Quiet Success: Unions cooperate to forward privatization at Gdynia shipyard
Polish unions have a reputation for fighting privatization, but the reality is different in many places.
Unionized shipbuilders at Stocznia Gdynia, for instance, have backed a debt-for-equity swap that made one-time creditors the new owners. And they are working closely with management as the shipyard gears up to fill $1.6 billion in orders between now and 1998.
Anti-privatization harangues took headlines recently during the Ursus protests in Warsaw, and there is some of that rhetoric in Gdynia. Dariusz Adamski, Solidarity vice president, says his union feels betrayed because the government didn't distribute shares of state-owned enterprises to all Poles in 1989-1990. That failure, he says, gave the ex-communists and the nomenklatura a leg-up in buying up state companies and making themselves rich.
But when the privatization of the Gdynia shipyard is discussed, Adamski, one of three union members on the board, is very much a believer in the debt-equity swap. The process makes banks and suppliers the major shareholders, with the Privatization Ministry holding a 30% share, mostly on behalf of workers.
The debt was higher than the book value of the shipyard, Adamski notes, and the government threatened to close it in 1992, when debts soared above $100 million. New orders were hard to get and harder still to finance.
"The banks had said they could start over, without the debts," he recalls. And that is what they have done. As orders pour in, foreign and domestic banks have helped provide up-front financing by loan-guarantee syndications.
Major changes in the organization of work are underway. More than 2,000 new workers have been hired in three years. A second shift of workers was added July 1 and a third is contemplated by yearend, cutting construction time by 40%.
Gdynia's dry docks equip it to build the largest ships on the Baltic and to compete for smaller vessels. With demand high, Gdynia and Szczecin shipyards are well on their way to finding their niche in the worldwide market. Solid cooperation between workers and management has been part of the essential mix, Adamski says.
Tougher turnarounds
Turnarounds have been harder at the Northern Shipyard, where the entire production had to be retooled from military to commercial vessels, and at Gdansk. The famous strike there 15 years ago launched Solidarity but provoked political retaliation in the 1980s, and the highly politicized working climate delayed the yard's restructuring of costs timetables to meet the competition.
Just how much this has changed was dramatized earlier this summer at a christening ceremony for the first of eight ships ordered by a German company, Alphaship of Bremen. The customer representative made the customary contribution to the workers' social fund and also said if the vessel came in earlier than scheduled, he would double his donation. A Western banker at the ceremony braced for union chiefs to bristle. Instead, they said they'd try to meet the challenge.
'Count on us'
"I told him I knew I could count on my skilled members," says Jan Guminski, president of Wolny Zwiazek Zawodowy Pracownikow Gospodarki Morskie, a union formed in February 1992.
For Adamski, the most important lesson of the past five years is "that you have to count on yourself. You can't expect banks to come to you. You have to show them what you're worth. Then you can get their interest.
Some Gdynia vessels recently made Lloyd's list of the best ships built during the year.
Both unions are struggling with their new role of supporting workers and management. "Solidarity, of course, represents workers, but we know we also have to represent management. If we don't support them, we don't have work," Adamski says.
Guminski notes that "the unions are trying to help the management. They care about workers but also have to see about who's giving them the money. They cannot always see just the workers' side."
Model for success
Success at the Szczecin yard has spurred on the Gdynia workers.
Guminski says the Szczecin yard "is much better organized" than the nearby Gdansk shipyard, perhaps because the Gdansk workers "are too close to [President Lech] Wa*esa," a former shipyard electrician who won international fame as a Solidarity strike leader.
Adamski won't comment on the politics of Gdansk but says Gdynia has profited partly because of its newer machinery and technology. And he agrees that Szczecin is their model.
Fewer than half of the 7,100 shipyard workers belong to a union. Three union members are on the shipyard management board; all three are Solidarity workers, chosen in elections by the yard's union members. Solidarity has 1,800 members by the management's count, 2,300 according to Adamski; the management says Guminski's union has 800 members, he says it has 1,000.
The two unions are uneasy allies in pushing for success of the Gdynia yard, while remaining critical of each other.
The unions' goals for the future differ. Guminski says he wants higher wages and a narrower range of pay scales "to make it more of and average.
"We are very, very far behind Western European wages, but we have Western European prices," Guminski says.
Solidarity, while expecting that more contracts will lead to higher wages, also is working on more structural changes the government could adopt to help the shipyards prosper. These would include delaying taxes and tariffs until after a ship is finished rather than demanding monthly payments which worsen the cash-flow problems today.
There is more than a little pride at the Gdynia yard at what they've done already. As Guminski says: "Gdynia was always in the shadows. Gdansk got the attention. But we had very skilled workers and staff. We're independent and are well-respected." And moving up at a fast clip in today's world shipbuilding market.
