Nobody’s Job Is Safe

It is not just crisis-hit firms going to the wall, or public employees losing their jobs as governments fuel recession by cutting spending. Profitable firms also close as capitalists seek greater and greater profits. This is not because of ‘greed’, but because the onset of capitalism’s third great depression means that more and more capital is chasing fewer and fewer investment opportunities, driving down the rate or profit and forcing firms to cut production costs to the bone.

A couple of weeks ago the employees of MSD, a pharmaceuticals factory in Oss in the Netherlands were undoubtedly, like the rest of their compatriots, looking forward to seeing a triumphant end to what was shaping up to being, for the Dutch, a memorable World Cup.

That hope, of course, went unfulfilled. But by the time the national team lost a not particularly memorable final to Spain, the MSD workers had a great deal more on their minds than Arjan Robben’s fatal missed sitter or Nigel De Jong’s attempt to merge the sports of Association Football and Kung Fu. What 2,175 of them no longer had was a job.

The total population of Oss is less than 80,000, and as well as those directly affected it is estimated that 2,000 more local people and 3,000 elsewhere will end up unemployed as firms supplying the pharmaceutical plant are hit. That is not counting, of course, the people who will be affected by the absence of the euros which will no longer be available to all of those people to spend.

Factory closures are always unpleasant for those affected, but if a firm is losing money it is hard to see how it can continue to operate indefinitely. Under such circumstances, the workers’ plight becomes a social responsibility and the state must step in to ensure adequate unemployment benefits, retraining and so on. This can happen in any kind of society, but it is not what has happened in Oss.

As Paul Ulenbelt, MP and employment spokesman for the radical left Socialist Party (SP) says, “Everyone understands that a firm which is no longer able to sell its products must close, but Organon is very much alive and kicking. It’s totally unacceptable that a company should close because shareholders can make a few more percentage points of profit elsewhere.”

MSD used to be called Organon. And Organon is no ordinary firm. Based in Oss since 1925, it was one of the first companies to manufacture insulin. In the 1960s it played a major role in the development of the contraceptive pill, and in 1981 introduced the low-dose pill. Since then, it has continued to be at the cutting edge of contraceptive pharmacology and technology. Oss is, according to the firm’s own website “the company’s principal knowledge centre for research and development, and production.”

So why is Organon, a firm with a relatively clean reputation in the dirty world of pharmaceuticals, a modern company making genuinely useful products which save and improve lives, about to sack half of its workforce in Oss?

Firstly, this is not a result of the crisis. While the economic crisis looms over all of our lives, these jobs are being sacrificed to a quite different monster, and one which has been around longer: neoliberalism.

Organon-MSD may have a better ethical reputation than other pharmaceutical manufacturers, but it is a capitalist enterprise in a capitalist market, and a highly successful one. In the last quarter of 2009, the firm made global net profits of over £4 billion.

The Oss closure is part of a ‘restructuring’ exercise designed by people in the conglomerate headquarters on the other side of the Atlantic in New Jersey. These people do not make their livelihoods researching and manufacturing pharmaceuticals or anything else of value, but by trading in companies, in productive facilities, and, ultimately, in other peoples’ livelihoods.

This time, however, they may have bitten off more than they can chew. For Oss is not only the home of Organon, it is the birthplace of the SP and home of its charismatic former leader, Jan Marijnissen. And the SP, Marijnissen, the workers at MSD and the people of Oss are gearing up for a fight.

To the faceless men who took the decision to close the plant, Marijnissen says, “Oss is only a spot on the map, a speck of fluff that you can blow away. But we’re no speck of fluff. We have a duty to use every means possible to resist this injustice, to counter this scandalous decision. Organon belongs to us. It was built by our grandfathers and grandmothers and our parents.” It had, he says, done much to benefit humanity and at the same time enjoyed good labour relations. But since the company was taken over by an American transnational “it has been obvious that another wind was blowing.” The firm had then been sold “like a cow at market” to MSD, and things had gone further downhill.

This then, is a tale of our times. It is not just crisis-hit firms going to the wall, or public employees losing their jobs as governments fuel recession by cutting spending. Profitable firms also close as capitalists seek greater and greater profits. This is not because of ‘greed’, but because the onset of capitalism’s third great depression means that more and more capital is chasing fewer and fewer investment opportunities, driving down the rate or profit and forcing firms to cut production costs to the bone.

