Coventry Evening Telegraph of April 19th put it in a nutshell with its banner headlines. "They worked tirelessly to boost productivity." "They pioneered continuous 24-hour production." "They built one of the world's most popular cars." "Now Ryton workers have been rewarded with, Le Sack."

If the closure goes ahead it will mark the end of volume car production in Coventry, once dubbed the heart of UK motor manufacturing. Ryton has been producing cars since 1939. Despite the T&GWU's Tony Woodley pleading to the government to "remind companies like Peugeot that they have responsibilities to this country", the truth is that the only responsibility they have is to their shareholders. For capital the closure is a necessity. Analysts in the City said that the closure was a positive step as the share price of Peugeot rose in Paris.

Peugeot boss Jean-Martin Folz flew in to say that "because of mere economics, sadly it is the only option we could take" and then went on to praise the "wonderful job in improving quality and productivity at the plant."

What are the economics from the point of view of capital? Firstly, there is the estimated £175million needed to retool the plant for a new model at a time of falling demand for cars and rising European competition as the car industry world wide faces a crisis of over production. In addition, rising raw material prices because of demand from India and China have added to costs, together with new EU legislation that regulates car emissions. For capitalist car makers it seems that pollution is more profitable!

Secondly, each car produced at Ryton is alleged to cost 450 Euros more than each one at Poissy in France and almost 1000 Euros more than in the Czech Republic. As one worker put it, the costs per hour at Ryton are £11.30, but at the new plant in Slovakia it is £2.50. Slovakia and the Czech Republic are recent entrants to the EU and have far lower labour costs, proving a magnet for EU manufacturers whose only loyalty is to profit. Conversely, low wages there have led to more than 120 Polish bus drivers coming to Coventry. Yet the same process happened when Spain and Portugal joined the EU. Within 10 years costs of production began to reach the European average. Any move eastwards therefore will only provide a short-term advantage.

Thirdly, the social costs of plant closures in the UK are far lower here than in the home of Peugeot in France. Here in the UK the social costs are borne by the government, while in France it is the company that pays. One estimate says that a plant closure in France would cost the company £140,000 per worker, while here in the UK it is £50,000 per worker. These are the "fruits" of having the most flexible workforce in Europe that Tony Blair often boasts of!

Derek Simpson of Amicus rightly condemns the sacrifice of UK workers on the altar of a flexible labour market and Tony Woodley has condemned the massacre of UK manufacturing in the "leave it all to the market madness". Since Labour came to power in 1997 over a million jobs have been lost in the manufacturing sector and employment there now stands at just over 3 million. Tony Blair has expressed sadness but has said that such cuts are "inevitable".

And he is absolutely correct! Under capitalism, the needs of the workers and their families take second place to those of shareholders. In the jungle law of the "free market" production takes place not to satisfy social need but to make profits for the owners of industry. The fact that workers have mortgages to pay, some as high as £1500 per month, or that some have re-mortgaged their house to pay for their daughter's wedding, is of no consequence to the god of profit. Workers at the plant quite rightly say that after their sacrifices to improve quality and productivity, they feel absolutely "shafted".

So will there be a fight back to stop this closure? At the time of writing a campaign is gathering momentum that may include strike action, yet mass meetings to test the mood for such action have proved inconclusive with votes evenly split.

What are the factors against industrial action? Firstly, there is the record of the trade union leadership in relation to Rover a year ago where 5,000 jobs went without a fight in the run up to a general election. Secondly, there is the possibility of at least one more year's work before the plant finally closes in mid 2007 and some workers don't want to lose what may be their last year's pay packet for some time and they fear this may happen if they strike. Thirdly, the prospect of redundancy payments being hit by industrial action will determine the mood of some of the 800 workers there with longer service and who are approaching retirement. This was one of the factors that led to the closure of Jaguars despite a marvellous march through the city last year.

Do these factors mean that closure is inevitable? By no means! Between now and July, when the first redundancies take place, there is time to mount a campaign to halt the closure. Firstly, there has to be a campaign mounted by the trade unions to explain that it is not the French who are shafting the workers but the logic of capitalism. Secondly, the trade unions should be demanding that the company books are opened to trade union inspection to see the levels of profits and investment of the company and how much has been salted away in pension plans for the bosses. Thirdly, an inventory of stock on the site should be drawn up so that the workforce has a bargaining chip in their fight should they decide at some stage to occupy and prevent asset stripping. Next, the trade unions should draw up plans to prevent any machinery leaving the plant as operations are closed down. We should learn from Rover which is now an empty shell. Plans should also be drawn up to occupy the plant so that the workforce controls what goes in and out.

In the last analysis however the demand that the Labour Government nationalises the plant without compensation has to be raised so that the skills and expertise of the workers can be used to develop transport vehicles. Peugeot could then be dovetailed into an integrated publicly owned transport system to do away with the anarchy of capitalism. Under capitalism and production for profit closures like Peugeot are inevitable.

French trade unions have already pledged their support to a struggle. If Ryton shuts and production is transferred to Eastern Europe, French workers know that it will be their turn next. The battle lines have been drawn at Ryton. There is no time to lose if this struggle to save jobs is to win!