Opposition has given up on shipyards' future - Gonzi

The opposition had lost confidence in the future viability of the shipyards and was thus saying that they should continue to be given state subsidies, Social Policy Minister Lawrence Gonzi said in parliament yesterday.

In contrast, the government felt the shipyards could be restructured so as to return to financial viability, Dr Gonzi said during the second reading debate on the Dockyard and Shipbuilding Yard (Restructuring) Act yesterday.

Dr Gonzi said that a difficult reform process was now in a delicate stage, but it seemed that opposition spokesmen were trying to hinder it.

Instead of encouraging workers to shoulder their responsibility and look ahead courageously, they made allegations and cast doubts, accusing the government of conducting an exercise aimed at closing down the shipyards.

This, Dr Gonzi said, was as much a moment of test for the opposition as it was for the government. The government had passed its test as it had managed to reach agreement with the GWU on what needed to be done. The agreement was a blueprint which was aimed at saving the shipyards and the jobs of all 2,600 workers, and not just the 1,700 who would continue to work in ship repair.

When the Labour government in February 1997 had moved a law aimed at introducing certain changes at the shipyards for restructuring to go ahead, the Nationalist opposition had voted with the government in both the second and third readings, Dr Gonzi observed.

The then opposition's contribution had been a positive one aimed at aiding the shipyards to reach sustainability for the benefit of all.

The current opposition, however, did not seem to want to understand that this was a golden opportunity for further reform and success.

The country, Dr Gonzi said, was giving shipyard workers one last chance to return the enterprise to viability. It was shouldering a burden because it believed the shipyards could indeed be viable.

Opposition MPs had been inconsistent in their speeches. They said the government needed to control its spending, but they were against measures which would reduce the dependence of the shipyards on state aid.

Opposition MPs argued that the country should be made more competitive. But on the other hand, they were sentimental and seemed to only want to protect trades that were no longer needed.

The shipyards were a typical example of a place where competitiveness and productivity had to improve substantially. The current productivity level of 35 per cent needed to be raised to at least 65 per cent, and the government knew this could be achieved.

The debate, Dr Gonzi said, had focused on the 900 workers being transferred from the shipyard to other jobs or offered retirement. He would have preferred the debate to also concentrate on the 1,700 workers being retained, and how they had to change their work practices to make the enterprise a successful one.

Dr Gonzi outlined government efforts over the years to restructure the shipyards, pointing out that experts had repeatedly complained of overmanning and low productivity. Yet the union had for years even objected to the transfer of workers between Malta Drydocks and Malta Shipbuilding.

In 1996/97 the Labour government had also realised that the situation at the yards had to change, and commissioned Appledore to draw up a report.

Appledore said that the shipyards could not be made viable before difficult decisions were taken to reduce the number of workers.

The Labour government had accepted Appledore's proposals and embarked on a process to choose workers for transfer away from core ship repair work. He had seen a handwritten list of such workers by former Labour Prime Minister Karmenu Mifsud Bonnici.

On taking over, the Nationalist government wanted to continue with restructuring and set up a task force for this purpose. It had also sought new work for the shipyards. Among them was a major ship conversion job seen as a test for the shipyards, and the refurbishment of the USS La Salle.

The updated business plan for the shipyards was examined by Appledore expert Sue Hall last year.

Ms Hall said that in its early years the main bottom-line benefit would come out of the reduction of the cost base, mostly by making long-overdue separation of the productive and unproductive work forces.

She said that the burden level had become an obstacle to productivity improvement and a culture change was required, as had been identified in the 1997 Appledore report.

She said that the greatest risk to the business was a further delay to the restructuring process.

Dr Gonzi said he would not be making the business plan public, because he did not want to do shipowners any favours by giving them commercial information.

He defended the workers' selection process and said the choice of workers was made according to criteria agreed with the GWU in a just manner in the interest of the 'yard.

The 'yard management had just mailed explanations to more than 200 workers who had asked for an explanation of their assessment.

All had been given a reason - some had medical problems, others had disciplinary issues and others, although very good at their work, were unfortunately still surplus to the shipyards' needs.

Applications for the early retirement schemes would close on Friday, Dr Gonzi said, and the workers should therefore make up their minds. Those who decided to stay on would be offered alternative jobs and the country expected them to give their maximum, like the other workers retained on ship repair.

Labour MP Carmelo Abela said the shipyards sector was very important for the country, but this importance was not always understood.

The Labour MP drew contrasts between the actions of Nationalist and Labour governments vis-à-vis the shipyards, saying Labour had been very clear in its targets and had set about the task soon after taking office.

The present government's direction was very different, and he feared that the eventual target was the closure of the shipyards.

Could Malta do without a shipyard? His view was that Malta as a central Mediterranean island could not dump a resource which could be very useful for the country. But there was clearly the need to reform the shipyards so that their dependence on state aid would be reduced.

The dockyard was a university of skills in Malta, and its closure would have a detrimental impact on skills training as well.

Mr Abela criticised the selection process of the workers and said the choice of workers would determine the success or otherwise of the company which was replacing Malta Drydocks and Malta Shipbuilding.

Mr Abela asked how much the people would be saving through the restructuring of the shipyards.

It was clear, he said, that if Malta Shipyards was not competitive in future it would have to close down. In the current economic climate, what the government was doing at the shipyards was setting a bad example, as it was showing that where there were difficulties the workers should be the first to suffer.

To reduce the number of workers but retain the same number of chiefs did not make sense.

Labour MP Joe Brincat said that government was being hasty in the restructuring process because of its agreement with the EU, which was against state subsidies as it believed these created unfair competition.

In terms of EU directives European governments could only give their shipyards a one-time subsidy, effectively leading to their closure, thus removing the small shipyards while keeping the stronger ones such as Germany's and France's.

Dr Brincat said there were instances when local shipyards had tendered for work but this was then given to foreign workers, even though the shipyard workers themselves asked to do the work.

Turning to the USS La Salle issue, he said that according to what the government had said, a lot of work should have followed after the La Salle came to Malta, but this never did.

Workers could not be blamed for a lack of work at the shipyards. But it was only the workers who were being sent home. What about those who were in charge of marketing?

Ms Marie Louise Coleiro, opposition spokesman on social welfare, said this bill was evidence of the government's failed policy on the shipyards over the past 15 years. The government had also deceived the workers and not announced its plans before the election.

In October 2002 the EU had warned that the dockyard could not withstand the pressures of the internal market, and the implementation of the plan proposed by Malta did not justify restructuring aid in terms of EU directives. Of course, the workers were never told this. Nor were they told that the EU had called for a 50 per cent cut in the workforce, and that the aid that could be given would be aimed at enabling the government to write off the shipyards' debts.

The government, Ms Coleiro said, was not really following the Appledore report but only using it as a tool against the opposition. What the government was doing was implementing EU conditions, not least in the production capacity limitations.

It was also because of EU requirements that foreign workers gradually found their way into the shipyards, even though the 'yards were said to have surplus workers.

The EU documents also showed that the government knew before the election that Dock No. 1 would be transferred away from the dockyard, but again, nothing was said before the election.

Ms Coleiro hit out at the worker selection process, saying workers who had received specific skills training were among those chosen for transfer. This simply did not make sense.

The Labour MP praised the GWU for its actions, saying the union had acted as a responsible trade union in difficult circumstances. What the GWU had done was a damage limitation exercise in the face of the government's failed policies.