Auto Industry in Crisis



The situation is worrisome for workers in the automotive industry. Over 70% have been relieved of their jobs. Only a few auto-assembling plants are functioning as the economy worsens, since very few Nigerians can afford to buy new cars, when they can even buy one at all. So, importation of secondhand cars continues to flourish.

The government made superficial commitment towards the implementation of an auto policy that would make local production of cars cheaper. In 2016, the ministry of industry, trade & investment rolled out directives which encouraged banks to make loan facilities available for auto investors for this purpose.

This, however, has not resulted in much success for the initiative. New cars remain too expensive for a sizeable number of Nigerians to buy. With the depth of poverty of working-class people, this is hardly surprising.

But, despite the mass sack of workers and middle-management staff by auto companies such as Stallion Group, Innoson Vehicle Manufacturing (Nig.) Limited, ANAMCO Nigeria Limited; Leyland- Bussan Nigeria Limited, Honda, Peugeot and MAN trucks, top management staff receiving the bulk of money in the payroll remain at work. The employers have also ensued that they would not be without profit by diverting into related businesses.

So, it is workers that are too poor to buy cars due to the poverty wages they earn. And it is also workers in the auto-industry that bear the brunt of the failings of the capitalist system. For instance, the Stallion Group has retrenched about 65 % workers in its auto division since 2016.

The expected 2018 minimum wage from the Muhammad Buhari’s Administration, as many experts forecast, would be meaningless if there is no fight back on the attack on the poor masses. Low purchasing power of working-class people who comprise the vast majority of the population will result in continued poor aggregate demand and stagnation of the economy.

The problem being aced by the auto industry reflects yet a deeper problem of capitalism in Nigeria; low level of industrialization. It is impossible for any backward capitalist country to achieve even a modicum of modernization of its productive forces without developing its manufacturing sector.

To do this requires an iron and steel development strategy. The 12th largest iron ore deposit is situated in Nigeria. But over N23 trillion worth of steel products, including for the auto-industry was imported in the last nine years.

This is while, steel rolling mills and integrated iron and steel plants remain redundant in Ajaokuta, Utakpe and Aladja despite trillions of naira spent to build them over the last forty years.

This is a further example of the fact that the bosses’ class in Nigeria lack what it takes to develop Nigeria, not to talk of transform it. Auto workers, steel workers and all other workers have to be united in fighting for a new form of economic and political system which will ensure sustainable growth, development and a better life for everybody.




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