Socialist Worker

Car bosses’ Brexit threats expose their weakness

Alistair Farrow looks at why car industry fat cats say they might move production abroad after Brexit

Issue No. 2620

Threats from car company fat cats are nothing new

Threats from car company fat cats are nothing new (Pic: Steve Jurvetson/Flickr)


According to the people who want to stop or limit it, Brexit will change every aspect of our lives for the worse. They see every problem as evidence of this.

Bosses are more than happy to fuel this narrative to suit their interests.

The car industry claims to be particularly vulnerable post-Brexit because it relies on just-in-time production methods.

Last week Japanese ambassador to Britain, Koji Tsuruoka, intervened on behalf of Japanese bosses who have factories in Britain.

“You want to have an assurance that you can trade very confidently across borders and not to have to worry about tariffs,” he said.

He went on to say that Nissan would stay in Britain—thanks to a deal with the Tories brokered in October 2016. The implied threat is other Japanese firms could pull out if they do not get similar beneficial deals.

Just-in-time production is a system where costs are kept down because commodities such as car parts are produced, transported and used rapidly.

A spokesperson for car firm Honda said it kept enough parts in storage to keep its factory in Swindon going for 36 hours.

Football

To store enough parts to ensure nine days’ production would take storage space equal to 42 football pitches.

Bosses’ latest argument is that border controls will be tightened post-Brexit, leading to logistical bottlenecks at ports such as Dover.

Holdups in the production process would be the result, apparently because this problem is insurmountable.

People opposed to Brexit have seized on this as another example of how the vote to leave the EU will cause chaos. What it actually shows is the teetering vulnerability of the system—and the potential power of workers.

In a system of production where everything is designed to be used almost instantly, the slightest hiccup in the process can be catastrophic.

A week-long strike, for instance, would be devastating to Honda.

Bosses are emboldened to stretch supply chains to their limits in part because of historically low levels of strikes.

Workers should use their power to make their own threats to the Tories and the bosses. Threats from car company fat cats are nothing new.

Bosses regularly say they will take their factories to other countries if wages get too high, production too expensive or they feel they’re not handed enough tax breaks.

Investor

The industry employs over 850,000 people. “Government must take steps to boost investor confidence and safeguard the thousands of jobs,” said Society of Motor Manufacturers and Traders chief executive Mike Hawes.

The Tories are more than willing to offer the incentives.

In 2016 then Brexit minister David Davis said, “We could do a great deal to support the industry.

“Research support, investment tax breaks, lower vehicle taxes—there are a whole range of possibilities to protect the industry.”

Car manufacturers know that there is big money to be made in Britain. In the year to July almost 1,500,000 new cars were registered here.

Whatever Brexit means for import tariffs, bosses will want access to that market.

And they are not going to throw away huge investments in equipment and training workers.

Honda’s Swindon factory cost it over £250 million.

The bosses’ threats should be an opportunity to pull the Brexit debate away from what is best for capital, and towards what is in the interests of ordinary people.


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