POLAND: Home of Solidarity movement threatened by bankrupcy as it fails to comply with EU norms

Workers at the Gdansk shipyard are concerned about losing their jobs as the European Commission puts pressure on the company to either cut capacity or return subsidy money. It's a move which threatens to push the home of anti-Communist movement Solidarity towards bankruptcy. As the European Commission's deadline for reform at Poland's Gdansk shipyard approaches, workers say the changes required would destroy the company. The EC gave the shipyard until next Tuesday (August 21) to either cut capacity or return subsidy money, a move which threatens to push the home of anti-communist movement solidarity to bankruptcy. Under EU rules, governments can give financial help to ailing companies only if the cash is accompanied by plans that would make the firms viable in the long term. But the shipyard workers are fighting back, claiming that they had already decreased capacity before EU intervention. The Commission demands that the shipyard close two slipways used to assemble ships. According to Solidarity workers union deputy chairman Karol Guzikiewicz, this would destroy the company, which just managed to get out of trouble after being mismanaged for years after system transformation. "The hard times are over for the shipyard. We have split from the Gdynia shipyard, we started to take on profitable contracts; prices of ships are thirty percent higher now. We do not generate any losses, although we still have old debts. The shipyard crew is starting to be more stable. The attack from the European Union comes at a time when the situation inside the shipyard has improved. The closing of two slipways, not one but two, is going to kill the shipyard firstly because we will stop being profitable, and secondly a large part of the crew will have to be fired due to lack of work," Guzikiewicz said. Other shipyards monitored by the EC are Gdynia, where one dock would be closed and one left open, while at Szczecin one slipway would be closed and two left in operation. But the workers in Gdansk are far from accepting EU arguments, claiming that the shipyard's problems have been ignored by governments since the Solidarity movement led to the toppling of communism in Poland. "When the countries of the old European Union subsidised their shipyards and put huge money into them, our politicians wanted desperately to destroy the Gdansk shipyard. Today they are attempting to destroy the shipyard again with the help of Polish politicians in the European Union, the deputies in the European Parliament," said foreman Brunon Baranowski, who has been working in the shipyard for more than decade. Shareholders of the Gdansk shipyard recently increased the company's capital by up to 400 million zloty (approx 105 million euros) through a share issue in order to more easily find an investor. But any deals have to wait for the European Commissions decision. "We are trying to convince European Commission that in case of necessity of closing down of two slipways, it will be very hard for us to survive," said Vice President of Gdansk shipyard, Andrzej Buczkowski. "I must say that our efficiency is still not good enough and European Commission is still referring to the efficiency of west European yards, which definitely we may reach but after certain investments - and this is still missing," he added. The company chosen to invest in the shipyard will have to be able to finance the building of one modern slipway, which will replace the two ageing slipways currently used and keep up the production rate at lower costs. The Commission said it accepted capacity cuts at two other Polish shipyards, Gdynia and Szczecin, in return for clearing past state aid. The three yards have had a total of 1.3 billion euros in subsidies since Poland joined the European Union in May 2004. The Commission said it has yet to calculate how much money Gdansk would have to pay back if it misses the August 21 deadline. For the shipyard workers, some former colleagues of Solidarity leader Lech Walesa, closure of the yard would mean a bitter reward for their courage in defying and bringing down communism in Poland. The Gdansk shipyard blossomed under communism, building merchant ships for the Soviet Union. Yet its workers were badly paid and mismanagement led to strikes in the 1970s and 1980s. After communism collapsed in 1989, trade unions blocked the sale of the yard to foreign investors, fearing massive restructuring and layoffs. Subsequent governments avoided radical changes and the yard has lingered on the verge of bankruptcy for years.

ITN Source | August 20, 2007

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