Drax power station in Yorkshire, the UK’s largest single CO2 emitter and the site of the first-ever climate camp and numerous actions since, this week announced a fall in profits for the first quarter of 2009, due to a collapse in demand caused by the recession.
The power generator’s profits for the first quarter of 2009 were £34m against £150m in the same quarter last year. Demand overall for its electricity was down 6.1%, and most significantly, demand from industry was down 8.2%. Long closures and shorter working at car factories and companies making vehicle parts, was the major factor.
As climate campaigners in Scotland yesterday put out of action a conveyor belt that takes 100,000 tonnes of open cast coal from Glentaggart to power stations like Drax, this profit collapse is something worth thinking about.
It is an excellent example of how a reduction in production of goods, such as vehicles, reduces the need for power. It underlines that only a global transformation in the quantity, durability and materials content of the goods human society produces to meet its needs, can make an immediate reduction in global emissions of greenhouse gases.
However, as long as these reductions take place within the social context of capitalist enterprise, the impact of a cut in production is devastating for those workers who rely on these industries for a living.
Over the same period that Drax experienced its slump in demand, the number of people in work in the UK fell by 271,000, the biggest quarterly drop since comparable records began in 1971. Young people have been particularly hard hit, with the unemployment rate in the 18-24 age group reaching 16.6%, its highest point since 1993. The highest rate of unemployment is in the West Midlands, the UK’s manufacturing heartland, where 9.3% of people are now out of work.
However, new car sales rose this month, as a result of the government’s scrappage scheme. A total of 157,149 new cars were registered in July - an increase of 2.4% on the July 2008 figure, according to the Society of Motor Manufacturers and Traders (SMMT).
The government itself admits while the scheme MAY deliver a small reduction in emissions as a result of people buying more fuel efficient cars , the real purpose was to boost the car industry.
And it won’t reduce emissions. As a report from the Campaign for Integrated Transport explains: “Technical improvement in engine efficiency is vital, but it cannot meet the [government’s climate change] targets alone, not least because the fuel saving from more efficient vehicles will of itself lead to an offsetting increase in travel. It needs to be said quite simply that transport will not effectively contribute to carbon reduction unless the growth trends in private car use and air travel are changed....”
The reality is that we cannot unpick the economic devastation that capitalism is wreaking on people’s lives and livelihoods from its destruction of environment and eco-systems. They are an interconnected whole and need to be tackled in that way.
Workers who occupied the Vestas wind turbine plant in the Isle of Wight and car workers in South Korea who took over their plant and fought pitched battles to defend jobs, have everything in common though the products they make couldn’t be more different.
Both struggles raise the central issue of who owns and controls production. While these resources remain in the hands of shareholders who demand year-on-year profit increases, there are no real prospects of tackling climate change or the misery of mass unemployment.
Penny Cole
Environment editor
For revolutionary solutions to create a sustainable, not-for-profit economy in place of global capital alongside a real democracy based on People’s Assemblies. Visit our web site at www.aworldtowin.net
Showing posts with label Vestas. Show all posts
Showing posts with label Vestas. Show all posts
Friday, August 07, 2009
Wednesday, August 05, 2009
Occupations confront the state as crisis deepens
Hopes of a recovery in the health of the banking sector and the real economy look more like pipe dreams in the wake of worse than expected figures from Lloyds and Northern Rock. Both sets of losses reveal the impact of the deepening recession.
Financial institutions worldwide are now suffering the second wave of destruction of value since the crisis erupted in 2007. The first wave was triggered by the end of the credit-induced boom as consumers reached the limits of their ability to pay the interest on their mortgage debt. The most exposed to the pyramid of fantasy finance built upon sub-prime loans were the first to be hit and the result was the closure of the credit markets.
The vast sums poured into the financial sector by central banks and governments last year in an attempt at a globally co-ordinated programme to restart lending came to nothing. Rather than disappearing into a black hole as some said, the money has found its way into the gambling houses of the world’s soaring stock markets and is once again driving commodity prices up. These are the figures that are used to bolster belief in a recovery.
Lloyds’ losses of £4 billion are worse then the most pessimistic of expectations, partly as a result of its exposure to the sharp and continuing deterioration in the commercial property market. New Labour’s fabled asset protection insurance scheme designed to help banks by nationalising their losses and passing the cost to taxpayers has also come to nothing, as neither RBS nor Lloyds have fulfilled their promises to sign up.