Unionized shipbuilders at Stocznia Gdynia, for instance, have backed a debt-for-equity swap that made one-time creditors the new owners. And they are working closely with management as the shipyard gears up to fill $1.6 billion in orders between now and 1998.
Anti-privatization harangues took headlines recently during the Ursus protests in Warsaw, and there is some of that rhetoric in Gdynia. Dariusz Adamski, Solidarity vice president, says his union feels betrayed because the government didn't distribute shares of state-owned enterprises to all Poles in 1989-1990. That failure, he says, gave the ex-communists and the nomenklatura a leg-up in buying up state companies and making themselves rich.
But when the privatization of the Gdynia shipyard is discussed, Adamski, one of three union members on the board, is very much a believer in the debt-equity swap. The process makes banks and suppliers the major shareholders, with the Privatization Ministry holding a 30% share, mostly on behalf of workers.
The debt was higher than the book value of the shipyard, Adamski notes, and the government threatened to close it in 1992, when debts soared above $100 million. New orders were hard to get and harder still to finance.
"The banks had said they could start over, without the debts," he recalls. And that is what they have done. As orders pour in, foreign and domestic banks have helped provide up-front financing by loan-guarantee syndications.
Major changes in the organization of work are underway. More than 2,000 new workers have been hired in three years. A second shift of workers was added July 1 and a third is contemplated by yearend, cutting construction time by 40%.
Gdynia's dry docks equip it to build the largest ships on the Baltic and to compete for smaller vessels. With demand high, Gdynia and Szczecin shipyards are well on their way to finding their niche in the worldwide market. Solid cooperation between workers and management has been part of the essential mix, Adamski says.
Tougher turnarounds
Turnarounds have been harder at the Northern Shipyard, where the entire production had to be retooled from military to commercial vessels, and at Gdansk. The famous strike there 15 years ago launched Solidarity but provoked political retaliation in the 1980s, and the highly politicized working climate delayed the yard's restructuring of costs timetables to meet the competition.
Just how much this has changed was dramatized earlier this summer at a christening ceremony for the first of eight ships ordered by a German company, Alphaship of Bremen. The customer representative made the customary contribution to the workers' social fund and also said if the vessel came in earlier than scheduled, he would double his donation. A Western banker at the ceremony braced for union chiefs to bristle. Instead, they said they'd try to meet the challenge.
'Count on us'
"I told him I knew I could count on my skilled members," says Jan Guminski, president of Wolny Zwiazek Zawodowy Pracownikow Gospodarki Morskie, a union formed in February 1992.
For Adamski, the most important lesson of the past five years is "that you have to count on yourself. You can't expect banks to come to you. You have to show them what you're worth. Then you can get their interest.
Some Gdynia vessels recently made Lloyd's list of the best ships built during the year.
Both unions are struggling with their new role of supporting workers and management. "Solidarity, of course, represents workers, but we know we also have to represent management. If we don't support them, we don't have work," Adamski says.
Guminski notes that "the unions are trying to help the management. They care about workers but also have to see about who's giving them the money. They cannot always see just the workers' side."
Model for success
Success at the Szczecin yard has spurred on the Gdynia workers.
Guminski says the Szczecin yard "is much better organized" than the nearby Gdansk shipyard, perhaps because the Gdansk workers "are too close to [President Lech] Wa*esa," a former shipyard electrician who won international fame as a Solidarity strike leader.
Adamski won't comment on the politics of Gdansk but says Gdynia has profited partly because of its newer machinery and technology. And he agrees that Szczecin is their model.
Fewer than half of the 7,100 shipyard workers belong to a union. Three union members are on the shipyard management board; all three are Solidarity workers, chosen in elections by the yard's union members. Solidarity has 1,800 members by the management's count, 2,300 according to Adamski; the management says Guminski's union has 800 members, he says it has 1,000.
The two unions are uneasy allies in pushing for success of the Gdynia yard, while remaining critical of each other.
The unions' goals for the future differ. Guminski says he wants higher wages and a narrower range of pay scales "to make it more of and average.
"We are very, very far behind Western European wages, but we have Western European prices," Guminski says.
Solidarity, while expecting that more contracts will lead to higher wages, also is working on more structural changes the government could adopt to help the shipyards prosper. These would include delaying taxes and tariffs until after a ship is finished rather than demanding monthly payments which worsen the cash-flow problems today.
There is more than a little pride at the Gdynia yard at what they've done already. As Guminski says: "Gdynia was always in the shadows. Gdansk got the attention. But we had very skilled workers and staff. We're independent and are well-respected." And moving up at a fast clip in today's world shipbuilding market.
