Trade unions support Ford Valencia scheme to lay off 1,144 workers

Alejandro López

Ford Spain has announced a savage redundancy scheme to lay off 1,144 workers, or 20 percent of its workforce, at its plant in Almussafes, Valencia. Just hours after the announcement, the trade unions signaled their readiness to work with management to impose these attacks in the space of three months.

Ford plant in Valencia, Spain [Photo: Ford Motor Company]

The cut is a devastating exposure of the Socialist Party (PSOE)-Podemos government which has showered Ford with billions of euros in tax benefits and claimed that attacks against working conditions where necessary to attract supposed investments to preserve jobs.

Above all, it has exposed the German and Spanish trade unions which organised last year’s fratricidal competitive bidding contest between Almussafes plant against Ford’s Saarlouis plant in Germany. The one who imposed the most savage attacks on its workforce would secure the contract to produce electric vehicles, and supposedly, preserve the plant’s future and jobs. Almussafes “victory” has only meant a new round of attacks, as the WSWS had warned.

The savage cuts were expected for months. The Almussafes factory will stop producing the S-Max and Galaxy models in April because Ford is accelerating its strategy towards the total electrification of its passenger vehicles in 2030 and of its entire portfolio in 2035. Thus, the factory Almussafes will keep the production of only the Kuga, accounting for 62 percent of the more than 245,000 cars assembled in Valencia in 2022. The factory also assembles the Transit Connect but will stop making the version for the European market at the end of this year.

It is clear that this is just the start of the job onslaught. Last November, Martin Sander, director of Ford’s electric car division in Europe, said that electrification would mean a reduction in jobs compared to combustion vehicles. “The time it takes to produce an electric vehicle is significantly less than the time it takes to produce a combustion engine vehicle. Depending on who you ask, it’s somewhere between 30-50%, so we’ll need less capacity to build vehicles in the future. That is a reality.”

Thousands more jobs are under threat. According to the Valencian Association of the Automotive Industry (AVIA), Ford’s operations are responsible for nearly 25,000 direct jobs in the region of Valencia, many of these are linked to the combustion vehicles.

Already in February, Ford Europe announced 3,800 job cuts across Europe over the next three years. In Germany, 2,300 jobs are to go and 1,300 in Great Britain.

The trade unions are not only refusing to mobilise workers in defence of jobs. Instead, they have long agreed to the cuts behind the backs of the workforce and immediately announced their readiness to work with Ford management to impose them through so-called voluntary redundancies.

The UGT, which won a majority of the union election votes last month, with 2,713 votes (61.91 percent) translated into 22 delegates in the company committee, reacted by bemoaning that it will be hard for them to impose the job losses on workers. It stated: “This is a more than considerable volume of jobs [losses], which makes it difficult to reach an agreement that guarantees 100% voluntary leave through retirement support plans and incentivized leave. We can say that a more than complicated negotiation is starting today.”

It added, “What [the company] is not going to be able to claim is that, since the surplus is extensive, it will make the conditions of the previous [redundancy] plans cheaper. In any case, what would proceed is the opposite, in order to seek the greatest number of volunteers.”

UGT has now called management to lower the age for voluntary redundancies under the previous job cuts agreed at 55 years. This layer now represents only 600 workers in the plant, after the UGT signed off on mass redundancy schemes over the past years, the last one affecting 630 workers in April 2021.

Last week, UGT cynically stated that “far from what the company intends, and although it may seem crazy, what we will request from UGT at the negotiating table is that the exit age for a hypothetical plan be lowered below the 55 years agreed in the previous plan.”

The UGT recalled the clause in the Electrification Agreement they signed last year allowing management to “reach an agreement to undertake the voluntarily exits.” The whole deal has been exposed as fraud, sold as a way of preserving jobs at the expense of workers at the Saarlouis plant in Germany.

The Electrification Agreement represents the most savage attack on workers in the Valencia plant’s 46-year history designed to ensure it “won” a fratricidal bidding contest against Saarlouis. It imposes a four-year wage freeze, which under conditions of soaring prices due to NATO’s war against Russia in the Ukraine, represents thousands of euros less for each worker.

Aware of mounting anger, the UGT refused to submit the agreement to a referendum, even when it represented 97 percent of the unionised workers before February’s elections. Instead, they opted to submit the deal to a sham vote last February, while pre-empting opposition to it by posting a video on YouTube featuring an attack on the WSWS for opposing its reactionary collaboration with Ford management. Without the text available, workers were forced to vote via a union app. It was thus impossible to independently count the vote.

The UGT has once again been exposed as a tool of Ford to ram through attacks. Last August, the UGT downplayed Ford Spain’s refusal to accept millions of euros in corporate bailouts from the Spanish government and the EU which signaled its intention to increase attacks on workers, reneging on its earlier commitments. UGT cynically claimed that investments “are not in question” and will preserve “thousands of jobs in very good conditions.”

The STM-Intersindical Valenciana also stands exposed. The union claimed to oppose the UGT backroom deals with Ford management, the Electrification Agreement and its sham vote. On this basis, it received a substantial increase in its votes during last February’s elections, gaining 30 percent of the votes and increasing its union affiliation by 28 times, according to STM spokesperson in the plant, Daniel Portillo. Portillo also claimed that the UGT suffered a 40 percent disaffiliation.

