news analysis - the manufacturing massacre continues
WORKERS, JUNE 2005 ISSUE
One million British manufacturing jobs have been destroyed under Blair. There were 4.52 million in May 1997. Now there are only 3.52 million. Manufacturing jobs are down 3% in the past two years, the worst performance among the G7 countries — over the same period, such jobs were up 5% or more in the USA, Germany and Japan.
Every month 7,000 British manufacturing jobs are being destroyed. Manufacturing output fell by 1.6% between February and March, the worst month for a decade. And all the parliamentary parties conspire to ignore this continuous disaster, treating it as both unimportant and inevitable. When was manufacturing discussed during the election campaign?
Marconi
In April, BT announced that it had decided to award the whole £10 billion contract for renewing the telecommunications network to overseas firms, snubbing the British workers at Marconi. Yet BT had conducted a successful six-month trial with Marconi's advanced 'soft-switch' equipment and has conducted no similar trials with the contract-winning firms' equipment.
As a result, Marconi has already cut 800 jobs, with another 1,200 likely to go. Still, it's not bad news for everybody — Marconi's chief executive has cashed share options worth £8 million since last August. What is the government's response to the loss of jobs, of skills and of manufacturing potential? No action, no comment.
Motor industry
Storm clouds still hang over the car industry, following the loss of Rover and the equally damaging loss of 850 jobs at Peugeot in Coventry. Sales of Jaguar's X-type cars, built at Halewood, have dropped 29%. Coupled with the job losses at Jaguar in the Midlands, this should start alarm bells ringing. Britain now produces 30% more cars than it did in 1982, and with 50% fewer workers, but most car production in Britain is Japanese owned, with productivity and profitability soaring.
Ford
But Ford (US) is struggling; any crisis in the US will impact on Ford UK and Ford Europe. Profits have dropped by 38%, enough for Standard and Poor's (the credit ratings company) to re-classify Ford's debts of $160 billion to 'junk' bond status, further hitting their stock value. General Motors has also had its credit rating undermined with its $290 billion debt reaching 'junk' status. GM made a loss of $1.2 billion on revenue of $193 billion, and has not a made a profit in Europe since 1999.
Critics of General Motors and Ford point to production methods that have remained basically unchanged for nearly 100 years, with no investment and little or no innovation or attention to the demands of the market. A million US workers, pensioners and their families are dependent on GM for its healthcare and pension provision. If General Motors or Ford staggers, the knock-on effect through industry will be huge.