Our future is what we make it

Like every other major restructuring exercise, the shipyards' restructuring plan involved a very sensitive social element. The shipyards have known for many years that they have too many workers to be able to compete in a very difficult market.

Recent reports have indicated quite clearly the extent of the under employment in the shipyards. The present management revised the most recent projected workforce figures and adjusted them to cater for the needs of steel fabrication that is being targeted in our business plan for the Marsa yard.

As we have seen earlier, the failure to implement the split in the labour force mentioned in the Appledore Report is the single most import factor that prevented any significant progress in the 'yards' financial performance in the last few years.

Attempts to find alternative employment in light industry projects within the shipyards failed. This, in my personal opinion, has more to do with our declining competitiveness as a country, and the inflexibility of labour practices in the shipyards, than any lack of commitment by management to promote joint ventures.

We considered various projects, most of which were not viable, while others involved conditions imposed by private investors that could not be met in the present environment of labour practice restrictions.

The outgoing board of directors of both shipyards have insisted that workers in excess of the 'yards' needs should be offered alternative work.

We all knew that the Appledore report had identified a substantial number of workers who could no longer be involved in shiprepair and that a social solution to this issue had to be found.

This has been done and no one will lose his employment, even if about 900 will be working (hopefully in productive jobs) for a different company that is wholly owned by the government if they wish to do so.

This has been our commitment to the workers. But, of course, neither I nor anyone else could promise that overtime income for employees of both the new companies would remain at the same levels that it was in recent years, irrespective of whether it was justified or not.

German and French shipyards are at present negotiating with the unions an increase in the working hours of workers and a reduction of wages in return for a short-term guarantee of employment for the next year or two. This is the kind of competition that we are facing.

Assessment and selection of workers is always a management prerogative. The clear direction given by the board of directors to the shipyards senior management was to select the best persons who would be most suited to help the 'yard achieve its aims.

Two years ago, a local training consultancy organisation trained our managers in the skills of assessment and provided a framework for such assessments.

Assessing 2,600 workers is a major task which has to be spread out over a number of layers of management. Middle line management is the most qualified first line of assessment.

They know the workers who work for them individually. Early in 2002, every manager assessed the workers in his area of operation on criteria which included age, health condition, level of competence in trade, trainability, aptitude and flexibility.

Each of these criteria was broken down in various elements to ensure that all relevant information about every individual was captured.

One of the main criteria was age, where workers over 56 were transferred out of the shipyard with about 18 exceptions in posts where a suitable substitute could not be identified.

For instance, we had to retain one Cospicua 'yard official who is nearing retiring age in a key post because his substitute could not be transferred from the Marsa 'yard to take a proper handing over. Up to some weeks ago, we still faced restrictions on the transfer of workers between the two 'yards.

Another important criteria was medical conditions. If a manager decided that a particular worker had a serious medical condition but scored highly in his assessment and could carry out his duties effectively, he was retained despite his medical condition.

We had a case, for instance, where we retained a young tradesman who was seriously injured recently but was transferred to a clerical job because of his good IT skills. His injury is in no way impeding him from carrying out his duties that are needed in the 'yard.

However, the 'yard could no longer cater for the social needs of workers who were seriously ill or injured on duty and could not carry out their duties effectively.

The selection criteria were based on a requirement of reaching a minimum 60 per cent scoring in the assessment. When this assessment was completed, the results were vetted by senior line management to ensure that there were no obvious errors or abuse of judgment.

Some corrections had to be made. Some consideration was also given to serious breaches of discipline by workers in the last seven years.

In the assessment process, management had to face some formidable obstacles. Unlike most large commercial organisations I know of, there is no annual assessment of employees in our shipyards. So management had to rely on just one assessment made early in 2002 and revised earlier this year. This prevents the process from being based on an average of performance over a number of years.

Another problem we had to face was that at some time in the past a number of files at Malta Drydocks seem to have been "purged" of certain correspondence relating to disciplinary records. Discipline criteria were therefore given a low ranking in the evaluation process.

Yet another problem was the misuse of medical certificates. Some workers in the past resorted to obtaining a medical certificate to help them avoid certain work or movement from one 'yard to the other.

These certificates are on file and some time ago workers were urged to have their medical certificates withdrawn if they believed that they no longer suffered from certain conditions. Some did this while others did not. So it was assumed that the medical certificates on file confirmed a genuine medical impediment.

