THE US motorcar giants GM and Ford were rescued from bankruptcy by President Obama who ‘nationalised’ them, so that the US taxpayer could get them back on their feet through billions of dollars of financial support, supplemented by a programme of plant closures and wage and benefit cuts agreed for the workers by the ‘patriotic’ UAW autoworkers union.
Now, back on their feet in the USA, the car giants are moving to shut down their EU operations who are a big drain on their profits.
Ford has just announced that its Genk factory is to be shut with a loss of 4,300 jobs and around another 9,000 that depend upon them, and its plants in Southampton, Bridge End and Dagenham are being threatened with the same fate. Ford says its European operations will suffer losses of $1bn (£630m) this year.
Ford has plants in Germany, Spain and the UK where it employs 15,000 workers. Ford’s sales fell almost 10% in Europe during the first half of 2012, to its lowest level in 17 years. The company is working at less than 65% of its capacity in the EU.
GM is making even heavier losses in the EU. It is shutting one German Opel plant and is threatening to go from a one-week shutdown of its Luton and Ellesmere Port plants to their closure.
Both plants manufacture Vauxhall cars, with the majority exported to Europe by Opel. Opel lost $747 million last year due to weak car sales, high fixed costs and excess production capacity. This resulted in a total loss of more than $12 billion in 12 years.
In the first half of 2012, Opel’s loss amounted to 938 euros per vehicle sold. In December last year, Opel had revealed that it expects to report an operating loss of 1 billion euros in 2012.
In order to reverse the 12 years of losses in Europe, particularly from the Opel brand, GM formed a global alliance with PSA Peugeot Citroen (PEUGY).
However, this tactic has just collapsed with the news that PSA Peugeot Citroen is to receive a government-backed refinancing deal for its lending arm as the struggling French automaker’s financial position deteriorated further, collapsing its stock.
Europe’s second-biggest automaker said it was close to an agreement with creditor banks on 11.5bn euros of refinancing and had won state guarantees on seven billion euros in further borrowing for its Banque PSA Finance.
Peugeot is scrapping more than 10,000 jobs and a domestic plant to stem losses approaching 200m euros a month, and was developing future vehicles with General Motors to deliver more savings in five years’ time. The French Socialist government will now seek to push through further rationalisation measures with more job cuts, wage cuts and closures. Talks with new alliance partner General Motors had settled on four joint vehicle programmes. Now these plans may well be off!
Meanwhile, the German state of Lower Saxony, a major Volkswagen shareholder, has said it would oppose the Peugeot rescue plan as a breach of EU rules. Brussels has not yet been informed of any bailout agreement and refused to comment yesterday.
In fact, the EU is sinking fast both economically and politically.
Official figures showed on Wednesday that the total debt of the 17 countries that use the single currency at the end of the second quarter was worth 90% of the price of the group’s economy — the highest level since the euro was launched in 1999. The entire EU is on the brink of bankruptcy, and a slump, that will affect not just motor cars.
In this crisis situation, workers throughout the EU must occupy the car plants and demand that they be nationalised, and put under workers’ control. To achieve this, workers in the UK must take action, to bring down the coalition and bring in a workers government.
