The MG Rover Phoenix Four must cough up

273214-157By Professor David Bailey

It’s almost a decade Since MG Rover went bust, and it’s time for the ‘Phoenix Four’ (plus one) group of directors to finally cough up.

The group has finally run out of excuses, and they are about to pocket another million quid each from the wreckage of the car crash that they presided over at MG Rover. They should hand it over to the ex-workers.

John Towers, Nick Stephenson, Peter Beale and John Edwards are in line for another payday as a result of the liquidation of MGR Capital, the car finance joint venture which was set up with HBOS.

The liquidator, Paul Stanley of Begbies Traynor, had banked more than £23 million from MGR Capital after MG Rover collapsed in 2005, but the cash had been trapped in legal limbo-land while the Pensions Regulator prepared a claim on part of the money.

A deal has been struck at last. Mr Stanley stated last week that £8 million had been paid to the pension scheme for former MG Rover management.

The remaining money, around £12 million, will be divided between the shareholders.

Mr Stanley couldn’t do anything else other than hand the money over, stating: “I do not have any options in law, all I can do in law is pay these people on the share register…I do not get a view on it, I do not get a moral standing on it. I have an obligation in law to pay out, no-one has discretion over this.”

That means more than a million pounds each for the Phoenix Four, plus MG Rover former chief executive Kevin Howe, thanks to their 49.9 per stake in MGR Capital, apparently held via a trust owned by Beale and Edwards. Nice work if you can get it.

News on this latest bonanza rubs salt in the wounds of 6,500 of ex-MG Rover workers who lost their jobs at Longbridge factory without any redundancy payment when the company went bust owing £1.4 billion. Our work tracking the ex-workers found what a struggle many of them and their families went through. While many of the ex-MG Rover workers did get back into work eventually, many were on much more precarious terms and with substantial cuts in incomes.

When the 2008-9 recession hit, many lost their jobs again. Many of the ex-workers have been in and out of employment repeatedly in the near decade since MG Rover went bust.

Contrast that with the pay-out bonanza enjoyed by the Phoenix Four-plus-one between 2000 and 2005. Remember that the Phoenix Four bought MG Rover for just a tenner from BMW back in 2000, with MG Rover coming with a £500 million dowry from the German car-maker.

The Four then set up a highly complex financial structure to move money around and extract value – to the tune of £42 million in salaries and pensions before the loss-making firm collapsed five years later.

A 2009 Department of Business report concluded that the five directors running carmaker MG Rover awarded themselves “unreasonably large” payouts, despite the fact that the risks they took were “relatively unsubstantial”.

Indeed, that 2009 BIS report noted that they “chose to give themselves rewards out of all proportion to the incomes which they had previously commanded, which were also large when compared with remuneration paid in other companies and which were not obviously demanded by their qualifications and experience”.

Meanwhile, the distribution of assets and liabilities in the complex group meant that assets could be allocated to non-MG Rover companies in the group, while MG Rover was made to bear liabilities that should have been borne by Phoenix.

Signs-on-the-gates-at-the-MG-Rover-plant-in-Longbridge

In addition, tax losses to which MG Rover was entitled were transferred to Phoenix.

The Four didn’t face any criminal charges as the complex financial structure they set up to extract value was cleverly designed and within the rules, but they were disqualified from being directors of any company for up to six years. After the latest pay out to the Phoenix Four, former MG Rover Trust Fund trustee Carl Chinn stated last week: “I am outraged and disgusted.

“If they had any honour, they would hand their money over to the workers who have lost so much. The workers gave everything to MG Rover and have been treated shabbily.”

Labour MP Richard Burdon, whose Birmingham Northfield constituency includes Longbridge, also said last week that the Phoenix Four should hand the money over to workers, stating that “they have a moral responsibility to pay up.”

They both have a strong point. When MG Rover collapsed the Pheonix Four pledged to set up a trust fund for the 6,500 former staff. When that pledge was first made, the Four did not attach any conditions to paying staff with the trust fund money. But so far the Phoenix Four have failed to cough up any money at all.

While there may be technical reasons as to why the Phoenix Four plus One couldn’t hand over funds for several years, you’d have thought that they could anyway dip into their own deep pockets. After all, they did manage to stash away £42 million during their five years at the helm.

And the latest pay-out to them anyway means that the Four – dubbed ‘the unacceptable face of capitalism’ when MG Rover went under – have now run out of excuses as to why they can’t honour their commitment to workers.

A million quid each from Towers, Stephenson, Beale, Edwards and Howe would be relatively small beer for them after all the money they extracted from MG Rover. But it would be a belated recognition of the very significant losses suffered by so many ex-workers.

And it would mean that the Phoenix Four finally honoured a promise they made to ex-workers back in 2005. It really is time for them to cough up.

Professor David Bailey, is Professor of Industry at Aston Business School

Facebook Twitter Plusone Linkedin Pinterest Email
Posted in Blogs, Economics, Employment Rights, Media, Politics, Trade Unions | Leave a comment

Reshoring Is Happening – But Not Fast Enough

273214-157

Professor David Bailey

By David Bailey and Lisa De Propris

Birmingham and the wider region took the biggest output and employment hit of any UK region in the last recession, in part because of a collapse in world trade (Birmingham is, after all, the ‘city of a thousand trades’ – including as a major exporter).

But since then the region has powered back more quickly than elsewhere in the

UK. This bounce back has been seen in improved performance across many sectors in the region but manufacturing activity in particular has spurred growth.

