The Malta Independent on Sunday
Drydocks employees this week approved the structure of the agreement so ably negotiated for them by the GWU. Indeed they should be thankful and appreciative of the solid defence that the GWU made on their behalf. Re-structuring at the shipyards is unavoidable not so much for EU commitments undertaken but more to stem the financial haemorrhage that has been going on for the last 18 years and that has piled up debts exceeding Lm320 million.
Yet taken in a wider macro-economic view this agreement is likely to be just another expensive patch-up. It also raises serious doubts about government`s true resolve to address the issues which have been left festering uselessly for so long and which have burnt up so many scarce resources. Rather than wasted these resources should have applied to achieve real re-structuring that has always been promised but never delivered.
Look at it from the taxpayers` view. Nine hundred employees are being lifted off the books. Assuming that these are surplus idol labour I would reckon that these were costing the shipyards some Lm7 million to maintain.` The remaining 1700 workers will remain employed with the organisation that is to succeed Malta Drydocks and Malta Shipbuilding.` If on average we have been subsidising the shipyards to the tune of Lm15 million p.a. (more in recent due to the financing of early retirement schemes) what assurances have been built into the agreement that efficiency gains of at least Lm8 million have to be included. Where are these coming from? Or is it just the saving in financial charges on the amount of debt that is being written-off? Saved finance charges on written-off debt of Lm320 million could amount to some Lm20 million that added to the Lm7 million saved wages for the 900 workers being lifted-off the books, will render the company profitable without delivering a single impulse of increased productivity.
And yet only increased productivity that can deliver our shipyards to a state of commercial sustainability. If notwithstanding EU rules and all, the slimmed down organisation does not generate a sharp increase in productivity than we are just wiping-off one slate clean to start writing up another one. Productivity improvements comes from investments, flexibility of the workforce, and management obsession with control on timely deliverables on the agreed quality levels and within budget. It takes management systems which track and reward efficiency and discipline defaulters. Are the work culture and work practices so much embedded within the shipyards ready for this change?
Tax-payers will still have to foot the bill of the Lm27 million `saved` expenses which although no longer on Drydocks` successor books are still on the taxpayers` back. The wages element of the savings could be mitigated through the operation of early redundancy schemes. But on a macro-economic basis these schemes are a very expensive method of delivering the necessary labour mobility and flexibility and on a social basis they are an absolute heresy.
Early retirement schemes, especially if operated on a voluntary basis, tend to attract the most able-bodied of the work-force who are more likely to find alternative employment given the skills they possess. They are attracted to the idea of cashing a lump sum of money for a change in the work environment. This could leave the organisation with the least productive layer of employees which will make the achievement of productivity gains within the successor organisation so much harder if not neigh impossible.
On a social level what sense does it make to give such lump sums to those who have no real problem to find alternative employment rather than use such funding to train the whole workforce to gain new skills. It is this multi-skilling which best guarantees efficient job mobility and flexibility. A trained worker is both productive within the organisation and can easily find alternative employment outside it.
And taking it further in a wider context what social sense does it make for the State to offer generous early retirement schemes to employees in para-statal organisations and leave relatively unprotected employees in the private sector whose only protection in case of redundancy is a maximum of 12 weeks notice` Are Maltese working in the private sector an under-privileged lot? Are they taxed any less than their brothers, sisters and friends in the public sector?
As long as we continue solving problems in this patch-work method we continue feeding the system of political patronage which is the main source of our economic problems. Voters will continue to make pressure on their political representative to procure them public sector jobs where redundancy comes with an `if-you-please` message and a bundle of cash. Why choose a private sector job where you have to work much harder, including full days in summer, and were job-security is not much better than a closed door and 12 weeks pay?
We are all witnessing the structural financial problems of the country. We have been warned of a stern budget as a result. Does it make sense to continue burning resources in this unsociable and unproductive manner rather than address the problem in a holistic manner and devise re-training schemes for the entire over-manning across the whole public sector?
And how can we promote early retirement schemes with one-hand and push for extended pension retirement age with the other? Can we go both left and right at the same time?
We seem to have lost all sense of creativity and all elements of true leadership. The taxpayer will unavoidably have to pay the price, yet again, of this just another patch-up.
