The EU Stands for Capital, Not Internationalism

The auto parts firm GKN is laying off thousands of workers across Europe, sparking a series of strikes and protests. And rather than helping workers, the European Union is helping the company offshore their jobs.

By Aurélie Dianara
Translation by David Broder
Sep. 30, 2021

“We have tears in our eyes, a thousand human stories to tell, but that’s not the point today. We’re not poor workers going home. We are dignity, pride and resistance.” So insisted the hundreds of workers protesting at the historic auto parts factory in Campi Bisenzio, Italy, after learning by email this July that the plant owned by GKN Driveline Firenze was to close immediately — and that they were out of a job.The move hits 422 employees, as well as at least eighty workers in contracted services at the factory such as cooks and cleaners. Some had spent a lifetime working there, manufacturing axle shafts for the main Italian and European car brands. But overnight, without warning, a “goodbye” came to their mailboxes. Despite the reasons the company gives, GKN workers are adamant: This is not a factory in crisis, and there are still orders and work.

Faced with what looked like an absurd decision, the workers decided to fight back: They occupied the factory, organized huge protests and marches, set up local and Italy-wide solidarity networks, and convened an assembly of supportive lawyers to help write a bill against redundancies and offshoring. And they won support and media visibility. There was an outpouring of statements by politicians both left and right, and Campi Bisenzio’s mayor even issued an order prohibiting trucks in the area, in order to prevent the British multinational that owns the plant from coming to collect its machinery.

There was also a government response, announcing an anti-offshoring law supposedly inspired by France’s deeply ineffective “loi Florange.” And the workers have won their first battle: On September 20, the Florence Labor Court revoked the declaration of collective redundancies on the grounds of “anti-union conduct.” But it’s clear the multinational won’t give up, and the battle won’t end here.

From Campi Bisenzio, Birmingham, and Offenbach . . . to Oleśnica

In England, workers at GKN Driveline Birmingham have faced a similar situation for several months. In January 2021, GKN Automotive announced the closure, planned for 2022, of its Chester Road car site in Erdington — a historic site of British engineering, dating back to the 1930s. There is talk of 519 redundancies and up to another 1,000 supply chain workers losing their jobs. Here, too, workers have mobilized and received declarations of solidarity from across the political spectrum. The government has offered to invest in vocational training and the purchase of new machinery to prevent closure. In May, the workers presented an alternative business plan to save their plant — rejected by British investment fund Melrose Industries, which controversially acquired GKN for £8.1 billion in 2018. Earlier in September, workers at GKN Birmingham had voted by 95 percent, with 95 percent turnout, for an indefinite strike against the closure of their factory.When seen from a European perspective, the Campi Bisenzio story takes on rather clearer definition. When Melrose bought GKN it promised to put the “welfare of the employees” of its subsidiaries first — only to do the exact opposite. Even before the Campi Bisenzio and Erdington redundancies, in 2019, the multinational announced the closure of its GKN Aerospace factory in Kings Norton (also in Birmingham), which took place in March 2021, with at least 170 redundancies. In late 2020, GKN/Melrose slashed 540 jobs at its GKN Driveline subsidiary in Offenbach, Germany.

So, these redundancies aren’t the result of a crisis in the auto sector, or of GKN, or the Florence site itself. In a recent interview, GKN Automotive CEO Liam Butterworth even pointed to things looking up — estimating that 102 million cars will be manufactured in 2030 compared to 89 million in 2019, and enthusing about the huge opportunities offered by the transition to electric vehicles. With 27,000 workers and fifty-one manufacturing sites in twenty countries, and a turnover of £4.7 billion in 2019, the company boasts of supplying components for 90 percent of the world’s car companies and 50 percent of cars produced worldwide. The CEO intends to double the size of the company by 2030 while remaining at the forefront of the electrification race. Indeed, the Florence site was undergoing a strong recovery after the pandemic-induced slowdown: The first quarter of 2021 brought a 7 percent increase in overall turnover compared to the last quarter of 2020 and a budget surplus of 14 percent.In other words, the redundancies do not respond to the needs of people or the environment, or to the production demands necessary to meet these needs, but to a pure logic of financial speculation. Melrose’s motto is “Buy, improve, sell” — where “improve” means slashing costs and thus inflating shareholders’ dividends. It is very likely, particularly in the cases of Birmingham and Florence, that the company’s intention is to transfer production to other EU countries — probably partly to Oleśnica, Poland, where wages are lower and trade unions are weaker.