Sectors such as automotive, aerospace and the production of specialised precision components are all driving ahead.

The performance and flexibility of the region’s automotive industry in particular sets a great example for other sectors.

The sector has seen more than £7 billion of investment over the past three years, with much of that here via Jaguar Land Rover and supply chain firms such as GKN (whose Birmingham-based, world-beating Driveline business division posted bumper profits in 2014).

Dr Lisa De Propris

Dr Lisa De Propris

There is a real sense of confidence in several manufacturing sectors including automotive and aerospace. Order books extend several years ahead. “There’s never been a better time to be a manufacturer” one CEO of a major local manufacturing firm told a BQ Magazine dinner in Birmingham recently.

This confidence is reflected in the nascent trend of reshoring, which is seeing manufacturing activity come back to the region. Our own take on things, based on research which is just about to be published, is that reshoring really is happening but on a smaller scale than many have claimed, with around one in six local firms actually doing it.

Top of the list of drivers for local firms in ‘bringing it home’ are transport costs and quality issues overseas, followed by supply chain resilience, exchange rate shifts, rising wages overseas, the need for rapid turnaround, as well as the need to offer a service alongside manufacturing.

There are, of course, barriers to further repatriation. It’s the skills issue, along with access to finance (especially for smaller firms down the supply chain) and high energy costs which provide some of the biggest barriers to an even faster manufacturing upturn and a boost to growth locally. Tackling these would also help local firms export more.

Rapid lead times are critical in sectors such as clothing, textiles and high design content items, where fashions can change quickly and retailers try to avoid having stock in transit for long periods. Indeed, the increased variety and speed of change associated with ‘fast fashion’ have tilted the balance of competitive advantage towards firms nearer ‘home’.

For such reasons, the firm Bathrooms.com, an online retailer of bathroom furniture, is bringing back around half of the contracts currently awarded to Chinese manufacturers to Midlands’ firms, in turn reducing the time from design to production from six months to six weeks.

Another example of reshoring sees RDM Group, the Coventry-based engineering and automotive specialist, starting production at a new state-of-the-art Coventry factory. It is bringing production of aluminium rechargeable torches for Jaguar Land Rover back from China. More products may follow.

Meanwhile, Birmingham-based Brandauer has successfully won work that had previously been sub-contracted to Europe and China, across a range of sectors including the medical, space, safety and auto sectors. In part this is because the firm can offer superior technology and processes, notably in stamping, which can reduce costs for customers.

And just like with the fashion industry, rising costs overseas are not the only driver. Turn around is becoming critical, especially for premium automotive products where the consumer helps to design the final product and doesn’t want to wait months for the car to be delivered. That means more opportunity for local suppliers to provide good and services locally and flexibly.

So, the good news is that manufacturing is indeed reshoring but maybe on less of a scale than had been hoped for, and policymakers at all levels need to think about how they can push this along.

Experience from the United States is instructive in this sense. Just like here, in the US, shrinking cost gaps and the desire of firms to assemble nearer to their customers are making reshoring a fertile opportunity. However, conditions on the ground are sometimes pretty hostile.

For example, both General Electric and Google Motorola Mobility faced huge difficulties in hiring skilled people with experience in modern precision manufacturing when they tried to reshore to the United States, and the firms struggled with local supply chains which had been hollowed out.

In the Google Motorola case most of the parts had to come from China, while GE struggled to source locally. While GE has of late made a success of its Louisville operations, Google Motorola is closing its Fort Worth plant is part because of high shipping costs.

What this US experience shows us is that reshoring is indeed a real opportunity, but isn’t a foregone conclusion.  And like the US case, while a range of economic fundamentals have shifted, the actual logistics of bringing production back to the West Midlands can be hard going.

So whether reshoring benefits the West Midlands depends on the local availability of skills, innovation capacity, the supply chain base, support services and institutional ‘thickness’.  And just like the US, reshoring in the UK will play out on a region-by-region basis.

In many ways the West Midlands – and especially its auto sector – is well placed to make the most of these trends. Major firms like JLR, JCB and BMW (via its world class Hams Hall engine plant) have all located here to access the region’s rich assets.

These include excellent skills, a flexible workforce, a strong innovation environment built around local universities and consultancy firms, a superb design base and low costs. Only a handful of regions in Europe actually have the genuine capability to completely design, develop and build a whole car, including its powertrain. This region is one of them.

Moreover, the region can compete with anywhere in Europe on the basis of high productivity, high quality and competitive labour costs. The region is well placed to develop this further through investment in skills and technology.

But local actors still have to work hard to drive reshoring. The government’s £245 million Advanced Manufacturing Supply Chain Initiative (AMSCI), for example, grew out an earlier auto-focused Regional Growth Fund bid by several Local Enterprise Partnerships (LEPs).

While a welcome move, the overall amount of funding on offer (£245 million in total across manufacturing nationally by 2015) is limited. Extending the scheme so that smaller firms can directly access the support available is critical, especially when the lack of access to finance is a major issue for such firms.

On the latter, ‘tooling up’ in the automotive supply chain is still a big challenge given uncertainty over future vehicle volumes, the asset specificity of the tool (which means that lenders are reluctant to accept it as collateral), and a lack of specialist knowledge in the baking system over how to evaluate proposals.

