Australian government meets General Motors executives amid closure threat

General Motors Holden executives and trade union bureaucrats held a closed-door discussion in South Australia yesterday with Ian Macfarlane, industry minister in the recently elected Liberal-National government. The talks formed part of negotiations over public subsidies to the company, which is threatening to follow Ford Australia in shutting down all production operations unless it receives further handouts.

In August, the Australian Manufacturing Workers Union (AMWU) rammed through a regressive industrial agreement covering the approximately 1,700 production workers at Holden’s plant in Elizabeth, South Australia. The deal imposed a three-year wage freeze, amounting to a substantial real wage cut, and reduced break times. It allowed management to dictate all holiday leave time, made concessions on shifts and overtime, and gave the company unfettered power to exploit casual and contract workers instead of hiring permanent employees. The union insisted this was necessary to ensure the “competitiveness” of the company and prevent it from ceasing operations in Australia.

Holden executives welcomed the substantial reduction in their wages bill, while still refusing to guarantee continued production beyond 2016. In March 2012, Holden was promised another $275 million “co-investment” payment by the then federal Labor government and its South Australian state counterpart, supposedly ensuring continued production until 2022—but the company later declared that more money was required.

Before the September 7 election, the Liberal Party pledged to cut $500 million from Labor’s car industry subsidy package. Holden is not only demanding that the previous government’s funding be maintained, but that additional public money be provided. The company has received around $90 million a year over the past five years, only paying tax in one of these years (just under $1 million in 2010).

Industry Minister Macfarlane yesterday toured the Elizabeth plant, with company executives, AMWU officials, South Australian Labor Premier Jay Weatherill, and other state and federal politicians, including Senator Nick Xenophon.

The photo opportunity highlighted the all-party conspiracy confronting car workers at Holden and throughout the industry. For all the hot air from politicians and union bureaucrats about “saving jobs,” all are agreed that if the local car industry is to survive, workers have to make further sacrifices. As has been demonstrated in the restructuring of the car industry under successive Labor and Liberal governments during the past three decades, subsidies to the auto producers are not aimed at protecting jobs, but at eliminating them in the most efficient and profitable manner.

Macfarlane downplayed expectations before going to South Australia, declaring that though the industry was “on the brink of closing,” he would be arriving “with empty pockets,” adding, “I might get some shillings for them later.” At a press conference at the Elizabeth plant, the minister declared: “I’m being deadly serious here: the next car plan I hand down will be my last car plan… If there are [further] changes, the industry is going to have to adjust.”

Macfarlane said no subsidy decision would be made until after an investigation by the Productivity Commission, an official “free market” body connected to the Treasury Department that has a long record of opposing industry subsidies. The minister reportedly plans to fast track a Productivity Commission preliminary report within three months.

Macfarlane also pointed to divisions within the Abbott government on the car industry, declaring that he would likely clash with Treasurer Joe Hockey, who has previously called for the abolition of car sector subsidies, and would have to try to “grind him into the ground.” The comments reflect tactical divisions within the ruling elite. One section wants the local car industry to survive in some form, ensuring that Australian capitalism retains a viable manufacturing capacity, including the ability to shift to military production when required. Finance capital, on the other hand, would prefer that public subsidies be handed over to more profitable industries, even if this means the collapse of all car production in the country.

There are no disagreements within the bourgeoisie on the task of making car workers bear the burden of the crisis. Macfarlane was yesterday full of praise for the AMWU, hailing its “fantastic job” and “responsible attitude” in enforcing the wage-cutting industrial agreement in August.

AMWU official John Camillo boasted: “We didn’t just pick the low-hanging fruit in the trees, we sat down and looked at not just a wage freeze but looked at a lot of things that gives that cutting edge for Holden in regards to being more competitive in an international market. Workers have given up a lot in regards to wage freezes and doing everything the company wants. Now we’re just waiting on the Abbott government to give the go-ahead in regards to the replacement of the Cruze and Commodore… [W]hether Holden’s bluffing or not, we just have to wait and see.”

Workers at Holden and throughout the car industry cannot passively wait on the decisions of the Abbott government and General Motors executives. The shut-down threat is no bluff. Camillo’s comments are aimed at pulling the wool over workers’ eyes as the AMWU prepares to enforce whatever the company decides—another round of restructuring or the complete closure of its plants.

A counter-offensive in defence of all jobs, wages and conditions must be organised immediately, in opposition to the trade unions. Auto workers are confronting not merely the destructive decisions of corporate management and government ministers, but the breakdown of global capitalism. The crisis at Holden is another expression of the crisis that has wracked the international auto industry since the 2008 financial crash.

Following its declared bankruptcy in 2009, General Motors aggressively restructured its global operations, eliminating tens of thousands of jobs in the US and elsewhere. It worked with the Obama administration and the United Auto Workers (UAW) union to cut wages in half for new American workers. GM’s corporate strategy now centres on further boosting profit rates in its North American division, slashing production in its loss-making European division, and expanding operations in China, where the company is investing $11 billion in new plants and products. GM is developing more than 60 vehicle models in 2013 and 2014, all as “global platforms”, i.e., internationally homogenous vehicles built in as few plants as possible.

In Australia, GM’s local subsidiary is expected to shut down its Port Melbourne V6 engine production facility, sacking around 300 workers, regardless of any government subsidy decision. If it receives further subsidies, it plans to revamp the Commodore model with a more fuel-efficient four-cylinder engine, while focussing on expanding production of the compact Cruze, GM’s best-selling model internationally. However, the Cruze is assembled in nine other plants around the world, and the company has complained that production in Australia is more expensive than anywhere else.

The benchmark for “international competitiveness” has not just been set within the company’s factories in Thailand, Vietnam, South Korea, Russia, Kazakhstan, China, Brazil, and India, but in GM’s US plant in Lordstown, Ohio. In 2008–2009, GM retooled the plant, sacking around 2,000 workers in the process. Under an agreement brokered by the UAW, newly hired workers receive no overtime payments for shifts longer than eight hours, have minimal break times, earn a base wage of just $14 an hour, and are subjected to a “pay-for-performance” piece-rate style regime. With constant speed up, workers suffer gruelling conditions and face the risk of crippling injuries. (See “UAW plan for auto workers: back to sweatshop conditions”)

The first step in mounting a struggle to defend jobs and conditions is a complete break from the unions and the formation of rank-and-file committees. Holden workers need to turn out to other sections of workers in Australia facing similar attacks, especially Ford workers and others in the car industry, as well as GM workers in the US, Asia and internationally. This can only go forward on the basis of a new political strategy, based on the fight against the profit system and for the formation of a workers’ government committed to socialist policies.