In this sense, the fate of the Italian, British, and German GKN workers is hardly new. Rather, it is the shared fate of hundreds of thousands of workers in the Europe that has been built over the last seventy years. That means a European Union (EU) that enshrines the freedom of movement of goods, capital, and companies, and that is based on fiscal, social, and wage competition between member states. In this EU, the few instruments that are supposed to protect workers’ interests are too weak and ineffective to be of any help to the people standing at the gates of GKN. Yet things could have been different.

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Economic Democracy

The blackmailing of workers faced with the omnipotence of European and global multinationals and financial capital is not the result of chance or mere fate, but of decades of class war from above. Since the late 1970s, capital has reasserted its interests at the expense of an increasingly fragmented working class — not only at the local or national level, but above all on a transnational scale. Building the “European project” was crucial to this process.As early as the late 1960s, the increasing interconnection of European and world economies — and the growing power of multinational corporations in Europe — made clear the need for the Left to organize at a transnational level. It was then that the project of a “social Europe” or “workers’ Europe” took root on the left. In place of the free-marketeer Europe built after the war, most socialist parties and trade unions, and even some of their communist counterparts, began to call for a reform of EU policies and institutions in the interests of working people.

This outlook promoted measures like income redistribution; market regulation and economic planning; social and fiscal harmonization; increased European social funds; greater control over the movement of capital, large companies, and multinationals; and the redistribution of work through a reduction in working hours. Such measures were aimed not only at the national level but at the continental level, thus structuring an idea of Europe very different from the neoliberal one that has gradually consolidated, especially since the 1980s.One of the main demands of this “workers’ Europe” was the democratization of the economy and business. This issue was especially under the spotlight with the reawakening of worker militancy from the late 1960s onward: Workers’ assemblies, wildcat strikes, factory occupations, and experiments in worker self-management expressed workers’ desire to gain a voice in running their firms. This drive was also expressed by the European left, albeit in varied forms depending on the national context. For example, while in France the idea of worker self-management of factories was widespread, in Germany the idea of comanagement by worker and employer representatives dominated.

In the 1970s, this theme inspired many reform proposals. In Italy, the appearance of works councils after 1968 and the 1970 Workers’ Statute strengthened the role of workers and their union representatives in companies. In Germany, the 1976 codetermination law (Mitbestimmung) extended the participation of workers’ representatives on supervisory boards (but not management boards) to all companies with more than 2,000 employees. In the UK, the 1977 Bullock Report — commissioned two years earlier by Labour prime minister Harold Wilson — went much further, formulating a (never-implemented) proposal known as “2x + y,” which provided for the same number of directors chosen by workers and employers, supplemented by state-appointed directors. In Sweden, the Meidner Plan proposed in 1975 by the main trade union confederation, the Landsorganisationen (LO), aimed at the gradual socialization of company ownership.

This democratization agenda also arose at a European level, both through the trade unions — unified on a continental scale in 1973 with the creation of the European Trade Union Confederation (ETUC) — and through European social democracy, which was then enjoying a strong electoral rise. The European Commission drew up a series of proposals — later systematically shelved by the European Council — aimed at guaranteeing workers’ representation on company boards or creating transnational works councils.

Attempts to strengthen workers’ control over companies were flanked by international trade-union efforts to establish democratic control over multinationals. Faced with the rise of companies resorting to offshoring or tax avoidance techniques, international trade unionism developed various strategies to stem the resulting loss of organizational and bargaining power. First, they tried to develop transnational trade union structures at the company level, the so-called World Works Councils. Secondly, they became active in bodies like the United Nations (UN) and its International Labor Organization (ILO) to obtain a legal framework to regulate multinationals’ activities. This effort, which found an important ally in the movement of Third World countries, met with strong resistance from big business and the governments representing it (led by the United States), and ultimately led only to vague and nonbinding codes of conduct for multinationals.

