The dead-end of the metal unions’ Manufacturing Alliance with the bosses
By
Andrew Martin
The Australian Manufacturing Workers Union
(AMWU) has criticised the Labor government for failing to invest in
manufacturing. It claims that Labor is ignoring its “base”
in the blue-collar unions and is likely to lose thousands of votes
unless it invests heavily in manufacturing.
What has
disturbed the usually cosy relationship the AMWU officials have with
the ALP is the government’s decision to slash the green car
innovation fund - a handout to big business. The government claimed
it axed the $500 million program to fund the flood relief
package.
The AMWU officials launched a campaign to “save
manufacturing jobs”. Central to their campaign is an expensive
run of TV advertising. Dave Oliver, national secretary of the AMWU,
has said he’s not sure which way votes will flow at the next
federal election as a result of the union’s campaign. On March
15, 8000 workers rallied in Perth as part of this campaign, demanding
more local jobs from the resources export boom. The rally was
directed at the Western Australian Liberal state government to secure
more local contracts for mining construction projects.
The
Construction, Forestry, Mining and Energy Union (CFMEU), AMWU and
Maritime Union of Australia (MUA) all mobilised big contingents for
the rally. Workers chanted “our rocks, our gas, our jobs”.
There were placards at the rally reading “train our kids first”
and “support local businesses”. The nationalist
sentiments expressed turned into overt racism when CFMEU state
secretary Kevin Reynolds took the stage. He claimed Chinese migrants
on 457 visas were undermining Australian wages and working
conditions.
Less than two years ago, Oliver was making claims
that the federal ALP government had committed to strengthening
manufacturing in Australia and boosting local jobs following the
formation of the Manufacturing Alliance, an initiative the AMWU took
with the Australian Workers Union (AWU) in July 2009. Together, both
unions represent 250,000 workers.
In its newsletter, AMWU
News, Oliver was quoted as stating: “We want the industry’s
interests to be heard at all government levels, to support and
promote Australian manufacturing businesses, to lead debates and
further the industry, and to ensure that the two unions work jointly
to protect and promote the sector.” Paul Howes, national
secretary of the AWU, made a similar statement in the same article:
“We must prepare for the future, and ensure that our industry
and our country, is well positioned to navigate the global financial
crisis, and come out the other end with a strong recovery”.
‘Buy Australian’
The AMWU claims that
the government responded with a “Buy Australian”
initiative and the establishment of the Steel Industry Innovation
Council. The newsletter reported that both unions welcomed the
initiative and “have a seat at the table of the new body”.
The Manufacturing Alliance convened a national round-table of union
officials and industry bosses out of which came nothing but the usual
Laborite class-collaborationist rhetoric about the employers and
workers having mutual interests. Not a single job was saved.
Oliver
in the AMWU News stated that “there are many employers
who are willing to engage in cooperation to the benefit of both the
company and the worker.” He also claimed that the “‘Buy
Australia’ policy is the first major reversal of free trade and
free-market-based policies for more than 15 years and will deliver
thousands of jobs in manufacturing”. According to the
Australian Bureau of Statistics Labour Force May 2009, between
February 2008 and May 2009 the manufacturing sector shed 81,000 jobs.
Apart from big closures such as the Bridgestone plant at Adelaide
which shed 600 workers, thousands of smaller firms have also closed
or moved off-shore.
Speaking at an October 2009 Business
Leaders’ Forum, Treasury secretary Ken Henry stated that not
only was the decline of manufacturing in Australia necessary, it was
also desirable. A similar view was expressed by Alan Wood, an
economics writer for News Ltd’s Australian. His response
to the Swedish-owned Electrolux company’s decision in 2006 to
close its manufacturing plants in Australia, at the expense of 500
jobs, was to comment that “[i]n the age of globalisation,
offshore sourcing of production by industries like Electrolux is
sensible and inevitable”.
As far as Ken Henry and Alan
Wood are concerned, this is the “free-market” at work,
with a shake-out of inefficient enterprises that can’t compete
on the world market. Capital has no interest in the welfare of
wage-earners. Neither is it restricted by national borders. What
these job losses indicate is not just inefficient enterprises falling
victim to the Global Financial Crisis, but a flight of capital away
from Australian manufacturing.