MSD/Organon is just the kind of company that the Dutch state and the European Commission claim to want to see. If this company does not represent the ‘knowledge economy’, if it is not high-tech, forward-looking and innovative, then what is?

None of that matters. Capitalism is engaged in a fight for survival. Nobody’s livelihood is safe.

The people of Oss, however, are showing us how to fight back. An action committee has been formed and Saturday witnessed a huge demonstration in the town under the slogan ‘Organon belongs to Oss’. At the same time, the SP has won cross-party support for a recall of Parliament to debate the matter with the Minister for Employment.

The party, which led the successful campaign for a ‘No’ vote in the European Constitution referendum of 2005, has long demonstrated masterly organisational skills and the determination to succeed.

These qualities will be needed in Oss. They are needed everywhere. The question is, where can they be found, or will we all simply be led like lambs to the slaughter as, in country after country, government and opposition collaborate in the destruction of everything we have gained?

  • This article first appeared at Spectrezine.
  • Steve McGiffen is editor of Spectrezine where this article first appeared. Read other articles by Steve.

    5 comments on this article so far ...

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    1. Cameron said on August 6th, 2010 at 5:00pm #

      I don’t know much about SP but more power to the SP, Marijnissen, the workers at MSD and the people of Oss for not accepting the capital dictatorship. Like you said these qualities are needed everywhere. Laborers around the world must go on the offensive. The battle at Oss will set another good example. Thank you for bring this to our attention.
      The root cause of this economic depression, just like its predecessors, is the secular fall in the rate of profit and the so called financialization. Rate of profit falls as competing capitals use new and more advanced machinery, automation, and technology (fixed capital) to make more profit. One of the ways to enhance the rate of profit is to increase the unpaid labor (surplus value), in other words, cut wages and salaries and force the remaining employees work harder and longer. This is what we’re witnessing now. But then there are those corporations that will cut wages, etc regardless of their rate of profit because they can and because capitals has no purpose other than to maximize profit. I’m with you so far but I don’t understand it when you say “more and more capital is chasing fewer and fewer investment opportunities, driving down the rate of profit and forcing firms to cut production costs to the bone”. This is new to me. When there are no investment opportunities, idle capitals end up in speculation and creation of bubbles. We saw that in recent years in derivatives, housing, commodities, and stocks. That’s typically what happens. The same happened before and during the previous depressions. I don’t see how idle capitals drive down rate of profit and force cuts in production costs.

    2. Steve McGiffen said on August 7th, 2010 at 5:51am #

      Hi Cameron, on your last point, as I understand it there is no conflict between our positions. There are different ways of dealing with the problem of idle capital. I quote Foster and Magdoff, The Great Financial Crisis p 131-132:
      “With corporations unable to find demand for their output… and therefore confronted with a dearth of profitable investment opportunities, the process of net capital formation became more and more problematic. Hence, profits were increasingly directed away from investment in the expansion of productive capacity and toward financial speculation…”
      and p.129
      “Stagnation in the 1970s led capital to launch an accelerated class war against workers to raise profits by pushing labor costs down.”
      This is surely happening again, alongside the financialization described in the first quote. Too much capital chasing too few investment opportunities surely works like too many apples chasing too many customers, doesn’t it? You can find new markets for your apples, or reduce the cost of production to make them profitable at the new price. Similarly, you can create new investment opportunities through financialization, or increase the profitability of those which exist.
      Or have I misunderstood?

    3. Wingnut said on August 7th, 2010 at 6:21am #

      “more and more capital is chasing fewer and fewer investment opportunities, driving down the rate of profit and forcing firms to cut production costs to the bone”

      Hi gang! I’m sure Steve will return and clarify that comment, but I’ll take a simpleton shot at it… just for fun. Let’s pretend that MSD, being a labor-heavy, long-established mainstay in Oss, runs a bit of an old-style operation. They don’t have the most modern of machines and technology. It all still works great, because they compensate by using human labor to ensure quality control. But lets say MSD has a fierce new competitor or 4… all fairly new companies, and thus, they have automated about as much of THEIR operations as is possible. And therefore, they can make certain comparable-to-MSD products, much cheaper than MSD can. MSD needs investors… to modernize their productions… in order to keep up with this ‘race’ that they didn’t ask to be a part-of. MSD could have been using a ‘commune’ or ‘family’ mentality (which I love)… and it showed in worker satisfaction and devotion (happiness levels). When MSD made profits, they might have put a higher priority on worker happiness… than upon modernizing and automation.

