The Press WEDNESDAY, NOVEMBER 30, 1966. British Motor Industry

Press, Volume CVI, Issue 31230, 30 November 1966, Page 16

The Press WEDNESDAY, NOVEMBER 30, 1966. British Motor Industry

Workers in the British motor industry face a bleak winter. A heavy decline in car sales because of the Government’s credit squeeze—in particular the tougher restrictions on hire purchase—has been reflected in redundancy dismissals and work-sharing in nearly every plant in the country. The most recent estimate is that in the industry, including the peripheral trades turning out parts and accessories, more than 100,000 workers are either idle or working short time on reduced wages. Strikes continue in many plants, against both dismissals and the shorter week. Union work-to-rule practices have cut production in some plants by a third, in spite of employers’ warnings that the consequence must be the progressive shutting down of assembly lines. Most of the factory strikes have been isolated and unofficial. In one Austin plant a five-week strike of delivery drivers protesting against dismissals brought the plant to a standstill because the completed cars left no space for production. In another plant the workers ceased production because men laid off for a week were not paid on full time.

The Government, which has resisted all pleas to ease its grip on the economy, has been under fire from both management and the unions. The unions say the restrictive credit policy amounts to the deliberate creation of unemployment. The makers of cars, who regard their role as vital to industrial growth and Britain’s export trade, say the slump in sales has caused havoc in the industry. The Government’s retort is that its moves towards a managed economy were inevitable; that there should be redeployment rather than unemployment, since there is a “ wide range ” of other jobs available; and that substantial redundancy payments for dismisseu workers are now mandatory. Predictably, the signs are that the “ cushioning ” of unemployment through redundancy payments is actually discouraging the redistribution of labour hoped for by the Government. The motor industry, notably the giant British Motor Corporation, pays well. A £25 weekly pay packet—the average for the men dismissed from B.M.C. plants—might come down to £2l or £22 after tax deductions; whereas the dole, in spite of the earnings-related benefit scheme which began in October, would range from £9 weekly for a single man previously earning £24 gross, to £l4 16s for a married man with four children in the same wage group. Redundancy payments vary between half a week’s pay for each year of work for men aged 18 to 21, and one and a half week’s pay for each year of service for men over 40. The argument, based on experience, is that motor plant workers, mostly in the Midlands, prefer to live on the improved unemployment benefits, plus short time if it is available, in the expectation of getting their old jobs back, rather than face the cost and upheaval of moving. Workers attracted by higher wages are thought more likely to move in a boom period than during a recession. The current situation in Britain appears to support this criticism of Government policy—that men forced out of work do not necessarily “ redeploy ” by seeking jobs where the planners think they ought to go.

It is certainly true that the slump in sales has dealt the industry a hard blow. B.M.C. provides an example. Car stocks in August of 1965 were 44,800; in August of this year they were 68,000; on September 3, 115,000; and, by mid-October, 130,000. The effect of the crisis on the export market, which absorbs 40 per cent of output, making the industry the highest foreign currency earner, has yet to be measured. Tariff discrimination, through the removal of internal customs duties in the Common Market area, could seriously affect sales in Europe. Moreover, competition in world markets generally tends to become fiercer as the great American and Japanese corporations extend their marketing range. The slump, it has been suggested, could lead to a needed reorganisation within the British industry by eliminating overstaffing—the tendency to cling to skilled workers rather than allow them to go elsewhere—and by encouraging the production of fewer models with longer production runs. Rationalisation, it is argued, would be the best preparation for a new era of expansion when the present economic difficulties have been overcome.