Vauxhall’s van factory: UK electionomics microcosm, a British “corridor agreement”
White van man has an exalted place in British politics. But go to the one place in Britain where those vans are still churned out by the thousand, and you see an essential unchanging truth about the politics of Britain’s recovery.
As more impressive jobs numbers were released this morning (record employment numbers, record employment rate, and record vacancies) it is no surprise that the Prime Minister came here to extoll the virtues of economic recovery. But the story in Luton is a little more complex than that, as I found out on a visit a fortnight ago.
With less than three months to go you can find, in microcosm, at Luton’s Vauxhall van plant, the two fundamental strands of UK electionomics in one factory. Last month, a remarkable victory. The (almost entirely) white Vivaro vans are now rolling off the production line all morning and all afternoon. The second shift has returned. Output could reach in excess of 60,000 vans. About half are badged Opel and will be exported to Europe via Purfleet docks. But plenty will be loaded on to transporters and find themselves sold across to small businesses and fleet providers across Britain’s recovering economy. A banner announcing “Hiring now for 2015” is draped across the entrance, and hundreds of new jobs have been created. The workers are delighted. And a more potent symbol or recovery you could not get. Overall, in 2013, UK car production beat that in France, and the latest figures for 2014 were the best since the global financial crisis. Investment in the second shift in Luton just part of the £7 billion of investment going into UK car factories from its foreign owners, in Vauxhall’s case, the US giant General Motors. Vauxhall will be Britain’s top van producer. Stephen Withey is the launch manager for the Vivaro van. He told me: “Five years ago we didn’t know we were going to have a job… everyone was quite worried and now everyone’s very excited, there’s a lot of new talent here which is great for the future, a lot of training going on which should help us with any recovery. We’ve just got to make sure we launch the second shift successfully … work on quality and work on the throughput and then we will be successful going forward”.
In fact in a mirror of jobs figures showing record vacancies, he says it was not easy to find 250 new workers. Some came across from an Amazon distribution plant. They prefer staff to agency workers. So you might imagine that George Osborne and David Cameron would be parked there for large swathes of the election campaign. In terminal decline in the mid 2000s, now the UK car industry is spewing out 3 cars per minute.
However, in the story of the rise of this factory, is also the other side of that coin. And Ed Miliband might want to visit it too. The foundation of the success of this place is the “Corridor Agreement” struck here and at the Ellesmere Port Vauxhall Astra car factory too. Essentially the existence of the factory, its contracts to build new vehicles and the current recovery stem back to a combination of pay cuts, freezes, and flexible working deals struck in 2011–2012. “We had pay cuts, having to do overtime on Saturdays… it was a struggle it was hard, but we had to do what we had to do. Everyone had to knuckle down but we were fighting for our future,” says Clive Sinclair who checks the quality of the vans leaving the production line. Some workers saw 10 per cent pay cuts, and new workers were recruited on different pay scales. The truth is that in the car industry at least, the much-maligned unions, were hugely accommodating. The workers traded lower wages for a job, and eventually now, more jobs. Globalisation meant a weak wage negotiating position. The same van is produced in a factory in France, almost entirely by robots.
And what goes at the Vivaro plant, also applies across the country. The very real squeeze on living standards could be seen to contain the roots of the economic recovery. It has been part of the plan. They are inextricably linked. Britain as a whole has been on a Corridor Agreement. Two questions follow: perhaps those in Government should be far more in awe of the sacrifice of workers rather their own genius in saving the economy. And the Labour Party should ponder whether they would take the deal of jobs for wage freezes, if offered. In reality, the pressures underpinning low wages came from global competition, the rise of robots, the collapse in world trade. These competing political stories are not mutually exclusive.
In fact there is another leg to all of this: across the road from the factory, a Vauxhall dealership that has done a mean business in the past couple of years, but increasingly based on innovative credit plans called PCPs. low interest rates and the willingness of consumers to buy cars on monthly upgradable plans (based on mobile phone contracts) have been the fundamental underpinning of Britain’s recovery. But that is a story for another day. for now the two major parties want you to believe one or other description of the economy- a jobs miracle or a cost of living crunch. Who wins that argument will go a long way to determining who is in Downing Street in May.
NB this is an update to a web article I wrote at the time for the Sky News website