Defending Jobs at Rover - 6
By a Rover worker
(First published Socialist Outlook June 2000)
On April 27th came the dramatic news that Alchemy had pulled out of the deal with BMW. A few days later came the news of the Phoenix offer. There were celebrations at Longbridge and the media presented a picture of Longbridge having been "saved" on May 8, the day that John Towers announced that he had brought the plant from BMW for £10. Workers demonstrated outside the plant, drinking champagne. The ex-policeman, who didn't work in the plant, but wore a John Bull outfit, and a union jack, was again prominent in all the news coverage. John Hemmings the Liberal councillor, who wants to be mayor of Birmingham, and is one of the founders of Phoenix, was continuously interviewed.
Longbridge is a plant with a militant history. How did we reach a point where workers, in large numbers (though not the whole work force) greet with enthusiasm a new a private boss arriving at the largest car factory in the country? According to Towers, he did a feasibility study into the possible survival of the plant, and showed it to Trade Secretary Stephen Byers, a personal friend, on the weekend BMW announced the sale of Rover (March 18/19).
Then, according to Hemmings, the Phoenix group first met on March 28 - four days before the huge demonstration in Birmingham against the plant closure. When you now look back at the speeches made on that day you can see why for instance that Tony Woodley, national officer of the TGWU, stressed that whatever happened thousands of jobs would be lost. Woodley knew this because he was in with Phoenix from the beginning: in fact he claims it was him that phoned Towers and persuaded him to front up Phoenix.
There is hot competition among those claiming to have started it all rolling. Stephen Byers has also claimed that he got Towers involved: but no doubt when things turn sour these same people will start to take their distance and issue disclaimers. The rumour went around, amongst Rover stewards, that Woodley, who at the original Gaydon conference of all Rover stewards on March 21 had called for nationalisation of Rover, had been ordered by TGWU leader Bill Morris to drop this demand. But the reality is he was already in with a capitalist 'saving' the company. So that magnificent demonstration was really about putting pressure on BMW to accept a rival commercial bid. When the Phoenix bid became public knowledge, after the Birmingham demonstration, all union efforts were directed towards backing it, and asking BMW to reject the Alchemy bid.
On April 18 all stewards were brought back to a recall meeting of the Gaydon conference. At this Woodley outlined what he said were the differences between the Alchemy and the Phoenix bids. He said these were the only choices. BMW had offered Rover to large car producers, but all had said they weren't interested. As far as nationalisation was concerned, ministers had said they would not consider it.
Tony Woodley argued that Alchemy did not have the dealers on board, and therefore would not be able to sell many cars. It had also declared it would not try to stay in mass car production. Phoenix on the other hand was led by a "car man", and planned to continue volume production. This was a distortion. Alchemy had said that it would continue to produce the cars as long as they could sell them, and that they would produce the Rover 75 under licence in Cowley, assess its sales, and then, if they were good, move it to Longbridge. So under both plans, all cars were to be produced at Longbridge. The real difference was that in moving the 75 to Longbridge straight away they would cut down the numbers of immediate redundancies. (Probably thereby saving on redundancy payouts, as for the first year the redundancy money is relatively high).
As far as the longer term is concerned the crucial fact is that Towers has no replacement for the Rover 25 or 45. BMW had offered to sell their planned new model code named the R30, which they had earmarked for Longbridge, for £800 million, but Towers said he could not afford it. As the details of the Towers plan have emerged more clearly, his future plans seem to be exactly the same as Alchemy, i.e. producing more sporty MG derivative cars, all of which sell in small numbers. At the second Gaydon conference, when Woodley was asked by stewards from Longbridge if he had any fall back plans if the Phoenix bid failed he said that he "did not believe in failure". In his view the Longbridge workers were totally reliant on Phoenix.
At the first Gaydon conference Woodley had accepted that all of Rover was united. He had insisted that the plants "could not survive separately". At that meeting he himself had said that if BMW didn't change their minds, or another major car company take over, then nationalisation was the answer.
He had also said that the next demonstration, after Birmingham, would be in London to fight for this. But by the second stewards' conference he was happily agreeing to divide up the Rover work force. Woodley's new line was that BMW needed to sell Solihull, and the 4x4 to Ford in order to give money to whoever took over Longbridge, and therefore Solihull stewards should go away and negotiate their conditions with Fords. And since BMW would not sell Cowley and the mini to Towers, the Cowley stewards, too, should go and negotiate their conditions with BMW.
As far as Swindon and Power and Train were concerned, they would start off with BMW, but he hoped would wind up eventually with Towers. All calls for a demonstration in London were dropped. The call for the occupation of Longbridge was ignored, as it had been at the original Gaydon conference, and there was no call for any action by the work force. This meant that any meaningful pressure for nationalisation was gone, at a time when the situation at Fords was erupting.
Tony Woodley's explanation for this succession of retreats and concessions was that he had to be "realistic". With the union back-pedalling so hard it is no wonder that the Longbridge stewards, and their local radio mouthpiece, Karl Chinn, concentrated on lobbying for Phoenix to win. The work force at Longbridge was excluded from all this. No mass meetings were called throughout the whole closure process. All the workers could see was the entire local media, the city council and their own union and shop stewards, supporting Towers. Only the left were saying that they should occupy, and it was an uneven battle.
The Longbridge stewards, and activists, organised some small events. They were against Alchemy - and for Towers. Only one demonstration was called by the Works committee, at Crofton Park opposite the plant, on April 25 ( The Convenor claimed, on May Day, that this was a mass meeting), was surreal. Apart from the convenor and his deputy welcoming the 2,000 or so people there, the only speaker was Karl Chinn, who spent the whole time getting people to chant "Alchemy out! Towers in!" The specially prepared placards asked BMW to give Towers time to prepare his bid. They then marched down to the gate, chanting "Towers in!" Chinn and the works committee then flew to Munich asking for BMW to listen to Towers.