It shows that workers are seeking an alternative to oppose wage cuts and job losses, but the STM is no alternative.

Celebrating the results, Portillo promised “we are going to do everything possible as a union to fight and prevent all those cuts that the company can achieve with its majority union (UGT).”

Weeks later, the same Portillo reacted to Ford’s jobs cuts announcement by stating “We hope that within 30 days an agreement can be reached that is so beneficial so that people can present themselves voluntarily [for the redundancy scheme].”

The union then posted a 114-word statement, stating that it “will work and fight to reduce the number of those affected, in order to improve the production lines’ work rhythms and speeds to avoid harm to our health. Of course, we will also fight to avoid traumatic dismissals.”

Protests sweep France as National Assembly accepts Macron’s pension cuts without a vote

Alex Lantier

Protests erupted across France yesterday evening, after the National Assembly failed to censure Prime Minister Elisabeth Borne’s government for imposing President Emmanuel Macron’s unpopular pension cuts without a parliamentary vote. Violent clashes between heavily-armed police and thousands of protesting youth and workers continued into the night in cities throughout France.

Only 279 deputies voted a censure motion presented by right-wing deputy Charles de Courson and backed by the neo-fascist National Rally (RN) of Marine Le Pen and the Unsubmissive France (LFI) party of Jean-Luc Mélenchon. This fell nine short of a majority in the 577-seat Assembly. Under the arcane and reactionary terms of Article 49, line 3 of France’s 1958 constitution, Macron’s cuts are thus formally adopted as law without a parliamentary vote.

These events constitute a historic exposure of the state as a class dictatorship of the capitalist oligarchy. Three-quarters of the French people oppose Macron’s cuts, and two-thirds want a general strike to block the economy and prevent their adoption. But the Assembly trampled the will of the people underfoot. There is no parliamentary road to stop the looting of the French people by an entrenched ruling class determined to slash pensions by hundreds of billions of euros in order to fund bank bailouts for the rich and war with Russia.

The vote was also a devastating exposure of the union bureaucracies and pseudo-left parties like LFI. For weeks, at protests of millions of workers and youth, they claimed that just attending protests in large numbers could convince the Assembly to oppose Macron’s cuts. The predictable outcome in the Assembly, which never had a majority to vote a censure motion against the Borne government or the cuts, exposes the political charlatans who peddled these illusions.

Instead, a direct confrontation is emerging between the working class and the capitalist police-state machine, as protests continue to escalate amid growing, palpable fear in ruling circles. Industrial action is continuing among airline, rail and refinery workers, whose strike is beginning to cause fuel shortages in southeastern France. There is also a growing movement among teachers to stop the holding of the baccalauréat end-of-high school exam in protest against Macron.

A nationwide protest strike is scheduled for March 23, and even in official media there is growing speculation that the trade unions may not be able to hold back an uncontrolled social explosion of strikes and protests after that date.

Last night, after the announcement of the failure of the censure vote in the Assembly, spontaneous protests erupted for a fifth night since Macron announced Thursday he would impose his cuts without a parliamentary vote. The Macron administration again launched a brutal police crackdown on the protests throughout the country. Riot police armed with plastic shields, pistols and assault rifles fired tear gas and rubber bullets at protesters and savagely beat protesters, including women, with batons.

There were clashes with police in Toulouse around the Jean-Jaurès station, in Strasbourg around Kléber square, in Lille on Republic Square, and in Lyon around Bellecour Square. In Strasbourg, police kettled and trapped protesters in narrow streets and shot multiple volleys of tear gas at them, leaving protesters to choke and pass out from the fumes.

In Paris, protesters gathered and were attacked by police in areas across the city including Vauban Square near the National Assembly, then at the St. Lazare train station and Châtelet and Bastille squares. Protesters marching from Bastille Square shouted chants on the 1789 French Revolution, saying: “Louis XVI we decapitated him, Macron fears we can start again.”

As large squads of heavily-armed police charged back and forth across central Paris, some cops also assaulted diners who happened to be eating at restaurants near where protests were taking place.

An objectively revolutionary situation is emerging, as the working class in France moves into a direct confrontation with the capitalist state machine. This takes place amid a wave of strikes against austerity and inflation by millions of workers across Europe, in Germany, Britain, Portugal, Greece, Belgium, the Netherlands and beyond. The critical question posed, as the class struggle continues to mount, is on what perspective the fight against Macron can be waged.

Twenty years since the US invasion of Iraq

Patrick Martin

Twenty years ago, on March 20, 2003, the government of the United States embarked on one of the greatest crimes of the 21st century, launching an unprovoked and illegal war against Iraq. It began with saturation bombing of the defenseless country (“shock and awe”), which annihilated the bulk of its armed forces and much of its social infrastructure, including electrical power and water supplies, food processing, and the production of medical supplies.

In this June 19, 2004, file photo, residents of a Fallujah, Iraq neighborhood walk through the wreckage of their homes which were destroyed in a U.S. airstrike. The U.S. launched its invasion of Iraq on March 20, 2003, unleashing a war that led to over 1 million deaths. (AP Photo/Abdul-Kadr Saadi, File)

This was followed by the invasion of the devastated country by more than 130,000 American troops, armed with the most technologically sophisticated weapons, who cut through what little remained of organized Iraqi resistance and reached Baghdad in only two weeks. After another week of slaughter, US forces captured the capital, suffering only 34 casualties in this final one-sided battle, compared to countless thousands of Iraqi dead.

