Issue 248 of SOCIALIST REVIEW Published January 2001 Copyright © Socialist Review

Britain in decline?

Manufacturing a crisis

Closure of Vauxhall's car factory in Luton came at the end of a year of job losses. Lindsey German looks at the state of manufacturing industry

New industries

  • Total employment in what are called electrical and optical industries, including mobile phones and cable television, was 681,000 a year ago.
  • Motorola is now the largest private sector employer in Scotland, with more than 10,000 employees.
  • BSkyB employs 7,000 workers at just two call centres in Livingston and Dunfermline.
  • Another example is Leeds, where the traditional base in the clothing trade has been eliminated, but where manufacturing is still a major employer. There it covers 56,400 workers.
  • Is manufacturing industry in Britain finished? Certainly its long term decline seems to have accelerated recently. The closure of the Vauxhall car factory in Luton--announced just two weeks before Xmas, and three days before the plant's five-week holiday shutdown--was the most dramatic in a list of closures which included Coats Viyella and the steel company Corus, where thousands of jobs are rumoured to go in the major South Wales plant of Llanwern. The past year saw jobs scaled back in much of the car industry, including Ford, Honda and Rover. The conventional wisdom of both government and union leaders is that such events are beyond the control of anyone because they are simply the workings of the market. The only role of government, therefore, is to cushion the blow a little, and to continue to provide incentives for big business to stay in the country even though there is little evidence that this makes any difference.

    This sense of inevitability is extended to opposition to any form of fightback. Attempts to demonstrate, let alone to occupy the plant, are derided as relics of the past which are doomed to achieve nothing. The seemingly inexorable decline of industry is no more controllable than any natural phenomenon--or so we are led to believe. It is important, therefore, to look at what is really happening, and what its significance is for working class organisation.

    The recent spate of closures is alarming and, if predictions of a slowdown or recession in the US economy are correct, may be the prelude to a much more severe crisis. However, it is important not to leap to too many conclusions all at once. It is true that after a prolonged period of relative stability the car and steel industries in particular have suddenly run into trouble because of worldwide overcapacity. Too many cars are being produced for the market to sustain. The car industry in Britain and elsewhere has repeatedly gone for downsizing, job losses and 'rationalisation' over the past two decades. The result has been greater competition and more job losses. The impact of the restructuring has already hit Rover, Ford and Vauxhall, but this is not an exclusively UK phenomenon--for example, the Daimler-Chrysler corporation is also undergoing major changes but has no plants in the UK.

    Save Vauxhall

    Low unemployment

    The other side of recent calamities in cars and steel is that employment levels in the UK remain at historically very high levels. Many jobs, it is true, are low wage and unskilled, and many who might once have been on unemployment benefits have been forced into such jobs through schemes such as 'welfare to work'. But unemployment remains relatively low, and in key sectors the problem for a number of years now has not been too much labour but a severe shortage, particularly of trained and experienced staff, often as a consequence of over-zealous cutbacks in the 1980s and 1990s, and abolition of apprentice training schemes. This has been especially so in the case of the construction industry, railways, aerospace, parts of engineering, and in the utilities such as water and gas.

    It is simply not true that all these jobs (about 23 million of them altogether) are in the service sector. Overall, the numbers employed in UK manufacturing have declined in the past 30 years (the high point was reached about 1970) but, according to figures published in Social Trends (January 2000), the total number of workers employed in UK manufacturing today is actually slightly higher than it was in 1901. However, there are two points worth making in relation to manufacturing jobs. The biggest single decline took place in the 1970s, not in the 1980s or 1990s under Thatcher and Major. And the decline of manufacturing does not mean that these jobs become less important, or indeed less powerful, from the point of view of workers. Increased productivity means that machines replace people to perform certain jobs, but then the workers who use the machines produce more wealth per worker for the capitalists.

