Meeting corporate objectives

Late last year Reuters issued a news item reporting that WET Automotive Systems AG would be closing its Malta plant, making 117 workers redundant. The company, which had been manufacturing car seat heaters in Malta for 17 years, claimed that the cost of the Maltese production were the highest in the group. This, the company added, was despite the fact that the Malta plant was the most efficient, flexible and productive.

In itself, the fact that factories close down is not something out of this world. More and more direct investment is becoming footloose, in search of ever-cheaper production locations. And, yet, such an event raises many questions which our policymakers would do well to answer.

This German company operated in the automotive industry. A sector which had been identified by the Malta Development Corporation as one of the most suitable for our country. Even in its swan song it eulogised the merits of the local plant. If such companies were finding it difficult to compete, what is the future for other firms operating in such sectors as textiles and wearing apparel? Is it just a question of time for them too? Not necessarily.

These thoughts came to my mind as I was preparing to address, upon the invitation of the Reggie Miller Foundation, the middle management of Nylon Knitting Co. Ltd. This Italian-owned company assumed its present name in 1986 but has been operating in Malta much longer. Initially it was known as Chatillon then as Montefibre.

Indeed, there were a number of times when this company too was on the verge of closing down. Today, the company engages over 300 employees. Nylon Knitting has been investing heavily in machinery. New product lines were launched. Today, a unique plasticised material used in the production of nappies is exported primarily to Germany and Japan. Work practices too had to change. I was repeatedly told that it was not easy, that people tend to resist change. Yet, it was done.

My audience was entirely male and middle aged. They had been through thick and thin. What could I tell them about the need to be effective? What did it really mean to each one of them? After all, why did workers resist change?

Having discussed the matter at some length, we came to the conclusion that it had a lot to do with communications. The employees insisted that they wanted to be talked to, not talked at. They hate feeling treated as just another resource into the production process, or mere add-ons to machines.

How can support be garnered in the hour of need if the boss, or manager, thinks he/she knows it all, is the only person who cares about the well-being of the enterprise. Ultimately, it is a question of attitudes. How many local companies reward initiative; have some form of suggestion scheme? The days of Taylorism which sought to reduce the worker to a robot are gone. Companies can no longer be run as the army in colonial days.

Though a dose of cynicism was not lacking, the company's employees were proud of their place of work. They do their utmost to get their off-spring and relatives to work there. They were eager to participate and do valid things.

Modern studies have repeatedly shown that workers want to feel useful, want to belong to a team, in which every one of them has an important role to play. Schumacher is probably one of the greatest Formula One drivers ever but he still needs the flawless support of the mechanics in the pit box to win races.

Inevitably the discussion turned to the effects of globalisation, the importance of competitiveness, on their place of work. Nylon Knitting buys its polymers in euros and sells a good part of its output in dollars. What happens if in the next round of negotiations within the World Trade Organisation, Japan decides to grant preferential, or improved, access to the importation of substitute nylon products from Third World countries?

In today's business environment such threats can practically come from anywhere, anytime.

What can employees do about these things? Little, except to be aware of these risks and not to continue assuming that jobs are necessarily for life. The in-thing in official circles now is to emphasise life-long learning as the solution to all their work-related woes. Workers are being expected to consistently seek to learn new skills and be prepared to adapt to changed circumstances.

This is easier said than done, especially for those that are now middle aged. And, yet, employees, while obviously defending their rights, can no longer take things for granted. Each one of them should realise they could be the next guy on the dole. Prevention is the best cure. A divided house will not stand. The "us and them" syndrome has to change its locus from divisions within the enterprise to focus on the competition.

Also, for firms to be effective it is no longer sufficient that they be efficient. It is not enough for them to do things right, trying to work harder and possibly cheaper. Effectiveness also demands that enterprises do the right things. They have to find the shortest and smartest way of meeting their corporate objectives.

This often requires stopping to reflect, to try and think strategically. Where do we stand? Where would we like to go? How are we going to get there? Who are our likely competitors? Is it possible for us to change the ballgame or to shift the goalpost?

After all, despite strong competition globally, the EU textile and clothing industry still accounts for a large share of world exports and employment. Over 114,000 firms operate within the industry and increasingly specialising in marketing and knowledge-intensive activities.

Nylon Knitting appear to have done it. Increased automation, product development, changed work practices, a changed market position. They are no longer competing just on cheap labour or low costs. Indeed, the company is a clear example that ultimately it is not in which sector an enterprise competes which is important but how it competes.

Malta's industrial strategy, and investment promotion drive, would do well to take the experience of companies such as Nylon Knitting into account. After all, we have had a number of firms, say in electronics, which closed down. General Instruments. Plessey. Shirasuna. What will be written in five years time?

fms18@maltanet.net