It once employed over 14,000 workers, and was at the forefront of practically every historical development of the 20th century: from Sette Giugno, to World War II, to the 1958 riots, to Independence and EU membership. On the occasion of its formal closure, MaltaToday pauses to commemorate the emblematic history of the Malta shipyards
A mainstay of our nation’s economy for over 150 years, the (formerly ‘Royal’) Malta Dockyard has shaped our identity in more ways than just the obvious. Indirectly it contributed to the internecine language issues that formed part of our birth-pangs as a nation; it earned a reputation for ‘heresy’ by serving as recruiting grounds for Manwel Dimech’s Xirka ta’ L-Imdawwlin (a reputation not even Dun Gorg Preca’s similar recruitment drive for the MUSEUM could dispel); and it pitted the ‘Aristocracy of the Workers’ in a class war against the ruling establishments of successive generations.
But from its early inception in the mid-19th century, the Yard was also synonymous with higher education for the Maltese working class. At that time, the Royal Navy was experimenting with the then-fledgling steam engine technology (the only other alternatives being wind and manpower). Steam engineers were in high demand, but supply was pitifully low. So when the Admiralty decided that Maltese apprentices should be trained, the Dockyard School was born.
Language of instruction was English, so its 14-year-old students were among the first to receive their formal education in this language (thus laying the foundations for the notorious ‘Language Question’, which would bring Malta to the brink of civil war in the 1930s).
Final year exam papers show that these boys were also taught differential calculus and even concepts such as entropy: highly advanced subjects, compared to the education standards on offer elsewhere.
Usurpers of the establishment English language skills allowed its alumni to transfer to the budding Civil Service – at the time ‘out of bounds’ to the Italian speaking intelligentsia – and Dockyard workers were quickly singled out as ‘usurpers’ of the established order – thus sowing the seeds of an ancestral resentment that can still be felt today.
At any time between 1900 and 1950s, the shipyards provided direct and indirect employment for thousands of skilled and unskilled labourers. This number swelled in times of war, to be followed by mass discharges when peace reigned again. In post-war periods, its workforce was identified as a source of dissent and possible sedition. Dockyard workers were in fact among the crowd that turned violent on 7 June 1919 – a date now closely associated with the acquisition of self-government two years later, in November 1921.
In 1943, it was a Dockyard employee who, together with colleagues, founded the General Workers’ Union. The mass discharges that immediately followed the war led most of its members to find solace in the forceful words of a young but strongly determined Labour activist named Dom Mintoff. The Union and the Party had common members as well as a shared fundamental scope, so cohesion between the two was inevitable.
This led to even greater resentment by the dominating class. The great union and political struggles of the 50s led The Times of Malta to describe the Dockyard workers in its banner headline as ‘HOOLIGANS!’
Dockyard in decline The replacement of Britain by the United States as the guardian of the Mediterranean, and the decimation of the Royal Navy, made it impossible for Britain to retain the Malta Dockyard, the largest Naval Dockyard outside Britain. It was sold to Baileys of Wales – against the demands of Mintoff, who preferred Vickers.
Within a few years Mintoff was vindicated, as Bailey’s were found to have embezzled development funds. Swan Hunter & Wigham Richardson were called in as managing agents, and the shipyard was nationalised and passed into the hands of the Maltese Government under the Independence Treaty.
The Swan Hunter management proved bellicose and confronted union leaders who, as apprentices, had been at the forefront of the great union standoffs of the fifties and the Battle of Paola Hill in 1958. The intransigent attitude on both sides led to severe industrial action. However, poor management techniques practised by Swan Hunter meant that they lost money on most jobs anyway, so it was cheaper when the workers went on strike.
The most serious blow befell the shipyard with the closure of Suez Canal following the Six Day War of 1967. Tankers returning in ballast from North Europe to load in the Persian Gulf were no longer sailing past Malta, but instead were rounding the African Cape. This new routing removed 60% of the Drydock’s market and intensified competition for the remaining 40% with the other Mediterranean shipyards.
Years of success One of Mintoff’s first acts when elected in 1971 was to fire Swan Hunter. But with Suez still closed, business remained tough. Suez was widened and re-opened and Mintoff held his memorable Pjazza Gavino Gulia meeting where he said that shipyards in North Europe were making money and we in Malta had as many ‘balls’ (bocci) as they had. Mintoff’s words were twisted by the shipyard’s detractors and have remained a millstone round the shipyard’s worker neck ever since.
However, Mintoff promised that if workers showed more commitment he would enact a system through which the workers would elect their own directors. As luck would have it, the Italian tanker Agip Genova blew up while tank cleaning off the Libyan coast. The nearest port of call was Malta, and once in Malta it was deemed too hazardous for the ship to go anywhere else.
This captive, insurance paid, huge repair job customer was the shipyard’s saviour and in 1974, Malta Drydocks registered its first-ever profit.
True to his word, Mintoff enacted a system of Workers’ Participation where the employees elected their own directors. The results were evident from the fact that profits kept on increasing until 1981. Mintoff, with the help of China’s Mao Tse Tung, also built the 300,000 tonne No. 6 Dock to enable the shipyard to service any ship going through Suez.