The methods employed by the Bush administration in Iraq were entirely criminal, in keeping with the nature of the whole enterprise. The war began with a sneak attack: cruise missile strikes against government buildings where Iraqi ruler Saddam Hussein was believed to be, in an effort to assassinate him. It continued with the use of weapons banned by international law, like white phosphorus bombs, which set cities on fire and cause horrific burns to human flesh. In addition, US and British forces fired an estimated 440,000 depleted uranium shells, which cause long-term cancer rates to skyrocket and produce hideous birth defects.

In the course of the war, the most horrific forms of torture were employed by US forces, revealed in shocking images from the Abu Ghraib prison. The authorization of torture was drawn up by Bush administration lawyers, who asserted that the president had virtually unlimited powers as Commander-in-Chief.

The result of the invasion, followed by an eight-year occupation, was what the WSWS branded as “sociocide,” the deliberate destruction of an entire society. The imperialist conquest reduced one of the most advanced countries in the Middle East to conditions of medieval barbarism, not only economically, but also politically. The US rulers systematically promoted religious divisions and ignited sectarian warfare between Sunni and Shi’ite Muslims and between Muslims and smaller religious minorities, in an effort to prevent any united resistance to the US occupation.

In deliberately embarking on an aggressive war, the US government and its leading officials—including George W. Bush, Richard Cheney, Donald Rumsfeld, Condoleezza Rice, and Colin Powell—were guilty of war crimes. Along with allies like UK Prime Minister Tony Blair, they violated the core principle laid down by the Nuremberg Tribunal after World War II, which found that the central crime of the Nazis, from which all their other crimes flowed, was the launching of unprovoked and aggressive wars. (See below, remarks delivered by David North in 2004 at a debate in Dublin, Ireland.)

David North speaks at Trinity College in Dublin, Ireland on October 14, 2004

The American media paid only perfunctory attention to the Iraq War anniversary. What has been said is aimed at covering up for the colossal scale of the crime, and of the media’s own role in it.

The cynicism, as always, found its most perfidious expression in the pages of the New York Times. A news analysis by Max Fisher under the headline, “20 Years On, a Question Lingers About Iraq: Why Did the U.S. Invade?” treats the motives of the Bush administration in launching the war as uncertain and even “fundamentally unknowable,” in the words of one “scholar” interviewed by Fisher. 

The Times article flatly rejects the “once-prevalent theory: that Washington invaded to control Iraq’s vast oil resources,” without referring to the prominence of former oilmen like Vice President Cheney and Bush himself in driving the decisions for war. And it attributes the systematic lying about Saddam Hussein’s possession of “weapons of mass destruction” to a form of groupthink, in which “[a] critical mass of senior officials all came to the table wanting to topple Mr. Hussein for their own reasons, and then talked one another into believing the most readily available justification.”

The Times’ “analysis” carefully avoids any discussion of the role of the Times itself as one of the main promoters of the “weapons of mass destruction” campaign. Reports written by Judith Miller and Michael Gordon, most notoriously a September 2002 front-page exclusive under the headline, “U.S. Says Hussein Intensifies Quest for A-Bomb Parts,” parroted the claims of top Bush administration officials, and were taken up by the corporate media as a whole. White House officials then cited these reports as “evidence” against Iraq, which they themselves had planted.

The motivations for the war are not “unknowable.” Indeed, they were known at the time, with tens of millions throughout the world participating in demonstrations in advance of the invasion, rejecting the lies of the administration and demanding “no blood for oil.” The size and breadth of the demonstrations were so large that it prompted the New York Times to comment that there were “two superpowers”: The United States and “world public opinion.”

On March 21, 2003, the day after the invasion began, World Socialist Web Site International Editorial Board Chairman David North published a statement laying out the nature of the war:

The unprovoked and illegal invasion of Iraq by the United States is an event that will live in infamy. The political criminals in Washington who have launched this war, and the wretched scoundrels in the mass media who are reveling in the bloodbath, have covered this country in shame. Hundreds of millions of people in every part of the world are repulsed by the spectacle of a brutal and unrestrained military power pulverizing a small and defenseless country. The invasion of Iraq is an imperialist war in the classic sense of the term: a vile act of aggression that has been undertaken on behalf of the interests of the most reactionary and predatory sections of the financial and corporate oligarchy in the United States. Its overt and immediate purpose is the establishment of control over Iraq’s vast oil resources and reduction of that long-oppressed country to an American colonial protectorate.

The war was part of an unending series of invasions and occupations initiated by the United States in the midst of and following the dissolution of the Soviet Union, under both Democrats and Republicans. This includes the First Gulf War (1990-91); the bombing of Serbia (1999); the invasion of Afghanistan (2001); the bombing of Libya (2011) and the US-backed civil war in Syria (2011). Far from expressing the strength of American capitalism, the effort of the American ruling class to use military force to conquer the world arises out of extreme crisis. As the WSWS statement explained:

Whatever the outcome of the initial stages of the conflict that has begun, American imperialism has a rendezvous with disaster. It cannot conquer the world. It cannot reimpose colonial shackles upon the masses of the Middle East. It will not find through the medium of war a viable solution to its internal maladies. Rather, the unforeseen difficulties and mounting resistance engendered by war will intensify all of the internal contradictions of American society.

