Auto manufacturer Toyota and the Unite trade union announced an agreement March 12 cutting pay and working hours at UK plants by 10 percent. A total of 4,800 workers at plants in Burnaston, Derby, and Deeside, Flintshire, are affected by the cuts, which begin on April 1 and are scheduled to last for one year.
The previous week Toyota announced a voluntary redundancy scheme and immediately shed 200 temporary jobs. Citing a fall in demand for its vehicles, Toyota has suspended a night shift on its Auris production line in Burnaston and will shut production for 4 weeks in 2009.
Toyota is the latest auto company to implement cuts including pay, job losses and extended closures. Other firms to do so include Ford, Nissan, GM Vauxhall and Honda. Honda has closed its UK plant at Swindon for 4 months.
The Toyota agreement with Unite follows that last month between Jaguar Land Rover (JLR), Unite and the GMB trade union for a two-hour reduction in production and a one-hour reduction in pay for its 15,000 strong workforce. As part of the agreement, pay is being frozen until October 2010, and planned bonuses for 2,400 workers will not be paid this year. The pay freeze is expected to cost the workforce £70 million a year.
More than 3,000 auto jobs have been lost in recent months, with 450 job losses announced at JLR in January. Other major recent losses include 850 jobs at Mini at Cowley, Oxford, and 1,200 at Nissan, Sunderland, in the north-east of England. Bentley, Aston Martin, Rolls Royce and LDV have all either introduced cuts in jobs, hours and pay, or scaled back production.
Auto cutbacks are resulting in large scale job losses in the auto supply industry. According to the Birmingham Chamber of Commerce, an estimated 1,000 jobs are being lost every week in the West Midlands region alone at supply companies.
These attacks on the pay and working conditions of workers are rapidly becoming the norm throughout the whole economy. Many other firms in Britain are also imposing pay freezes and cuts in pay in response to the deepening recession.
The day prior to the Toyota announcement, British Telecom (BT) announced a pay freeze for its 100,000 UK staff. According to estimates, the firm could save up to £40 million.
BT recently announced 10,000 job losses worldwide this year.
Chief Executive Ian Livingston is set to be awarded more than £6 million in bonuses this year, based on performance targets being met. His basic salary stands at £850,000 per annum.
Other firms that have imposed pay freezes include transport company National Express with 17,000 employees, sugar producer Tate & Lyle with 6,000 workers and aircraft motor engineer GKN with 1,000 employees. GKN already announced nearly 6,000 job losses in the last year, with 806 of these in Britain.
At the accountants firm KPMG, a four-day week has been introduced alongside a 20 percent cut in salary. Pearson, publishers and owners of the Financial Times, and the bookmaker William Hill have also imposed pay freezes.
The porcelain giftware manufacturer Royal Crown Derby has introduced a cut in working hours and pay by a fifth for 150 factory workers. The firm has demanded that its white collar staff take a cut in salary.
Two airlines, BMI and Virgin Atlantic, have imposed pay freezes, while British Airways is currently in negotiations with trade unions regarding a freeze.
According to an Incomes Data Services report released on March 13, about 10 percent of companies surveyed are freezing pay for staff. Ken Mulkearn, the editor of the IDS Pay Report, said this could be the tip of the iceberg. "We are also seeing pay pauses, where it comes to the time for an annual pay review, and firms are saying they will put off a decision on what to do about pay. This means it does not get recorded as a pay freeze even if, in all likelihood, that will be the outcome eventually in many cases. That may be covering a much darker picture of the number of employers who are freezing pay".
Other surveys affirm this "darker picture".
Research released by the Engineering Employers Federation found that two-thirds of companies had frozen pay or were considering doing so.
Last week the Confederation of British Industry announced that it expected the "overwhelming majority" of its member companies to freeze pay this year. Another survey commissioned by the CBI found that a third of firms are eliminating overtime for staff. Many workers are reliant on overtime to supplement their overall pay, and such cuts can mean a significant fall in take-home pay.
The role of the unions
The pay deals over cuts, freezes and reductions in working hours demonstrate the role of the trade unions as the policemen of the working class. The unions are openly collaborating with companies to shifting the entire burden of the crisis onto the backs of workers.
At Toyota, Unite lauded the deal and called on workers to continue to make sacrifices to defend "our industry". Announcing the agreement, Peter Tsouvallaris, Unite's representative at the plant said, "Our members are reminded daily of the tremendous insecurity this recession has brought to our industry. The proposals put to the workforce today present a real opportunity to restore some measure of stability to Toyota in the coming months, and we will be recommending them to our members".
He continued, "Once again, workers in the car industry are demonstrating that they will sacrifice in the short-term to ensure that they, their friends and colleagues can have a future in the years to come".
Commenting on the "increasingly widespread" deals now being concluded by the trade unions, the Trades Union Congress presented this as a progressive step forward with everyone sharing the "pain" equally and redundancies avoided.
Adam Lent, head of economics at the TUC said, "It's a very tough recession. People are having their pay frozen or even cut and it can affect their finances extremely badly. Unions will always opt for a pay freeze and short-time working over redundancies. People understand that it's better for a large number of people to take that pain, which is quite tough, than to have a small number of people take redundancy, which is totally devastating".
It is a fallacy that the unions are opposing redundancies. As many workers, such as those at Mini and Nissan, have found out at the cost of their jobs and livelihoods, the unions are more than prepared to sacrifice jobs and assist firms in imposing redundancies.
The exhortations to workers to make "sacrifices" by the trade unions must serve as a warning. Under conditions of deepening recession and the greatest economic crisis since the Great Depression, this can only mean a downward spiral of pay cuts, short-time working, job losses and a descent into poverty for millions. Every concession will be used by companies to set new, lower benchmarks and to demand that workers accept further attacks.
The glut of pay freezes and cuts have been fully endorsed by representatives of big business such as the Daily Telegraph and the Times. A leader comment published in the Sunday Times on March 1 stated, "Though pay freezes and cuts reflect the recession's severity and weak bargaining power of employees at a time of sharply rising unemployment, there are positive elements. Britain's flexible job market is being tested, and the fact wages are proving flexible suggests it is passing that test".
The Socialist Equality Party calls on workers to reject the demands of companies and the trade unions to make sacrifice after sacrifice on the basis of there being "no alternative". Working people must proceed from the standpoint that this crisis is not of their making and oppose all attempts to make them pay for it. Such a struggle can only be organised independently of the trade unions, which function as management's right hand.