To win in the “global race” that David Cameron and his chums are always banging on about, we are often told that a flexible Labour market is essential.
The theory goes that if workers are easy to fire then companies will be more confident in hiring. Britain benefits by having lower unemployment than, say, France.
Ford demonstrates the problem with that analysis.
If it feels the need to prune its workforce in Western Europe, Britain is always gong to be in its crosshairs when compared to operations on the Continent where getting rid of workers is harder and more expensive (France, Germany, etc).
Unfortunately, when they are gone, the rare highly skilled, well-paid manufacturing jobs it provides in places like Dagenham, Daventry and Brigend aren’t likely to come back, however “flexible” Mr Cameron makes Britain’s labour market by eroding what limited rights workers still have.
Which brings us to the ire of Unite, the union which represents thousands of Ford workers. It announced a strike ballot yesterday because it wants legal assurances to address the issue of the lack of job security faced by its members (plus a better deal on pensions).
The aim, says the union, is to force the company to the negotiating table. But in doing so it may simply succeed in ushering in yet more job losses as bosses in faraway Detroit react to any strike-related blips in the figures that they see in their spreadsheets by cynically taking advantage of Britain’s flexible labour market.
Ford’s managers aren’t any more evolved than Unite’s bosses – just compare them to the Japanese who have shown just how successful car making in Britain can be.
Our loss will be Gujarat’s gain, or the gain of somewhere else where workers are paid pennies compared to pounds. As Unite found to its cost in the Grangemouth dispute, this is a country where the employers hold nearly all of the cards.
Strikes might get members’ blood flowing and tug at the heartstrings of the antediluvian left, but in threatening them Unite not only risks handing the company an excuse the next time it wants to make cuts but a PR victory to boot.
In saying this I don’t mean to adopt the position of the appeaser. It’s simply a recognition of the chill reality workers at Ford’s UK plants face.
But while Ford may hold most of the cards, it is still susceptible to embarrassment and to PR defeat. A subtler campaign against its shameful treatment of its UK workers could pay dividends.
Consumer-facing companies don’t generally like being portrayed as the bad guys because it’s terribly damaging to the holy “brand”.
Unite could win more by playing against type like this. Unfortunately, right now it’s fighting hard. But not smart.
Unite’s boss, Len McClusky, has been characterised as the ultimate dinosaur – a throwback to the days of the “Winter of Discontent” 35 years ago.
But here’s the thing: strikes in modern Britain are still very rare. For all the huffing and puffing of Mr McClusky, the unions aren’t the problem for Britain’s economy that the political right would like them to be (and still claims they are).
Meanwhile, the situation in Britain’s workplaces deteriorates to the detriment not just of the country and its employees, but to employers which have to put up with an unskilled and demotivated workforce.
The knee-jerk response of employers’ groups such as the CBI to this – when they are not blaming the unions – is to attack the education system, for which read teachers. In reality, they might better train their guns on successive education secretaries who have done nothing very much to improve things other than shouting a lot and repeatedly promising to “get tough” (leaving teachers demotivated, and unproductive, etc).
The Smith Institute, launching an inquiry into “Making Work Better”, noted yesterday that average wages have fallen for the majority of workers over the last decade while pay at the top has risen. At the same time productivity has fallen (so all that extra at the top is scarcely merited). The British work longer hours than elsewhere in the EU but appear to achieve less with them.
The Institute wants to find ways of addressing this malign situation.
Employers could do worse than pre-empt it by making their people feel a bit more valued. Having won the battle, they have responded by squeezing their staff. As a result they are losing the war.
Growth is BG’s big worry while the past haunts RBS
What a gloomy start to the week. BG started the day with a profit warning, the second (after Shell’s) from an energy sector which seems to be running out of puff.
Then Royal Bank of Scotland ended it on a smiler note, warning of increased provisions.
Of the two, BG looks better-placed. It has big problems, notably in Egypt, from where a fifth of its production comes, but disappointed elsewhere too. That needs to change although a moderate improvement in the outlook for energy prices wouldn’t hurt.
Royal Bank of Scotland’s woes seem more intractable. A rise in interest rates would help profitability, but the provisions just keep coming. There’s not an awful lot that chief executive Ross McEwan can do to stand in the way of the tidal wave.
BG’s real problem is finding growth for the future. It’s the past which keeps catching up with RBS.