The third strategy developed within the European Community (EC) — the only international organization with supranational legislative powers. Here, attempts to democratize companies and control multinationals culminated in the proposal for a European directive on information and consultation of workers in transnational corporations. It was presented in 1980 by the commissioner for employment and social affairs Henk Vredeling — a Dutch Labor Party figure and early supporter of a ”social Europe” — who managed to get his proposal adopted by the European Commission, even in the face of strong hostility within this institution.

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The commission’s proposal was by no means revolutionary — it talked about information and consultation, not codetermination and still less self-management. But it was seen as a serious threat by the multinationals, because it favored the possibility of workers organizing at a transnational level. The text stipulated that multinational companies’ decisions on all matters “likely to affect substantially the interests of workers” (including investments, closures or transfers, major organizational changes, mergers, and so on) would be subject to information and consultation with workers’ representatives in European subsidiaries. Further, the companies in question would have been subject to disclosure obligations (concerning their economic situation, production, investments, restructuring projects, introduction of new working methods and technologies, and so on).

The draft directive also sought to make multinationals’ head offices accountable to the workers in their subsidiaries. A so-called “bypass clause” allowed workers’ representatives to start direct consultation with the head office if its local subsidiary did not provide satisfactory information, even if the head office was located outside the European Community. If this was the case, the parent company would have had to designate an “agent” within the EC to inform and consult employees; otherwise, this responsibility would have fallen to the company’s largest subsidiary within the EC. The directive would have applied to all multinational companies with more than ninety-nine employees (or more than ninety-nine in one of their European subsidiaries).

In short, by combating business secrecy, bypassing local management, and being applicable to companies outside the EC, the directive aimed to strike at multinationals’ immunity from collective bargaining. Unlike other international agreements, the “Vredeling directive” would also have been legally binding.

The Failure of the European Left

Naturally, this prompted a fierce reaction from multinationals and their political allies — triggering what was then described as the most expensive lobbying campaign in the history of the European Parliament. UNICE (Union des Industries de la Communauté européenne) — the European employers’ organization, today called BusinessEurope — dismissed the proposal as “unacceptable,” indeed “unnecessary” as there were already (nonbinding) codes of conduct for multinationals in place in the Organization for Economic Co-operation and Development (OECD), UN, and ILO. It would also be “detrimental” to employer “authority” and the competitiveness of firms within the European Community. International business circles beyond Europe also denounced and took measures to obstruct the move: Bills were even introduced in the US Congress to protect American companies from the directive, for instance by preventing them from disclosing information in Europe.In the face of such a massive counteroffensive, the European left clearly needed to intensify its efforts to build an effective social and political bloc. In addition to the commission and the member states, one of the key institutional battlegrounds was the European Parliament, which, although it still only had an advisory role, was gaining political legitimacy, particularly following the first direct election in 1979. Its opinion could therefore influence the decisions of the commission and the council, and the economic elites were well aware of this. Unfortunately for the European left, the 1979 elections had marked the emergence of a right-wing majority of conservatives, Christian Democrats, liberals, and Gaullists. The Left in the European Parliament thus faced an uphill task in winning the backing of members of other groups, especially left-wing Christian Democrats, closer to the trade unions.

The battle was not lost in advance — in fact, in the first months the council and the Economic and Social Committee and the Employment and Social Affairs Committee of the parliament were giving encouraging signs for the European left. In the run-up to the debates in the plenary chamber in autumn 1982, however, the right-wing majority had tabled almost 300 amendments, while the attitude of the socialist members resembled self-sabotage — with absenteeism, lack of voting discipline, and little ability to rally support in the other groups.The directive was thus dismantled by the time it came to a vote. In the following years, the industrial lobby continued its pressure to bury the proposal, receiving considerable help in this from Margaret Thatcher’s British government. The Vredeling proposal was thus informally abandoned after years of inconclusive discussions. European trade unionism thus achieved almost nothing in more than ten years of struggle — neither in organizing a transnational mobilization of European workers, nor in standing up to the employers’ lobby in the institutional battle.