In tackling such issues, we need to see a ‘step change’ in the engagement of the UK’s financial sector with the automotive industry. At some point a dedicated automotive (and manufacturing) loan fund – backed by the state – may be required to overcome failures in the financial system.

On this, in mid-2014 the government launched a £24m National Tooling Fund to assist toolmakers and component manufacturers to fund the design, development and manufacturing of tools following a firm order from a major assembler.

So far we have seen a great effort locally by local LEPs, suppliers, unions, assemblers and support agencies such as the MAS to work together to support the local mini-renaissance of manufacturing, especially in auto. The cooperation between some of the local LEPs over inward investment, for example, has been genuinely excellent.

But that needs to go further – for example in terms of more cooperation between local authorities – particularly in the form of a combined authority Manchester-style. Local authorities need to seize the devolution opportunity so that the region can develop a wider array of policies to boost the local availability of skills, foster the region’s innovation capacity, support the supply chain base, and provide effective support services.

There is a big opportunity here. The UK economy hasn’t rebalanced in quite the way that the government hoped for. But manufacturing and business services in this region really are doing the ‘heavy lifting’ of reshoring, exporting the economy out of recession, and driving growth.

Let’s make the most of it.

Professor David Bailey and Dr Lisa De Propris work at the Aston Business School and Birmingham Business School respectively.

Facebook Twitter Plusone Linkedin Pinterest Email
Posted in Trade Unions | Leave a comment

Len Lays It On The Line To Labour

Len McCluskey

Len McCluskey warns Labour: “The time for being timid is past”

In a typically barnstorming speech to marchers and demonstrators who took part in ‘Britain Needs A Pay Rise’ march organised by the TUC, Unite’s Len McCluskey laid it on the line to Labour today.

Following the Scottish Referendum, UKIP’s by-election win in Clacton and the slashing of Labour’s majority at Heywood & Middleton, many political commentators, Labour Party members and trade unionists have willed Labour to take on the Tories and set out clear policies that will win voters back to Labour’s cause.

In a combatitive speech, Len McCluskey hammered the Government’s austerity policies and the damage they have done, but he saved his toughest message for Labour’s leadership saying:

“The millions we represent here today know there is an alternative to the starvation policies of the Tories

  • Tackle tax dodgers
  • Build more homes
  • Bring the banks under real public control
  • Freeze energy prices
  • Re-nationalise rail
  • And boost the minimum wage immediately

It needs strong fighting trade unions It needs a mass movement for social justice in every town, every village, every workplace.

And it needs a Labour party that offers a clear socialist alternative at the next election.

Aiming directly at the heart of Labour’s leadership he said:

So I say to Labour – stop being scared of your own shadow.

Don’t shrink what you offer the British people.

The time for being timid is past.

Be brave, be inspired by this march today.

Believe that people power and working class movements can change our country for the better – as history tells us it can.

The achievements of our forefathers and mothers are in our hands Hold on tight, comrades, keep the faith – keep fighting and victory will be ours.

You can’t be clearer than that!

Facebook Twitter Plusone Linkedin Pinterest Email
Posted in Economics, Employment Rights, Labour Party, Media, Politics, Solidarity, Trade Unions, Trades Union Congress, Unite The Union, Workers Uniting | Leave a comment

Support Toronto Packaging Workers! Buy Bottled Beer Not Cans!

The United Steelworkers (USW) has launched a radio advertising campaign aimed at ending a year long strike at Toronto beer can manufacturer Crown Holdings.

Compelling, 30-second spots encourage consumers to “buy bottles, not cans” when purchasing beer, to support factory workers who have been on the picket line for 13 months.

The ads target beer drinkers in the GTA and in cities across Ontario on country and rock stations that reach almost one million listener’s daily.

The “Buy Bottles, Not Cans” ads represent the biggest advertising campaign in the USW’s history. The ads promote a consumer boycott of cans produced by Crown Holdings, but do not discourage purchases of beer – in bottles.

The ad campaign reflects a David vs. Goliath struggle between a small group of factory workers and a powerful, union-busting global corporation.

Crown Holdings, a U.S.-based multinational, forced its 120 Toronto factory workers on strike in September 2013 by demanding massive concessions. Crown has refused to negotiate a fair settlement and has indicated it wants to get rid of most of its Toronto unionized employees even if the dispute is resolved.

Crown has been operating its Toronto factory with replacement workers who are bused across the picket line every day to make cans for major beer brands, probably including Molson, Coors, Labatt, Budweiser and Moosehead.

The USW has informed all Crown customers that strike-breakers are being used to make cans for their products, but to the union’s knowledge none of these major brands have ceased purchasing Crown cans.

“We fight for our members when we see injustice and what Crown Holdings is doing to its employees is among the worst we’ve seen,” said Ken Neumann, USW National Director.

“This company has shown utter contempt for the bargaining process and is waging an all-out attack on our members,” Neumann said. “We believe the public will be moved to help them with the simple act of buying beer in bottles.”

“These workers are hurting, their families are hurting and all they want is to get back to work,” said USW Ontario Director Marty Warren.

“Some of these families are about to lose their homes, others tell us their kids have had to quit college or university. We can all help these families simply by choosing to buy bottled beer instead of cans,” Warren said.

The USW has launched a YouTube video to accompany the radio ads, which are running in Toronto, Hamilton, Sudbury, Sault Ste. Marie, Kingston, London, Kitchener-Waterloo, Cambridge and Niagara Region.