Inefficiency is basically code
for “not enough profit”. It doesn’t necessarily
mean that the industry in question isn’t sustainable, or even
that the commodities being made aren’t profitable to their
owners, simply that they can make bigger profits if they
relocate their factory elsewhere. The goal of capitalist businesses
is to maximise profits, and that means minimising costs.
Where this can be done without having to invest in new machinery, it
will be. In an automotive spring factory I worked in, Monroe Springs,
the furnace that heated the leaf springs for Ford Falcon utes dated
back well before World War II. Of course there was no need for a new
furnace since the making of leaf springs hadn’t changed since
they were used on carriages towed by horses.
Much of
Australia’s heavy industry is archaic while the expectations on
the workforce to produce “good quality” with greater
intensity is greater than ever. When faced with decaying equipment,
Australian capitalists weigh up the cost of refurbishment and repairs
of their physical assets against their expected revenues. When these
costs start to reduce their expected profits, they will purchase new
equipment or look to reduce their labour costs, including by simply
moving production to where labour is cheaper.
Example of
ACL Bearing
After ACL Bearing received millions of dollars in
government subsidies, it went into voluntary administration in August
2009. ACL was the sole manufacturer of precision bearings for
automotive use in Australia and exported to over 55 countries. The
news of the closure came within weeks of workers being told that
their jobs were safe due to a rescue package worked out in June
between the federal and Tasmanian state Labor governments, ACL, car
producers Ford and Toyota, and the AMWU. According to the AMWU’s
newsletter, the workers voluntarily took a 20% pay cut. The longest
serving ACL workers were owed up to 96 weeks redundancy pay.
But
the capitalist media and politicians - despite their rhetoric about
the social and economic costs damaging the “nation’s
fabric” — weren’t interested in the ACL workers.
They were left to their own devices and forced into Centrelink
queues. The company executives will live on quite comfortably. Two
ACL directors were paid a combined $665,000 in redundancy payments
between July 2008 and the end of June 2009. ACL boss Ivan James was
paid a weekly income of $7814 from July 1, 2009.
What the AMWU
and AWU have tried to put together is a “national action plan”
that concentrates on investing in “high end technology”
in “niche markets”, but it hasn’t gone anywhere. In
a speech in June, Howes said: “If Australian manufacturing is
to survive and prosper it must meet the competition from firms
headquartered in Europe, the US and Japan that are exploiting
advanced management systems, propriety intellectual property and
technology leadership, and those in India and China that combine low
wages with emerging management and technology capabilities.”
The
idea was for government to pour money into research and development
(R&D), providing funding for industries that are supposedly
concentrating on “innovation”. Essentially what the
Laborite union leaders propose is that taxpayers’ dollars be
used to bankroll companies that already have a monopoly on advanced
technology. The Advanced Manufacturing Cooperative Research Centre
(AMCRC), based at Swinburne University, received $49 million in
government funding. The centre invests in intellectual property
protection giving exclusive control of new technologies to Australian
big business.
The outlook of the AWU, AMWU and CFMEU is
essentially nationalist-protectionist. Their general approach has
been to advocate for tariffs (taxes on imported goods) in order to
protect “jobs” - in reality business profits — from
goods made in low-wage countries. But this doesn’t work. For
one thing, the big end of town won’t allow it. Tariffs in other
countries threaten the profitability of basic commodity exports,
which is why mining companies in this country, such BHP-Billiton and
Rio Tinto, are major backers for “free trade”.
Tariffs
by another name
In their rhetoric, Oliver and Howes rarely
mention the word tariff. They often use the terms “protection”
or “import duties”. Perhaps they don’t want to
invoke memories of when “fully imported” used to be a
sales pitch for better quality. They call for “procurement”
clauses, such as for steel in government contracts, and thus
providing Bluescope with taxpayer-funded subsidies. This approach has
limitations in that government construction and infrastructure
projects account for a small amount of GDP.
The call for
government procurement and a “Buy Australia” campaign is
not new. The AMWU ran a similar campaign in the 1990s called “Build
it here or jobs disappear”. It didn’t achieve much except
for promoting nationalism in the labour movement. Australian
governments have since entered free trade agreements with many
countries such as New Zealand, Chile, Singapore, Thailand and the US
and negotiations for FTAs are under way with Japan, Indonesia and
India. Successive Labor and Coalition governments have made it clear
that tariffs are a policy of the past. They do not want to incur a
backlash from the US and other developed capitalist countries that
support “free trade”.
