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Proletarian issue 6 (June 2005)
Rover collapse: another lesson about the nature of capitalism
For all the column inches devoted in the mainstream media to the MG Rover collapse, none of the bourgeois commentators have touched on the real problem: that the capitalist system of production for profit is fatally flawed and incapable of providing jobs, security and a decent life, even for workers in the rich imperialist countries.
All the papers, be they bourgeois, revisionist, social democratic or Trotskyist, have given their views on the collapse of MG Rover. They have settled on two main theories: the collapse was either down to the greed of the Phoenix Four, or else it was the government’s fault for supporting the Phoenix takeover five years ago.

The first theory, laying the blame solely at the door of the four directors, John Towers, John Edwards, Nick Stephenson and Peter Beale, goes something like this: four sharp Midlands businessmen saw an opportunity to buy Rover and, despite tremendous help from the government, ripped it to shreds in order to enrich themselves while leaving the workforce betrayed and jobless as they made off with at least £40m (there are rumours of another ‘missing’ £400m).

The second theory comes in tow variations; (a) the government should have let Rover go to the wall when BMW had sold off what they could and wanted rid of it; or (b) the government should have nationalised it.

Role of the Labour government

But the government couldn’t let Rover go to the wall in 2000 with an election coming up. As it turned out, the collapse wasn’t staved off for very long, and the problem resurfaced just in time to catch Labour in the midst of another election campaign fiver years later. As to nationalisation, this government, or any other government in the present climate of economic crisis, cannot nationalise or renationalise anything, since private profits would be affected and that would not sit well with the bourgeoisie - Labour’s real paymasters.

In reality, the government, which has now set up an inquiry to find the Phoenix Four guilty, is as culpable as any of the four. The priorities of Labour ministers were not the welfare of workers at Longbridge but only parliamentary majorities and guaranteeing their own individual financial and public futures.

The Phoenix Four did indeed see a chance to enrich themselves. They bought Rover (with the backing of the Labour government and trade union leadership) for just £10. this gave them, according to the Financial Times of 21 April 2005, “£909m in cash, net assets and loans. The assets included a stock of 65,000 cars and an interest-free loan of $427m from BMW that would not need to be repaid until 2049”. It seems that the four had no plan other than setting up other companies to siphon money off from Rover and hide the true financial state of the company, along with selling off valuable assets (like the blueprints for the Rover 75 and land deals) and paying themselves huge dividends until the ship went down. Even while the ship was sinking they tried to get the government to stump up a bridging loan while they were supposedly in negotiations to sell the company to the Shanghai Automotive Industry Corporation (SAIC). These negotiations, it seems, did not only not take place but were easily seen through as SAIC, having already bought the blueprints to the Rover 75 and cleared space in southern China for a factory, only needed to enter negotiations with BMW, which still owns the Rover brand, regarding licence to produce. Why, then, would this company want to buy MG Rover and produce cars so much more expensively in Britain?

Capitalism exposed

Some of the bourgeois commentators called the ‘destruction’ of Rover the ‘unacceptable face of capitalism’. Richard Donkin of the Financial Times was moved to wonder whether ”perhaps the four executives who have profited handsomely from the break-up of MG Rover may begin to work out how they may put something back into society so as to remove the damaging impression that capitalism is a selfish system”. (21 April 2005) Of course, if we believe Mr Donkin, these four men are rogue capitalists, unlike the majority of capitalists who are the personification of fairness and incorruption. And pigs might fly!

Chris Brady of the Daily Mail was at least honest on this point when he wrote on 18 April 20005: ”Of course the men were greedy and opportunist. They saw their main chance five years ago and grabbed it with ruthless determination. We may not like it, but that is how capitalism, red in tooth and claw, operates.”

This quote from an unrepentant defender of capitalism is a lesson in politics for all the whiners of social democracy, revisionism and Trotskyism who complain that the Phoenix Four should have been better employers.

Within the capitalist system all production, regardless of the product or its uses, whether it be a car, a bar of soap, a medicine or a service, is solely for the purpose of making profit and not just profit, but maximum profit. To alter that means to alter the political system we live in and this cannot be achieved until workers are educated as to the nature and workings of imperialism, and the treachery of the opportunists within the labour movement who defend it. Those who cry out, “if only the Labour government could see the economic sense of renationalising Rover” (or any other privatised industry/service for that matter), fail to see that under capitalism economic sense is putting the profits of our imperialist masters before the needs of the many. And Labour, in or out of government, serves its masters well. Yet still we hear trade union leaders, who are supposed to represent workers of privatised or butchered industries, calling for votes for Labour.

Socialist planning the only solution

The CPGB-ML understands that imperialism is the enemy of the workers worldwide. We understand that imperialism will try to divide us on racial or national grounds and play worker against worker as it moves its capital around the world in search of maximum profits. We know that the Labour Party is a tool of imperialism along with the majority of trade union leaders and the so-called ‘left’ parties that always end up supporting the Labour Party.

We also know that the contradictions within the system, worker against employer, poor nations against aggressive rich ones, imperialist group against imperialist group, are moving us, once again, towards world war. We understand that communism is the only hope of the world. We are aware that here in Britain, we must educate workers about the need to support all the forces in the world that are fighting against imperialism, for they are fighting our common enemy and their victories are also ours and assist our struggle. We must clearly unmask the arguments being put forward about asylum seekers and immigration targets and quotas by the bourgeois parties and their ‘left’ apologists as the racism it really is, which is designed to divide us and weaken our struggle against imperialism.

We must not be afraid to ‘make political capital’ out of events like the Rover collapse. The bourgeois politicians all stopped their election campaigns for a day to rush and sympathise with the redundant Rover workers while declaring that they ‘would not make political capital out of the crisis’ (the word crisis making it sound as though the collapse was some kind of natural phenomenon that couldn’t be helped or foreseen). It is only right and proper, however, for communists to point out to workers that this was not just a case of corruption by four rogues - it is the entire system that is corrupt and must be done away with as swiftly as possible. There have been countless examples of corruption that demonstrate the truth of this and, while capitalism continues, there will be many more.

The whole of British industry - what’s left of it, that is - is under threat as, in search of maximum profit, ‘our’ capitalists export their capital to countries where more profit is to be made - mainly because wages and taxes are lower. Hence productive jobs are exported abroad while British workers, more and more confined (at best) to service industries, rely on workers abroad to produce for them the essentials of life - food, clothing, machinery, household goods, vehicles of all kinds, electronic equipment etc, with the whole country in this way becoming parasitic on others for their very existence.

This is the expression of a law of capitalism. The only way this process could be retarded under capitalism is through government intervention - nationalisation of ailing essential industries and financial support to ensure that they can withstand the pressures of international competition. We demand of the government that it takes these steps to protect our industry, and that the cost should be borne by higher rates of tax on the richest sections of society. This is not a demand that the government will willingly concede, since it is handmaiden to these richest sections who have no objection whatever to being parasitic. If the working class wants nationalisation, as it must, it will have to fight for it - tooth and nail.

In the end, however, the pressure of the bourgeoisie to secure its own best interests will always prevail unless the working class overthrows the rule of the bourgeoisie and establishes socialism and the socialist planned economy, a necessity that our party is bent on helping the working class fully to understand.
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