Irish workers show the way to save jobs – Waterford Crystal is occupied

The bad joke about Ireland is that it’s six months and one letter away from Iceland…

But as in Iceland, where the government has been replaced by a coalition of social democrats and green socialists, people are fighting back.

Socialist Worker reports:

Waterford Crystal: ‘We’re occupying this plant to save our jobs’

by Simon Basketter

Workers at the Waterford Crystal factory in Ireland have delivered a powerful example of how to take on the recession – they are occupying their plant to keep it open.

The factory is owned by Waterford Wedgewood, which went into receivership on 5 January. The receiver suggested that the plant move to a three-day week.

Workers were reluctant to go along with this and were suspicious of the motives behind it. Many believed that the factory would close as soon as they were out the door. It turned out the receiver had the same idea.

Last Friday afternoon the receiver declared that manufacturing would cease immediately at the Waterford factory – with the loss of 480 jobs out of a 700-strong workforce.

News that the plant was closing was greeted with anger by workers. The union was only told of the immediate sackings when it directly asked if the rumours were true.

Tony Kelly is the Unite union’s chief shop steward for Waterford Crystal. He told Socialist Worker, “The plant is on a three day week – so they chose Friday afternoon because it isn’t a production day.

“I was driving home when I heard the news and drove back to the plant. Over the phone we agreed we had to get inside.”

Workers texted and rang round each other, urging as many as possible to get to the factory. The receivers had already hired in private security guards to secure the site.

“The security tried to stop us getting in – but they failed,” one worker told Socialist Worker. “They closed the doors, but there were too many people. We stormed our way in – some 400 workers entered the plant.

Support

“We’ve been in occupation since 2pm on Friday. Food, money and support have been flowing in.”

The occupation is on six-hour rotating shifts with up to 100 workers on each one. The Starry Plough – the flag of James Connolly and the Irish labour movement – was raised over the plant.

A rally was held outside the plant last Saturday. Over 3,000 people turned up to show their support despite torrential rain.

Across Waterford taxis stopped running, while shops and businesses closed for an hour in solidarity.

A van was touring the area to hand-deliver letters telling the Waterford Wedgewood workers that they had been sacked.

It was spotted on one estate and chased away – so many workers have yet to receive official notice of their dismissal.

Tom Hogan is a former Waterford glass worker and president of Waterford trades council. He told Socialist Worker, “People are just saying, ‘Thank fuck somebody is doing something!’ They used to go home to their fires at night and contemplate which window in the dole office they were going to line up at. But the occupation has turned that mood around.”

A worker from the occupation added, “The bosses thought people wouldn’t fight because they were too fearful. People are fearful – but they are also very angry.”

John joined the company in 1962 and worked at the factory for 46 years before being made redundant just before Christmas.

Long haul

He told us he had received the statutory portion of his 55,000 euro redundancy package – but was still owed 30,000 euro from the company. “We’re going to stay here for the long haul. We have nothing to lose,” he said.

One of the workers’ demands is that the Irish government guarantees that all previously agreed redundancy payments are made.

Joe, another worker in the occupation, told Socialist Worker, “We’re staying until we get the receiver’s decision to close the plant reversed.

“We want there to be an opportunity for someone to come in and buy this company and save jobs. And we want reasonable conditions for any that have to leave.

“Most of us have put in between 20 and 40 years of service. We are not being thrown on to the scrapheap by a receiver appointed by some accountant.”

Within 24 hours there were talks between the unions, the government and the receivers. As Socialist Worker went to press a number of firms were looking to buy the company and at least one is promising to keep 300 of the jobs.

As one worker told Socialist Worker, “They are private equity companies, which isn’t good – but we can fight them over conditions if we keep the manufacturing plant open.

“At the very least we want money from the government to guarantee pensions and redundancy money. If the private sector won’t keep open the plant, then it should be nationalised.”

People across the trade union movement – and in particular, workers at the Wedgewood plant in Stoke-on-Trent which is owned by the same company – should draw two lessons from the Waterford occupation.

They should be wary of what little promises to look after workers really mean when a company goes bust.

And they should be inspired by the example of Waterford workers, who have shown that you can fight back and turn the situation around.

Send messages of support and donations to Unite Hall, Keyzer Street, Waterford County, Waterford, Republic of Ireland, phone +353 5187 5438, or send an email to walter.cullen@unitetheunion.com

Church of England leaders attack greed of capitalists

The two top Anglican leaders have spoken out against the unproductive financial sector which has come to dominate our economy at the expense of productive sectors such as manufacturing and agriculture.

Says Dr Rowan Williams, the Archbishop of Canterbury, in an article for The Spectator:

It is no use pretending that the financial world can maintain indefinitely the degree of exemption from scrutiny and regulation that it has got used to. This crisis exposes the basic level of unreality in the situation — the truth that almost unimaginable wealth has been generated by equally unimaginable levels of fiction, paper transactions with no concrete outcome beyond profit for traders.