The USW has filed an unfair labour practice complaint with the Ontario Labour Relations Board, asserting Crown has avoided reaching a collective agreement by repeatedly changing its positions and tabling unjustified proposals designed for rejection by union members.

For more information on the campaign to end the strike at Crown Holdings, go towww.takebacksnomore.ca.

Facebook Twitter Plusone Linkedin Pinterest Email
Posted in Employment Rights, International Trade Unions, Media, Trade Unions, Trades Union Congress, Unite The Union, Workers Uniting | Leave a comment

George Osborne’s deficit-reduction plan is way off track

273214-157By Professor David Bailey

On current trends, government borrowing in 2014-15 will come in at around £100bn. The shortfall in the first five months of this financial year is actually higher than it was in the same period in 2013-14.

In June 2010, just after the election and before the George Osborne’s ‘emergency’ Budget, government borrowing for this financial year (2014-15) was forecast to be £70 billion.

The chancellor’s plan was to reduce that 2014-15 borrowing figure to £37 billion and to eliminate the structural deficit (that’s the bit of the deficit which doesn’t go away after a recession) by May 2015 – just in time for the next election. ‘Jam Tomorrow’ was going to be the Tory offer at the election.

Four years on, and Osborne’s deficit-reduction plan is way off track. On current trends, government borrowing in 2014-15 will come in at around £100bn. The shortfall in the first five months of this financial year is actually higher than it was in the same period in 2013-14.

Clearly, this all leaves the Chancellor with a bit of serious explaining to do. On current trends, in the Autumn Statement, Osborne will either have to say that his plan is even further behind schedule or he will have to announce yet more spending cuts or tax increases to fill the fiscal gap.

Just before the 2015 General Election, that’s not exactly a great place for him to be in, and nowhere near where he had hoped to be. Of course, there may still be bumper tax receipts later in the fiscal year, notably in January when the self-assessment returns pile in, which could help Osborne hit his (heavily revised) targets for 2014-15.

There will certainly be a hefty New-Year tax take for Osborne, especially as more people have been caught in in self-assessment under this government. Nevertheless, even if there is a big tax-take in January, Osborne would still be way off-track compared to Plan A.

Remember that he said back in 2010 that the deficit would be down to £37bn 2014-15. Even with bumper New Year self-assessment returns piling in, the deficit will be at least double Osborne’s Plan A figure.

Why is this?

Firstly, over the life of this Parliament, Osborne hasn’t delivered enough growth. The UK economy may be in a sweet spot right now, but remember that it flat-lined over 2011 and 2012 (in part probably because of Osborne’s mis-guided austerity measures), and that lack of growth in turn damaged Osborne’s own deficit reduction plan.

Realising he was in a pickle, Osborne at least had the good sense to scrap his own targets and instead of unveiling yet more tax increases or spending cuts to stick to the original Plan A, he kept putting back the targets so that austerity now stretches well into the next parliament.

Secondly, the recovery has been good at creating jobs but not very well paid jobs, as the warning from the head of the Office for Budget Responsibility that income tax receipts will probably fall short of the government’s target for 2014-15 indicates.

A combination of growth in low-paid jobs and a steady rise in the amount of income people can earn before paying income tax meant the shortfall was likely, said Robert Chote, OBR Chief, in comments to the BBC: “We’ve been getting fewer pence of revenue coming in for every pound of wages and salaries that’s generated. From the perspective of the public finances that’s not particularly good news.”

What this suggests is that low paid workers are not earning enough to take them above the £10,000 threshold at which income tax starts to be levied.

One other relevant point made by the OBR back in August is that tougher financial ‘health checks’ on those applying for mortgages (as part of the Bank of England’s attempts to stop a house price boom) seem to have slowed down demand for mortgage loans, with some knock-on effect on the amount of money raised by the government through stamp duty.

So where does this leave Osborne’s Plan?

Firstly, let’s recognise that Plan A has been effectively scrapped, even if Osborne doesn’t admit it publicly. Deficit reduction will take two parliaments not one. Jam tomorrow seems a long way away.

Secondly, as economists know well, the deficit is very sensitive to the state of the economy. If there is no growth, then the deficit doesn’t come down very easily. Osborne should have been more sensitive to that in the first place.

Thirdly, growth on its own isn’t enough. Its distribution, matters. Having lots of people on zero-hour contracts and self-employed workers scratching around for a living doesn’t make for healthy state finances.

Overall, what this all reinforces is what many of us have been saying since 2010: a very sharp tightening of fiscal policy in the context of strong economic headwinds weighs heavily on growth, in turn actually making it harder for the government to meet its own fiscal targets.

And so it is turning out.

Professor David Bailey is Professor of Industry at the Aston Business School.

Facebook Twitter Plusone Linkedin Pinterest Email
Posted in Trade Unions | Leave a comment

Manufacturing is coming home….

273214-157By Professor David Bailey, Aston University

Reshoring really is happening but we need to do more locally to make the most of it

‘Reshoring’ manufacturing – or manufacturing activities ‘coming home’ has been a recurring theme in my work over the last few years. My own take on things, based on survey work I have undertaken with Dr Lisa De Propris at the Birmingham Business School, is that reshoring really is happening but on a smaller scale than many have claimed, with around one in six local firms actually doing it, driven by concerns over costs, quality and turnaround or lead times.

Our most recent work on this has just been published in the Cambridge Journal of Regions, Economy and Society. It pulls together a whole range of studies that look at the reshoring phenomenon and looks at the drivers of, and limits to, reshoring.

