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Charlot Zahra
Speaking to BusinessToday in wake of last week’s redundancies from VF and Bortex, which left 650 workers jobless, Professor Edward Scicluna, an eminent economist, said that like the loss of a beloved member of the family, the loss of a big firm sends a “strong shock that reverberates throughout.
“We ask questions and also try to find answers which comfort us. Thus we have both the deep crisis theory and the inevitability theory as well. It is the Chinese, we all say. We cannot do anything about it. But when death strikes do we say it is inevitable. We all have to die someday. Or else try to find the real causes?
“The case in point”, he said, “is the loss of jobs clearly due to loss of competitiveness. Let us be frank with ourselves.
“What have we done to help firms gain competitiveness?
“How did we perceive all the past national subsidies and white elephants which have all been a burden on the wage-earner through needless heavier taxation?
“How responsible were we, when we had the chance, to ensure that our exchange
rate does not become a millstone around our necks? “How responsible were we to ensure that
we have a truly liberal market and keep inflation lower than other countries?
“How much have we encouraged research and development to ensure more productive venues?
“Are we happy with the long-awaited port reform?
“Are our labour markets flexible enough?
“Were wages kept in line, say though a social contract, when the country was passing though a clearly marked recession?
“Let’s answer these questions before we talk of a crisis. I rather believe the manufacturing industry is being strangled or killed in small doses.
“These doses may indeed be small, like pin pricks or mosquito bites. But as we all know there comes that one extra mosquito bite during one evening along the beach, when you stand up and shout ‘Let us pack and leave, we’ll go elsewhere!’”, said Scicluna.
General Workers’ Union (GWU) Deputy General-Secretary Geitu Mercieca said the Union was “not only disappointed but also very sad about the recent mass redundancies from VF and Bortex”.
However, he said, one has to put the two issues in different perspective. While the closure of VF has come up suddenly and when the company was still making good profits, the redundancies from Bortex resulted from the unsustainability of certain department within its manufacturing process. In this situation the GWU did its utmost to alleviate the hardships that will be faced by the workers affected.
Mercieca said one cannot say that mass redundancies are a sign that the manufacturing sector is in deep crisis as this sector does not comprise only the textile industry. It comprises other industries which are doing well and the information that the GWU gets during talks with the management of these companies is that their order book is in good shape.
“However, we strongly feel that the textile industry in Malta needs to be assisted for example by way of a reduction in the government induced cost. One has to keep in mind that the wage bill is only just one element of the production cost,” he said.
Asked whether there will be any redundancies from the manufacturing sector, Mercieca said: “We cannot foretell if there will be more redundancies from this sector soon. However as a union we have been given indications that there might be more redundancies in the offing.”
Gejtu Vella, UHM Secretary-General, described the VF and Bortex redundancies as “a severe blow to the workers’ dignity. Their families are also economically and socially adversely affected while the Maltese economy will be hit negatively in this process.”
He said redundancies have happened in the past, are happening today and unfortunately will continue to happen in future in a global economy. As Malta’s economy shifts from labour intensive to more value added, some manufacturing operations may be adversely hit.
In a global economy, workers’ redundancies are the net result of a once successful enterprise that was at one time fit and profitable to operate from Malta.
“Unfortunately workers will continue to shoulder this very high price in the event of transfer of business from one country to another or bankruptcy. These are the much-dreaded times for any trade union.
“The most important thing is that Government, in partnership with the social partners, ensures that local and foreign investment is enticed to the islands to create new job opportunities to substitute for the job losses from the affected sectors,” Vella said.
He explained that in this regard the UHM strongly encourages that workers’ education and life-long learning becomes a national objective embraced by all stakeholders including Government, Employers and Unions. “This is imperative if the hardship of redundancies is to be alleviated,” he said.
“Industry should not be burdened by gratuitous Government induced costs and/or unnecessary bureaucracy. On the other hand the taxpayer should not subsidies bottom line driven private enterprise/companies with hard earned cash.
“The UHM has expressed solidarity with the workers affected by redundancies and will collectively with the other social partners continue to work to find alternative new work opportunities,” Vella said.
Malta, although small in geographical terms, is ideal to serve as a business incubation centre to value added enterprise both in the manufacturing and service industries creating new job opportunities.
On our part we have to learn to adapt to change and to use our skill, intelligence and knowledge in a working world that is fast changing. With a workforce that is highly commendable, our unemployment figures should be very low at all times.
“Government must have seen the VF and Bortex thunderbolt coming. In this regard the UHM expects that a devised plan of action will now be put into motion to find new job opportunities for the unemployed
Joe Farrugia, Secretary-General, Malta Employers Association (MEA) said the recent redundancies were a process through which the economy is going through. “The question is, though, how much is our human resource trainable to manage change into other sectors.”
“There will be 700 persons seeking employment, but there are also companies out there who are looking for new recruits. Hopefully some sort of balance will be struck between those who are unemployed and vacancies in the market. |