As businesses fail, jobs are lost and unemployment soars no-one should be surprised that Northern Rock is suffering a greater exposure to mortgage payment default than the rest of the industry.
As the crisis deepens, corporate employers and the capitalist state that stands behind them must attempt to rescue their economic system and pursue a return to profitability by intensifying the elimination of excess capacity in the real economy. They will stop at nothing to achieve this aim.
Yesterday, Vestas, the Danish wind-turbine company won a court order for the bailiffs to end the workers’ occupation aimed at preventing closure of their factory on the Isle of Wight in the UK. Earlier in the day, in South Korea, police commandos descended from helicopters onto the roofs of the Ssangyong car assembly plant in Pyeongtaek, about 80 km south of the capital Seoul, to try and break the occupation by workers trying to protect their jobs. The police commandos stopped short of trying to storm the paint shop after fierce resistance from the workers inside, who were armed with metal pipes, firebombs and projectiles launched by catapults.
As the crisis deepens and workers are forced to fight for their livelihoods they will increasingly find themselves confronted by the capitalist state and its forces. In Britain, this takes the form of the courts, the police and bailiffs and the government. All are dedicated to upholding the legal right to private property – the basis of capitalist exploitation.
Now we must move beyond protest, turning our attention to composting the capitalist economic system and the state which defends it. In the end, “their” property has to become ours if we are to tackle the economic crisis in the interests of ordinary people and not the rich and powerful.
Gerry Gold
Economics editor
Financial institutions worldwide are now suffering the second wave of destruction of value since the crisis erupted in 2007. The first wave was triggered by the end of the credit-induced boom as consumers reached the limits of their ability to pay the interest on their mortgage debt. The most exposed to the pyramid of fantasy finance built upon sub-prime loans were the first to be hit and the result was the closure of the credit markets.
The vast sums poured into the financial sector by central banks and governments last year in an attempt at a globally co-ordinated programme to restart lending came to nothing. Rather than disappearing into a black hole as some said, the money has found its way into the gambling houses of the world’s soaring stock markets and is once again driving commodity prices up. These are the figures that are used to bolster belief in a recovery.
Lloyds’ losses of £4 billion are worse then the most pessimistic of expectations, partly as a result of its exposure to the sharp and continuing deterioration in the commercial property market. New Labour’s fabled asset protection insurance scheme designed to help banks by nationalising their losses and passing the cost to taxpayers has also come to nothing, as neither RBS nor Lloyds have fulfilled their promises to sign up.
As businesses fail, jobs are lost and unemployment soars no-one should be surprised that Northern Rock is suffering a greater exposure to mortgage payment default than the rest of the industry.
As the crisis deepens, corporate employers and the capitalist state that stands behind them must attempt to rescue their economic system and pursue a return to profitability by intensifying the elimination of excess capacity in the real economy. They will stop at nothing to achieve this aim.
Yesterday, Vestas, the Danish wind-turbine company won a court order for the bailiffs to end the workers’ occupation aimed at preventing closure of their factory on the Isle of Wight in the UK. Earlier in the day, in South Korea, police commandos descended from helicopters onto the roofs of the Ssangyong car assembly plant in Pyeongtaek, about 80 km south of the capital Seoul, to try and break the occupation by workers trying to protect their jobs. The police commandos stopped short of trying to storm the paint shop after fierce resistance from the workers inside, who were armed with metal pipes, firebombs and projectiles launched by catapults.
As the crisis deepens and workers are forced to fight for their livelihoods they will increasingly find themselves confronted by the capitalist state and its forces. In Britain, this takes the form of the courts, the police and bailiffs and the government. All are dedicated to upholding the legal right to private property – the basis of capitalist exploitation.
Now we must move beyond protest, turning our attention to composting the capitalist economic system and the state which defends it. In the end, “their” property has to become ours if we are to tackle the economic crisis in the interests of ordinary people and not the rich and powerful.
Gerry Gold
Economics editor
Wednesday, July 29, 2009
No arguing with the profit motive
Extreme weather events throughout the world mark the impact of profit-driven capitalist growth on a changing climate brought about by burning fossil fuel. Wildfires are sweeping across swathes of Southern Europe and Canada, Turkey is hit by floods, and mid-summer torrential rain is lashing the UK.