Several recent large UK-wide surveys come to similar findings for the UK as a whole as our own work for the Midlands: one in six UK manufacturers have brought production back from overseas during the past year or are in the process of doing so.

The Manufacturing Advisory Service (MAS), for example, surveyed over 500 small and medium-sized (SME) manufacturing firms last year and found that – like our own local survey – around one in six firms were actually bringing production back, compared with only 4 per cent that offshored in the past year.

Around a quarter of respondents to the MAS survey said concern over the cost of offshore production was the main motive for reshoring, followed by quality (cited by 20%) and lead times (18%).

The latter issue of rapid lead times or turnaround is key in sectors such as clothing, textiles and high design content items, where fashions can change quickly and retailers wish to avoid having stock in transit for long periods hence a desire to produce near market.

Indeed, the increased variety and fashionability associated with ‘fast fashion’ have tilted the balance of competitive advantage towards firms nearer ‘home’.

In a similar vein, the firm Bathrooms.com, an online retailer of bathroom furniture, is bringing back around half of the contracts currently awarded to Chinese manufacturers to Midlands’ firms, in turn reducing the time from design to production from six months to six weeks.

Another local example of reshoring sees RDM Group, the Coventry-based engineering and automotive specialist, beginning production at a new Coventry factory, thereby enabling it to bring back production aluminium rechargeable torches for Jaguar Land Rover from China which it had previously outsourced. More products may follow.

And as with the fashion industry, rising costs overseas are not the only driver. Turn around is becoming critical, especially for premium automotive products where the consumer helps to design the final product but doesn’t want to wait months for the car to be delivered. That means more opportunity for local suppliers to provide goods and services locally and flexibly.

So, the good news is that manufacturing is indeed reshoring but maybe on less of a scale than had previously been thought, and at a national level policymakers need to think about how they can push this along, through access to finance, skills, capital allowances and an industrial policy committed to ‘bringing it home’.

Moreover, how can we make the most of this locally? For starters we can learn from experience elsewhere, especially in the United States, where the reshoring trend has been more pronounced.

Just like here, in the US, shrinking cost gaps and the desire of firms to assemble nearer to their customers are making reshoring a fertile opportunity. However, conditions on the ground are sometimes pretty hostile, with local supply chains and the skill base often hollowed out after years of off-shoring.

For example, both General Electric and Google Motorola Mobility faced huge difficulties in hiring skilled people with experience in modern precision manufacturing when they tried to reshore to the United States, and the firms struggled with local supply chains which had been hollowed out.

In the Google Motorola case most of the parts had to come from China, while GE struggled to source locally. While GE has of late made a success of its Louisville operations, Google Motorola is closing its Fort Worth plant is part because of high shipping costs.

What this US experience shows us is that reshoring is indeed a real opportunity, but isn’t a foregone conclusion.  And like the US case, while a range of economic fundamentals have shifted, the actual logistics of bringing production back to the Midlands can be hard going.

Whether reshoring benefits a region like ours depends on the local availability of skills, innovation capacity, the supply chain base, support services and institutional ‘thickness’.  Like the US, reshoring in the UK will play out on a region-by-region basis.

So far we have seen a great effort locally by Local Enterprise Partnerships (LEPs), suppliers, unions, assemblers and support agencies such as the MAS to work together to support the local mini-renaissance of manufacturing, especially in auto. The cooperation between some of the local LEPs over inward investment, for example, has been great to see.

That needs to go further – for example in terms of more cooperation between local authorities so that we can make the most of devolution opportunities thrown up in the wake of the Scottish referendum. That’s needed so that we can have the policy levers available to continue supporting the mini-renaissance of manufacturing locally.

Blog originally published on The Information Daily.

Facebook Twitter Plusone Linkedin Pinterest Email
Posted in Trade Unions | Leave a comment

Venezuela: the disturbing message of Robert Serra’s murder

Hector Rodriguez, Antino AlvarezLetter published in The Guardian, Thursday 10th October 2014 

We express our condolences and solidarity to Venezuela following the murder of Robert Serra (27), the national assembly’s youngest parliamentarian, who was found dead in his home on October 1st (theguardian.com, 8 October).

Government officials have stated it was tied to a terrorist plot from extreme elements of the rightwing opposition, with the secretary general of the Union of South American Nations, former Colombian president Ernesto Samper, saying: “The assassination of the young legislator Robert Serra in Venezuela is a worrying sign of the infiltration of Colombian paramilitarism.”

Worryingly, Serra’s murder joins the list of other assassinations of government figures and the situation resembles the prelude to the overthrow of Salvador Allende in Chile, when sections of the Chilean opposition did not distance themselves from violent actions, including the assassination of a general.

We condemn this murder and other examples of extreme, anti-democratic violence aimed at destabilising Venezuela’s elected government.

