Gdansk's good lesson
The Gdansk Shipyard entered the political arena in 1980 when Lech Walesa led the Solidarity Union into the famous showdown with the former communist government. When Solidarity toppled the government nine years later, the shipyard came under the protective banner of then-President Walesa.
Ironically, free marketeer Walesa sheltered Gdansk for better and now worse from the music faced by other shipbuilders on the Baltic coast. Both Szczecin and Gdynia had to trim the fat and become market savvy. They did, and now they are healthier and wiser.
Gdynia, for example, used the 1993 bank conciliation law to restructure its debts and now has $1.3 billion in orders for container ships. Today's payroll lists a staff of 8,000, about 2,000 more workers than it employed during the crisis of the early 1990s when the shipbuilding industry had no markets.
The message from Gdynia is clear and workers and management in Gdansk probably now must pay the price for past omissions. But ultimately, the state, just like any owner, bears the burden for the shipyard's bankruptcy and uncertain future.
And at the helm is the Privatization Minister Wieslaw Kaczmarek.
Kaczmarek is now brokering a scaled-down version of the former Gdansk giant, allowing workers to finish out current contracts. Late last week, amid calls for his resignation he showed the shipyard's health chart, a grim record of failing financials: $88 million in losses overburdened with more than $185 million in debts.
But those results are nothing new. In 1993, the year Kaczmarek took office, losses amounted to $16 million, $39 million the following year and $71 million the next. It doesn't take a rocket scientist to figure out those financials. So why did the state let the patient keep bleeding? The answer is politics ... and it provides just as clear an answer for why the state has no business in business and should privatize as quickly as possible.
Ironically, free marketeer Walesa sheltered Gdansk for better and now worse from the music faced by other shipbuilders on the Baltic coast. Both Szczecin and Gdynia had to trim the fat and become market savvy. They did, and now they are healthier and wiser.
Gdynia, for example, used the 1993 bank conciliation law to restructure its debts and now has $1.3 billion in orders for container ships. Today's payroll lists a staff of 8,000, about 2,000 more workers than it employed during the crisis of the early 1990s when the shipbuilding industry had no markets.
The message from Gdynia is clear and workers and management in Gdansk probably now must pay the price for past omissions. But ultimately, the state, just like any owner, bears the burden for the shipyard's bankruptcy and uncertain future.
And at the helm is the Privatization Minister Wieslaw Kaczmarek.
Kaczmarek is now brokering a scaled-down version of the former Gdansk giant, allowing workers to finish out current contracts. Late last week, amid calls for his resignation he showed the shipyard's health chart, a grim record of failing financials: $88 million in losses overburdened with more than $185 million in debts.
But those results are nothing new. In 1993, the year Kaczmarek took office, losses amounted to $16 million, $39 million the following year and $71 million the next. It doesn't take a rocket scientist to figure out those financials. So why did the state let the patient keep bleeding? The answer is politics ... and it provides just as clear an answer for why the state has no business in business and should privatize as quickly as possible.