The 20th anniversary of the Iraq war is being marked now amidst an escalating US-NATO war against Russia, which threatens to become a much wider war, involving the whole of Europe and risking the potential use of nuclear weapons for the first time since the Truman administration carried out the nuclear incineration of Hiroshima and Nagasaki.

While the former middle class critics of the Bush administration’s war against Iraq have become the most fervent advocates of the war against Russia, the basic interests driving US policy remain the same. American imperialism, now led by the Biden administration, instigated the war and is determined to pursue it to the military defeat of Russia, whatever the consequences. Facing intersecting crises, enormously exacerbated by the pandemic, the ruling class toboggans toward catastrophe.

The media which yesterday promoted the lies of “weapons of mass destruction” peddles the “Wuhan lab leak” hoax to blame China for the coronavirus pandemic, and the claims of “unprovoked Russian aggression” and ludicrous allegations of Nazi-style atrocities in Ukraine.

The lies of 2023 are even greater and more brazen than the lies of 2003. Putin’s reactionary invasion is a desperate effort by the Russian oligarchy to defend its class interests against a real threat: the far more powerful forces of American and European imperialism.

Pressure grows on another US bank amid controversy over Credit Suisse takeover

Nick Beams

The desperate actions by governments, regulatory authorities, and banks in both the US and Europe have not only failed to stem the growing financial crisis but in some ways are making it worse.

In the US, following the failure of the Silvergate bank, Silicon Valley Bank and Signature over the past two weeks, the latter two recording the second- and third-largest banking failures in US history respectively, attention has turned to the travails of the First Republic Bank with growing concerns that it could be the next to go.

Last week, a consortium of 11 major banks, under the leadership of JPMorgan Chase CEO Jamie Dimon, with the collaboration of Treasury Secretary Janet Yellen, deposited $30 billion with the struggling bank. It was hoped this show of confidence would stop the outflow of depositors’ money, ease the pressure on its share price and stabilise it.

In just a few days, the operation has been revealed as a complete failure. While the outflows are reported to have slowed somewhat, First Republic has lost $70 billion out of the total of $176 billion it held at the start of the year.

And despite the injection of cash, the company’s shares have continued to plummet. Its share price has fallen by 90 percent since the beginning of the month, closing 47 percent down yesterday. Long-term bonds that mature in 2046 were trading at 55 cents on the dollar, down from 75 cents in early March.

First Republic took another hit before trading opened yesterday, when the ratings agency S&P Global downgraded its credit rating for the second time in a week. It said the $30 billion in deposits from the major banks “should ease near-term liquidity pressures, but it may not solve the substantial business, liquidity, funding and profitability challenges that we believe the bank is now likely facing.”

With the deposit operation having failed, a new plan is under discussion today in which the banks may convert a part or all their deposits into an infusion of capital.

The failure of SVB and the deepening problems of First Republic have focused attention on the role of small to middle-sized banks in the US financial system and their potential for setting off a systemic crisis.

The limited regulatory measures introduced after the crisis of 2008 focused on the large banks, characterised as “too big to fail.” In 2018, Congress removed many middle-sized banks from oversight with a decision that some regulations should only apply to banks with assets of $250 billion and above as opposed to the earlier stipulation of $50 billion.

This posed no great danger so long as the Fed was continuing its policy of ultra-cheap money. But the situation has shifted sharply with interest rate hikes initiated by the Fed over the past year, lifting its base rate from near zero to 4.5 percent.

This has meant that the assets held by these banks, which play a significant role in regional areas and in key sectors of the economy—there are some 4000 banks in the US—have suffered a decline in their market value, such that they are well below the book value as recorded in the banks’ balance sheets.

This applies not only to Treasury bonds and other financial assets, the value of which falls with interest rate rises, but also to other interest rate-sensitive assets such as commercial real estate.

A divergence between market value and book value does not present a problem so long as money continues to flow in. But if it starts going in the other direction, as it did for SVB, then those losses must be recognized when the assets are sold to cover the cash outflow.

The situation recalls that which developed with regard to subprime loans, the spark that set off the 2008 crisis. When problems first came to the surface in 2007, Fed chair Ben Bernanke said they would not spread because the subprime market was so small relative to the total financial system.

The circumstances of the present crisis are very different from those of subprime. But there are similarities in that a crisis that erupted in what might have been regarded as an inconsequential area of the system has been shown to have broad implications. And in some ways the present crisis is more serious than that which erupted with subprime.

Subprime mortgages, which were sliced and diced to form bond packages and then sold off to investors, were in essence speculative assets.

Today the crisis arises from the fact that many middle-sized banks have invested heavily in what are supposed to be the safest assets of all, Treasury bonds and mortgage-backed securities, which have fallen in value because of the Fed’s interest rate hikes.

This is what led financial regulators to invoke the danger of “systemic risk” as they moved in to guarantee the money of wealthy individuals at SVB whose holdings went well beyond the limit of $250,000 automatically covered by insurance.

The issue now is: How far will these measures be extended? Are all deposits throughout the banking system now guaranteed? And what is going to happen to the value of the holdings of Treasury bonds and other financial assets held on the books of so many small and middle-sized banks if the Fed continues its rate rises? And if there is a pause in the rate hike cycle what does this mean for the Fed’s so-called “fight” against inflation?

