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Proletarian issue 14 (October 2006)
Industry matters: Closure of LG Electronics in Newport
The crisis deepens

The erosion of Britain’s industrial base continues with the imminent closure of Korean firm LG Electronics in Newport.

The pattern is a familiar one. In July 1996, LG promised to create 6,100 jobs in Newport, in exchange for a £124m sweetener out of the public purse, care of the Welsh Development Agency. The plan was to include two sites: one for electronics and the other for semi-conductors. However, with the collapse of world chip prices, the semi-conductor plant stayed in mothballs, whilst the electronics plant in 2003 gave up making colour tubes for monitors, shed 870 jobs, and stripped operations down to simple assembly of monitors and TVs.

Now LG have announced that even this operation will shut down before Christmas, with 315 redundancies. The TVs will be made in Poland or China instead. Of the £124m grant paid out under false pretences, only £34m has been repaid.

So what went wrong with this venture, at its inception hailed as the largest single inward investment (export of finance capital) in Europe?

The problem was the global crisis of overproduction in this branch of industry, and the impact of that on the Welsh economy. Rival manufacturers Sony and Hitachi, already established in Wales, were starting to saturate the market with their commodities, and the opening up of new capacity in China and eastern Europe sounded the death knell for LG’s Newport operation.

Capitalist ‘solutions’

The capitalist ‘solutions’ to this problem ring as hollow as LG’s original promises. A local Tory gushes that “This is a magnificent plant and a wonderful site. It’s a question of identifying the right manufacturer to take it.” But if the market is glutted and cheaper labour beckons overseas, it makes no difference how “magnificent” the plant is.

Indeed, as was described by the redundant Dunlop worker in the August/September issue of Proletarian, the competition will often quite deliberately acquire rival capacity with the express intention of destroying it. This is exactly what Goodyear did to Dunlop – kept the brand and wiped out the redundant capacity. Meanwhile, Plaid Cymru’s capitalist solution is to call feebly for “retraining and advice” for the redundant workforce, coupled with a plea for “more stable jobs based on investment in small local firms”. (Quoted in ‘Help call for “doomed” LG workers’, BBC News Online, 19 August 2006)

But Welsh nationalist nostalgia for a (supposedly) less ruthless capitalist past won’t reverse the tide of deindustrialisation. The massive concentration of productive forces, the mergers by which capital is concentrated into ever fewer hands, the melting of national and regional borders before the imperious need of monopoly capital to maximise profits, and the destruction of capacity which an impoverished demand market renders ‘surplus’: all these are central features of modern capitalism (imperialism) that cannot be reversed.

Instead of dreaming about a world in which semi-conductor manufacture can be organised on the basis of “small local firms” guaranteeing Welsh jobs for Welsh workers, the working class needs to be preparing to overturn the exploitative relations of production, which now stand as an obstacle to the rational planning of the complex and gigantic productive forces commandeered by capitalism.

Such a socialist perspective is naturally beyond the ken of Plaid Cymru. But the ‘left’ wing of social democracy, as expressed in the voices of ‘awkward squad’ trade union militants, does no better. The trade union response to the sight of the anarchy of capitalist production wiping out jobs wholesale seldom gets further than the plaint that ‘we jumped though every hoop they demanded of us, and see what thanks we get!’

This impotent rancour slips easily into the rancid chauvinism perfectly expressed in the T&GWU poster that proclaims “You’re either England or you’re Peugeot” . Or, as Tony Woodley said when confronted with plans to relocate the HP sauce bottling operation from Birmingham to Holland, “Heinz joins the increasing list of companies who have broken promises to their workers by looking to shift production out of the UK. If this brand does not spell out Britain, I don’t know what does. [Presumably this is something to do with the picture of the Houses of Parliament on the label! ] This is all about supporting local jobs, about supporting UK brands, and saying we believe in manufacturing.”

Ritual condemnation of the Heinz closure by 130 MPs looking for some cheap popularity by signing an early day motion is not worth a light, in the absence of a clear demand for

1. The immediate nationalisation without compensation of Heinz, Peugeot, LG Electronics and every other capitalist outfit that proves unwilling or unable to retain its workforce in full employment, and

2. The immediate provision of benefits at least equivalent to the wage received by workers before the anarchy of capitalist production robbed them of their livelihood.

All other ‘solutions’ are at best just hot air, and at worst dive straight into the chauvinist gutter, supposedly defending ‘British’ jobs from theft by ‘foreigners’ in general – whether the ‘foreigners’ in question happen to be rival exploiters, other exploited workers in low-wage economies, or ‘illegal’ immigrants (increasingly the number one scapegoat).

Our task

Yet despite all the social-democratic threads by which organised labour is kept tied to imperialism, class struggle keeps asserting itself as the motive force of social development, even though this sometimes expresses itself in some odd and back-to-front ways. An example of this is two meetings coming up shortly in London, both undoubtedly in response to growing unrest in the working-class movement.

The first, on 28 October, called at the initiative of RMT leader Bob Crow and others, promotes the view that the way to revive the class consciousness of workers is to revive the Shop Stewards’ movement, thereby challenging the conservatism of the trade-union movement. The second, on 11 November, is a Respect-inspired conference entitled Organising for Fighting Unions, which “any trade unionist worried and concerned at low pay, pensions, privatisation and political representation should attend”, according to Mark Serwotka.

However backward the politics workers will assuredly encounter on such occasions, with any notion of a consistent struggle against social democracy way off the agenda, such ripples on the surface nevertheless reflect some real shifts within the British proletariat under the impact of sharpening crisis. It is the task of the emergent communist movement to analyse these objective developments and, on however limited a scale at present, study how best to intervene and give leadership in the struggle against social-democratic influence in the labour movement.

Comrades are urged to take part in either or both of the following meetings, whether by getting themselves delegated or simply by selling papers and leafleting outside.



1. National Shop Stewards' Conference
11.30am-3.30pm, Saturday 28 October 2006
Camden Centre, Bidborough Street, London WC1H 9JE
Conference is open to all trade union members.
Email j.croy@rmt.org.uk, giving your name, contact details, union and branch.



2. Organising for Fighting Unions Conference
Saturday 11 November 2006
Shoreditch Town Hall, 380 Old Street, London, EC1V 9LT
Delegate’s fee £10.00
Email sam@respectcoalition.org.uk


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