ARTICLE FOR CAMPAIGN GROUP NEWS
GOVERNMENT MUST ACT TO SAVE VAUXHALL
By Kelvin Hopkins MP
Luton North
Luton was stunned by the sudden announcement before Christmas that General Motors planned to close the Vauxhall Luton car plant. The battle to save the plant has begun, but its significance goes way beyond Luton. It is a battle to stop the meltdown of British motor manufacturing, and indeed a battle for the future of all manufacturing in Britain. Finally, and most important of all, it is a battle for democracy itself. Multi-national companies must ultimately be subject to democratic government, or there will be no meaningful democracy at all.
Vauxhall faced a previous crisis in 1998, when General Motors was threatening to abandon the UK completely. A vigorous campaign, led by the trade unions and supported by MPs saw Government intervention at the highest level, a unique pay deal and a guarantee by the company to keep open their UK plants and invest in the production of new models in the UK. The "Epsilon" car was to be built at Luton, as the successor to the Vectra.
The company had been concerned about the high Sterling exchange rate relative to the Euro zone currencies, and the pay deal included a provision that if the Pound remained high, pay rises would be reduced, to be increased later when the Sterling parity fell back to a more sensible level. This was an extraordinarily generous concession by the workforce and demonstrated their commitment to Vauxhall's future.
Productivity at Luton has dramatically improved in recent years and the Luton plant has shown a profit throughout the 1990s. The quality of the vehicles produced at Luton is also of the highest order, so the workers have done everything to make Luton a success. To be kicked in the teeth by the company after all that is almost beyond belief, a cynical betrayal by the moguls of Detroit.
General Motors cannot claim that the high Pound is now a major factor in their decision. The pay deal took account of that, and the company has also increased the import content of Vauxhall cars assembled in the UK, further offsetting exchange rate costs. Nor can General Motors claim that “over capacity” is a problem, at least in the UK. The UK is a substantial net importer of motor products, so we cannot even supply domestic demand for cars from UK plants. And Vauxhall car sales, notably the Astra and Vectra, are substantial and buoyant in the UK, with both cars near the top of the sales charts in their respective sectors.
The decision therefore seems to come down simply to the fact that sacking workers in the UK is cheaper than elsewhere in the EU. To use the economic liberals' jargon, UK “labour markets” are more “flexible” in the UK than abroad.
The Vauxhall crisis illustrates the monumental failure of the neo-liberal strategy and it should now be junked with all the other nineteenth century claptrap trotted out by the free marketeers, those manic followers of Friedman and Von Hayek who still infest political and economic policy establishments. Democratic governments are elected to represent the interests of their people, not give away power to global corporations. We have to choose between globalisation and democracy, and Vauxhall has put this choice into stark relief.
Our Government must now act to save Vauxhall. They cannot wash their hands. They have a duty to intervene – to save Vauxhall, to save UK manufacturing, and to re-establish the principle that the interests of working people, their jobs and livelihoods come before profits, share price and global corporate power. The people of Luton are watching.