These are some of the issues which will confront the Fed’s policy-making body when it meets today and tomorrow.

It will also have to consider the implications of the takeover of Credit Suisse, a globally significant bank, for the stability of the US and international financial system.

One issue of immediate concern is the effect of the Credit Suisse takeover by UBS, organised at the insistence of the Swiss government and the country’s financial regulator FINMA, on the bond market.

In any liquidation or takeover, as financial interests salvage what they can from the carcass, bond holders are further up the line from shareholders.

But in the takeover of Credit Suisse, the Swiss National Bank declared that holders of $17 billion worth of so-called additional tier ones (AT1s) would get zero. The AT1s are a variant of contingent convertible bonds, known as cocos, which were introduced after the 2008 crisis in which debt could be converted into equity.

The pecking order in the event of liquidation was that shareholders would be wiped out first, followed by cocos and then senior creditors. In return for increased risks, the holders of the coco bonds were paid a higher rate of interest.

However, in the takeover of Credit Suisse these rules were overturned. While equity holders may get something, AT1 holders will get nothing.

Financial Times columnist Gillian Tett pointed to some of the motivations for the decision.

“It is hard to escape the suspicion,” she wrote, “that the Swiss authorities decided to make (modest) payments to equity holders – but not to bond investors – because the former included a powerful Saudi shareholder [the Saudi National Bank] (that Bern did not want to offend.)”

Protectionism, geopolitical self-interest and state intervention “seem to have over-ruled free-market principles.”

But she went on to note that there was “uncertainty about the legal structures surrounding US finance too.”

When SVB and Signature failed, protection was given to all depositors despite the mandate of the Federal Deposit Insurance Corporation that it only applied to the first $250,000 of deposits.

The net result, she concluded, is that investors are in limbo land, not knowing whether capital market laws apply as a “pillar of faith” for the future or whether governments in the US and Europe have the desire or the means to stand behind all banks. It was “no wonder fear abounds.”

The Bank of England (BoE) and the European Central Bank (ECB) both issued statements criticising the Swiss decision, with ECB president Christine Lagarde pointedly telling the European parliament, “Switzerland does not set standards in Europe.”

The ECB statement said, “Common equity instruments are the first ones to absorb losses, and only after their full use would Additional Tier 1 be required to be written down.”

The BoE set out its opposition, saying there was a “clear statutory order” in which shareholders and creditors should bear losses.

There are important political conclusions to be drawn from this incident. One of the central tenets of bourgeois ideology is that the capitalist system, and above all its financial mechanisms, are a rules-based order to which the working class must submit and obey as if it derives from Nature itself.

In fact, the financial system is not some natural and therefore eternal mechanism but a product of class society in which supposedly immutable rules are overturned overnight in a time of crisis as the conflicting interests of the ruling elites come to the surface.

Rough sleeping rises in UK amid tidal wave of homelessness

Dennis Moore

For the first time in five years there has been a marked rise in rough sleeping across England.

Office for National Statistics (ONS) data shows that in 2022, an estimated 3,069 people were sleeping out on the streets of England, a rise of 26 percent. This is the biggest year on year rise since 2015 and exposes the pretense of the Conservative government’s 2019 manifesto promise to “end the blight of rough sleeping” by 2024.

A homeless man sleeping in a shop doorway in Romford, London, December 2022 [Photo: WSWS]

Even this rise is not the full picture as the numbers of those sleeping out on the streets does not include those who are homeless, living in temporary shelters or hostels.

There has been a rise in rough sleeping across all regions of England. London and the southeast represented half of those on the streets, with Westminster local authority in London recording the largest number of rough sleepers, 250 people, an increase from 63. Christchurch, Poole and Bournemouth showing a doubling of rough sleepers.

Up to two thirds (64 percent) of rough sleepers were from the UK, 21 percent were EU nationals and 6 percent were from outside the EU and UK. The remaining 10 percent were not known.

Rick Henderson, chief executive of the Homeless Link charity said, “The 26 percent rise is evidence of how the cost-of-living crisis has exacerbated long-standing drivers of homelessness, such as shortage of affordable housing, an often punitive welfare system and increasingly stretched health services”.

Local councils are warning of a coming tidal wave of need, caused by soaring food and energy prices, benefit freezes, and the lifting of COVID eviction bans.

Research from a year ago by homeless charity Crisis and Heriot-Watt University predicted that by 2024, there will be 66,000 more homeless people in England, including 8,000 more sleeping rough and 9,000 forced into unsuitable accommodation.

“The Homelessness Monitor: England 2022” surveyed 155 English councils, finding that nine out of 10 town halls are expected to see an increase in evictions from private rented homes over the next year. Eight out of 10 councils have concerns about the increase in homeless children.

It predicted that councils in London will see the biggest increase in homelessness. At the time a council official in southern England told researchers, “We are expecting a tidal wave, to put it mildly”.

The rise in the private housing rented sector across the UK has led to many tenants constantly worrying if they will be able to pay the rent and worrying if they will receive an eviction notice.

ITV News recently reported prospective tenants being forced into a bidding war when looking for a place to live as rents increase and demand for properties is greater than current availability. ITV was told people were paying out hundreds of pounds to provide a deposit for a property, only to be gazumped by a bidder offering more money.

There has been a marked decrease in the building of social housing, with just 5,955 homes built for the cheapest social rents in 2020/21, down from 40,000 for 2010/11.

