Britain: Peugeot Coventry - The Fight Continues

On Thursday June 16th, some 60 Peugeot workers from the threatened Ryton plant in Coventry showed their determination to fight the proposed plant closure by demonstrating outside a Peugeot dealership on the A45 Kenpas Highway in Coventry.

This action is part of an ongoing campaign to get the public to boycott Peugeot cars. In 2005 Peugeot sold 280,000 vehicles in the UK with more than 10% of the market share and the unions at the plant believe that if there is a fall in this market share as the result of a boycott, this would more than negate the savings made if the plant is closed and a new one opened in Trnava, Slovakia.

Even before the closure was announced, it was obvious that secret discussions had been going on for some time between Peugeot and the Slovakian government which has offered £73million towards the construction costs of the new plant. Peugeot plans to invest 350million Euros there and produce 450,000 vehicles by 2010, with a new, undisclosed product coming on the market in 2009/10. Despite having made more than 1billion Euros profit in 2005, the company believes that even more profit will be made by switching production to Slovakia where wages costs are 20-25% the level of Ryton.

The T&GWU and Amicus believe that their efforts to put forward a viable alternative plan has been hampered by the lack of information from the company. A car industry expert from the T&GWU nationally has requested full disclosure of the facts, but so far only about 25% of what is needed has been released by Peugeot.

According to the Amicus Convenor, Tony Johnson, “there is a need to challenge the company’s figures, especially where they claim that vehicles will be 415 Euros cheaper per unit to produce in Slovakia than Ryton”. He condemned the company’s refusal to disclose the information needed on the basis of “commercial sensitivity” and stated that the “alternative trade union business case was preliminary as it is based on partial information”. Tony also believes that “the lack of consultation over the proposed closure amounts to breaking UK laws, but if the case were to go to court, there would only be a punitive fine of only £75,000, which would be nothing for Peugeot”.

The campaign by the unions will now intensify in the five-week run up to the August shutdown. According to Tony, “the International Motor Show in London on July 18^th will now be targeted as the boycott campaign spreads”. In addition he said that the “issue was raised at the recent Amicus conference in Scarborough and all 114 delegates there would be taking the message back to their workplaces to spread the boycott of Peugeot vehicles”.

There can be no doubt that many sections of the Peugeot workforce are determined to keep the plant open despite facing many obstacles. The fight is being hampered on two fronts. Firstly, workers at the plant have rejected industrial action as part of the campaign. A ballot saw 440 T&G members vote for action and 516 against on a turnout of 69%. Amicus members too narrowly voted against strike action. Secondly, Peugeot Citroen have threatened to reduce redundancy pay and bring forward the closure date if workers take action to challenge their decision.

Time is not on the side of the unions. One shift is to be made redundant in July 2006 followed by complete closure in mid 2007. On May 12^th the joint unions, T&GWU and Amicus, presented their preliminary alternative business case to the company. This involved:

1. Moving to a single shift operation in July 2006 with the loss of over 1,000 jobs in the short term.
2. Significantly reducing costs at Ryton by cutting the cost of labour as well as other costs throughout the plant, including management overheads, through an innovative labour agreement to achieve labour savings for existing employees and greater labour savings for new hires. What this means in practice is not spelled out, but it could possibly mean fewer workers producing more cars at a faster pace on lower wages and the pay rates that have been achieved through years of struggle not being offered to new workers. To try and get cost levels down to those expected from the Slovakian plant could mean large cuts, especially in the area of labour costs. If such wage differentials came into existence for workers doing similar work, it would be a recipe for division, not unity, amongst the workers.
3. The trade unions are also committed to accepting all reasonable proposals by the company to improve productivity. But whose definition of “reasonable” will be used? What is reasonable for the company may not be so for the workers.
4. The trade unions hope that as they have always co-operated in terms of accepting initiatives to improve plant productivity, quality and flexibility, the new, undisclosed product will be built by two more shifts at Ryton in 2009/10 as the company has already admitted that building the product at Ryton will be profitable.

Despite the substantial savings proposed by the unions the company has declined the offer without any discussions, and therefore no agreement exists on any of these proposals. The proposals however do reflect the willingness of the trade unions to go to even greater lengths and make even more sacrifices to keep the plant open.

The unions believe that the company’s calculations are wrong as closure would create “bad will” in the Midlands which will cost the company in terms of reputation and sales, and the unions are prepared to spend £millions in a high-profile campaign to reduce Peugeot-Citroen’s share of the market. The problem is that even if the unions were to be successful in reducing the market share and thus forcing the company not to close the plant, they would then have to spend more £millions in another high-profile campaign to persuade motorists to buy Peugeot products. Once buyers have switched brands, it is difficult to get them to switch back again. Would a consumer boycott therefore work?

The unions also believe that it is “morally wrong” for Peugeot to shut plants in the UK or in western Europe because “labour is cheaper in eastern Europe”. Again the problem is that capitalist owners of manufacturing only have one moral – the profit and loss account. For them it is morally right to increase profits even more by transferring production, despite the hardship that this will cause to existing workers.

Throughout Europe the Peugeot-Citroen workers are planning a joint day of industrial action at all their plants to make clear to the company that their plans are unacceptable. Again this shows the determination to fight.

Up to now however the trade union campaign has been based on delivering greater productivity, greater savings and therefore greater profit to the company. And the company won’t listen. Sooner or later Peugeot workers and the trade unions will have to recognise that Peugeot-Citroen and the products they make belong to the workers, not the shareholders, as it is those who work in the plants that actually create the wealth through their labour. On the basis of private ownership, of capitalism, that wealth is creamed off by the shareholders who are now demanding an even greater share of the wealth that is produced. They are not satisfied with 1 billion Euros. They want more. This is what determines their actions, not morals.

How can the plant be therefore saved? The issue of nationalisation under workers’ control will have to be raised and discussed amongst the workers. Peugeot workers and the society they live in have to reclaim the wealth that they have produced. The skills that they have can then be used to produce vehicles that could provide an efficient, reliable and frequent public transport system.

Once the plant is closed, these skills will be lost to the community and society. We must learn from what happened at Rover. As Derek Simpson and Tony Woodley said in the Guardian on June 13^th, “many of those who lost their jobs when Rover collapsed a year ago are still unemployed – and those who have found alternative work are usually being paid a half or even a third of their former wage”.

Tony Johnson said that Peugeot had opened up a £5million Resource centre at the plant to help workers find alternative jobs, but that “many workers, particularly those from the track, were getting negative feedback as they did not have transferable skills”.

On the basis of capitalism, Peugeot workers face an uncertain future of unemployment, low wages, skills dissolution and attendant stress and trauma. A campaign for public ownership of the company under workers’ control could prevent that happening.

June 16^th 2006 

• Britain: "We have to show that Peugeot cannot walk over its workforce" (May 8, 2006)
• Britain: Make plans now to stop the closure of Peugeot, Coventry (April 21, 2006)