There were cases where some workers passed the criteria of age and health and scored more than the minimum 60 per cent in the assessment. However, since there were more workers in a particular trade or department or rank than was needed for Malta Shipyards, these workers were released while higher scoring workers were retained.

Every worker assessment process is almost by definition subjective, especially when one has to decide on non-tangible elements like "attitude to work" or "cooperation with colleagues".

I know of no employee assessment system based on totally objective criteria. Yet, we have to work with the tools we have available.

One has to add to this the complete absence of a tradition of a formal and structured assessment of workers by managers in the shipyards.

One therefore has to acknowledge that errors of judgment may creep in such systems. Moreover, because of human weakness one cannot exclude wrong judgments caused by human respect or prejudice.

To counter all this, different managers from those preparing the original report reviewed every assessment at least once. In this way, errors of judgment could be limited, even if not totally prevented.

And what about those workers who have been retained in Malta Shipyards but who want to take early retirement? There have been about 30 such cases so far.

They feel they have been discriminated against because their colleagues have been given the chance to retire. The shipyards' management, like the management of any other commercial business, always made it clear that the yard could not release those workers it believed were necessary for its future business.

Early retirement had to be offered selectively if the 'yard has to retain control on the resources it needs for the future.

Will the recently signed agreements between the government, management and the union make the 'yards viable? Only time can answer this question. Our future is what we make it. So far there have been mixed signals.

The continuing inward-looking public debate, blame pinning and mistrust do not augur well for the future.

One also needs to ask whether it is realistic to expect to change in a few years the culture of the shipyards that is the result of many years of tradition that completely ignored commercial realities.

I often ask myself whether the line management and the workers will buy into these reforms, which are so radically different from what they have seen in the yards for the past several years, and implement them with the enthusiasm and passion that is needed to make this last attempt at reforming the 'yards a successful one.

Many are genuinely asking whether the 'yards should close down now and save about Lm90 million in the next five years. Others believe that the obvious solution was to privatise the yards.

While this is essentially a political issue, one needs to ask whether there is anyone really interested in taking over a shipyard with a presumed commitment to keep reasonable employment levels and carry the high risk associated with this industry.

The interest we have seen so far in this area was motivated more by the lure of acquiring very valuable assets in the form of docks and land on the harbour waterfront than genuine commercial interest in running a shipyard business.

Another question I often ask myself is whether it is worth draining one's energy and expose oneself to senseless recrimination for trying to find a solution which has eluded so many politicians of all political hues, so many controllers of the public purse, so many previous chairmen of the shipyards, so many opinion makers who have filled our newspapers with suggestions on how to overcome the shipyards malaise.

Leading a troubled large organisation is a very lonely task where you have to rely on your inner compass that shows you the best direction and tells you what is right and what is wrong.

You listen to and evaluate every suggestion, but in the end you make your own judgments free from the personal and vested interests of the many who volunteer solutions which seem alarmingly simple.

I know that quite a number of workers want to be given a chance to prove themselves. The 'yards' culture has in the past prevented them from asserting themselves.

They now have a last chance to influence their future. It is not important who leads the 'yard as long as whoever is selected is given the chance to push ahead with the reforms.

Chairmen of such troubled businesses usually have a short shelf life anyway. Sitting on a hot seat for too long makes you susceptible to burnout.

The legitimate demand for information on a publicly owned company that depends on taxpayers' money should be satisfied. But management should then be left to manage and concentrate on the external factors that affect our future.

Our competitors have gone through this process before us and are already ahead of us. We can no longer afford to look inwards in defensive mode but need to go out and attack the markets that others are targeting with much more focus than we are.

So the question I posed in the beginning of this article can be answered in a few words. Yes, the local shipyards could have a good future if only all interested parties adopt a positive attitude to the hard work that needs to be done.

The chances of success are not high because attempts for reforms over the past 30 years have generally failed. However, it is still worth taking the last chance for the sake of the hundreds of families who still depend on the shipyards for their livelihood.

The risks are high but I would like to believe that we have learned some lessons from the past and all those who today could influence the future of the 'yards can produce better results than those achieved by others who came before them.

Finally, our national economy will be richer and more prosperous if we can transform our shipyards industry into a viable business but it will be poorer and weaker if our shipyards continue to channel hard earned public funds from more deserving priorities of our society.

Mr Cassar White is chairman, Malta Shipyards.

Concluded. The first part of this article appeared on Wednesday.