GWU's position on yards' privatisation

The GWU wishes to clarify its position on the privatisation of Malta Shipyards Ltd (MSL). The GWU has been insisting that the deal is awarded among other criteria to the bidder who agrees to retain in employment the maximum number of employees and who makes maximum utilisation of capital resources. On this the government is in agreement. However, at the same time the government wants to introduce the Early Retirement Schemes (ERS) as soon as possible before the privatisation process begins. The GWU is in total disagreement on this issue for the reasons mentioned hereunder.

The government claims MSL would not be attractive for any potential bidder if the workforce is not drastically reduced from the present 1,700 to some 500-750 employees. Therefore it wants to roll out the ERS as soon as possible to all employees irrespective of the skills and competence of the employee.

On the other hand the GWU is claiming that it is in the interest of all stakeholders concerned (i.e the employees, the government, the taxpayer and the bidder) that the ERS are rolled out once the preferred bidder is known. The GWU is committed and is ready to put this in writing so that this is included as part of the privatisation documentation. Once the preferred bidder is known, the GWU is ready to discuss and come to an agreement on the number of employees required with the bidder and the government. The following are the advantages if this route is taken.

a) The employees would be able to access and choose between early retirement and employment with the new owner, making an informed decision. If the employees decide now on the ERS, as the government is saying, they would be deciding for early retirement out of fear of the unknown. This is far from what the government promised before the election!

b) Any prospective bidder would want to ensure that once he takes over, the transition is smooth and he returns to business as usual as soon as possible. He would also want to ensure that the employees retained have the right skills and competence to support his business plans. If the government route is taken and the ERS are rolled out now there is a high possibility that the most skilled of the employees will take the ERS. The consequences could be disastrous. This could result in existent contracts (work-in-progress) being put at serious risk of not being completed on time and within budget, with the added risk of having to pay penalties. Secondly it can take between three and four months to recruit the required resources (most probably from those same employees who took the ERS) to become fully operational again, and this can seriously jeopardise the future of MSL under the new management without state subsidies to make good for the initial losses.

c) The government will save taxpayers' money from the funding of the ERS as only the employees who really want to will take it and not out of fear of the unknown. The money saved by the government can be used to subsidise further the water and electricity surcharge, for example!

It is therefore very evident that the GWU's route is in the interest of all stakeholders involved - the employees who will be taking the ERS, those who wish to continue working for MSL, the taxpayer and the prospective bidder. We are sure that if the government takes professional advice on this issue from people with experience in such takeovers then common sense will prevail!

Mr Carachi is president of the General Workers' Union.