04.06.2020
Global unions needed
Workers in Sunderland should not be pitted against workers in Barcelona, writes Eddie Ford
Confounding general expectations, Nissan announced last week that it will keep open its Sunderland plant. As a result, the company’s 40-year-old Barcelona plant is going to close, with 3,000 job losses - with many more to come for those workers dependent on the plant indirectly.
Sunderland will now become Nissan’s European hub, being Britain’s biggest car plant - in 2019 it built nearly 350,000 vehicles, employing almost 7,000 workers. At the same time though, the carmaker said it would seek to “improve efficiency” at the factory - preparing to cut a fifth of its global production capacity and hence reduce annual spending by 300 billion yen (£2.3 billion) worldwide, Covid-19 having pushed Nissan to its first annual loss in 11 years. As the pandemic hit hard, the company felt forced to temporarily close plants around the world, including Sunderland - which produces three of Nissan’s five core models: the Qashqai, Juke SUV and the Leaf electric car. According to Makoto Uchida, the firm’s chief executive, the priority at the present time is to “pursue steady growth”, instead of the massive sales expansion it pursued in the past.
Of course, Sunderland was under very real threat even before the coronavirus. The company had made it clear that a no-deal Brexit would jeopardise the “entire business model for Nissan Europe”, thanks to the prospect of 10% export duties on the majority of the plant’s production - the legal default under World Trade Organisation rules. This explains why many found Nissan’s decision to reopen Sunderland puzzling, especially as the talks between Britain and the European Union seem to be going nowhere. The UK government still insists that there will be no extension of the transition period.1
When it comes to production, Nissan’s contingency plan, however - cunning or not - is to pull out of mainland Europe and ‘double down’ in the UK. Under this audacious scenario, the Sunderland plant would be kept as part of an attempt to increase market share compared to other carmakers. If companies like Ford and Volkswagen that import to Britain suddenly face tariffs that make their cars more expensive, Nissan hopes that their UK-made models would develop a competitive edge - allowing the company to grow from the current 4% of the market to as high as 20%.
For example, the Micra would be moved back to the UK from France. The company would also explore Sunderland producing the X-Trail, the largest of its models. Another factor is that Nissan’s reliance on components imported from Europe - which would face tariffs under a hard Brexit - will also reduce, as the brand winds down its use of diesel engines. Nissan ambitiously plans to eliminate that fuel source from its line-up by 2022. But other carmakers have similar plans, it almost goes without saying. Carlos Tavares, chief executive of Peugeot owner PSA - France’s largest car manufacturer - is promising that in the event of no agreement between Britain and the EU, he would step up the company’s presence at its Ellesmere Port plant in Cheshire. Post-Brexit competition could be brutal.
Having said all that, Sunderland’s future might not be as secure as it first appears. Sending out contrary messages, Nissan’s global chief operating head, Ashwani Gupta, told the BBC on June 3 that the plant is “unsustainable” if the UK leaves the EU without a trade deal.2 Gupta went on to say that any plans for its strategic partner, Renault, to take up spare capacity at Sunderland would be a matter for the French carmaker. This is complicated by the fact that the French government has a 15% stake in Renault and its €5 billion emergency loan guarantee to help the company through the pandemic may mean it is less likely to allow production to move to the UK. As a sting in the tail, Gupta added that recent sales figures from China showed the world’s biggest car market was “recovering fast” and the company was “winning market share” - but vehicles for that market are not produced in the UK, of course.
Either way, Sunderland or not, Nissan is obviously planning to restore production - in part because of the fairly recent EU-Japanese trade deal, enabling the company to make cars in Japan and then export them to Europe at a minimal or zero tariff. No longer part of the single market - something so prized by the Brexiteers’ hero, Margaret Thatcher - the UK cannot be the gateway to Europe any more, unless the EU talks take a spectacularly positive new turn. As part of the major restructuring, it seems, Nissan will instead focus on “key” markets like Japan, China and North America - whilst ceding Europe to Renault, at a time when the global car market will have to make very aggressive cost reductions. In this capitalist ‘brave new world’, only plants that can demonstrate an ability to be ruthless about efficiency will continue to attract investment - meaning the workers will have to pull out all the stops and prove their ‘flexibility’ at all times. Work, work, work.
Alliance
Modern car ownership is highly complex. Nissan is actually part of the Nissan-Renault-Mitsubishi Alliance - not a single company, but a French-Japanese strategic partnership that has held approximately 10% of the total global market share since 2010.
The Alliance was the brainchild of Carlos Ghosn, its former CEO - as well as previously being chairman and chief executive of Renault, Mitsubishi Motors, Michelin North America, and so on. But he is now an internationally wanted fugitive for allegedly “under-reporting” his income, and is holed up in Beirut after an American private-security contractor helped him flee from Japan. A man obviously full of entrepreneurial spirit, who deserves to be immortalised in a Hollywood film - either as the hero or villain.
But not everything is rosy in the garden, as you can imagine. Insiders and industry experts have bemoaned the companies’ failure to capitalise on their early lead in electric cars, with frictions in engineering departments apparently preventing the proper sharing of information and technology. Rather unimpressively, Renault and Nissan have only one pure electric mass-market car each, respectively the Zoe and the Leaf - the latter produced in Sunderland. This is at a time when they need to cut carbon dioxide emissions to avoid EU fines potentially running into billions of euros. It is estimated that Renault alone faces costs of €1.4 billion if it is to cut emissions by a fifth. Renault is planning eight new models by 2022, but details are very vague. Analysts at Evercore ISI investment bank say Renault is “muddling through” its approach to the transition, with the “future of the alliance” looking “troubled”.
Inevitably, there have been large demonstrations in Barcelona protesting about the closure - tyres set on fire, placards waved, etc. Of course, some on the left will raise the demand for nationalisation. Back in June last year when the rumours first started to circulate about Nissan closing down the Sunderland site, along with Honda in Swindon and British Steel in Scunthorpe, the Socialist Party in England and Wales called for “the nationalisation of threatened plants and shops to save jobs” - as “workers’ livelihoods will only be safe from the designs of greedy bosses if we take the decisions out of their hands”.3 But for Marxists, looking at how these transnational companies operate, such a call is anachronistic - trying to put production back in a national box in pursuit of some form of nostalgic national socialism. Okay, imagine that the Spanish government nationalises the Barcelona plant - but what about the component parts, finance operations, and all the rest of it? Madrid, or anybody else who seized control of the plant, would be left with a pile of useless junk. In other words, we are dealing with a truly global level of production, marketing and financing.
The only serious demand has to be for global trade unions, with the aim of bringing global production under democratic social control - anything else is totally inadequate, if not positively retrogressive. Encouragingly in many respects, some Sunderland workers when interviewed said, “Good for Sunderland, bad for Barcelona”. How very true. But has there been any actual solidarity between the two workforces - or have they been pitted against each other, seeing who can work the fastest and the cheapest? Internationalism and cross-European organisation is an urgent necessity.