The ‘yard also diversified into building and built an impressive series of single point mooring buoys and other complex offshore oil equipment, as well as series of chemical tankers. This new building success led the Government to set up Malta Shipbuilding Co Ltd, and to build the Marsa yard dedicated to ship building.
Oil crisis In the oil price hikes of 1973 and 1978, inflation had followed the increase in the cost of energy and a few months after the oil price increase the cost of everything else rose in proportion and the oil producers were no better off. By 1981 OPEC had learnt its lesson and rather than increase prices, it limited supply. This led to an oil price increase in real terms. Oil had been discovered in the North Sea, but its extraction was too costly. The real increase in the price of oil led to the exploitation of these deposits by the Thatcher government.
This led to a crash of the tanker charter market, with devastating effects on Malta Drydocks’ turnover – 70% of which was accounted for by the tanker market. Not only was the shipyard’s principal customer category unable to pay for repairs, but a huge number of ships was laid up. Malta’s market and that of its European competitors evaporated. In 1982, the shipyard registered a loss after a string of profitable years. By 1983, the situation had deteriorated further. The shipyard agreed that workers would work overtime on a time off in lieu basis and management agreed to a 15% pay cut. Even these measures were not enough to stave off loss making.
Cruise liner central By 1983, the Falklands War was over and the British Government returned the cruise ship “Cunard Countess” which it had been using as a hospital ship. The UK Government was to pay for the refurbishment of the passenger ship back to five-star standards. By that time no single UK shipyard had retained enough work force to be able to finish the job in the time frame required by Cunard and Thatcher agreed that the contract was to go to international tender. The contract was won by Malta against an impossibly short contractual repair period and against ultra stiff delay penalties. The Daily Mirror, with a strong following in the shipyard due to its Page 3 girls, came out with a lot of colonial era logic complaining that this work awarded to a tiny former colony meant the closure of the Southampton yard. The Maltese worker was deeply offended, applied equally nonsensical colonial era logic and finished the work and a huge amount of additional work two days ahead of schedule. Malta had established itself as the premier Cruise Liner shipyard worldwide.
The problem was that while there are tens of thousands of tankers, there are only a few hundreds of cruise ships. While Malta gained several lucrative cruise ship contracts, it was not enough to make up for the dearth of the core tanker business.
In that period the shipyard stopped its apprenticeship intake – with hindsight a mistake, as there is today a scarcity of good, multi role technical people in Malta. The shipyard had to fund its own capital expenditure while competing shipyards in Greece, Italy, France and Spain had their losses written off.
In 1986, Sheik Yamani of OPEC and oil minister for Saudi Arabia, the world’s biggest oil producer, decided that as all OPEC members were cheating and selling more oil than the OPEC quota, henceforth Saudi would no longer apply a quota. While the oil price went down, by now the capital expenditure in the North Sea had been committed and there was only a slow uptake in the tanker charter market.
Management matters By the time the PN returned to power in 1987, relations with Dockyard workers had soured over numerous incidents during the political violence of the 1980s: most poignantly, the implication of Dockyard workers (described by then Prime Minister Karmenu Mifsud Bonnici as ‘the Aristocracy of the Workers’) in an attack on the Archbishop’s Curia and the Law Courts in 1984.
Under Eddie Fenech Adami, the PN government brought in competitors Blohm & Voss (the German shipyards were those mostly hurt by Malta’s Cruise ship success) to advise on the future of the shipyard. They had to reluctantly agree to withdraw their original negative report when the shipyard pointed out an evident improvement trend.
Government took on a more confrontational role, a role that did not improve when shipyard workers used a former CIA spy ship (the tanker Copper Mountain), arrested in the shipyard for non-payment of repairs, to blockade the Harbour entrance against the entry of the HMS Ark Royal. The British aircraft carrier had to anchor in St Paul’s Bay instead.
Finally the Fenech Adami Government, through the intermediation of then parliamentary secretary John Dalli, made peace with the shipyard and agreed to finance a 10-year restructuring plan.
In 1996, Alfred Sant’s Labour Party was elected with the promise that it would strengthen Worker’s Participation: a promise which translated into a diluted 50% elected, 50% appointed board, and an appointed chairman. The better quality members of the previous fully elected board kept their distance: those who stood for elections were the less useful, ego hungry components.
Morale hit rock bottom and shipyard losses escalated despite the appointment of a foreign top management team who were paid mega salary packages.
Beginning of the end Despite the mega salaries, losses escalated. Bigger contracts resulted in bigger losses and everybody blamed this on the worker, while nobody paid even lip service to appropriate management techniques. In this scenario, the PN government laid on attractive early retirement schemes and many first class workers were transferred to sinecures in Government departments. The potential of the shipyard was destroyed, as it no longer had the critical mass to attack large contracts that required high quality at an ultra-rapid completion time.
EU membership in 2004 spelt an end to subsidies. Up until this year, government’s strategy was evidently to further reduce the workforce, split the assets into a number of saleable units and try to get some money out of a heavily loss making entity: now that almost everything built in the Mintoff era has been sold off to enable the deficit/GDP ratio to look right for the adoption of the Euro.
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