SHARES in India’s Tata Motors collapsed by almost 30 per cent yesterday after the company reported gigantic losses at Jaguar Land Rover (JLR).
On Thursday, Tata Motors Ltd stunned markets by posting its biggest-ever quarterly loss of £3.4 billion in just three months from September to December 2018. This, Tata said, is because of slumping sales in China where Jaguar sales almost halved in the December quarter. This comes on top of news that German industrial output fell in December for the fourth consecutive month. This means that Germany slid into outright recession at the end of last year. The developing economic crisis is striking at the heart of the eurozone.
Capitalism’s crisis is not just a crisis of over-production. It is a crisis of the system as a whole that is producing gigantic indebtedness, trade wars, economic collapses and military adventures such as the threatened US invasion of Venezuela. What began in 2007/8 as a worldwide banking crash was met by the US bosses nationalising GM, and the UK bosses pumping over one trillion into its bankrupt banks, with both countries creating quantitative easing, that is electronically created symbols representing money, that was put at the disposal of the bosses and bankers. The US and UK workers paid the bills for this indebtedness with a decade of super-austerity.
Today, the level of indebtedness of the system is much greater than in 2008, and a new banking and industrial crash is developing, which is currently ripping the EU apart and will do the same for the USA. The class struggle between the working class and the bosses and bankers is sharpening by the hour, since the working class will make revolutions rather than put up with further decades of austerity.
The economic and political crisis is now so deep that it can only be resolved through the working class overthrowing the outdated capitalist system and and replacing it with a planned socialist economy.
Meanwhile, the crash in the car industry has hit the US, Germany, Japan and the UK hard. Jaguar Land Rover (JLR), the UK’s biggest carmaker, has announced 5,000 job losses. This follows the announcement last year by JLR of 1,000 jobs going at its Solihull factory. 2,000 workers at its plant in Castle Bromwich were put on a three-day week last year. At the same time, Ford announced 14,000 jobs in the UK are under threat, along with 50,000 motor car jobs in the EU.
Nissan has confirmed that the new X-Trail, which was going to be produced in Sunderland, will instead now be made in Japan. However, Japan is in the middle of an intense economic crisis itself. Japan’s debt is currently 253% of its Gross Domestic Product (GDP). It is bankrupt more than twice over!
Of course, the car and steel industry are completely intertwined. Tata Steel is in serious financial trouble and is shutting plants worldwide. The British steel industry and the British car industry, what is left of them, are being ripped to shreds.
In 2016, Tata Steel announced that it was going to shut down all steel production in the UK. Rather than fight this with demands for nationalisation, the union leaders fell over themselves to agree to wage and pension cuts along with the loss of thousands of jobs in its Scunthorpe site and from the massive steel plant at Port Talbot.
Last week, after a further collapse of profits at the steel plant, Scunthorpe MP Nic Dakin had an urgent meeting with senior representatives of the UK’s four biggest steel firms – British Steel, Tata Steel, Liberty Speciality Steel and Celsa Steel UK. Closures are on the way.
It is a European and worldwide problem. Dr Karl Koehler, Tata’s European chief executive, said: ‘Growing European steel demand continues to be undermined by a flood of imports into the region. Chinese steel shipments into Europe leapt more than 50 per cent last year, while imports from Russia and South Korea jumped 25 per cent and 30 per cent respectively.’
The reality is that the bosses and bankers’ EU is on the rocks. The way forward is clear: the workers of the UK must press ahead and force the UK out of the EU and advance to socialism with the nationalisation of the major industries under workers’ management. This will spread thoughout the EU like wildfire and see socialist revolutions bring down the EU and replace it with the Socialist United States of Europe!