If targets are not reached 'yard will be closed down

Public Investments Minister Austin Gatt warned yesterday that should Malta Shipyards not achieve its financial targets, the workers would be dismissed and the 'yard would be closed down.

He said the company had reached its targets for the first quarter of this year and could even have made a modest profit had a small minority of workers not hindered the introduction of new work practices.

The dockyard was also close to winning three significant contracts which could yield substantial profit.

The minister was speaking in parliament in reply to questions by Labour MPs Leo Brincat and Joe Mizzi.

Dr Gatt said he had received reports that some workers were spreading the word that one need not worry about the shipyard not meeting its targets as the government would introduce new voluntary redundancy or early retirement schemes or else close the 'yard and transfer the workers to Industrial Projects Ltd (IPL).

Dr Gatt said he wanted to flatly deny all these rumours.

"If the dockyard does not achieve its targets, there will be no further bailouts, no voluntary redundancy, no early retirement schemes and no transfer of workers to IPL. The dockyard will have to be closed down, with the consequent job losses."

He added that although the shiprepair market was depressed in the first part of this year, Malta Shipyards had achieved its cost targets.

Had the necessary flexibility been fully introduced and had the implementation of certain reforms laid down in the reform agreement not been stopped, the situation would have been better than projections but, unfortunately, some workers who could be very influential were following their own agenda.

Speaking on problems which affected the dockyard's efforts to win new contracts, Dr Gatt said few major contracts were available in the international shiprepair market over the past few months.

The quality of work at Malta Shipyards was rated highly by ship owners, he said, and prices were also competitive. But Malta Shipyards was suffering a problem of credibility, with the ship owners unsure that delivery dates would be respected.

It was small consolation that shipyards in neighbouring countries also had problems. For example, one ship owner was so disappointed with the work being done on his ship in a Greek 'yard that the work was stopped half way through and the ship was brought to Malta, where miracles were performed within a week.

This was very good for the dockyard's reputation but, generally, the credibility problem was persisting, with word on official and unofficial work directives spreading quickly internationally.

Should the flexibility and the practices laid down in the shipyards agreement be implemented, Malta Shipyards would have overcome its delivery dates problem and really achieved competitiveness.

Dr Gatt said Malta Shipyards was very close to signing three contracts of certain importance in different areas. These were very important contracts which, if won, would yield substantial profit. But a major question mark were official directives by the General Workers' Union which hindered workers' flexibility as well as other directives which the GWU said were unofficial but which were followed on the ground.

The worst thing that could happen was winning the contract but then running into problems. That would be "the beginning of the end" for the 'yard.

Work on such contracts, if secured, would start at the end of this month and activity on one of them could continue right up to the end of the year. This work would be carried out in partnership with two major firms. "Should Malta Shipyards win these contracts, it would be a feather in the cap for the 'yard and for Malta but competition is cut-throat," Dr Gatt said.

He said shipyards in Spain, Greece, Italy and Germany all had their own problems and Malta, therefore, had an unprecedented opportunity to exploit by being efficient.

Making an appeal to the workers, Dr Gatt said he understood they now had a lower take-home pay. The pay and overtime which in the past used to be assured were no longer certain.

But if the dockyard made money, they too would make more money. The reform agreement provided for profit sharing on the basis of profits made not by the shipyard itself but on individual contracts.

Indeed, had there not been hindrances in the first quarter of this year the shipyard would have made a modest profit, some of which would have been passed on to the workers. That had not happened because a small number having a strong influence had refused flexibility and wanted to return to old practices. In contrast, the vast majority wanted to work.

The workers had to understand they were working in new terrain. Ship owners appreciated the quality of their work and the workers could bring a turnaround for the shipyard if they ignored the small minority who did not want change, the minister said.