The private rented sector has doubled in the last 20 years to 4.6 million households, accounting for 19 percent of UK households.

The increase in interest rates and soaring mortgage costs has been passed on by landlords to their renters. According to Crisis, rental evictions have surged by 98 percent in a year.

Ministry of Justice figures for England and Wales show that between October 1-December 31, 2022, there were 5,409 evictions, double the figure for the same period in 2021.

Action taken by landlords against tenants in the county courts in England and Wales with orders for possession were up by 135 percent, repossession claims up 42 percent and warrants up 103 percent. A survey carried out in December 2022 by Crisis indicated that nearly 1 million low-income households across Britain feared eviction in the coming months.

Crisis CEO Matt Downie said, “The devastating impact of the cost-of-living crisis, rising rents and low wages has once again been laid bare as thousands more renters are faced with eviction and the very real threat of being left with nowhere to go”.

The lack of private tenants’ rights has left many people worrying when they might be evicted. Portia Msimang, project coordinator from the campaigning organization Renters’ Rights London, said, “People are being held to ransom by landlords, who themselves are living really well.”

The homeless charity Shelter described the private sector as like the wild west, with people gazumped and tenants evicted and replaced with higher paying tenants. Many did not even know who their landlord is. One woman from Manchester told ITV News that she would need to put a minimum of five months’ rent up front.

ONS figures show that private rented sector rents increased by 4.4 percent in the last year, an increase from 4.2 percent from December 2021.

According to Citizens Advice renters in the private sector are paying 43 percent more on rent than those in the social housing sector.

Private sector landlords are also restrictive regarding who they will let to and will not always let to people on welfare benefits or will require deposits that are financially insurmountable.

The servicing of mortgage debt has been one of the key factors leading landlords to increase rents. The Bank of England having kept interest rates low for years has recently put through 10 consecutive base rate increases.

Many buy-to-let landlords will choose to sell up, as their profit margins diminish. According to estate agent Hamptons analysis of data from Countrywide, landlords sold 35,000 more properties than they bought across 2022. Hamptons has estimated that the private rented sector is losing homes at a rate of 66 per day.

In London the SpareRoom website, used by many to try to find a spare room to share, calculates that there are 106,000 people looking for a room to rent, with 1,500 available properties.

The rental crisis in London has led to record numbers of homeless families having to be temporarily housed in hotels. Westminster council has confirmed that in the last two years the number of families lodging in hotels has risen by a staggering 1,740 percent and is directly attributable to the cost of living crisis and the shortage of private rented properties.

Homeless families are being housed at enormous cost, with the average hotel room costing £268 per night, £8,152 a month.

Shelter estimate that there are nearly 250,000 people living in temporary accommodation, the majority families, including 123,000 children. Two thirds of families (68 percent) have lived in temporary accommodation for over a year. In the last decade there has been a 74 percent rise in those living in temporary accommodation.

Millions of social housing tenants are already seeing a rent rise of up to 7 percent this year. This comes on top of council tax and cost of living rises that have pushed many to the brink.

Kenyan government threatens crackdown against cost-of-living demonstration, as protests erupt across Africa

Kipchumba Ochieng

The Kenyan government of President William Ruto is threatening police violence against Monday’s protest against high costs-of-living. The protest is organised by billionaire opposition leader and former prime minister Raila Odinga of the Azimio la Umoja–One Kenya Coalition Party. It coincides with mass rallies across Africa and Europe.

Odinga has declared the demonstration on the streets of Nairobi the “mother of all protests,” while continuing his calls for an investigation into fraud in last August’s presidential election.

President of Kenya William Samoei Ruto addresses the 77th session of the United Nations General Assembly, Wednesday, Sept. 21, 2022 at U.N. headquarters. [AP Photo/Mary Altaffer]

Sunday, Nairobi police chief Adamson Bungei said Monday’s protest is illegal and the security forces would not allow it. “Any person who will breach the peace or break the law during the procession shall be dealt with according to the law,” he said.

Last week, Ruto declared, “The government will not allow loss of life, destruction of property and looting. We will not allow a few individuals who have refused to accept election results to cause chaos among peace-loving people.” His deputy, Rigathi Gachuga, threatened “finding a final solution to Raila.”

In anticipation of the rally, the government converted Nairobi into a fortress, deploying 5,000 heavily armed police offices and the notorious paramilitary, the General Service Unit (GSU). Created by British imperialism to suppress the Mau Mau anti-colonial insurgency in the 1950s, the GSU has been used by successive regimes to crush workers’ and peasant protests and strikes.

Throughout the week there have been demonstrations in various parts of the country including Kisumu, Mombasa, Nairobi, Kiambu and parts of the Mount Kenya region, an area with few Azimio supporters. Videos of citizens complaining about the high cost of living have gone viral on social media.

For over a month, the government had been stepping up police repression against workers and youth. In February, police arrested popular comedian Eric Omondi and 17 other protesters after hurling tear gas. In March, 40 people were arrested in another protest.

On Saturday, 50 university students were arrested by police at a city hotel after holding a press conference in support of Monday’s rally. They were handcuffed and bundled to the Central Police Station, charged with engaging in an illegal gathering.

