Angry confrontations between police and young people on
housing estates near Amiens are a sign of growing
social unrest in France
as the recession, highlighted by the threatened Peugeot plant closure, deepens.
There were riots here during the nationwide disturbances in
2005 across France ,
but economic and social conditions have greatly intensified in the wake of the
global financial meltdown of 2007-8. Massive upheavals in the Middle East, North Africa , Greece
and Spain and riots in
cities in the UK
are indicators of social turbulence on a transcontinental scale.
Unemployment is already as high as 40% amongst the mostly
immigrant youth on the estates surrounding French cities, and now the deepening
slump is driving corporations onto the offensive throughout Europe .
Growth in the eurozone has turned to contraction, so workers and unemployed
people throughout the whole continent are being driven into action against
employers and the state.
With no possibility of any recovery in demand for mass market
cars, car maker PSA Peugeot Citroen has announced plans to close its Aulnay-sous-Bois factory in the suburbs of Paris . Other cut-backs
are certain to follow.
Sergio Marchionne, the chief executive of Chrysler and Fiat,
two of the world’s biggest car companies, and president of the European
Automobile Manufacturers’ Association, warned in April that the industry needed
to cut capacity in Europe by 20%.
Translated into jobs that would hit close to half a million
workers in an industry directly employing 2.3 million people in Europe , including sub-contractors. Economic conditions
have worsened since Marchionne’s forecast, so the assault on jobs is likely to
be much worse than his prediction.
The crisis is echoed in steel production – one of the car
industry’s main inputs. World crude
steel capacity utilisation was running at 80.4% in May, down 2.5% on last year.
No part of the world is exempt from the global contraction.
Its impact is reflected in a crisis
in shipping where disappearing credit and overcapacity interacts with
falling demand. The second-hand ship market has collapsed. Both bulk ships and
tankers are trading at lower levels today than during the worst moments of the
2008-09 crisis.
Clarkson’s ClarkSea Index for maritime freight rates has
halved since mid-2010, and fallen by 80% since 2008. This includes the wildly
volatile Baltic Dry Index for bulk freight, which has crashed by 90% to
post-Lehman depths.
Responses to the Aulnay-sous-Bois
planned closure have been mixed, to say the least. Jean-Pierre Mercier, head of
the CGT union at the factory targeted for closure said: "We have the power
to make Peugeot back down, to preserve our jobs." He told a crowd gathered
by its gates. "We are a political bomb, a social bomb, and we intend to
detonate."
The union is planning a long-term campaign of protest,
including marches on the company headquarters, to keep the plant open. Other
unions are more intent on extracting improved redundancy terms for workers. Gerard
Segura, Aulnay’s Socialist Party mayor, has ordered Peugeot to find a new
industrial employer for the site, threatening to expropriate the factory
grounds if it fails.
Closure would wreck the town's finances. It would lose
taxes from the company and from hundreds of families that would have to rely on
social services. Already deep in the red, its debt payments have doubled in the
past four years to €90.4
million euros in a budget of €226 million.
These attempts to preserve jobs, attract a new employer or
even win improved redundancy conditions only serve to hide the impact of the
unfolding economic holocaust. Conflict is certain to sharpen when French car workers
return from their August holidays.
Gerry Gold
Economics editor
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