Being the dominant player in
the world market, the US however does employ tariffs; particularly to
protect its automotive industry. The fall-out from the Great
Recession of 2008-09 shows how artificially subsidised the auto
industry was and the hypocrisy of “free trade”. When the
US tyre industry recently faced collapse, US President Barack Obama
proposed a 35% tariff on imported tyres. The last 40 years of
Detroit’s history has been an unholy alliance between the
auto-manufacturers, the government and the United Auto-Workers union.
For more than 40 years a 25% tariff kept out of the US foreign
imports of light trucks and SUVs while the big three auto
manufacturers pocketed billions from producing sub-standard,
petrol-guzzling vehicles that didn’t have to comply with all
the environmental and safety standards of other passenger vehicles.
The crisis the auto-manufacturers face is just one part of an
overall long-term decline in the world capitalist economy, with a
resulting increase in inter-imperialist competition. Australian
governments won’t pursue tariffs at this stage, because they
seek to force a restructuring drive onto industry in order to move
capital away from areas that are deemed inefficient.
Tariffs
lead to a weakening of world trade as they provoke retaliatory
measures. They have never averted a capitalist economic slump.
Between 1929 and 1934 when governments across the developed
capitalist countries erected tariffs, world trade decreased by
66%.
Furthermore, nationalist protectionism - by encouraging
workers to identify their interests with those of “their”
capitalists — pits workers of different nations against each
other, solely to the advantage of “their” national
capitalists. At a recent monster-truck show in the US, an editor for
the economics website, Seeking Alpha, observed that lots of booing
was directed toward the lone Toyota among all the Fords and Chevy’s
(naturally the Toyota was cast as the “evil truck”).
Stung by the collapse of manufacturing in the US, many workers there
have directed their anger towards foreign-owned products (or even
products made in the US by US workers employed by foreign-owned
subsidiaries). At a base level this extends to national chauvinism
towards the workers of other countries, as if they were responsible
for “stealing” jobs from us.
Under capitalism, the
systematic gutting of manufacturing and transfer of capital into
more profitable areas, whether rational or not, is inevitable. In
this environment, Australian manufacturing has become heterogeneous
in nature. Traditional heavy industry is giving way to new high-tech
industries that have less requirements for large amounts of manual
labour. What has emerged is that manufacturing activities with strong
links to Australia’s natural resources of food, forests and
minerals account for a significant and growing share of manufacturing
value added. A second category of goods — more differentiated
products with higher skill and R&D intensities — also have
tended to increase in relative significance. These include medicinal
and pharmaceutical goods, photographic, scientific and medical
equipment and, to a lesser extent, electronic equipment. This trend
is not only taking place in Australia, but is a common feature of all
capitalistically developed countries. Among 17 “rich”
countries, only one (Singapore) experienced an increase in the share
of traditional manufacturing in nominal GDP over the two decades from
1978.
The Labor government seeks to wholeheartedly embrace the
big corporations’ agenda of “free-trade”, while on
the other hand preserving social peace through fostering
collaboration between the trade unions and big business. By seeking
to openly collaborate with big business to secure Australian
manufacturing industry jobs, the leaders of the AMWU and AWU are
pursuing a futile course. None of their proposals address or
challenge the inherit logic of capitalism - its pursuit of corporate
profit maximisation through the production of commodities without any
rational social basis or social plan. Neither do they address the
dominant role big business plays in formulating government economic
policy.
As divided as the capitalist ruling class is by its
competing business interests, there is one point it is united on —
the central element of its plan for economic recovery is the
reduction of living standards, working conditions and democratic
rights of workers everywhere in order to bolster business profits. A
necessary step in the halting of factory closures is the fight for
democratic rights. Workers need the ability to be able to
collectively withdraw their labour and that requires a challenge to
the existing industrial laws which are a continuation of John
Howard’s draconian Work Choices. A serious fight against these
laws would strengthen the level of organisation of the union movement
and lay the basis for stronger resistance against factory closures.
And a serious fight against Labor’s Work Choices Lite
is impossible as long as the unions are dominated by pro-Labor
officials who peddle the illusion that workers and their “national”
exploiters - which consists of all of the employing class, the class
that lives off our labour — have a mutual interest in the
defence of workers’ jobs. It will require the replacement of
these officials with militant union leaders who are guided by the
principle that an injury to one worker, anywhere in the world, is an
injury to us all. H