Socialist Worker

Build the resistance as risk of recession grows

by Charlie Kimber
Issue No. 2684

Audi announced 9.500 job cuts last month

Audi announced 9.500 job cuts last month (Pic: Alexander Migl/Wikicommons)

News from the German economy last week sent a shiver through bosses across Europe.

Official figures showed Germany’s industrial sector is suffering its steepest downturn for a decade. Industrial output dropped 5.3 percent in October from the same month in 2018.

The news came after data published recently showing industrial orders fell sharply in October, and with most manufacturers expecting a further shrinkage in November.

The Financial Times reported, “The figures suggest that the two-year downturn in German manufacturing is nowhere near close to ending”. Indeed it’s getting worse in the country that is supposed to be the engine for European Union growth.

Because the service sector continues to expand, the German economy as a whole is not in recession. But some sectors are already close to the edge.

The German car industry, which directly employs 830,000 people, is certainly under pressure. Vehicle production in the country slumped 5.6 percent from September to October, taking the year-on-year decline to 14.4 percent.

The bosses—just like those in Britain or the US—are going to make workers pay.

Last week the German automaker Audi announced 9,500 job cuts over the next five years, with one out of every six workers losing their job. Volkswagen has eliminated 30,000 jobs over the past three years, while increasing productivity by 25 percent over the same period.

In the components industry, Continental has announced plans to eliminate 20,000 jobs in the coming years. Bosch has already slashed 2,500 jobs in Germany this year and plans to cut a further 3,000 by 2022.


Manufacturing is in crisis worldwide. There has been a year-on-year fall in manufacturing output in Britain, Australia, Brazil, Canada, Chile, France, Germany, Greece, Italy, Japan, Netherlands, Portugal, South Korea, Turkey, and the US.

In addition a trade and technology war between the US and China is intensifying, destroying world trade growth.

Last Sunday the Chinese authorities instructed all government offices and public institutions to remove foreign computer equipment and software within three years. It was a devastating blow to firms such as HP, Dell and Microsoft.

A decade on from the financial crisis, many economies teeter on the edge of recession. Even where there is growth it is anaemic. And its fruits are grabbed overwhelmingly by the very richest in society.

Another recession will intensify every political and social tension—often to explosive levels.

It is easy to imagine how the racists and the fascists will step up attempts to blame migrants, Muslims and black people as suffering intensifies. And they will be coming from a much more developed base than during the crisis of 2008.

But there will also be a space for bold responses by the left. The revolt in France now could be replicated in many other countries—including Britain.

Some French unions are openly pointing to how the bosses have been bailed out. “In 2008 they found 400 billion to save the banks,” said one this week. “Withdraw the pension plan.”

There may not be a recession in the next few months. But when it comes, half-measures will not be nearly enough.

Whoever takes over in Downing Street will face strict limits laid down by the bosses who will be determined to restore profits at any cost.

Defending working class people will be impossible unless there is direct confrontation with the capitalists.

There would have to be public ownership under democratic control not just of utilities but of banks, pension funds and major firms in every sector.

Without this it will be impossible to defend jobs and living standards or to tackle climate change because investment will be controlled mostly by private firms. And they won’t invest unless they make profits.

None of the main parties went into the election with such a programme.

It will have to be developed from below.

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