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
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
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
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
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.