Nissan to cull 12,500 jobs globally as Chinese car market stalls

The crisis of overproduction continues to wreak havoc with workers’ lives.

Proletarian writers

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Ford’s plants in China operated at just 11 percent of capacity in the first half of the year, according to the FT.

Proletarian writers

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Japanese automotive giant Nissan has announced a cull of its global workforce, cutting 12,500 jobs.

The company is feeling the heat from the overproduction crisis hitting the global automotive market. Last year its sales were down by 4.4 percent, with that figure breaking down into a 9 percent drop in US sales and a 15 percent drop in Europe, where the general situation of market glut was aggravated by the backlash against diesel.

This collapse in sales has translated into a crisis of overcapacity, a result of the anarchy of capitalist production, and now Nissan workers all over the world are holding their breath to see which of their number are to be rendered surplus to requirement and sent to the scrap heap.

Under pressure from a fraud scandal enveloping Nissan boss Mr Ghosn, the marriage of convenience between Nissan and its French counterpart Renault is on rocky ground, with France agitating Nissan to build more of its cars in Renault’s French underused plants.

Nissan employs 8,000 workers in Britain, 7,000 of whom annually assemble nearly half a million vehicles in Sunderland, including the diesel Qashqai model. The other thousand, working in marketing and research, are located in Hertfordshire, Bedfordshire and west London. (Nissan to cut 12,500 jobs around the world by Robert Lea, The Times, 25 July 2019)

Chinese market glutted

The global automotive industry has come to rely heavily on the ability of the Chinese market to go on soaking up an endless expansion of auto production. As the world’s single biggest car market, it has previously served to mask the true dimensions of the overproduction crisis besetting the industry worldwide.

However, with China’s phenomenal growth rate now slowing, some of the industry’s biggest hitters are feeling a chill breeze.

VW suffered a 6 percent year-on-year decline in sales for the first quarter of the year, whilst GM sales fell by 10 percent. Ford’s plants in China operated at just 11 percent capacity in the first half of the year.

Meanwhile, the French company PSA (manufacturer of Peugeot, Citroën and Vauxhall, among others), in a joint venture with Chinese manufacturer Dongfeng Auto, saw its China sales dip 62 percent in the first half, with its plant operating at just 22 percent capacity. (Shrinking Chinese car market sparks fears over foreign groups’ future by Tom Hancock, Financial Times, 28 July 2019)

While most companies regard the Chinese market as being too big to ignore, Japanese carmaker Suzuki last year pulled out. It seems that the days when the Chinese market could be relied upon to stave off the evil consequences of the rest of the world’s overproduction are numbered.

In fact, while Chinese consumers gave the failing industry a temporary shot in the arm, there is not and could not be a market big enough to soak up the output of capitalist industry, since it expands at an ever-increasing rate while the share of society’s wealth that goes to the workers and enables them to buy the products flooding off the production lines declines steadily.

This is a fundamental contradiction at the heart of the capitalist system, and no moving of the pieces on the chessboard is capable of fixing it. Only a socialist planned economy will enable society to make full use of the enormous productive forces that humanity has created, using them to make the things that workers need and thus provide them with a secure, cultured and ever-rising standard of living.