The existence of Malta's shipyard has been troubled for a long while. Ever since, in fact, the British government decided the naval dockyard no longer formed part of its military plans for Malta, and embarked on its first privatisation. The shipyard passed through the control of two British commercial companies, first Swan Hunter, then Bailey. Those early privatisations did not and could not work. From the word go the commercial focus brought to bear on the dockyard highlighted a clear fact. As set up to service the British Navy in the 19th and 20th century the manning levels of the enterprise were far above those existing in private 'yards all over the world, including in the United Kingdom. That is not to say that the dockyard was staffed with layabouts. The training and skills experience of those workers brought them to the highest level of their trades when compared to any similar activity the world over. Nevertheless, as was also evident in other UK military services departments in Malta and in other overseas military bases, little attention was paid to the number of workers taken on.
The first priority was not economic efficiency, but that the military departments, in particular the naval dockyard, were available to service the military requirements of Britain, at a time when it had a dominant presence in the hotbed that was the Mediterranean.
That criterion was totally absent from the commercial enterprises who took over the running of the dockyard as a result of the military establishment rundowns of the 1960s decided upon by successive British governments. Commercial criteria start with lean manning and high productivity.
The labour force of the dockyard declined over the years, but not as part of careful restructuring agreed upon by all sides. In the process, during the Labour years of the 1970s and 1980s, the government experimented with self-management, and also set up a shipbuilding yard.
In some of those years self-management did form part of a move towards a level of profitability, calculated without close reference to economic and financial criteria, such as the opportunity cost of the land utilised by what became known as Malta Drydocks, and the proper depreciation cost of the machinery and equipment deployed in its activities. It was another Labour government, that of 1996-98, which diluted the concept and implementation of the self-government model in the Drydocks. That government also commissioned what was to result in the very relevant Appledore Report. Its recommendations, however, were never put to the test of full implantation. For the past 10 years the dockyard has been passing through what was meant to be a thorough structural overhaul. Massive past debts were written off. A subsidies programme was started, within the context of the structures brought about by membership of the European Union. New management was put in place, and work practices began to be targeted for change.
The overall result was not what everybody hoped for. For a time, there was some improvement. But not nearly enough. The workers' representatives claim that was due to managerial mistakes. The government put it all down to the workers, asserting that productivity was still well below what was required in order to move into profitability and do away with subsidies, which are in their last lap.
Through it all, the atmosphere was always cloudy and heavy with mistrust. Too much so to permit a getting together of the stakeholders to assess and analyse the ongoing situation critically and to speak frankly but without acrimony about what really needed to be done, and how to go about it. This failure meant that there were many bitter exchanges between the government and the General Workers' Union, but never any lucid interlude where a sustainable action plan was not only agreed upon, but also implemented as part of the agreement. This situation prevailed in the open before the March 2008 general election arrived. The government would grunt that the dockyard's outturn was not sustainable, but never said what would be its next step in view of the impending fall of the EU's sword of Damocles. At the tip of its first 100 days after the election result, the government acted. Spurning the new MLP leader's offer to cooperate over such national problems, and without bothering to tell the GWU what it was about to announce, the government declared that it had decided to privatise the dockyard. To the surprise of many observers, including this one, it declared that, over the years it had various expressions of interest by private operators to take over the dockyard.
The Prime Minister, who gave the privatisation media conference, did not drop any hint of an answer to the obvious question: if the dockyard had been failing to make headway and there was a possible solution through some form of arrangement with private operators, why was not the possibility followed up, after consultations with the stakeholders?
All the government is saying is that it will discuss with the GWU about how to trim the 1,700-strong workforce, through early retirement, but that the privatisation decision is final and no other form of option would be considered. It may well be that privatisation is the only way forward, after so much effort at a strong degree of commercialisation has failed. But it is not at all clear that the government is going about it the right way. It was definitely wrong to spring its decision as a surprise to the workers and their representatives. It was also wrong not to seek, at least as a matter of form, some form of cooperation from the Opposition.
When it comes to details, it is strange that the government is saying that the dockyard has surplus labour, after the workforce had been reduced to the level set by the official experts. It is stranger still that it is saying so at this stage, without waiting to see what interested private operators might put on the table in business plans which should follow their expression of interest. Moreover, the dockyard is not one entity. It is said that its Manoel Island yacht yard makes a positive operating contribution. How will it be dealt with?
