National Sections of the L5I:

Force Labour to nationalise Rover

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“The ugliest face of capitalism”. Not the words of militant socialists but of Britain’s top bosses’ paper, the Financial Times. They were describing the betrayal of 6,000 Rover car workers by their asset stripping bosses.

The last remaining British-owned volume auto manufacturer, MG Rover, faces closure following the collapse of takeover talks with the Chinese government-owned manufacturer Shanghai Automotive Industry Corporation (SAIC). The closure threatens the loss of 6,100 jobs at Rover’s plant in Longbridge, Birmingham, as well as an estimated ten to twenty thousand jobs at component suppliers.

The timing of the announcement of the breakdown of takeover talks and the collapse of the company is a blow for Blair’s government, coming suddenly and unexpectedly at the end of the first week of the British general election campaign. But Rover has long been one of the most vulnerable corporations in a global auto industry plagued by chronic over-capacity. That is why union leaders such as Transport and General Workers Union general secretary Tony Woodley were so keen on the SAIC takeover - a deal which would have saved British jobs... by guaranteeing the loss of at least two thousand jobs at Longbridge.

Rover was “rescued” less than five years ago when the previous owners, the German auto corporation BMW, sold the company to the present bosses of the Phoenix consortium for £10. Now Tony Blair and Gordon Brown, with Tony Woodley’s enthusiastic backing, want to reopen negotiations with the Chinese to sell the company on what are bound to be even less favourable terms, with more jobs lost and further deteriorations in working conditions for those who are kept on.

Both the British government and SAIC blame the collapse of the original takeover negotiations on Phoenix’s tardy disclosure of the extent of Rover’s debts. Since the collapse of the talks, it has emerged that there may be a further £200 million or more gap in the company accounts. The bosses since 2000, John Towers and the others in the ’Phoenix Four’, have milked the corporation systematically, moving funds from the Rover company to others in the Phoenix group. Estimates of how much they have paid themselves in salaries, bonuses and pension provisions range from a minimum of £30 million to upwards of £50 million. They have squandered the “dowry” of £247 million from BMW that came with the company in 2000. Worst of all they have left a huge gap in the workers’ pension fund.

The British government and SAIC are now demanding to see all Rover’s accounts. Doubtless the same demand will come from the other vultures that are beginning to gather seeking a share of Rover’s remaining prime assets including the land and the successful MG brand.

Why can’t we all see where the millions have gone? The trade unions must demand the books be opened for inspection by the Longbridge workers and their unions.

Blair, Brown and Woodley are desperate to pull off some sort of “Phoenix Mark Two” deal with the Chinese to minimise the effects of the catastrophe on Labour’s vote in key West Midlands constituencies in the general election. Even if they succeed, such a deal would do nothing to ensure the long-term security of car production at Longbridge. At best, it would begin the final chapter in the long drawn out death agony of the plant.

The union bureaucracy’s enthusiasm for “Phoenix Mark Two” follows their muted response to recent job losses at Jaguar, and imminent cuts at Peugeot, both in near-by Coventry. The bankruptcy of Rover also starkly shows the bankruptcy of the bureaucratic strategy of trying to save jobs by selling jobs and conditions.

In 2000, Workers Power and others on the left working in the Rover Action Group, warned that reliance on John Towers would lead to disaster. Despite the fact that the Phoenix bid had the support of both the national and local union leadership, we argued that Rover workers would in the end pay the price and further cuts and job losses would follow.

We repeat now what we argued in 2000: for there to be a future for Longbridge, the plant needs to be nationalised under workers control.

This is the only way of guaranteeing either car production or production of socially useful goods using the many skills of Longbridge workers. Workers at Longbridge and the associated industries have a right to demand Work or Full Pay and full pension rights.

With Labour at the height of a general election campaign, the time is right to raise these demands. Rover stewards should call together workers representatives from the components industry – and indeed from across Birmingham as all sectors are affected – to form an Action Committee and organise the fight back.

Labour can be forced to concede, but only under the pressure of militant working class action in defence of jobs, beginning with a workers’ occupation at Longbridge.