Yet the logic that motivates capitalist producers abounds. As it shuts the only UK wind turbine facility, Danish manufacturer Vestas has issued dismissal notices to 11 of the workers occupying its Isle of Wight factory and is seeking a possession order today. Vestas prefers to concentrate on its cheap labour venture in China competing with local producers in a less regulated economy, while the New Labour government is totally deaf to pleas to nationalise the firm.
Meanwhile BP, the third largest private energy company in the world is forging ahead with its plans to extract more profit from more oil whilst riding out the global economic storms. With the price of oil down to $52 a barrel during the second quarter– less than a half of last year’s price, and a more than 50% drop in profits – BP actually increased production by 4%. No sign of any concessions to the green agenda there.
Between March and June, BP generated $6.8bn of operational cash flow. Against that it spent $5.2bn on capital expenditure and paid out $2.6bn in dividends. That totals a $7.8bn outflow. In other words, after excluding changes in working capital, BP spent $1bn more than it brought in.
With no sign of a recovery in demand, the global squeeze on profits makes the drive to cut costs all the more urgent. BP says it has already reduced its costs by $2bn in the first half compared with the equivalent period of 2008, and hopes to be more than $3bn lower for the year as a whole. How does it do it? 5,000 jobs have already gone and many more are certain to be lost. That’s how capitalism deals with a slump in demand.
Longer term consequences of the impact of oil extraction and the chase for profit can be found in Nigeria where, in the 1950s, BP became the first to bring the black gold to the surface. As one commentator puts it: Nigeria is now “a country whose electricity grid has totally collapsed, whose ruling elites are almost uniformly corrupt and heedless, whose citizens have often appeared to accept that it is their cursed fate to live in such wretchedness, and whose government, with some happy exceptions, is clueless and dysfunctional.”
So where that leave us? We have BP pumping up production – it’s just won a new contract in Iraq – and slashing jobs, while renewable energy production in the shape of Vestas is shutting up shop on the Isle of Wight. There is a logic to all this – it’s the quest for profit, regardless of human and environmental costs. Arguing with the likes of BP and Vestas is a waste of time. Their primary obligations are to shareholders – not communities or the workforce. Replacing shareholders with forms of co-ownership has to become our obligation.
Gerry Gold
Economics editor
Yet the logic that motivates capitalist producers abounds. As it shuts the only UK wind turbine facility, Danish manufacturer Vestas has issued dismissal notices to 11 of the workers occupying its Isle of Wight factory and is seeking a possession order today. Vestas prefers to concentrate on its cheap labour venture in China competing with local producers in a less regulated economy, while the New Labour government is totally deaf to pleas to nationalise the firm.
Meanwhile BP, the third largest private energy company in the world is forging ahead with its plans to extract more profit from more oil whilst riding out the global economic storms. With the price of oil down to $52 a barrel during the second quarter– less than a half of last year’s price, and a more than 50% drop in profits – BP actually increased production by 4%. No sign of any concessions to the green agenda there.
Between March and June, BP generated $6.8bn of operational cash flow. Against that it spent $5.2bn on capital expenditure and paid out $2.6bn in dividends. That totals a $7.8bn outflow. In other words, after excluding changes in working capital, BP spent $1bn more than it brought in.
With no sign of a recovery in demand, the global squeeze on profits makes the drive to cut costs all the more urgent. BP says it has already reduced its costs by $2bn in the first half compared with the equivalent period of 2008, and hopes to be more than $3bn lower for the year as a whole. How does it do it? 5,000 jobs have already gone and many more are certain to be lost. That’s how capitalism deals with a slump in demand.
Longer term consequences of the impact of oil extraction and the chase for profit can be found in Nigeria where, in the 1950s, BP became the first to bring the black gold to the surface. As one commentator puts it: Nigeria is now “a country whose electricity grid has totally collapsed, whose ruling elites are almost uniformly corrupt and heedless, whose citizens have often appeared to accept that it is their cursed fate to live in such wretchedness, and whose government, with some happy exceptions, is clueless and dysfunctional.”
So where that leave us? We have BP pumping up production – it’s just won a new contract in Iraq – and slashing jobs, while renewable energy production in the shape of Vestas is shutting up shop on the Isle of Wight. There is a logic to all this – it’s the quest for profit, regardless of human and environmental costs. Arguing with the likes of BP and Vestas is a waste of time. Their primary obligations are to shareholders – not communities or the workforce. Replacing shareholders with forms of co-ownership has to become our obligation.