There are many factors to take into consideration, including that of not bad-mouthing the dockyard unnecessarily even as the government is trying to attract private interest in it.
It would be in the interest of the workers, but also of the rest of Malta if the future of the dockyard is handled with more delicacy, even if it should prove to be to go down the privatisation road.
The first priority was not economic efficiency, but that the military departments, in particular the naval dockyard, were available to service the military requirements of Britain, at a time when it had a dominant presence in the hotbed that was the Mediterranean.
That criterion was totally absent from the commercial enterprises who took over the running of the dockyard as a result of the military establishment rundowns of the 1960s decided upon by successive British governments. Commercial criteria start with lean manning and high productivity.
The labour force of the dockyard declined over the years, but not as part of careful restructuring agreed upon by all sides. In the process, during the Labour years of the 1970s and 1980s, the government experimented with self-management, and also set up a shipbuilding yard.
In some of those years self-management did form part of a move towards a level of profitability, calculated without close reference to economic and financial criteria, such as the opportunity cost of the land utilised by what became known as Malta Drydocks, and the proper depreciation cost of the machinery and equipment deployed in its activities. It was another Labour government, that of 1996-98, which diluted the concept and implementation of the self-government model in the Drydocks. That government also commissioned what was to result in the very relevant Appledore Report. Its recommendations, however, were never put to the test of full implantation. For the past 10 years the dockyard has been passing through what was meant to be a thorough structural overhaul. Massive past debts were written off. A subsidies programme was started, within the context of the structures brought about by membership of the European Union. New management was put in place, and work practices began to be targeted for change.
The overall result was not what everybody hoped for. For a time, there was some improvement. But not nearly enough. The workers' representatives claim that was due to managerial mistakes. The government put it all down to the workers, asserting that productivity was still well below what was required in order to move into profitability and do away with subsidies, which are in their last lap.
Through it all, the atmosphere was always cloudy and heavy with mistrust. Too much so to permit a getting together of the stakeholders to assess and analyse the ongoing situation critically and to speak frankly but without acrimony about what really needed to be done, and how to go about it. This failure meant that there were many bitter exchanges between the government and the General Workers' Union, but never any lucid interlude where a sustainable action plan was not only agreed upon, but also implemented as part of the agreement. This situation prevailed in the open before the March 2008 general election arrived. The government would grunt that the dockyard's outturn was not sustainable, but never said what would be its next step in view of the impending fall of the EU's sword of Damocles. At the tip of its first 100 days after the election result, the government acted. Spurning the new MLP leader's offer to cooperate over such national problems, and without bothering to tell the GWU what it was about to announce, the government declared that it had decided to privatise the dockyard. To the surprise of many observers, including this one, it declared that, over the years it had various expressions of interest by private operators to take over the dockyard.
The Prime Minister, who gave the privatisation media conference, did not drop any hint of an answer to the obvious question: if the dockyard had been failing to make headway and there was a possible solution through some form of arrangement with private operators, why was not the possibility followed up, after consultations with the stakeholders?
All the government is saying is that it will discuss with the GWU about how to trim the 1,700-strong workforce, through early retirement, but that the privatisation decision is final and no other form of option would be considered. It may well be that privatisation is the only way forward, after so much effort at a strong degree of commercialisation has failed. But it is not at all clear that the government is going about it the right way. It was definitely wrong to spring its decision as a surprise to the workers and their representatives. It was also wrong not to seek, at least as a matter of form, some form of cooperation from the Opposition.
When it comes to details, it is strange that the government is saying that the dockyard has surplus labour, after the workforce had been reduced to the level set by the official experts. It is stranger still that it is saying so at this stage, without waiting to see what interested private operators might put on the table in business plans which should follow their expression of interest. Moreover, the dockyard is not one entity. It is said that its Manoel Island yacht yard makes a positive operating contribution. How will it be dealt with?
There are many factors to take into consideration, including that of not bad-mouthing the dockyard unnecessarily even as the government is trying to attract private interest in it.
It would be in the interest of the workers, but also of the rest of Malta if the future of the dockyard is handled with more delicacy, even if it should prove to be to go down the privatisation road.