Marx long ago observed the way in which unbridled capitalism became a kind of mythology, ascribing reality, power and agency to things that had no life in themselves; he was right about that, if about little else.

The last bit leaves the impression that Williams hasn’t read much of Marx, who wasn’t some kind of anti-capitalist Nostradamus. But good on the Archbishop for saying it.

Kudos too for Dr John Sentamu, the Archbishop of York for saying the following in a speech to the annual dinner of the Worshipful Company of International Bankers on Wednesday night:

To a bystander like me, those who made £190m deliberately underselling the shares of HBOS in spite of a very strong capital base, and drove it into the arms of Lloyds TSB, are clearly bank robbers and asset strippers.

We find ourselves in a market system which seems to have taken its rules of trade from Alice in Wonderland.

Our country has built its financial strength historically on the manufacturing of goods, where money was the medium of exchange. In the last week, we have seen its systems come close to ruin because now money is no longer being the medium of exchange for goods, but rather is the very item that is being traded.

[…]

One of the ironies about this financial crisis is that it makes action on poverty look utterly achievable. It would cost $5bn (£2.7bn) to save six million children’s lives.

World leaders could find 140 times that amount for the banking system in a week. How can they tell us that action for the poorest is too expensive?

Pertinent questions indeed. The answers are clear enough: the system works best for the capitalists, they rule. What do they care about eradicating poverty? They won’t be able to have any more lavish charity dinners or auctions.

At the A World To Win blog, Paul Feldman has some criticisms of Sentamu and Williams:

The archbishops would like to return to a more benign form of capitalism of the 1960s, before the globalisation genie was let out of the bottle. Those of a mature age like myself would love to go back 40 years, which shows how the imagination can run riot. It is far easier to conceive of a future based on co-operation expressed through common ownership and democratic control of the resources of the global economy.

Of course, the Church of England cannot help in this respect. Since the Reformation, it has provided the theological justification for capitalism. Money-lending and the accumulation of individual wealth through land grabbing, slavery and colonial possessions were generally blessed and approved of by the church, which is an integral part of the British state. Rather than limiting ourselves to Sentamu’s and Williams’ criticisms, the action of Jesus in driving the merchants and money-lenders out of the temple would be a far better starting point!

Hear, hear!

Mind you, there are signs that the CofE will act, in as much as it can, by changing its investment rules:

The Church does not regulate the practice of “short-selling” by firms in which it invests.

However, a source close to its Ethical Investment Advisory Group said he thought the archbishops’ intervention “might prompt a rethinking of the rules”.

“It would not surprise me if the General Synod (the Church’s governing body) did not raise concerns about investment and business practices in future,” he said.

A Church spokesman said that while its fund managers were banned from short-selling, the rules do not apply to the firms it invests in.

The CofE already has an “ethical investment policy” governing how it invests its money. Examples include a ban on armament and tobacco firms, and any companies involved in the pornography industry.

Although the Church’s investment in private equity firms, which aren’t listed on the stock exchange and are subject to less regulation, is worrying. (The bit about fund managers above makes me think: one very important reform under capitalism would be to allow more ethical investment, to give incentives for investment in the domestic economy – in manufacturing and agriculture – most especially to worker co-operatives.)

I look forward to hearing what England’s other faith communities have to say on the economy. A multi-faith alliance to tame the multinationals? I live in hope.

By the way, plutocrat Richard Branson was yesterday forced to defend plutocracy in the Daily Mail. (Well, actually he’s written a book. Not surprising really, greedy pig.)

And again in the Mail today he’s bitterly whining that he didn’t get Northern Rock.

Politicians shouldn’t be allowed to run businesses, he says. True, but beither should capitalists. Democracy, Richard, that’s what we need in our economy!

The mutual banking sector hasn’t experienced much trouble. In fact, the Co-operative Bank’s profits are up, despite the trade turned away on ethical grounds. Depositors are rushing to building societies to stash their cash.

And north of the border, the Scottish Trades Union Congress (STUC) is arguing for a national bank to be set up, asking the nationalist-led government to “establish a Scottish Investment Bank to provide patient, committed long-term capital to growing Scottish companies”.

One hopes the English TUC will suggest the same. Northern Rock was a lost opportunity…

No democracy please, we’re New Labour

Diane Abbott, socialist Labour MP and guest on the BBC’s This Week explains why she isn’t at the party conference:

Gradually conference has become overrun with lobbyists. Fewer local delegates go. And, when the prime minister speaks, many find that their seats on the floor of the conference have been taken by party staff. This is because paid staff can be relied upon to clap to order. New Labour loyalists scorn how conference used to be. They point out how embarrassing the public rows about policy were. But a Labour party where ordinary party members had a real say would never have gone to war with Iraq or abolished the 10p tax rate.