Several meetings the national negotiating committee, led by Tony Woodley, called on BMW to accept the Towers bid. The German unions were persuaded to pressurise for the Towers bid. This was the only time they were involved, apart from their representatives on the board voting for the original sell-off.
So when the Alchemy bid failed on April 27 it was not surprising that workers demonstrated their joy, and when the Towers bid succeeded they also celebrated. This was the only choice that Woodley and their stewards had given them: they were clutching at straws. Now their problems start. Up to now everything has been obscured from them. This confusion has been added to by the fact that Rover has jumped to the top of the sales league in Britain. This is heavily distorted by the fact that whoever brought Rover would keep the stock of cars. So BMW in order to get every penny out of the deal, slashed prices dramatically, selling at a loss because any money raised was a bonus, and would simply reduce the stocks they were giving away. Will these sales continue when prices go back up, and when the firm drops out of the media limelight? No one knows.
And much of the bid itself is still hazy. There is hardly any new money is involved for example. The American bank that has stumped up £200 million has the stock as collateral: but what interest rate are they charging? BMW gave £75 million as a donation and an interest free 50 year loan of £500 million. This latter is spread over three years, no doubt so that BMW can get tax advantages out of it. (They have sold Land Rover from a company on the Isle of Man, saving themselves £70 million).
But who has put money in? Apart from the famous £10, it appears that each of the six founders - Towers, Hemmings, Nick Stephenson from Lola cars, Mayflower, John Edwards and another dealer - has put in £100,000. Is this £600,000 really the only new money? Towers has talked about the workers acquiring one third of the equity in Phoenix. But how will they get it? Will they have to pay cash for shares? Or does he perhaps expect them to carry out the suggestion of BMW UK's boss Werner Samaans, that they pay by working unpaid overtime?
Another percentage will go to the dealers. So what percentage of Phoenix will remain with the six founders? If anything is left to sell off at the end, what percentage of the assets will they receive? For that matter, what salaries are they paying themselves? They have already appointed a Manufacturing Director, Chris Bowen for Longbridge, and they are now looking for a Managing Director. At that point the founders will just be the board of directors, and go back to their other businesses. No doubt they will continue to get a salary for being on the board. But whatever reward they receive, it will basically be for having carried out the negotiations.
Towers will have come out very well. In 1996 he left Rover with a £500,000 payout. No doubt when he is on the board he will make sure his style of management continues. In 1991 he proposed Rover Tomorrow, a far reaching document that dramatically changed working conditions, and led to draconian pressure on issues such as time keeping and flexibility. He told the unions he would introduce it "with or without them". The union negotiators, then led by Jack Adams and Tony Woodley, immediately capitulated and strongly recommended accepting the document. This was outside of a wage review, and gave nothing to the workers.
The reality is that Towers will have to cut costs and drive up productivity. This is where it is so dangerous for the unions to jump so readily into bed with the boss. How can the union that has led the workers to cheer for the new boss then resist him when he worsens working conditions? Remember conditions at the major plants usually lead the way for what happens in other workplaces, so all workers could lose out of this. Geoffrey Robinson, who was involved in the last days of the talks, said he would expect the workers "as their contribution" to "tear up the rule book". Karl Chinn has insisted that Phoenix would have "the most enthusiastic workers in the world." Is it a job at any cost?
The problems will get worse. But as the plant runs down, how can the union oppose any redundancies? Phoenix will argue that this is just the "reality" of a plant with no new models in an increasingly competitive market. And what about those workers who are already affected by the present level of rundown, in companies which supply Rover? Will Rover dealers stay loyal if other companies offer them franchises, and if sales start to decline again? If Longbridge closes at any future date, this will be a lot harder to fight as the plant is now on its own, and will be owned by a small scale concern.
At the other threatened plants similar problems will occur. Solihull will be on its own against Ford who have shown at Dagenham how ruthless they can be. Cowley will only have one model, the new mini, and will be on their own negotiating with BMW. Immediate moves need to be made to form links by workers nationally and internationally to break the fragmentation created by the union leadership's approach.
As time goes on, it becomes clear that the main beneficiary of the Towers plan is the new Labour. Most financial commentators consider that the company will at least survive until after the next general election. If the Alchemy plan had been instituted then most of the pain would have been immediate and therefore could have had a big effect on Labour's electoral chances.
The major crisis facing the working class in Britain is developments in manufacturing: cars, components, steel, textiles and shipbuilding. Blair obviously had a choice. The Daily Telegraph quotes him as saying he resisted calls for nationalisation - but that the government "didn't stand idly by". So what exactly did they do? It would be interesting to know the full involvement of Byers in the process leading to the successful Phoenix bid. For example, why did the Alchemy bid suddenly fail? Was there government pressure? Alchemy, who got a £5 million sweetener, say that on the final day they noticed a sudden changed in BMW's attitude.
Officially the argument was over redundancy and pension payments. But after six months of negotiations, wouldn't venture capitalists have already clarified such a question? And wouldn't BMW have already worked out where they stood?
It transpires that, 10 days prior to the success of the Towers bid, Labour's millionaire former minister Geoffrey Robinson had become involved. Byers had been involved from the beginning and he did not hide his relief when the Alchemy bid failed. So did the government put pressure on BMW? These are hard-headed business people. They know that BMW had planned a new model for two years time, having worked out that this would be the viable life span of the Rover 25 and 45.
Towers has no such replacement model but at least his plan keeps the plant open beyond the next general election: then we can expect more major cutbacks to take place. His plan is therefore a cynical way to treat the jobs of thousands of workers. And it leaves no doubt that with a couple of years we will be back at square one fighting for the jobs of Rover workers.