12th September 2008
The Malta Independent - Friday Wisdom
The Malta Independent - Friday Wisdom
As my hair gets thinner and whiter it
is happening to me more often that I find myself walking alone. It is not a good
sign when my strong belief in something seems to the shared by practically no
one else as I should think it unlikely that I be right and all others wrong. But
in the end I cannot just change a strong opinion just to follow the
crowd.
The mainstream opinion is always right in the short-term and the way out maverick opinion only gets vindicated, if at all, in the long-term. In US politics presently mavericks are the talk of the town on the republican side.
John McCain won his nomination against all odds purely because the party could brand him as a maverick compared to the unpopular Bush. The choice of Sarah Palin as a McCain’s running mate reward her maverick views for whistles blowing cosy relationship with oil companies in Alaska, so much so that at the republican convention of 2004 Palin sat all alone and was considered as an outcast.
Mavericks in Malta are far less appreciated. Take the shipyards agreement where the government and the General Workers Union agreed to bridge their differences basically by increasing the early retirement package from e9 million to e58 million. The government is happy that its old habits of solving problems by writing a taxpayers’ cheque has worked again and can now proceed to privatise the yard to favour close interests that somehow fall within the network that feeds it to gain and retain political power. The network now expects payback through opportunities to continue extending its economic power.
The GWU is happy that in the face of inevitability of privatisation it could show that it did a good job to secure an improved offer for its members. The general public seems quite happy that confrontation was avoided and seems unperturbed that so much of publicly owned assets get channelled to so few, most of them getting cash piles purely to continue rendering the same work for a different employer.
I am not happy because I am a maverick taxpayer who cannot stand seeing our tax money spent so irresponsibly and inequitably. What hurts even more is the knowledge that this deal was brokered by the representative of private employers who would fight tooth and nail to avoid having similar generous redundancy and pension schemes extended to private employers. It is easy to be cavalier with other people’s money!
Let time be the best judge. This is what I had written about the last restructuring exercise of the shipyards in 2003 which indeed should have been the last. “Just another expensive patch up?”, I had opined on 2 November 2003:
“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 1,700 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 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?”
Unfortunately I was only too right and I am afraid I will be right again that the taxpayer is once again being short-changed. It takes courage and fortitude to stand alone dissenting when all around you are applauding. Time will be the best judge as it has been for my dear friend John Borg Bartolo who passed away on 4 September 2008.
John was a maverick who stood up against all odds to protest the forced takeover of private shareholders in Mid-Med Bank following the majority acquisition by HSBC. When it was even difficult to find a lawyer to take our case John stood tall till final settlement was achieved which protected minority shareholders interests, from which protection they gained handsomely. These shareholders should remember John in their prayers. May God give him eternal peace in a better world where there is only one truth for mavericks as much as for mainstreamers.
The mainstream opinion is always right in the short-term and the way out maverick opinion only gets vindicated, if at all, in the long-term. In US politics presently mavericks are the talk of the town on the republican side.
John McCain won his nomination against all odds purely because the party could brand him as a maverick compared to the unpopular Bush. The choice of Sarah Palin as a McCain’s running mate reward her maverick views for whistles blowing cosy relationship with oil companies in Alaska, so much so that at the republican convention of 2004 Palin sat all alone and was considered as an outcast.
Mavericks in Malta are far less appreciated. Take the shipyards agreement where the government and the General Workers Union agreed to bridge their differences basically by increasing the early retirement package from e9 million to e58 million. The government is happy that its old habits of solving problems by writing a taxpayers’ cheque has worked again and can now proceed to privatise the yard to favour close interests that somehow fall within the network that feeds it to gain and retain political power. The network now expects payback through opportunities to continue extending its economic power.
The GWU is happy that in the face of inevitability of privatisation it could show that it did a good job to secure an improved offer for its members. The general public seems quite happy that confrontation was avoided and seems unperturbed that so much of publicly owned assets get channelled to so few, most of them getting cash piles purely to continue rendering the same work for a different employer.
I am not happy because I am a maverick taxpayer who cannot stand seeing our tax money spent so irresponsibly and inequitably. What hurts even more is the knowledge that this deal was brokered by the representative of private employers who would fight tooth and nail to avoid having similar generous redundancy and pension schemes extended to private employers. It is easy to be cavalier with other people’s money!
Let time be the best judge. This is what I had written about the last restructuring exercise of the shipyards in 2003 which indeed should have been the last. “Just another expensive patch up?”, I had opined on 2 November 2003:
“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 1,700 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 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?”
Unfortunately I was only too right and I am afraid I will be right again that the taxpayer is once again being short-changed. It takes courage and fortitude to stand alone dissenting when all around you are applauding. Time will be the best judge as it has been for my dear friend John Borg Bartolo who passed away on 4 September 2008.
John was a maverick who stood up against all odds to protest the forced takeover of private shareholders in Mid-Med Bank following the majority acquisition by HSBC. When it was even difficult to find a lawyer to take our case John stood tall till final settlement was achieved which protected minority shareholders interests, from which protection they gained handsomely. These shareholders should remember John in their prayers. May God give him eternal peace in a better world where there is only one truth for mavericks as much as for mainstreamers.
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