The Tribune blog confirms the attitude of Blue Labour to democracy:

Ministers have required some basic education in the democratic process during the new arrangements for negotiating policy with party representatives under the National Policy Forum. One did not understand that everybody in the process had one vote and that ministers could not simply dictate.

Yes, presumably they thought “one man, one vote” meant “I’m the man, my vote decides it”…

The Prime Minister and beleagured Labour leader, Gordon Brown, has been forced to attack the greed of the corporate elite – for even the Tory press speaks about the City slickers with contempt.

Mr Brown said “irresponsibility”, driven partly by the bonus culture, had helped trigger this month’s markets crisis and that elements of the bonus system were “unacceptable” and had to be tackled.

At the same time he’s been stressing on The Andrew Marr Show that his government is pro-business and pro-markets.

Kitty Ussher, economy secretary at the Treasury, appeared at the Labour conference with media baron Rupert Murdoch’s favourite economist, Irwin Steltzer and the private equity boss Simon Walker, to discuss the economy:

Walker said the new crisis would mean more business for private equity and sovereign wealth funds – eg the Chinese and Indian governments — to invest in Britain. So that’s all right then.

However, the Labour faithful should not be too downhearted. Ussher kept calling contributors “comrade” throughout the proceedings.

It must be very disconcerting for these New Labour types.

Jon Cruddas, runner up in last year’s deputy leadership contest and distinctly Bold Labour, has called for a new 45% top rate of income tax to fund tax cuts for low and middle income workers:

Mr Cruddas said too many people had been caught by the current top rate of 40% – but those earning more than £175,000 should pay more.

Speaking at a Labour conference fringe meeting, he said the party needed “clear dividing lines” from the Tories.

He also savaged rebel MPs who have been calling for a leadership contest.

Mr Cruddas told the Compass fringe meeting that the financial turmoil of recent weeks had given Labour a chance to have a radical policy rethink and a “return to the values and ethics” the party believed in.

It should be noted, and noted well, from Frank Luntz’s Newsnight focus group that when a group of Labour and floating voters were shown Nick Clegg’s speech at the Liberal conference in which he called for tax rises for the rich and tax cuts for ordinary workers, the response was overwhelming approval…

Private equity pirates seize NHS firm

From the Morning Star:

Private equity snaps up NHS-funded firm

HEALTH-CARE charities and unions warned on Monday that care services are increasingly falling into the hands of profiteers thanks to the government’s insistence on outsourcing health to the private sector.

Private equity firm GI Partners revealed on Monday that it has snapped up Care Aspirations, which is funded by the NHS to provide care for people with severe learning disabilities and conditions such as epilepsy, autism and Asperger’s syndrome.

The NHS sends such patients to the company’s 11 private hospitals and care homes, guaranteeing it a regular income from public funds and making it a prime target for asset-stripping equity firms like the US-financed GI Partners.

Care Aspirations said that, thanks to NHS subsidies, its value had doubled in two years and it was now worth an estimated £70 million.

GI Partners, which is already worth about £2 billion, proudly declared that its intention was to “target such businesses with predictable, recurring cash flows, with a value that could be monetised to return capital to shareholders.”

A spokesman for the Adolescent and Children’s Trust said that “this means it is more interested in maximising profits and operating for short-term gain than providing long term care for the most vulnerable.”

And NHS union UNISON slammed the government’s outsourcing of health services to private companies as “exposing public services to the dangers of global markets.

“More than £80 billion of taxpayer’s money now goes to the private sector and to the private equity firms who increasingly own our public services. The government shouldn’t turn its back on the NHS,” the union said.

Will there B&B a recession?

For the manufacturing sector – which is, unlike financial services sector, productive – a recession is approaching:

UK manufacturing showed no growth last month for the first time in almost three years, a survey has shown, but there was no let-up in inflationary pressures as firms raised prices at the fastest pace since the index began.

The Chartered Institute of Purchasing and Supply/NTC purchasing managers’ index fell to 50.0 in May from 50.8 – the weakest figure since July 2005. The index measures activity among UK manufacturers, with a level above 50 indicating expansion and below showing contraction.

Vicky Redwood at Capital Economics said the figures suggested the “industrial sector is on the verge of recession”. The Cips survey was more pessimistic than EEF data published yesterday that showed a slight pick-up in orders. However, Cips is a broader measure than the EEF, which focuses more on high-end engineering, such as carmakers.

Both surveys pointed to firms increasing prices to offset rising raw material, energy, component and freight costs.

The purchasing managers’ output price index rose to 62.0 from 61.9 in April. Output prices rose in each of the past 34 months, the most sustained output price inflation since the series began in 1992.

