George M. Mangion

Nobody can say that this government has not been trying to solve the problem of the Drydocks, but time has come for facing the consequence of a commercial failure.

The recent belligerence by union officials at the shipyards in defence of seven workers caught sleeping on the job conjures ghastly dreams from the past. The sleeping seven were summarily suspended. The General Workers Union is arguing that the accusation against them would, if proven, merit disciplinary procedures but not suspension. Nobody expected the instant suspension of the breadwinners without a fair disciplinary tribunal to listen to their case. Are we poised for another socialist style confrontation? Who knows?
If the union is threatening an escalation of worker protests, this may bring the loss-making enterprise to its knees. This is the stuff that hit the headlines in the nineties and was the order of the day when prime minister Fenech Adami used to acquiesce and bow to union demands under the noble pretext of ensuring national reconciliation. This policy has not come cheap, but then, when votes are in the balance, no expense is spared. A substantial chunk of our national debt comprises the debt of the Dockyard of over Lm310 million. This was waived, but no mention is made about the subsidy that the government regularly pays to the ship repair yard. The type of subsidies are mostly prohibited under EU state-aid rules. These subsidies go towards recurrent payments of the corporation which comprise salaries, social security payments and overtime.
On the other hand, given the fragile economic state of the yard’s finances, most will agree that any irresponsible work stoppage is nothing short of commercial suicide. There is also a strong case for better investment in health and safety on the job. Workers face untold risks. For example, in the case of boiler operators, they face risks of burns and explosions by pressurised vessels or burning fuel. Some tanks on ship sides may not be safe and exceptionally there were reported cases of minute traces of carbon monoxide which is highly poisonous. Such obnoxious conditions may result in skin and eye disorders. Furthermore, we find electroplaters who are exposed to a multitude of hazardous chemicals.
This is not to mention that engine filters may be injured by falls on wet floors or may suffer cuts from sharp tools or in operation of lathes when machining steel parts. While sympathising with the potential risks on the job one cannot ask for clemency when rules are broken. It is not the first time that a dispute at the shipyards flares up to such an extent that it threatens to snowball into full-scale confrontation. It goes without saying that such disruption incurs untold financial and commercial costs that are grudgingly footed by taxpayers.
Obviously, in a sensitive and highly competitive sector, industrial action and unrest can easily scare off investment.
Gone are the days when solidarity with militant workers found solace with the general public. It was gallant for protesters to be cheered by political party activists when storming the streets of Valletta, thereby neglecting their responsibilities to give a fair day’s work. Sceptics may well ask if there is a subtle political agenda behind the recent incident. History has taught us a lesson that the Drydocks used as a political punching bag can never be competitive nor can it become a pillar of the economy. The penny has dropped and now is the time to bite the bullet. Palliatives and generous cash subsidies will not work. Now is the time for reckoning that harsh choices will have to be made in the interest of the nation.
The cause for this industrial failure is not hard to find. In colonial times hte dockyard was the dominant single employer apart from the civil service. At one time it provided a living to over 13,000 workers. Having been used as a fertile ground for so many political experiments in the guise of safeguarding workers’ rights and industrial democracy it is no surprise that work attitudes die hard.
Nobody can say that this government has not been trying to solve the problem of the Drydocks, but time has come for facing the consequence of a commercial failure. In the seventies and mid-eighties we witnessed the aristocracy of workers rule the roost. When the Nationalist government brought about the reform of the council, this was universally applauded. Instead of an eight-man elected workers’ council, it now consist of four elected employees and five government-appointed members, which includes the chairman. So can we continue to subsidy the yard?
The only factor which justifies state aid is in extreme cases where a public company is to be closed. This is not an easy political option when we are so close to general elections. We know that closure is not on the cards given that Drydocks was recently restructured at considerable cost and the major part of its surplus workforce is being hived off and paid out of a state financed company. Unfortunately, figures have shown that despite higher turnovers, losses persist. This has been squarely blamed on low productivity, in spite of the surgery which in the past two years has seen half of the original workforce redeployed with local councils. Malta negotiated a temporary derogation within the acquis communautaire to continue giving such operating aid up to 2008. Naturally this creates discrimination with other unaided industries.
Another direct consequence is the distortion in competition and shifting of scarce resources that could be better used elsewhere. One may ponder and ask what if the Fenech Adami government had instead chosen to redirect the Lm400 million in subsidies into improving our roads infrastructure or investing in alternative energy projects thereby reducing CO2 pollutants in the air from the oil fired power plants. Everyone is wise after the event, yet now having decided to abide with EU rules we cannot run roughshod on our industrial and state aid policy.
Investments Minister Austin Gatt has a tough nut to crack. He has recently shot a stern warning that the days of unauthorised work stoppages are a myth of the past. With mounting losses one cannot tolerate unjustified protests by a select group of workers showing solidarity with shipyard workers caught sleeping on their shift. Can this truancy go on unreported and unpunished when the country has been warned about the need to tighten its expenses to achieve lower annual deficits?
In the past the subsidy was of about Lm15 million yearly and reached a total of about Lm300 million. In spite of the restructuring and the agreement reached between government and the GWU, viability is eluding us. Over the past 20 years attempts to modernise and instil higher productivity failed.
During accession negotiations, Malta and the EU agreed on the need to assist the sector throughout the implementation of the restructuring plan. Many reports were commissioned by council to implement the best reform on how to render the corporation viable. The Appledore report states inter alia that a primary concern is the work practices at the ‘yard. Not only there is a skill mismatch but there are also too many employees who are not directly contributing in the productive cycle. These so called overheads are reminiscent of the days of colonial rule. Then the priority was a speedy turnaround of naval ships rather the excess cost of their repair due to surplus civilians.
Unfortunately there persists an anachronistic system of work practices which is firmly engrained and union militancy has in the past assured that change will be slow in coming. However, one cannot blame the workers’ control of the corporation since it is the professional management together with the council who steer the enterprise away from its dismal state of affairs. The government, which appoints the majority of members on the council therefore now has to take full responsibility. There is no denying that the shipyard workers are highly skilled and efficient in their large majority although most of the skills have now been overtaken by advances in modern technology in the electronic revolution that has engulfed the ship repair industry. This calls for extensive investment in specialised training, so it is a double-edged sword. It also needs a regular recruitment of technical apprentices to catch up with latest engineering skills. To conclude let us hope that the mistakes of the past, where drydocks workers were used for political purposes with deleterious effects on viability, are dead and buried.