Ken Livingstone President, Venezuela Solidarity Campaign, Colin Burgon Labour Friends of Venezuela, Tariq Ali, Diane Abbott MP, Baroness Janet Royall Leader of the opposition in the House of Lords, Tony Burke Assistant general secretary, Unite the Union, Mike Wood MP, Elaine Smith MSP, Lord Nic Rea, George Galloway MP, Neil Findlay MSP, Katy Clark MP, Jeremy Corbyn MP, Mike Hedges, Welsh AM, Jenny Rathbone Welsh AM, John McDonnell MP, Michael Connarty MP, Kate Hudson General Secretary, CND, Lindsey German Convenor, Stop the War Coalition, Salma Yaqoob, Andy De La Tour, Victoria Brittain, Billy HayesGeneral secretary, CWU, Mick Whelan General secretary, Aslef,  Doug Nicholls General secretary, General Federation of Trade Unions,  Ronnie Draper General Secretary, BFAWU, Roger McKenzie Assistant general secretary, Unison, Professor Peter Hallward Kingston University, Dr Francisco DominguezHead, Centre for Latin American Studies, Middlesex University

Facebook Twitter Plusone Linkedin Pinterest Email
Posted in International Trade Unions, Labour Party, Media, Trade Unions, Unite The Union, Workers Uniting | Leave a comment

Support Honeywell Locked Out Workers on October 11th


New_email_Top
As the lockout at Honeywell rolls into its second month, members of USW Local 7-669 and our allies are staying strong and we’re stepping up the fight for a fair contract at Honeywell. We’re mobilizing in Metropolis, hitting the road and taking our fight to Washington, DC, and building support around the world. With your continued support we’ll last one day longer and win a fair contract at Honeywell!

What’s at stake in Metropolis?

One of the biggest issues on the bargaining table in Metropolis is the company’s demand to expand contracting out language to staff large portions of the facility with outside contractors. We’re concerned that this will eliminate local jobs and create unnecessary hazards inside the facility.

Workers in Metropolis convert uranium to be used as nuclear fuel. On a day-to-day basis we work with radioactive materials and huge volumes of hazardous chemicals. A single accident could lead to a release that could put thousands of families in the area at risk.

We’re concerned that turning key pieces of work over to contractors who are unfamiliar with the facility and are not even Honeywell employees could cause confusion and increase the likelihood of a serious accident at the facility. Honeywell should take responsibility for managing the facility and not leave key pieces of running and maintaining the facility to outside contractors.

Since the end of the last lockout in 2010 we have lost 83 local, family-supporting jobs to outside contractors. If the company gets its way we could lose as many as 100 more jobs to contractors.

We set up a display in front of the plant to show our community what’s at stake in this round of contract negotiations. Apparently the company didn’t like the display because they parked a big trailer in front of their sign to obscure the view from the road…but not before we got some photos.


Taking the Fight to Washington, DC

Last week, members of USW Local 7-669 took the fight to the nation’s capitol to enlist support from key elected leaders and meet with administrative officials. On September 23, members of Local 7-669 joined the USW’s Atomic Energy Worker’s Council for a series of lobby visits, bringing our message to the Department of Energy and several members of Congress.

Then on September 25, a team of locked out workers took to the streets in Washington, DC. Locked out workers rallied at Honeywell’s legislative offices in Washington, DC at the base of Capitol Hill. During the rally, locked out members inflated a 30 foot tall ‘Fat Cat’ depiction of Honeywell CEO David Cote and attempted to deliver the more than 3,200 petitions that were signed by supporters from around Metropolis and round the world.

While they were in DC, locked out workers also visited lobbying firms of Akin GumpOB C GroupMcBee Strategic, and Duberstein Group, as well as Honeywell’s Washington corporate offices.Honeywell has ramped up political spending over the last several years hasspent nearly 6 million dollars on the current election cycle alone, and has a major lobbying presence in the nation’s capital.

Taking to the Streets in Metropolis on October 11

On October 11th, Local 7-669 is planning a mass rally in march in Metropolis, IL. Hundreds of supporters from around the region will be converging in Metropolis to stand with the locked out workers. The march starts at 12 noon at the Old Clark School (619 East 5th Street in Metropolis) and will be followed by a mass rally at Massac State Park.

Find more information and RSVP for the rally, click here!

Global Support!

Workers around the world are standing with the locked out members of USW Local 7-669. Unions representing Honeywell workers in Brazil, Turkey, Italy, France, Germany, and the UK have written to Honeywell to call on the company to end the lockout and bring the back the experienced unionized workforce.

IndustriALL, global union federation representing 50 million workers in 140 countries around the world has been particularly helpful, weighing in with Honeywell’s major customers and the Nuclear Regulatory Commission as well as Honeywell Management.

Read all of the letters of support online here.

Help us Keep Up the Fight!

If you can’t make it to Metropolis on the 11th, there are still some important ways you can support the members of USW Local 7-669 in this important struggle.

  • Sign and share our petition calling on Honeywell to end the lockout and calling on our local, state, and federal officials to intervene to hold Honeywell accountable. You can sign our petition online here.
  • Donate to our Lockout Fund. Members of Local 7-669 are preparing for a long and challenging lockout and any support you can provide would be incredibly valuable for our members during this challenging time. Donations can be sent to USW 7-669 at PO Box 601, Metropolis, IL 62960.
  • Adopt a Locked Out Family. If you or your local union wants to help on an ongoing basis and make a deeper connection with some of our sisters and brothers here in Metropolis, think about adopting a locked out family working directly with them to provide ongoing support for their family through the lockout. If you’re interested in adopting a family, e-mail slech@usw7-669.com and our Lockout Defense Committee can help connect your local with a locked out family that could use your support.
  • Invite a Locked Out Worker to Visit Your Local. Locked out workers are available to hit the road and visit local union meetings, conferences, and other events to give a first hand account of the struggle we’re facing in Metropolis. If you’re interested in hosting a locked out worker, e-mail us we’ll figure out a way to get a locked out worker out to visit you.