Gerry Gold
Economics editor
Friday, July 24, 2009
From South Korea to Isle of Wight - occupations show the way
Occupations of factories on opposite sides of the world show us different aspects of the problems facing workers as the state backs capitalist companies determined to restore profitability whatever it takes in the midst of the deepening global recession.
At Ssangyong Motors, in Pyeongtaek near Seoul, South Korea, the occupation is now in its eighth week. According to the Korean Trade Union Confederation , about 800 sacked employees are in a paint shop, armed with iron bars, air guns and Molotov cocktails. They have been confronting forces including more than 3,000 police using helicopters to spray tear gas, and company strikebreakers. Ssangyong – 51% owned by China’s Shanghai Automotive Industry Corporation – plans to eliminate 36% of its workforce to return to profit and thus meet a 15 September court deadline to avoid liquidation.
Following industrial action in anticipation of the layoffs, the workers launched their current strike on 27 May when the company announced the layoffs of 1,700 out of 7,000 workers, with immediate additional sackings of 300 casuals. The workers slated for layoff immediately occupied the plant, demanding no layoffs, no casualisation and no outsourcing.
On 26-27 June, a serious government and employer attack began, as hired thugs, scabs recruited from the workers not down for the sack, and riot police tried to enter the factory. They secured the main building after violent fighting in which many people were injured. The occupying workers retreated to the paint sector, as part of a defensive plan based on the belief that police would not fire tear-gas canisters into the highly flammable area. Since then, solidarity actions outside the plant have been taking place to build broader support.
Meanwhile, on the Isle of Wight, 600 workers have occupied the Vestas factory which makes blades for wind turbines. The workers are trying to stop production being transferred elsewhere, and pointing out the contradiction between the threatened closure and New Labour’s promise of new, green jobs. But the highly successful company says UK planning restrictions are too obstructive and the plant just isn’t profitable enough.
For those who run the capitalist profit system it doesn’t matter whether a company is producing oil-burning cars which contribute to climate change or green energy generators designed to reduce the use of fossil fuels – the only question that matters is what they must do to restore companies to profitability. No amount of appeals to New Labour’s Ed Miliband will change that.
The burgeoning support for Vestas workers, with rail union RMT leader Bob Crow championing their cause, shows the potential for building a movement throughout the country. Vestas workers should, for example, appeal to the 3,000 workers at the Corus steel plants on Teesside who are in imminent danger of losing their jobs.
An occupations movement would challenge the “right” of the employers to close down production and destroy people's lives in the process. Workers wherever they are have to challenge the capitalist state for ownership itself, in which they control the factories and the banks, running them not for profit but in a sustainable fashion, deciding what can and should be made, to provide jobs, meet people’s needs and tackle climate change. The actions in Pyeongtaek and the Isle of Wight show the way forward!
Gerry Gold
Economics editor
At Ssangyong Motors, in Pyeongtaek near Seoul, South Korea, the occupation is now in its eighth week. According to the Korean Trade Union Confederation , about 800 sacked employees are in a paint shop, armed with iron bars, air guns and Molotov cocktails. They have been confronting forces including more than 3,000 police using helicopters to spray tear gas, and company strikebreakers. Ssangyong – 51% owned by China’s Shanghai Automotive Industry Corporation – plans to eliminate 36% of its workforce to return to profit and thus meet a 15 September court deadline to avoid liquidation.
Following industrial action in anticipation of the layoffs, the workers launched their current strike on 27 May when the company announced the layoffs of 1,700 out of 7,000 workers, with immediate additional sackings of 300 casuals. The workers slated for layoff immediately occupied the plant, demanding no layoffs, no casualisation and no outsourcing.
On 26-27 June, a serious government and employer attack began, as hired thugs, scabs recruited from the workers not down for the sack, and riot police tried to enter the factory. They secured the main building after violent fighting in which many people were injured. The occupying workers retreated to the paint sector, as part of a defensive plan based on the belief that police would not fire tear-gas canisters into the highly flammable area. Since then, solidarity actions outside the plant have been taking place to build broader support.
Meanwhile, on the Isle of Wight, 600 workers have occupied the Vestas factory which makes blades for wind turbines. The workers are trying to stop production being transferred elsewhere, and pointing out the contradiction between the threatened closure and New Labour’s promise of new, green jobs. But the highly successful company says UK planning restrictions are too obstructive and the plant just isn’t profitable enough.