Drydocks employees this week approved the structure of the agreement so ably negotiated for them by the GWU. Indeed they should be thankful and appreciative of the solid defence that the GWU made on their behalf. Re-structuring at the shipyards is unavoidable not so much for EU commitments undertaken but more to stem the financial haemorrhage that has been going on for the last 18 years and that has piled up debts exceeding Lm320 million.
Yet taken in a wider macro-economic view this agreement is likely to be just another expensive patch-up. It also raises serious doubts about government`s true resolve to address the issues which have been left festering uselessly for so long and which have burnt up so many scarce resources. Rather than wasted these resources should have applied to achieve real re-structuring that has always been promised but never delivered.
Look at it from the taxpayers` view. Nine hundred employees are being lifted off the books. Assuming that these are surplus idol labour I would reckon that these were costing the shipyards some Lm7 million to maintain.` The remaining 1700 workers will remain employed with the organisation that is to succeed Malta Drydocks and Malta Shipbuilding.` If on average we have been subsidising the shipyards to the tune of Lm15 million p.a. (more in recent due to the financing of early retirement schemes) what assurances have been built into the agreement that efficiency gains of at least Lm8 million have to be included. Where are these coming from? Or is it just the saving in financial charges on the amount of debt that is being written-off? Saved finance charges on written-off debt of Lm320 million could amount to some Lm20 million that added to the Lm7 million saved wages for the 900 workers being lifted-off the books, will render the company profitable without delivering a single impulse of increased productivity.
And yet only increased productivity that can deliver our shipyards to a state of commercial sustainability. If notwithstanding EU rules and all, the slimmed down organisation does not generate a sharp increase in productivity than we are just wiping-off one slate clean to start writing up another one. Productivity improvements comes from investments, flexibility of the workforce, and management obsession with control on timely deliverables on the agreed quality levels and within budget. It takes management systems which track and reward efficiency and discipline defaulters. Are the work culture and work practices so much embedded within the shipyards ready for this change?
Tax-payers will still have to foot the bill of the Lm27 million `saved` expenses which although no longer on Drydocks` successor books are still on the taxpayers` back. The wages element of the savings could be mitigated through the operation of early redundancy schemes. But on a macro-economic basis these schemes are a very expensive method of delivering the necessary labour mobility and flexibility and on a social basis they are an absolute heresy.
Early retirement schemes, especially if operated on a voluntary basis, tend to attract the most able-bodied of the work-force who are more likely to find alternative employment given the skills they possess. They are attracted to the idea of cashing a lump sum of money for a change in the work environment. This could leave the organisation with the least productive layer of employees which will make the achievement of productivity gains within the successor organisation so much harder if not neigh impossible.
On a social level what sense does it make to give such lump sums to those who have no real problem to find alternative employment rather than use such funding to train the whole workforce to gain new skills. It is this multi-skilling which best guarantees efficient job mobility and flexibility. A trained worker is both productive within the organisation and can easily find alternative employment outside it.
And taking it further in a wider context what social sense does it make for the State to offer generous early retirement schemes to employees in para-statal organisations and leave relatively unprotected employees in the private sector whose only protection in case of redundancy is a maximum of 12 weeks notice` Are Maltese working in the private sector an under-privileged lot? Are they taxed any less than their brothers, sisters and friends in the public sector?
As long as we continue solving problems in this patch-work method we continue feeding the system of political patronage which is the main source of our economic problems. Voters will continue to make pressure on their political representative to procure them public sector jobs where redundancy comes with an `if-you-please` message and a bundle of cash. Why choose a private sector job where you have to work much harder, including full days in summer, and were job-security is not much better than a closed door and 12 weeks pay?
We are all witnessing the structural financial problems of the country. We have been warned of a stern budget as a result. Does it make sense to continue burning resources in this unsociable and unproductive manner rather than address the problem in a holistic manner and devise re-training schemes for the entire over-manning across the whole public sector?
And how can we promote early retirement schemes with one-hand and push for extended pension retirement age with the other? Can we go both left and right at the same time?
We seem to have lost all sense of creativity and all elements of true leadership. The taxpayer will unavoidably have to pay the price, yet again, of this just another patch-up.
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