Little Red Blogger

This blog looks at radical politics(with a libertarian socialist slant), music and culture. Marx to Mises, Girls Aloud to Steve Reich...

Location: Wiltshire, United Kingdom

Sunday, April 10, 2005

The Quiet Death of MG Rover

And so they went with a whimper not a bang, MG Rover are now in the hands of the receivers(and 'New' Labour lackeys) PriceWaterhouseCoopers with the Chinese playing off the management and the government quite brilliantly getting what they want with juicy deals for key elements of MG Rover's intellectual property falling in their lap. The failure of MG Rover while being a tragedy for the Rover workforce brilliantly illustrates some of the current trends in British state Capitalism and how they've played out in manufacturing.

MG Rover has had a variety of incarnations over the last thirty years, bailed out by the government in the seventies acquired on life support by BMW in the nineties. A mixture of private and public money has kept the show going...until now. So why has MG Rover failed? the popular consensus is that they were too small and produced unattractive cars that failed to sell. As usual the received wisdom is merely a heavily edited subsection of the wider story. MG Rover competed in a heavily rigged market, car production like the commercial aircraft business did not spontaneously arrive out of nowhere.

Across the western world car manufacturers are cosseted, subsidised and kept alive by governments, banking institutions and the wider technocratic infrastructure. MG Rover's treatment therefore is not unusual but the inability of the UK government to keep 'the English patient' alive is unusual amongst industrialised nations. Even in supposed bastions of the 'free market' like the USA car giants like GM and Chrysler have been kept alive and bailed out throughout various times in their history. The car industry like the aircraft industry is deemed 'too big to fail' and is seen as a strategic asset by other countries round the world. The result of a heavily subsidised car market worldwide is of course a glut of vehicles, demand is heavily out of whack with supply forcing the car companies to come up with ever more creative means of selling their product to deflationary minded consumers. China will of course make this problem worse rather than better in the long-term...

So when it comes to the failure of MG Rover I belong to the cock-up rather than conspiracy school of thought. Any government pre-election is not going to actively encourage job losses, but as Meaders pointed out 'New' Labour is trapped by it's own superficial 'free market' ideology when it comes to intervening to save MG Rover. The French on the other hand are more pragmatic when it comes to their own industrial policy and in a similar situation would have(and have done) told the EU to put their competition policy where the sun don't shine. Conservative pundits on the web have of course made this point as well, illustrating some interesting contradictions between nationalist and vulgar libertarian ideologies.

So what then is the solution to MG Rover going bankrupt? As has been pointed out in this post the failure of MG Rover is a result of the UK government's inability to play manufacturing game by the rules of Realpolitik rather than meekly believing that the death of MG Rover was a 'natural' result of the 'free market' winnowing the wheat from the chaff. So if we were going to be traditionally statist and nationalistic about it a government bail-out would be the natural conclusion.

Vulgar libertarians would of course be horrified at this, but like the Trots any potential implementation of their pseudo-libertarian ideas would require a worldwide revolution(which ain't gonna happen..). So we can safely discount the Vulgar Libertarian minarchist solution as both unworkable and ignoring the lessons of history. The social democratic solution would be pretty much identical with Realpolitik and conservative nationalist position, although for different reasons. They would dress it up with language about 'preserving skills', 'human capital' all the usual technocratic human resources style cant deployed to depressing effect, the status quo tweaked in effect. All these conventional solutions profess to be thinking of the welfare of the worker but in the end cleave to the standard capitalistic method of organising things, what then would a Mutualist do to save MG Rover?

Well like the social democrat we would have to be pragmatic, after all as the Wobblies say we have to construct the new society within the shell of the new. So we would have to find a way of saving MG Rover while protecting the workers. This would rule out any rejection of government subsidy/grants, despite our ideological objection to such things generally. First of all we would look at the management structure of the company. Like most large corporations MG Rover is locked into Weber's iron cage of bureaucratic rationality. The typical hierarchical structure of the capitalist corporation has been retained, workers sell their labour to the capitalists as they've done for the past four hundred years. The MG Rovers own neither plant nor equipment or tools though they do have the use of a union(the TGWU).

This then implies that the workers need to own the company that their labour has built. The obvious means of doing this are by transforming MG Rover into some form of Co-Operative ran by the workers democratically. The government, traditional statist unions and private would dismiss this outright but looking at the situation pragmatically it would seem that the traditional solutions are not working. A successful worker run MG Rover would prove an example to be copied and rallying point for the labour movement in general. It's time to try something new, let's start with Rover!