For those who run the capitalist profit system it doesn’t matter whether a company is producing oil-burning cars which contribute to climate change or green energy generators designed to reduce the use of fossil fuels – the only question that matters is what they must do to restore companies to profitability. No amount of appeals to New Labour’s Ed Miliband will change that.
The burgeoning support for Vestas workers, with rail union RMT leader Bob Crow championing their cause, shows the potential for building a movement throughout the country. Vestas workers should, for example, appeal to the 3,000 workers at the Corus steel plants on Teesside who are in imminent danger of losing their jobs.
An occupations movement would challenge the “right” of the employers to close down production and destroy people's lives in the process. Workers wherever they are have to challenge the capitalist state for ownership itself, in which they control the factories and the banks, running them not for profit but in a sustainable fashion, deciding what can and should be made, to provide jobs, meet people’s needs and tackle climate change. The actions in Pyeongtaek and the Isle of Wight show the way forward!
Gerry Gold
Economics editor
Tuesday, July 21, 2009
How to fight spending cuts
As Britain heads for state bankruptcy, we urgently need a bold strategy that rejects the massive cuts in public spending being planned by New Labour and the Tories because, clearly, the present economic set-up is not sustainable.
On the one side is growing mass unemployment, especially among young people, a rise in repossessions and growing poverty; on the other side, there are hidden plans for government-inflicted pain on key services because the economic and financial meltdown has devastated public finances.
A report today from the National Audit Office (NAO) reveals the steepest decline in government revenues since the 1920s. They fell by an estimated £32 billion or 5% in 2008-9, as the recession took its toll on taxes and VAT receipts. Taking this and bank bail-outs into account, the government will have to borrow a massive £230 billion in the coming year or about 40% of 12 months’ public expenditure.
There’s no guarantee that the financial markets will stump up this sort of money or, if they do, the interest charged will rise to take account of the possibility that the state may not be able to meet its repayment obligations. All this means that whoever wins the next general election will slash and burn to balance the books.
If you want to see the consequences of losing control of state finances, you need look no further than Ireland. The country has gone from being the so-called Celtic Tiger to the toothless pussycat in the flicker of an eye, joining Iceland as one of the most precarious economies in Europe.
Irish prime minister Brian Cowen has put his name to a 300-page report that includes proposals to slash social welfare payments and make cuts in healthcare and education. “The scale of the issues are such that no area of expenditure is immune from consideration,” he warned.
The Cowen government, which includes the Greens, has already passed two emergency budgets to stop the deficit soaring to 15% of the country’s annual wealth. They have not been enough. At least 17,300 public sector workers could now be laid off, even though unemployment is already 12% and heading for 16% next year.
Education faces severe cuts. Scores of rural schools will close, and 6,900 teachers must go. "The attacks outlined in this report would represent an education disaster and light a short fuse on a social time bomb," said the Teachers Union of Ireland. Child benefit is being reduced by 20% in a desperate bid to cut government borrowing, which is running at £345m a week, with punitive interest rates a large chunk of the bill.
If ever proof was required of the insane nature of capitalism, what is taking place in Ireland and what is planned for Britain is surely enough evidence to convict. Services built up over decades as the result of the campaigns and struggles of ordinary people are suddenly to be dismantled because global capitalism not only isn’t working but is on a path of self-destruction.
A crash programme is required to stabilise the position as a first step to reorganising the economy in a more sustainable way. The programme has to include:
* Public ownership of the entire banking and financial sector, without compensation to the former owners
* Redirection of the billions made in interest payments by corporations to shareholders in order to maintain services
* A recycling of UK pension funds, which have lost out by being tied to stocks and shares, to help public finances
* Creation of new jobs for the unemployed through public infrastructure projects and the seizure of all workplaces threatened with closure such as the occupied Vestas wind turbine plant on the Isle of Wight.
*The scrapping of Trident nuclear missiles and a withdrawal from Afghanistan.
Of course, neither New Labour nor the Tories would dare to challenge the vested interests of capitalism in this fashion. Carrying through this alternative to horrific spending cuts will require the building of a movement for revolutionary change that can turn society upside down – or perhaps put it the right way up!
Paul Feldman
Communications editor
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