Magazine of Socialist Action in Australia

New strategy needed to stop car industry job losses

Reading Time: 4 minutes

When looking at how the major parties approach the crisis in the car industry, you could be excused for thinking that you were living in a parallel universe.

In recent years both State and Federal governments have handed over billions of dollars in tax-payer funded subsidies to the car companies. In return the car companies have said “thank you very much” and then proceeded to shut down plants and sack thousands of workers.

To make matters worse the car companies have then come back to the government and asked for even more money! Without even batting an eyelid, let alone securing even one job, the government has proceeded to hand over millions more while the companies have continued to wind down their operations.

Unfortunately this is not a parallel universe but rather the logic of capitalism – a system that prioritises corporate profits over all else.

The 2008 global financial crisis put major pressure on the car industry. Since then car sales have taken a dip and the companies have faced huge debt problems. In response the industry on a global scale has undergone major restructuring. In order to try and maintain their profit levels, the major car companies have moved much of their operations to underdeveloped countries where wages are much lower.

As a result the major Australian firms of Ford, Holden, and Toyota have made thousands of workers redundant. Ford sacked 880 workers in 2008 and 240 more in 2010. In the last 6 years Holden has made more than 1500 workers redundant. Despite this, earlier this year they were given a $275 million tax-payer funded handout.

Mitsubishi was also able to swindle hundreds of millions of dollars in subsidies from state and federal governments before it closed down in 2008. In the process they destroyed the livelihoods of about 1700 families. Not to be outdone,Toyota has sacked 350 workers this year, almost 10% of their entire workforce.

Since 2006 it is estimated that in excess of 10,000 jobs have been lost from both the major car companies and from associated suppliers including component manufacturers. While billions have already been handed over, there are plans to pay out further subsidies of around $500 million per annum between now and the end of the decade.

Socialists reject the idea that ordinary people should be forced to pay for a crisis that they had no part in creating. In the case of the car industry, workers are paying twice, once with rising unemployment and then again with our taxes being handed over to thin layer of rich car company shareholders.

The problem with corporate subsidies is that once public money is handed over to private companies, there is no way to make sure that it is used to protect jobs, wages and conditions. It is not possible to exercise real control over a company that you do not own.

Up until now, the trade union leaders have not put forward a viable strategy to stop the steady steam of job losses, or indeed to oppose the corporate subsidies. Rather they have supported the idea of public subsides to private companies and in many cases have done the bidding of the car industry bosses to the government.

The truth is that the struggle to defend jobs in the industry and against corporate welfare is tied up with the struggle to build fighting, political unions. We don’t need unions that work hand in glove with employers to facilitate a huge shift in wealth from workers pay to bosses profits. We need unions that fight against every job loss and that have a vision for a saner way for running society.

Obviously it is no solution to just let the car industry wither on the vine. The factories are highly innovative and the workers are highly skilled. It would be madness to not utilise those resources. For example we desperately need more trains, trams and buses in order to improve strained public transport systems. Car plants could easily be retooled to manufacture public transport vehicles, but instead thousands of skilled workers are being thrown on the scrap heap.

The reason for this is that the private car companies are not interested in producing things for human need. They are only interested in profit. They would prefer to move off-shore rather than accept a lesser profit here. Their behaviour shows just how irrational capitalism is. Instead of utilising skills and facilities, profiteers prefer to destroy jobs and communities in their quest to satisfy company shareholders.

Instead of accepting the logic of a system that puts profits before all else, the trade union movement needs to be fighting for a different way of organising production. Workers and unions alike should be campaigning to bring the big car companies into public ownership under democratic control. If the car companies were run on this basis they could be quickly retooled and used to produce things that we need. This would not only save jobs but if we began producing public transport vehicles it would also be good for the environment.

If a publically owned manufacturing sector was linked up with other major industries that were under public control, we could then begin the process of developing a sustainable plan of production and an economy which genuinely operated to address human need.

The very recent example of the Argentinean Government forcibly taking majority control of YPF (the major oil company) shows a step towards what is possible. This move has been greeted with mass support in Argentina from a population that has suffered from the effects of neo-liberalism and domination by multi-national corporations. If union leaders in Australia were serious about defending jobs they would argue for similar measures against car manufacturers threatening to shut down and move offshore.

Rather than parroting the pro-capitalist ideas of the major parties and doing the bidding of the corporate elite, these are the types of socialist solutions that the trade union movement should be adopting and fighting for.

By Anthony Main


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