    Factory closures bring protests from those who suffer
    Factory closures bring protests from those who suffer

    The reason for the shift from manufacturing to services in the economy is because the more productive industry becomes, the more jobs are created to service it. So the number of people who are office workers, carers or educators, catering workers who ensure other workers are fed, or transport workers who take commuters to work, grows as a proportion of the total workforce. In a sense this is neither surprising nor alarming, since most of these jobs contribute overall to the production of wealth in society. In many cases there is not even a fundamental difference between manufacturing jobs and service jobs. Repairing a car exhaust is defined as services, while putting on a new exhaust in a factory is manufacturing. McDonald's workers are service workers, while those who can Heinz baked beans are in manufacturing.

    One of the reasons people tend to fall for the notion that manufacturing is finished is that they have an 'Andy Capp' image of the working class. This image is easily reinforced by the fact that traditionally labour-intensive industries like coal mining, shipbuilding, textiles and the docks appear terminally in decline, and because much of the restructuring of industry introduced during the Thatcher era involved the deliberate elimination of semi-skilled and unskilled grades (especially in engineering).

    Again, the other side of this is that manufacturing industry remains critical in every part of the UK, even though its make-up may have changed. Aerospace, for example, remains extremely important right down the west coast, with BAe Systems and Rolls-Royce employing many thousands of workers in places like Preston, Manchester, Chester, and Bristol, as well as Bradford and Derby. In Scotland there have been massive job losses in coal mining, the steel industry and shipbuilding (already nearly finished in 1971), but there has also been a very large expansion of jobs in the electronics industry and call centres. Current estimates of the number of call centres in the UK are between 4,000 and 5,000. Estimates of numbers employed vary from a quarter of a million to over 400,000. At Great Universal Stores in Nottingham around 3,500 work in one call centre, and there are 60 call centres in and around Glasgow.


    Factory closures bring protests from those who suffer

    Why does any of this matter? Because the stock answer that workers are most likely to hear will generally come either from New Labour politicians or union leaders. The MPs simply point to the futility of expecting any fight on jobs because of the inevitability of globalisation, and union leaders reinforce this message when they talk up how easy it has become for multinational companies to up sticks whenever they feel like it. Companies like Ford and Vauxhall would be a lot more cautious about wholesale sackings if the leadership of unions like the TGWU, AEEU and MSF showed any backbone whatever, and threatened immediate strike action the minute there was the slightest hint of cutbacks. It is this spinelessness which explains the disappointing votes for action at Ford more than a 'historical decline in manufacturing'.

    Unquestionably the underlying problem in the world car market is overcapacity. However, the way this crisis unravels is not preordained. Ford at Dagenham and Vauxhall at Luton face particular problems because of other factors, not least the fact that both the Fiesta and Vectra models had become very hard to sell. On the bosses' side, the whole issue has become so highly politicised that it is often very difficult to tell the difference between a serious threat and pure kiddology (for example, over the impact of the strong pound on car sales in Europe) or strategic opportunism (Vauxhall management taking advantage of the Ford vote).

    Finally, it is very ironic that--at a time when it seems increasingly obvious that big business and industrialised capitalism are getting completely out of hand--we should also be prepared to accept that this phenomenon no longer exists. Road congestion, pollution and global warming are consequences of the massive worldwide increase of industrialisation. In relation to competition with other countries, there are signs that Britain's decline of manufacturing can do it damage on a wider level which cannot be compensated for by increases in areas such as financial services. As the Financial Times argued recently:

    In other words, the danger of relying on low-tech, low wage jobs has its costs for the capitalist class and the whole economy--in creating a society where the level of education and skills are low and therefore less productive. Some sections of the capitalist class who need skilled workers worry about this problem. Others couldn't give a damn if they can continue to exploit workers and make a profit. They also see the decline of manufacturing industry--correctly--as often weakening organised workers. What they don't see is that a new working class is growing up in call centres and fast food restaurants--as well as in the substantial areas of manufacturing industry which still exist.

    Return to
    Contents page: Return to Socialist Review Index Home page