As with other battles, for instance that over working time, the European left’s defeat on the Vredeling directive both contributed to and was symptomatic of a clear change in the balance of forces in Europe. Where the social democratic hegemony of the long 1960s had opened the way for the construction of a Europe closer to the interests of workers, since the early 1980s a conservative turn has been evident in both the European Community and its member states.

Fighting in a Neoliberal Europe

Today’s neoliberal EU is the result of those defeats, and more generally of the defeat suffered by workers in the clashes of the late 1970s when the “Keynesian compromise” was exhausted. From the signing of the Single European Act in 1986 onward, the EU accelerated the liberalization of capital and goods and services markets, and abandoned the idea of economic and social planning and regulation that had characterized the “social Europe” project. Instead, successive enlargements and trade agreements with third countries have fostered increasing competition between workers in Europe and around the world. Moreover, European confederal trade unionism, as well as European social democracy and some heirs of Eurocommunism, gradually aligned themselves with the neoliberal compromise, destroying the already slim chances of achieving a Europe “of working men and women.”Overall, despite some modest extensions of the EU’s “social dimension” (e.g., in the field of occupational health and safety), European social policy can be said to have undergone what Wolfgang Streeck has called “progressive regression” ever since the 1980s, as it becomes increasingly oriented toward the goals of competitiveness, flexibility, and market “restructuring.”

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The fate of the Vredeling directive was an example of this regression: After the project’s defeat, the principle of informing and consulting European workers remained dormant for many years. In 1994, thanks to the extension of qualified majority voting in the council, the EU finally adopted a directive on the establishment of European Works’ Councils (EWCs), which required companies with more than 999 employees, including at least 150 in two different European countries, to negotiate and install a transnational body of workers’ and employers’ representatives, with legal rights to information and consultation.

But the 1994 text (revised in 2009) is much less ambitious than the Vredeling directive. Indeed, EWCs are not compulsory, but rather must be negotiated only after an initiative of at least 100 employees; the directive provides only general requirements instead of a common framework for the councils’ competencies, procedures, role, and composition; it does not extend to locations outside the EU or the European Economic Area; and, most importantly, all EWCs created before September 1996 (39 percent of the more than 1,000 EWCs existing today) are excluded from the directive’s binding legal framework.

Studies show that the rights EWCs are supposed to have are very often ignored and violated: Only a minority of committees are informed before decisions are finalized or even made public, and almost a third of them go entirely unconsulted. This was the case with GKN, whose Works Council was neither informed nor consulted about the closure and redundancies at the Campi Bisenzio site. More generally, as the European Trade Union Institute recently pointed out, workplace democracy is in sharp decline across the continent.

Not Our Europe

It is clear to GKN workers that Europe is not theirs. Earlier this month, some workers from the GKN factory collective, together with activists from Potere al Popolo, met with MEPs from the left-wing group in the European Parliament. The meeting confirmed the absence, in the European treaties and instruments, of any protections that could help the workers in Florence. As Belgian MEP Marc Botenga pointed out in a question to the European Commission, the fact that GKN has received millions in public funds (both from Italy and the EU) and continues to pay dividends to its shareholders is not treated as a relevant fact in the framework of European rules.Today, therefore, the GKN workers’ battle must take place above all at national level. They are rightly calling on the Italian government to intervene with an emergency decree to stop the closures and redundancies, and to adopt general legislation to combat relocations and the dismantling of the production fabric, ensure continued employment, and severely penalize firms’ predatory behavior — particularly by companies that enjoy public subsidies. Meanwhile, preventing multinationals from profiting from unfair wage, social, and fiscal disparities between member states remains a more distant demand.

Yet the GKN workers in Campi, Birmingham, and Offenbach continue to fight in a fragmented way. There are no real EU-wide mobilizations for a European minimum wage, for a redistribution of working time at the European level, and so on. So long as we cannot start organizing a popular counterpower at the international level — one that succeeds where social democracy has failed — we will not be able to really oppose the interests of capital and overturn the European and world order inherited from the 1970s. To do this, we will have to learn the lessons of history

Published atwww.jacobinmag.com

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