Everywhere the ruling class, whether in the former colonial countries or the imperialist centres, is breaking with democratic forms of rule, seeking to criminalize working class struggles. Monday’s protest in Kenya coincides with demonstrations across the world against austerity and worsening social conditions, marking a growing revolutionary situation internationally.

Across Africa, five mass protests are being held today. In South Africa, the opposition Economic Freedom Fighters is organising nationwide marches against power rationing, high unemployment and low public spending on education and has called on African National Congress President Cyril Ramaphosa to resign. Police have said that the planned protests are an attempt to overthrow the government and are mobilizing 18,000 security officers to suppress the demonstration.

In Nigeria’s capital Lagos, opposition politicians have called for street protests over what they have described as rigging in last month's presidential elections, intersecting with others against fuel shortage and currency swapping difficulties. In Tunisia, protesters marched against the rising cost of living, insecurity and the drive to authoritarian forms of rule by President Kais Saied.

Another protest is being held in Dakar, Senegal, after weeklong protests gathering thousands as President Macky Sall intensifies repression ahead of the 2024 presidential election.

In France, the epicentre of workers’ struggles in Europe, hundreds of thousands continue to protest against Macron’s pension reform. For weeks, millions across Europe have been striking and protesting to express their anger against the planned attacks and pro-war policies.

Like other opposition parties’ demonstrations against sitting governments, Kenya’s Odinga does not represent a genuine alternative. The demonstration is a means of cynically exploiting and also containing mounting opposition against Ruto, amid soaring inflation of 9.2 percent, sharp tax hikes, and soaring food and energy prices. Latest data from the Kenya National Bureau of Statistics shows that households spent 13.3 percent more on food compared to a year earlier. Food accounts for nearly a third of the shopping basket for Kenyan families.

Terrified at the spectre of anger exploding outside of Kenya’s corrupt political framework, Odinga called today’s limited protest action. The Star reported that sources who attended an internal Azimio meeting on whether to cancel the demonstration said, “We told him it is too late, our supporters are already psyched up and we cannot disappoint them because if you keep on cancelling such activities, nobody will take you seriously next time.”

Odinga, with an estimated net worth of $3.3 billion, has refused to present any concrete demands, besides vague calls for Ruto to reintroduce food and fuel subsidies, while insisting that exerting more pressure on the government will force it to reverse social attacks. Odinga is aware that any policies against inflation would impinge on the wealthy that he himself represents and anger his imperialist backers, including the International Monetary Fund (IMF), which is demanding savage austerity.

The Ruto government, composed of 24 cabinet members collectively worth US$120 million, is determined to unload the full burden of the economic crisis, which has been intensified by the COVID-19 pandemic, a prolonged drought that is resulting in 3.5 million Kenyans facing starvation, and the soaring of prices due to the ongoing US-NATO war against Russia. The economy is suffering falling foreign exchange reserves, depreciating of the Kenyan shilling, and mounting debt and debt servicing obligations amid a shortage of US dollars.

In the first 100 days of his presidency, Ruto has dutifully imposed the dictates of the IMF. The government has eliminated subsidies on the staple unga (maize flour) and fuel, announced new tax hikes on excisable goods and services, introduced new charges for bank-to-mobile money transfers, increased the rate of withholding (income) tax and raised mandatory National Social Security Fund contributions.

He is now preparing a privatisation programme, including the Kenya Ports Authority (KPA). KPA’s privatisation has the potential of sparking mass opposition among its 5,000 workforce, a traditionally militant section of the working class that can paralyse operations at the Mombasa Port, blocking the supply chain of goods across East Africa.

While the police state methods to impose the dictates of the IMF, US and European imperialism are reminiscent of the austerity attacked by Western-backed dictator Daniel Arap Moi—Ruto’s political mentor—during the 1980s and 1990s, the crisis of capitalism in Kenya and globally is far deeper today than it was four decades ago. Mass protest and strikes across the world have shaken bourgeois rule to its very core.

The working class and rural masses must forge its own methods of struggle against this savage austerity programme. This requires above all an understanding that neither the Ruto nor the Odinga factions of the ruling class can resolve the international crises facing Kenyan society. The working class cannot count on the trade unions, which are tied to the capitalist system.

The Central Organization of Trade unions (COTU), consisting of 36 trade unions representing more than 1.5 million workers in the public and private sectors, has refused to mobilise its members against Ruto’s austerity programme. On Saturday, COTU Deputy Secretary-General Benson Okwaro implored Ruto to embrace dialogue with Odinga “so that our country can be saved.” He urged workers to report to work, saying, “Let us not be used by politicians. This country is bigger than us all. We must leave the country as peacefully as we found it. History will judge us well.”

COTU’s members, the Kenya Medical Practitioners, Pharmacists and Dentists Union and the Kenya National Union of Teachers have called off strikes to increase salaries and improve working conditions over the past months. In November, the Kenya Airline Pilots Association called off a strike at Kenya Airways, after Ruto’s government outlawed the action. The ending of the strike was also supported by Odinga’s Azimio.

Drastic closures and job cuts at Germany’s biggest department store chain

Marianne Arens

Galeria Karstadt Kaufhof, the last remaining major chain of department stores in Germany, confronts a new round of drastic cuts with another 52 branches marked for closure. This means that around 5,000 shop assistants, administrative and warehouse staff and other workers will lose their jobs by the end of 2024.