More evidence that retailers are passing on rising costs to customers may concern the Bank of England’s monetary policy committee when it meets this week to discuss interest rates. The MPC kept interest rates on hold at its meeting last month because of concerns over inflation.

Howard Archer at Global Insight said: “The further rise in the prices-charged index in the purchasing managers’ survey reinforces the belief that the Bank of England will not be cutting interest rates again soon, even though weak manufacturing activity adds to fears that the economic downturn is deepening.”

The input price index eased slightly from record highs the previous month but remained at an uncomfortable level of 75.9. New manufacturing orders fell for a fifth month. Weak domestic demand was the main drag on total order books as new export orders posted a slight gain.

Archer said: “Most manufacturing data and survey evidence indicates that the sector is now buckling markedly as it is pressurised by slowing domestic demand, weaker activity in key export markets, elevated energy and commodity prices, and tight credit conditions.”

The bail-out of Bradford & Bingley by a US private equity company – in return for almost a quarter of the bank – shows how unstable the banking sector is, and how chaotic it will become:

Bradford and Bingley collapse brings UK recession closer
By Socialist Appeal
Monday, 02 June 2008

Bradford and Bingley are the latest bank to catch a cold in the present financial crisis. They’ve declared a loss of £8m for the first four months of 2008. This compares with £108m profits they made in the same period last year.

The main reason for the losses is because they’ve had to write down £89m of their assets. ‘Write down’ is banker-speak for the fact that they realise they can whistle for their money.

B & B is the market leader in ‘buy to let’ mortgages. One of the features of the housing bubble which has now burst is that people were buying houses, not only to live in, but also to lease to other people. This of course tended to push house prices even higher. ‘Buy to let’ was based on the assumption that house prices would just keep on rising. In that case not only had the buyer acquired an ever-appreciating asset, but they could also make enough money by letting it out to pay the mortgage. Free money!

When the housing bubble burst, the whole logic of ‘buy to let’ went into reverse. Not only is the house price going to fall after the deal has been struck, so the buyer is in effect stuck in negative equity, but tenants are expecting to pay less rent, since they know house prices are headed south. The ‘buy to let’ market, worth £120bn last year is now effectively dead in the water. And of course all those people jumping ship from the housing market will make the house price collapse that much worse.

So the number of those in arrears with B & B has risen sharply this year. It’ll get worse. The bank has had to sell 23% of its shares to the private equity firm Texas Pacific for £179m. Texas Pacific are not philanthropists. They buy into firms for what they can screw out of them. Bradford management are playing a dangerous game.

B & B have also been forced to ask for a rights issue of £258m. This means that shareholders are expected to reach in their pockets and stump up for extra shares. Now ‘investors’ don’t really buy shares so they can have further demands put upon their wallets. They expect to sit at home and watch the dividends roll in and the shares going up. So a rights issue will always hit existing share prices.

And so it has proved. Bradford shares have dropped by two thirds in the past six months and fell 40% in the last month. The announcement of the loss meant B & B shares took a further tumble. The panic spread to other bank’s shares. After all, they’re all in the same pickle.

Bradford and Bingley have just demonstrated they had an urgent need for more than £430m. These are panic measures. You can be sure they’re in big trouble.

We can all have a good laugh at the problems of financial institutions. But the trouble is, the financial crisis is impacting on the real economy. House prices are now definitely falling in the UK – maybe by 10% a year, maybe more. Does that mean it’ll be easier to buy a house? No, it will be harder. Interest rates are higher, which means a mortgage will cost more. The Bank of England would probably like to cut rates, but inflation is on the rise, so that’s ruled out. The banks are adjusting over a million mortgage interest rates this year, and it’s going to hurt. They are determined to spread their own misery around to the rest of us.

The level of mortgage approvals has actually halved over the past few months, since the house price bubble burst. No longer will the likes of Northern Rock chuck 125% mortgages at borrowers, so you can build a patio and have a holiday in Thailand while you’re buying a house. No, they want only fine, upstanding and, above all, solvent citizens on their books.

A house price collapse doesn’t just affect the unfortunates who buy at, say, £200,000 and find their precious house is only worth £150,000 a year later. They’re stuck in negative equity. They can’t afford to pay for the house and can’t move out. Negative equity blights whole neighbourhoods, as it did in 1992 in the last house price collapse.

And of course it brings new housebuilding to a stop. There are early signs that that is already starting to happen in Britain.

The Financial Times published an article (June 1st) headed ‘UK nears recession’. They quote Michael Saunders of Citigroup as saying. “Lots more economic pain lies ahead. The UK economy is heading close to recession and the recession risks are rising.” The recession is an inevitable outcome of unplanned capitalism, interested only in profit. It’s not our fault. Let’s make sure they don’t dump the pain of their recession on the working class.