On behalf of the 149 families of United Steelworkers Local 7-669 I want to thank you all for your ongoing support and solidarity in this incredibly challenging fight. We’re holding strong here in Metropolis and we are committed to winning the fight for justice at Honeywell.

See you on the streets on October 11th. 

In solidarity,


Stephen Lech

President, USW Local 7-669 

Facebook Twitter Plusone Linkedin Pinterest Email
Posted in Trade Unions | Leave a comment

Auto Supply Chain Re-shoring To UK

273214-157By Professor David Bailey, Professor Of Industry, Aston University

Over the last few decades, the UK’s automotive supply chain – including that in and around the Midlands – has taken a big hit. One well respected analyst, John Leach at KPMG, recently went as far as saying that the UK’s 2,300+ supply chain companies had been “ravaged”, with the proportion of parts sourced from British auto suppliers falling to as low as 35%.

But now things are starting to change. On the back of a major upturn in auto assembly in the UK – up by over 50% from a low point of around a million cars in 2009 – combined with a change in economic fundamentals which are encouraging firms to source more components locally, the sector is now experiencing investment on an unprecedented scale.  Over £6bn has been invested by major auto assemblers over the last 3 years, with more to come in the supply chain.

 I’ve talked before about how 1 in 6 manufacturing firms locally – including automotive firms – are re-shoring some of their activity, driven by rising costs overseas, increasing transportations costs, a desire to boost supply chain resilience, to improve quality, and to have a faster turnaround time for production. Local firms like RDM, Cab Auto and Lander are winning orders and bringing activity back to the UK.

Given the investment taking place, in part supported by a more intelligent industrial policy and a big effort by unions, assemblers and bodies such as the Manufacturing Advisory Service (MAS) and the Society of Manufacturers and Traders, the proportion of parts in UK-assembled cars sourced from UK suppliers is likely to rise – maybe to above 40 per cent by 2017.

A big question for government and LEPs is whether this surge of interest in investment in UK auto and localisation of more sourcing will feed through to more jobs. It should do, with the upswing likely to add “tens of thousands” jobs according to Leach.

 That figure has been reinforced by a recent survey of over 900 small manufacturers by MAS which found small firms bullish about prospects. They expect to see staffing levels increase almost a third over the next four years. More than half of firms were looking to recruit and create new jobs.

More than two-thirds of the firms surveyed saw concentrating on the domestic markets to be most fruitful in expanding business, linking in with the desire by UK-based auto assemblers to source more locally.

The survey also reinforced other intelligence suggesting skills shortages as the major challenge for firms in growing. Nevertheless, small manufacturers were confident about short-term prospects, with confidence measures on sales, future growth, jobs and investment all positive.

One dark cloud on the horizon is the state of the Eurozone economy, which is showing signs of stagnating again under the weight of excessive austerity. If that continues, it will impact on job creation in UK manufacturing.

Nevertheless, the auto industry looks set for continued growth in the UK, partly on the back of 55% of its exports going beyond the Europe. Total UK car production rose to just over 1.5 million in 2013, but is expected to rise to 2 million or more by 2017. If that happens, the UK will be on track to be making more cars than ever before. That’s quite a turnaround from just a few years ago.

Facebook Twitter Plusone Linkedin Pinterest Email
Posted in Trade Unions | Leave a comment

Has Germany Scuppered CETA? Is TTIP Next?

freihandelsabkommen-usa-eu,property=bild,bereich=bmwi2012,sprache=de,width=280,height=210Reports from Germany and Canada suggest that the free trade agreement between the EU and Canada known as the Comprehensive Economic and Trade Agreement (CETA) could have been blocked by a change of heart by Germany as confusion reigns on the issue of the clauses related to Investor-State Dispute Settlement (ISDS). These concerns are increasingly shared by unions around the world, and even the EU Commissioner due to take over trade negotiations appears to oppose ISDS.

In the UK there is now clear opposition to CETA and the EU–US trade deal (the Trans-Atlantic Trade and Investment Partnership, known as TTIP) from trade unions with the TUC now wholly opposed to these trade deals. Opposition is growing across Europe, the USA and Canada.

In the UK the focus has been, understandably, on the effect that TTIP will have on the NHS and public services – open to take-overs by powerful US companies and corporations, with no ability by a future government to reverse those takeovers. Investors would be able to appeal to the secret tribunals provided for under ISDS and sue national governments if they feel they have been disadvantaged or their profits and operations affected in any way. Opposition in the EU is also focusing on the ISDS provisions and on the issue of labour rights – which also looms large in the USA.

The final text of the CETA agreement was due to be ‘initialled’ by officials at a Canada-EU summit in Ottawa on Friday, but in an interview with the Globe and Mail newspaper a senior German official Uwe Beckmeyer said sections of the deal – notably ISDS – must be changed before Germany would support the deal. Mr. Beckmeyer, who is Parliamentary State Secretary for Germany’s Ministry of Economics and Energy, confirmed the position after meeting with Canadian Trade Minister Ed Fast on 25 September. 

Germany’s position (if confirmed) will scupper the CETA deal – especially as EU Trade Commissioner Karel de Gucht told a German newspaper that reopening CETA would mean “the deal is effectively dead”. According to the Globe and Mail Mr. Beckmeyer responded by saying: “I think that’s fundamentally wrong” – but he went onto say that CETA must not tie the hands of the German government to set policy.

