The General Workers’ Union and the Investments, Industry and IT Ministry crossed swords last week after minister Austin Gatt made it clear in Parliament that unless the Malta Shipyards improves productivity, employees could face wage cuts or no wages at all.
Dr Gatt’s line of reasoning is simple: unless productivity increases and overheads are cut, then the shipyard faces a very bleak future, especially after 2008 when all subsidies to it will have to stop.
We are all too familiar with the GWU’s knee-jerk reactions to comments made by Dr Gatt or his ministry. All too often, it seems that the union is waiting in the shadows ready to pounce on the minister as soon as he utters a single phrase that jars with their ideology. While the union professes that it has embraced free market economics and modern business practices, the roots deep down are still sending signals demanding “worker protection”, “the right of the worker to rule the workplace” and “don’t dare change our ways”.
It is a great pity that the GWU fails to understand the problems facing the shipyard today. Assuming that the figures provided are correct (since everybody today loves to play with statistics), revenue increased from Lm11.2 million in 2004 to Lm19.7 million in 2005 and to Lm24 million in 2006.
However, a corresponding reduction in costs has not occurred. Direct costs (salaries and raw material) totalled Lm6.8 million in 2004, Lm13.6 million in 2005 and Lm18.5 million in 2006. The resultant profit increased in 2005 to Lm6.2 million (from Lm4.5 million in 2004) but fell to Lm5.5 million in 2006.
What is of concern, however, is that profit as a percentage of turnover has halved since 2004 from a high then of 40 per cent to a low this year of 22 per cent. Surely, the General Workers’ Union has enough experts on its books to understand that the shipyard may be competitive on many fronts but it is certainly not efficient. What counts in business is the bottom line, and when your profits as a percentage of turnover are falling you need to take stock of the situation.
The GWU, rightly so, is concerned that the government will reduce wages or, far worse, lay off more workers. But the government is equally concerned that unless worker efficiency and productivity increase, and the shipyard becomes profitable by 2008, it will have no other option but to shut the place down, and that is the last thing the government wants to do – for obvious reasons.
Assuming that the government’s claims – not denied by the GWU – that a group of workers do not clock-in on time, that some are “lazy” so that they can then work overtime, and that workers are being paid for 6.5 hours but actually working an average of five hours, then the union must realise that these factors lead to thousands of unproductive man-hours, increased costs and lower overall productivity.
However, understanding the government’s point of view alone will get the shipyard nowhere. The GWU, as the representative of the majority of the workers, needs to take an active role in the matter. The union must ensure that the government and the management are doing everything possible to keep the ship from sinking, but it must also warn those few employees who think they run the system that it will not defend them if the situation gets worse and they face the chop.
The GWU needs to learn how to be tough with its members as well. There are hundreds of jobs at stake and it is unfair on the majority that a small group of shipyard workers care more about short-term gains than long-term survival.
The government and the management of the shipyard are doing their best to turn it into a profitable enterprise. The GWU can criticise as much as it wants, but the least it can do is lend a helping hand.