Its a bold plan indeed
If the Marsa and Bormla shipyards restructure according to the plans
laid out by the Drydocks task force in seven years time the companies
would see their combined turnover almost double, government subsidy
would go down by Lm14 million and the workforce would be more than halved.
The plan is an ambitious one indeed and despite the resolve government
has shown to tackle the problematic shipyards there is an amount of
scepticism circulating in private sector circles.
The restructuring exercise is intended to kick off as early as the beginning
of next year with the launching of a number of early retirement schemes
intended to reduce the workforce. If everything goes according to plan
more than 1,400 workers are expected to take up the various retirement
schemes in the next three years.
However, the report states that government prefers the schemes to open
and close during 2002. The schemes would cost government more than Lm19.3
million. The government agency MIMCOL is expected to draw up the details
of the retirement schemes, which will be tailored according to the age
of the employees.
The Marsa Shipbuilding and the Malta Drydocks currently employ a total
of 3,550 workers, which makes them on of the biggest shipyards in Europe.
The vast majority of European shipyards employ less than 1,000 people
with the average number of employees reaching 500.
A bone of contention will certainly be the clause stating that management
has the right to refuse somebody taking up early retirement. This clause
was inserted to prevent the yards best employees from leaving,
however the criteria for refusal have not been set.
The restructuring plan lays out a number of financial and human resources
targets, which should be reached for each of the next seven years. In
its reaction to the report government acknowledged that the targets
may not be met and if this occurs, workers might have to work a reduced
The financial projections presented by the task force show that the
yards would make a meagre profit of Lm200,000 by 2008 by when government
subsidy would be reduced to a mere Lm2 million.
The yards are expected to diversify their work into ship repairs and
conversions, ship hull building and yacht repairs.
The wider global scenario is not very helpful to the yards, which makes
the restructuring exercise all the more an urgent necessity. The fourth
report issued by the EU Commission on the situation on world shipbuilding
clearly indicates that South Korea is the largest shipbuilding country
in the world. Although last year EU shipyards saw an increase in ordered
tonnage, this is not expected to occur again because the increase resulted
from new cruise liners.
The cruise liner market is now on the decline, more so after the tragic
events of 11 September.
This foreign perspective clearly shows that Malta Shipbuilding has practically
no future ahead of it unless it merges with the Drydocks and both yards
act flexibly and on a broader industrial basis.