STEEL
In the doldrums
At a cost of £100 million and more than eight years work Colvilles have just opened a new steel plant in Scotland. A few weeks earlier the similar Spencer mill in South Wales was put into operation by Richard Thomas and Baldwins. Each plant is capable of producing about 750,000 tons of steel a year and these figures could be doubled fairly easily with further development.
Both projects are in fact the result of a Tory Government compromise. The original idea was to build just one plant of one million tons capacity, but there was such a struggle over whether it was to be sited in Wales or in Scotland that it was finally decided to allow one mill to each area (the Government could do this as it was putting up most of the money). Altogether an interesting sidelight on the ways of our political planners, though it must be added that their “expert” advisers then were quite sure that there would be ample room for both plants by 1963. The steel industry was booming and it looked as though it would continue so.
Alas for their prophecies. The Scottish mill is in fact working at only 20 per cent. of capacity and the Welsh one is hardly better. The industry as a whole is ticking over at about 70 per cent. of capacity and output in 1962, far from rising as originally expected, was actually 4 million tons less than in 1960. The prospects are hardly less dim for 1963.
What has happened, of course, is that British steel producers, and nearly all the other steel producers of the world, have widely miscalculated in their estimates of demand. Each nation has invested during the last ten years vast quantities of capital in new and bigger steelworks. It would be too much to imagine that they have done this without being aware that all their rivals were doing the same—capitalists are hardly as stupid as that—but there is certainly no reason to suppose that they did not know the risks.
The harsh reality is that capitalists, either as individuals or as national groups, have to engage in these insane activities if they are to maintain their positions in the race. So we see the United States, Germany, Japan, France, Belgium, Luxembourg, Italy and the U.K.—having spent huge sums in expanding their iron and steel production —all faced with a large proportion of this plant lying idle for lack of orders.
INVESTMENT
French eyes on the U.S.
Having already upset the United States by keeping Britain out of the Common Market, the French Government is needling them still further. It is trying to persuade the other members of the Six to take a closer look at the way American capital is penetrating into Europe.
Three incidents have recently helped to spark this off. The first was the way in which Chrysler got control over Simca, the French car makers (see below); the second was the big project by Libby, the American food firm to establish a canning factory in the newly irrigated region in the south of France; and third has been the recent closing of the Remington typewriter works at Caliure and the transfer of its production to Holland.
If the French intention is to stop American capital coming into Europe, and even into France, it is wasting its time. Capitalism, whether American or any other variety, hates a vacuum and if there is any prospect of profit they will seek a way of getting it. But the Remington incident is rather interesting since it echoes something similar nearer home.
At the end of February, the Glasgow factory of Remington Rand paid off over a thousand of its workers. The reason? The same as in France—lack of orders. And, again as in France, production of typewriters (portables only this time) will be concentrated in Holland. A nice illustration of the international workings of modern capitalism.
CARS
Chyrsler gets a hold
Of the Big Three in the American motor industry (Ford, General Motors, and Chrysler), only Chrysler have not managed to get themselves established in Europe. At least until recently.
Now, by crafty manoeuvrings behind the scenes, largely via Switzerland, they have managed to acquire 63 per cent. of the shares in Simca, the big French car manufacturers. This, of course, means financial control. They are now in a position to do battle in the European market with their fellow American companies; with Ford and their plants at Dagenham and Cologne, and with General Motors at Luton (Vauxhall) and Russelsheim (Opel).
As a producer, Simca is not as big as Opel nor is it quite up to Ford, Germany. It is comparable, however, with Dagenham and bigger than Vauxhall. At the same time, though it is the smallest of the French producers, it is the second biggest exporter; it seems clear, therefore, that Chrysler will not wait long before carrying their struggle with their competitors in the United States, into Europe.
Just to add spice to the situation, the big Italian firm of Fiat also holds shares in Simca—about 25 per cent. Latest reports from France are that Fiat has just set up a large-scale network of agents to sell their cars there. At the same time, Simca are busily exporting to Italy.
There are many people who firmly believe that the capitalist system makes sense. They ought to take a long, hard look at the international motor industry.
MONOPOLY
A little light
The Economist reported recently that the electric light bulb manufacturers are increasing their prices by 5 to 10 per cent. Apparently they have all come to this idea at the same time.
Once upon a time, when they belonged to ELMA (the Electric Light Fittings Association) they used to make this kind of decision whilst freely admitting at the same time that they had all got together to make it. But the Monopolies Commission stepped in and they were compelled to disband the Association.
Now, apparently, they follow the practice of courteously telling their fellow companies beforehand of forthcoming price changes. The arrangement is known as an “information agreement." The essential difference from what they did before being that it is not registrable with the Restrictive Practices Court.
Another example of how, under capitalism, the more things change, the more they remain the same.
Stan Hampson
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