      So now, with the current ‘fear’ of investors who recently saw many “sure things” have the rug pulled out from under them, “more and more capital is chasing fewer and fewer investment opportunities” becomes clear. The amount of “sure thing” investment opportunities… plunged. The amount of things that even “look somewhat promising”… plunged.

      By the numbers, investing in modernizing and automating MSD (making them competitive, though de-humanizing)… is not a savory investment. The wise investor chases one of the newer MSD-competitor companies, because the numbers look better. But as the quote loosely states, investors are in fear of MOST investments these days, be they bleeding-edge tech-infested companies… or be they warm, family-ar hometown/commune operations. If MSD doesn’t have competitors nipping at its heels, then it isn’t seeing diminished profits or a need to cut production costs… UNLESS… its operating costs are skyrocketing.

      Steve… is there a chance that the (former) employees of MSD… could buy the Oss division/plant? That MIGHT be the answer, but operations like that CAN lead to power struggles among these new employee-investors. In general, when 2000 former MSD employees in Oss… co-sign on a loan to buy a local plant that has been historically solid, there’s a pretty good chance for that loan to happen… if not TOO $load$-heavy. But keep in mind that this loan would be JUST to obtain the plant, and NOT necessarily include funding to modernize, whatever that means.

      DOES the MSD plant HAVE TO modernize to remain in a race with some competitors? And IF the plant COULD be bought by employees, would they want to remain in that competitive product line, or would they want to specialize and attempt to find a niche? Sometimes, finding that niche… making only a certain product or two, can let a company survive while letting competitors win-out in certain other products. That MIGHT make MSD shrink, and really, Oss wants to put all the displaced MSD workers back to work, one would think.

      Some biz folk might say… when in trouble, expand. It would take all 5000 former MSD employees to co-sign for a loan which both bought the plant AND modernized/automated it. Automation doesn’t necessarily mean less workers… IF the machine-displaced workers… now make the machines. So, the people of Oss, especially former MSD employees… need to build the machines that automate MSD. Who better qualified?

      Wish I had more intelligence to add to this, or any at all.

    4. mary said on August 7th, 2010 at 6:45am #

      I wish Oss and Mr Marjnissen well but I think that they are facing an uphill battle with a particularly hard faced set of gangsters-in-charge. Just look at their connections to power and money. Clark is described a a pharmacist on his Wikipedia page and takes $17m per annum for his services to capitalism as chairman of Merck (was Merck Sharp Dohme).

      http://www.merck.com/about/leadership/board-of-directors/home.html

      The history of the very recent cannibalistic takeover of the company by merger and acquisition -

      Organon is a human pharmaceutical company headquartered in Oss, Netherlands. In November 2007 the company became a part of Schering-Plough Corporation, which acquired Organon, active pharmaceutical ingredient producer Diosynth (separate from Organon until 2004),[1] and its veterinary pharmaceutical sister company Intervet from Akzo Nobel.[2] In November 2009 Schering-Plough merged with Merck & Co. under the name Merck & Co., known as Merck Sharp & Dohme or MSD outside the United States and Canada.

      Organon was founded by Dr. Saal van Zwanenberg in Oss, the Netherlands, in 1923 as Zwanenberg-Organon. Its first product was insulin in 1923.[4] In the thirties it manufactured estrogens.[4] The production of cortison was initiated in 1953.[1] The now named Koninklijke Zwanenberg-Organon (KZO) fused with the fiber producer AKU in 1969 to become AKZO, later Akzo Nobel. Organon is the human health care business unit of Akzo Nobel and transferred its headquarters to the USA while the main headquarter of Akzo Nobel remained in Arnhem, and has since moved to Amsterdam. Manufacturing facilities are in the Netherlands, Germany, the United Kingdom, Ireland, China, Japan, and the USA.

    5. Cameron said on August 12th, 2010 at 9:22am #

      Steve, thanks for the clarification. The phrase “investment opportunities” confused me a bit. I believe what you’re saying is that there is a considerable slack in exisiting productive capacities caused by weak demand forces capitalists to cut costs. It makes sense.