Chrysler and the Cabinet: How the Deal was Done (1976)

Pamphlet Review from the September 1976 issue of the Socialist Standard 

Chrysler and the Cabinet: How the Deal was Done. Granada Television, 35p.

This is the transcript of a TV programme shown on 9th February 1976, in which the Cabinet discussions of the Chrysler UK motor company were simulated. The parts of Wilson, Healey, other Ministers and the Chrysler officials were played by political and financial journalists, and the programme was generally thought to have come close to the reality.

The Chrysler Corporation of USA proposed closing down its British subsidiary which had made losses in six of the last nine years, amounting to £60 millions, and was expected to lose another £40 millions in the next year. The Government’s concern was with the unemployment — 25,000 jobs or more — which would be created by the close-down. However, the Government’s newly agreed “industrial strategy” prohibited financing obviously unprofitable companies; at the outset of these discussions the only voice in favour of giving help is that of the Secretary of State for Scotland, where Chrysler is a major employer.

A report from the Central Policy Review Staff (the “Think Tank”) had said the British car industry had already 25 per cent, over-capacity. From the viewpoint of the British Leyland company, which the Government had recently bought for £1,300 millions, Chrysler was an undesired rival; nor, for the same commercial reasons, was there any case for merging Chrysler with Leyland. The loss of jobs was agreed to be a regrettable necessity, summed up thus by Healey’s impersonator: “There’s nothing socialist about preserving existing jobs for their own sake.”

The conclusion was foregone — and yet the Government did undertake to support Chrysler, to the extent of about £145 millions. Why, with everything apparently against it? First, political fear of losing votes, in Scotland particularly. Second, the existence of a Chrysler contract to export to Iran (Healey: “Persia is becoming an increasingly important trading partner with us and the Shah is a touchy fellow.”).

The third reason was not stated explicitly in the TV programme but emerges implicitly from it. This is the inability of governments to manage capitalism even on its own terms. The sapient Ministers talked of “the long term” and “the future”, meaning “if we can keep out of trouble this afternoon perhaps tomorrow’s mail will bring an unforeseen lucky break”. While the discussions with Chrysler went on, attempts were made (fruitlessly) to attract Japanese car manufacturers to Scotland. If unemployment was prevented by the Chrysler deal, how will its transfer to other companies be prevented? What sort of “strategy” is firmly agreed, then has to be abandoned at the first engagement?

This is an interesting booklet, more relevant to what goes on in capitalism than some expensive volumes of retired Ministers’ memoirs.