Car industry statement by Derek Simpson, Joint General Secretary
27 January 2009
It used to be said in the 60s and 70s that if Ford sneezed the
economy caught a cold. The car industry is just as important an
indicator of the health of the economy now as it was then. Tens of
thousands of jobs depend on it in every part of the country, in
direct assembly, in parts manufacture and in retail. There
are also the spin off jobs in communities around manufacturing
plants, and of course the raw material producers like the steel and
rubber industries that would also suffer if the car industry
collapsed.
The snowball of the economic downturn that was started rolling
by the credit crisis will swiftly become an avalanche if the
government doesn’t move to stop it in its tracks. Tinkering around
the edges of intervention won’t achieve anything millions of jobs
will still be lost and millions of pounds will be wasted.
Car producers in the UK are hanging on by a thread because of a
lack of credit from the banks and a dramatic fall off in demand for
cars. The UK car industry has, more than any other in Europe,
been through two decades of punishing rationalisation bringing
massive improvements in efficiency, productivity and
profitability. This is no lame duck or smokestack industry.
Everyone in the industry holds the strong belief that demand will
pick up again in the near future and that producers, that are able
to hold onto their workforce over the slump will be in a prime
position to benefit from the recovery.
Other European governments are pouring huge sums of money into
their domestic car industries in the hope of establishing a
material advantage over counties whose governments take a free
market approach. Germany and France have used similar
measures over recent decades to protect industry and have enjoyed a
much slower decline in manufacturing output and employment than the
UK has during the same period.
There is no evidence to support a view that half -hearted
support for industry will have any success at all. So Unite is
urging the government to learn the lessons of past failures to
support manufacturing and begin a programme of emergency support
for strategic industries of which car production is most certainly
one. We are calling for £13 billion fund to be made available
to provide interim relief for producers and to cover employment
costs during the crisis period. The government must also use
its stake in the banks to free up credit for consumers to kick
start demand again. It’s time for the government to take
industrial policy out of neutral.