Galeria (formerly Kaufhof) at Frankfurt’s Hauptwache [Photo: WSWS]

One of the two remaining department stores in the cities of Duisburg, Düsseldorf, Frankfurt, Nuremberg, Stuttgart and Saarbrücken will close, and additional closures are planned in Berlin, Hamburg and Munich. Branches in Leipzig, Gelsenkirchen, Leverkusen, Erlangen, Offenbach, Hanau and many other cities will also close, either in three months, on June 30, 2023, or by January 31, 2024. The press agency dpa has published a complete list of the announced closures.

Of the more than 5,000 employees who will lose their jobs, 4,300 currently work in shops slated for closure. Another 700 workers will be laid off from the concern’s remaining 77 branches, while those not to be made redundant face further wage cuts and an even heavier workload. Workers have suffered wage cuts for years, with an average Galeria salesperson earning €5,500 less per year than provided for in the current contract.

A creditors’ meeting this month is expected to approve the insolvency plan, which will be presented jointly by Galeria CEO Miguel Müllenbach and insolvency administrator Arndt Geiwitz. In the media, the break-up of the company has been justified by high energy prices and a change in consumer behaviour. However, this merely glosses over the real reasons and conceals the naked profit interests behind the demise of the company. The initial reports in the media largely failed to mention the name of René Benko, who owns Galeria Karstadt Kaufhof via his holding company, Signa Retail GmbH.

According to Forbes magazine, Tyrolean real estate speculator Benko has a private fortune of at least €5 billion. He also owns the department stores KaDeWe in Berlin, Oberpollinger in Munich, Alsterhaus in Hamburg, the “Golden Quarter” in Vienna, the Globus chain in Switzerland, as well as shares in the Chrysler Building in New York, the US luxury hotel Park Hyatt and Selfridges in London.

Benko is not choosy in his methods and is currently under investigation for the umpteenth time for corruption. Authorities in both Italy and Austria have accused him of bribing tax officials and attempted tax fraud.

To rake in exorbitant profits, Benko and the Signa Group use the following method: They buy up department stores and separate the retail business from the valuable real estate in prime city centre locations. The real estate division, which belongs to the Signa holding company, then collects high rents from the department stores or sells these properties to global finance sharks, who in turn demand excessive rents from the shops, thereby aggravating the financial difficulties of the GKK group. Benko is currently in the process of selling half of the property of the luxury department store KaDeWe in Berlin to the Thai trading and real estate group Central Group.

Originally, Benko owes his rise to prominence to a political network centred around former Austrian chancellor Sebastian Kurz, who now works with Donald Trump. In recent years Benko has been able to multiply his fortune by relying on the close cooperation between his company executives with politicians and trade union officials.

Today it is Verdi, the German services trade union and its representatives that ensure the orgy of enrichment continues. Workers at the company confront a conspiracy in which Verdi works closely together with management, the insolvency administration, politicians and the real estate speculator René Benko himself.

When the multibillionaire René Benko took over the department store chain in 2014 for the symbolic price of one euro, Verdi supported him, as it had done with his predecessors, Thomas Middelhoff and Nicolas Berggruen. Benko was hailed as the new “white knight” and redeveloper who would save the financially strapped department store chain from bankruptcy and lead it into a prosperous future. Since then, one “restructuring plan” after another has been concluded, invariably involving new impositions and sacrifices for the workforce. All these contracts bear the signatures of Verdi officials.

When Benko took over the GKK group, around 37,000 workers were still employed in branches that formed the centre of shopping arcades in the city centres. After the latest closure plan only about 12,000, i.e., not even a third, will remain.

“This is a black day,” wrote the central works council a few days ago, when it—not management—gave workers the bad news. Stefanie Nutzenberger, Verdi national executive board member, also called it a black day. But while they are shedding crocodile tears, the union officials on the supervisory board are working hand in hand with management and the insolvency administration to push through the cuts.

At the beginning of the coronavirus pandemic three years ago, Verdi agreed to a brutal management plan behind the backs of the workforce, involving the closure of 40 branches and the destruction of around 4,000 jobs. At that time, the German government gifted the corporation a total of €680 million from its pandemic aid program (i.e., taxpayers’ money). Only a short time later, the Benko-owned Signa Prime Selection AG distributed dividends of €201 million to its shareholders.

The “restructuring collective agreement” signed by Verdi in April 2020 was worthless. The company management unilaterally terminated the contract in October 2022 and annulled the guarantee to preserve 131 shops, along with the guarantee to avoid any compulsory redundancies until the end of 2024. These were all empty promises aimed at dividing and paralysing the workforce.

Verdi pretends it is conducting a struggle, while the parties linked to Verdi, the Social Democrats (SPD) and the Greens, cooperate with Signa. In Berlin, for example, they have realised joint real estate projects. The Left Party also participated and allowed Signa to develop new building projects at several GKK locations. A Letter of Intent from August 2020, sealing such projects at Hermannplatz, Alexanderplatz and Kurfürstendamm in Berlin, bears the signature of then Senator for Culture Dr. Klaus Lederer (Left Party) alongside that of the then governing Mayor Michael Müller (SPD) and Mayor Ramona Pop (The Greens).

Last week, insolvency administrator Arndt Geiwitz said he was “convinced that the Galeria department stores have a future, even if not in their current form.” In about three years, the company would again make a profit, Geiwitz said. Until then, further sacrifices are on the agenda.