“We believe it must remain possible for national governments to act, to enact legislation in the future, and the agreement cannot undermine that. We cannot just be forced to accept that, thrust down our throat.”

Although Beckmeyer said Canadian officials were open to further changes, Canadian government sources insisted that negotiations were over. 

During the same week an announcement was made jointly by the German trade union federation DGB and the German Economy ministry, which appeared to oppose the ISDS clauses in free trade deals including CETA and TTIP (full English text awaited). The German Economy Ministry and DGB appear to oppose investor protection clauses and investor-state arbitration, according to a document which also says the DGB and the ministry support TTIP provided it doesn’t undermine Germany’s long established system of co-determination and employment relations, which reserves board seats for worker representatives, works councils, rights to information and consultation, and collective bargaining.

These are important issues especially for US unions who rightly argue that US workers should enjoy the same rights to information and consultation and seats on European Workers Councils where US companies are required to have them in the EU. The joint paper says:

“Investment protection provisions are generally not required in an agreement between the U.S. and the EU and shouldn’t be introduced with TTIP. In any case, investor-state arbitration and unclear definitions of legal terms such as ‘fair and just treatment’ or ‘indirect expropriation’ must be rejected.”

A DGB insider explained that, in relation to CETA, Germany believes that investment protection is not necessary as both Germany and Canada have strong legal systems; the protection levels offered in CETA would be significantly lower than that under German and EU law; the results of the EU’s public consultation should be taken into account; and the chapter on investment protection in its current form as of 12 September is not acceptable and the German Government can’t agree with the ISDS provisions in CETA. 

Malmstrom enters the maelstrom

Adding to the confusion, Commissioner de Gucht’s successor, trade commissioner-designate Cecilia Malmstrom, suggested on 27 September that she wanted to exclude ISDS from TTIP. This sent EU officials scrambling to retrieve the situation saying that the document saying this – her written response to pre-ratification questions from the European Parliament – was the “wrong text” of a draft and that it would be corrected in the final version. Commissioner-designate Malmstrom deleted some tweets on the issue in the confusion.

A German member of the European Parliament posted the text on his website, and the commitment has already been welcomed by the Socialists & Democrats Group in the European  Parliament (to which Labour belongs.) In the answers Ms. Malmstrom quotes Commissioner President Jean-Claude Juncker as saying that no limitation of the jurisdiction of courts in EU member states would be accepted in the new transatlantic trade agreement.

“This clearly means that no investor-state dispute settlement mechanism will be part of that agreement. I fully support this approach of the President-elect (Juncker) and will work in this sense in the negotiations.”

Union opposition goes global

In Austria the parliament last week voted to oppose CETA, citing ISDS clauses, the lack of strong employment rights and support for ILO Conventions and the potential for multi-national corporations to take over public utilities. As one opposition group said “It’s a beginning!”

CETA is facing union opposition on both sides of the Atlantic – the global union Workers Uniting formed by the United Steelworkers in the USA and Canada and Unite in the UK and Ireland issued a statement condemning CETA in particular ISDS. USW Canadian national director Ken Neumann said: ISDS is bad news for Canada. Under NAFTA (the North American free trade deal struck in 1994) we currently face $6 billion in lawsuits from American multinationals. If CETA is approved, that number will increase exponentially.” 

Len McCluskey of Unite said: “The Tory government in the UK is hell-bent on privatising our National Health Service. If that happens, CETA locks in the privatisation. If a Labour government reverses it, then the private companies can sue the government for damages. We would no longer have democratic control over our economy or our public policies.”

And Steelworkers President Leo Gerard said: “CETA sets a terrible precedent for future trade agreements, especially the Trans-Atlantic Trade and Investment Partnership (TTIP) between Europe and the US. In addition to the deficiencies we have cited in the CETA – which will likely be replicated in the TTIP – the attacks on labour rights in the US threaten the living standards of European and Canadian workers.”

Meanwhile the Australian Manufacturing Workers Union has said it strongly opposes a deal between Australia and Korea – which is being supported by the Australian Government and the Australian Labour Party. AMWU National Secretary Paul Bastian said that that KAFTA was “an appalling agreement that strips away local jobs and Australia’s sovereign rights. We are deeply disturbed that both sides of politics are supporting this dangerous agreement”.

AMWU is also opposed to ISDS clauses and the fact that KAFTA allows for imports from North Korea which is notorious for forced and prison labour.

The fiasco over CETA and TTIP looks set to run. However more European, US and Canadian unions are expressing opposition to these trade deals. There are now over 100 campaigning organisations expressing outright opposition to CETA and more governments are being forced to re-examine the proposals and take heed of public concerns. Let us not also forget also that there is growing skepticism about the number of jobs that the deals are purporting to create on both sides of the Atlantic. The jury is out on the widely ranging number of jobs which could be created in advance manufacturing sectors such as automotives, aerospace, chemicals and in the creative industries.

It looks like momentum is now building against the ‘turbo charged capitalism’ which will be created by CETA and TTIP.

This blog first appeared on the TUC’s Touchstone Blog Site.

Read more: Battle Royal in Brussels – backroom ‘trade’ deals under fire.

Facebook Twitter Plusone Linkedin Pinterest Email
Posted in Blogs, Employment Rights, International Trade Unions, Labour Party, Media, Politics, Solidarity, Trade Unions, Trades Union Congress, Unite The Union, Workers Uniting | Leave a comment