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NEWS & LETTERS, May-June 2005Hardships from Longbridge closingBirmingham, England--The closure of the Rover plant at Longbridge was announced today. It is suggested that the average worker will receive close to $10,000. However, the scale of the payouts will be much smaller. Anyone who has a car purchased from the company will be $6,000 in debt, as the company car buying scheme has collapsed. But the situation is worse than this, sending some families into greater personal debt and some relationships and marriages into divorce. Even when the individual finds a job, it can take up to two years to recover--in some instances, never. It also comes at a time when benefits and pensions are under attack. People may or may not be able to claim benefits or sick leave. To some extent it’s a home goal for the government, which has decided to place the economy on center stage for the May 5 election. It has already received a warning from the IMF over public spending. Within days of this censure it has been forced to offer $300 million in some kind of rescue bid for the components industry and retraining. The British car industry had been in trouble for some time. The Phoenix group took over Longbridge for just £10 and a long-term loan of a billion dollars. The published accounts show a $400 million discrepancy. The directors are believed to have acquired at least $90 million. The Shanghai Automobile Company acquired Rover for around $130 million, including all cars presently held. The $2 billion company is said to have no assets of worth--their management center is reputed to be ring fenced by the Phoenix holding company. If there is fraud, there is a poor record of the courts establishing it. In the late 1960s there was a series of government initiatives by Labour to restrain the unions. They included Industrial Labour Courts or Tribunals, codification of relationship and duties, and redundancy packages. The legal attacks accompanied direct attacks by the employers. These ideological offensives included sweetheart agreements and going over the heads of stewards and decapitating rank-and-file trade unionists. The defeat of the miners strike of 1984-85 helped lead to the industrial malaise of today. No lessons appear to have been learned. --Patrick |
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