Spanish shipbuilding sector joins European protests

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In November 1999, the 6,000 workers employed in Spanish shipyards, and many of the 30,000 working in auxiliary companies, participated in actions and mobilisations organised by the European Metalworkers' Federation. The aim was to call on the EU to take action against "social dumping" and supposed unfair competition by Asian shipyards.

Like the European shipbuilding sector in general, the Spanish shipbuilding industry - once one of the most powerful in the industrialised world - is now seriously threatened by economic "globalisation" and the fierce competition which it involves. Since late 1978, coinciding with the opening of the Spanish economy to the European Community, the sector has undergone successive phases of restructuring owing to its low productivity, arising from the low level of technological innovation, and to Spain's need to adapt to its European partners.

At the beginning of the democratic period in the late 1970s, the sector employed more than 30,000 workers. Some 7,000 jobs were lost as a result of a 1978 restructuring plan, whereafter restructuring took place again in 1984, 1990 and 1995, reducing the workforce from over 24,000 to the current figure of about 6,000 (with some 30,000 workers employed in auxiliary companies). During this period, in relative terms production and productivity have recovered slightly, but the industry has continued to show losses of billions of pesetas per year.

Astilleros Españoles SA (AESA), a public enterprise that forms part of the State Company for Industrial Participation (Sociedad Estatal de Participaciones Industriales, SEPI), today runs the following shipyards: Sestao (Bilbao), Juliana ( Asturias), Astano and Manises (Valencia), Astander (Santander), and Seville, Cádiz and Puerto Real ( Andalusia). Because of their social importance in terms of employment, Spanish shipyards, including the private ones, have received subsidies for technological improvements through a series of plans to enable them to face international competition. Although the annual deficit has diminished, the shipyards still find it difficult to compete. SEPI recently privatised Barreras de Vigo, one of the few shipyards that did not show losses, while Astander, which is in a similar financial situation, is in the process of being privatised (ES9706113N). The rest of the shipyards still show a deficit and are maintained through subsidies that were due to end on 1 January 2000. At the beginning of 1999, there was another threat of redundancies, but this was not carried out and the public aid was continued for another year.

European day of action

The whole European shipbuilding industry is under threat at present. A key problem, in Spain and in Europe more generally, is a dramatic fall in sales, largely due to the fact that Korea n shipyards are producing ships at 40% of the average price of European ships. Even Spanish shipping companies - and those in other countries of the EU - are placing a large part of their orders with Korea.

In response to this situation, a European day of action in shipbuilding was staged on 5 November 1999 by trade unions affiliated to theEuropean Metalworkers' Federation (EMF) in the 12 European countries involved in shipbuilding: Denmark, Finland, France, Germany, Greece, Italy, the Netherlands, Norway, Poland, Portugal, Spain and the UK. The day of action included stoppages, demonstrations and rallies at shipbuilding sites, press conferences, leafleting and petitions to national ministers (EU9911208N).

EMF states that the European shipbuilding sector is in crisis, leading to high job losses. This is said to be due to fiercer global competition, particularly from Korean shipyards which enjoy state subsidies, in contrast to the situation in Europe, where state subsidies are in the process of being abolished under an EU scheme aimed at boosting competitiveness. EMF believes that the European shipbuilding industry has a future "provided that the framework conditions are fair", and outlined a number of demands for consideration by the EU Industry Council of Ministers of 9 November 1999:

• a clear political commitment from the Council, the European Parliament and the European Commission to safeguard the European maritime industry through an active industrial policy for this sector;

• the immediate launch of negotiations between the EU and Korea, with the aim of curbing competitive practices;

• the resumption of talks for a new Organisation for Economic Cooperation and Development (OECD) shipbuilding agreement aimed at combating global distortions in competition;

• a review of the EU scheme to abolish shipbuilding subsidies; and

• the reinforcement of the high-technology shipbuilding sector by means of "market-driven research".

At the 9 November Council, ministers agreed that the shipbuilding sector is facing a critical situation worldwide, with very low prices and serious overcapacity caused by Korea, which severely affects the European shipbuilding industry. Ministers expressed serious concern about the fact that contracts have been awarded in Korea at prices below cost, damaging the interests of EU shipyards, and called for further investigation as to whether such these practices are compatible with World Trade Organisation (WTO) rules and with the conditions of International Monetary Fund (IMF) assistance to Korea. The Council: asked the Commission to pursue its efforts to establish a "level playing field" for the sector by engaging Korea in constructive consultations with a view to halting unfair competition; called for the collection of evidence of alleged anti-competitive behaviour, in order to take appropriate action under the WTO; called on Member States to urge the IMF and World Bank to investigate whether the conditions of rescue packages to Korean shipbuilding are fully respected; and requested Member States and the Commission to pursue the issue in the appropriate international fora, including the OECD. This diplomatic approach was seen as weak and unsatisfactory by European shipbuilding trade unions. In Spain, even the industry minister, who is opposed to maintaining subsidies for shipbuilding, believes that the EU should take direct commercial action on trade with Korea. However, such measures would open a "war" that the EU does not wish to enter. So the situation is currently on hold - a state of affairs that Spanish shipbuilding workers are not willing to allow to continue for too long, because shipbuilding companies have already started temporary lay-offs, which have been translated into closures and dismissals in auxiliary companies.

Spanish response

The Spanish trade unions operating in shipbuilding responded unanimously to EMF's mobilisation in November. CC.OO, UGT, ELA, CIG and some local trade unions participated side by side in the protests, while the Uninave employers' association also supported the unions' demands, which are aimed at the Spanish government and above all at the EU. From the government, the trade unions demand better management of the public shipyards, no privatisation of profitable shipyards, more effective management and a more effective market. From the EU, the unions demand the maintenance of subsidies to the shipbuilding industry while other countries continue to use them, negotiations over market shares with Korea, investment in European technological innovation and cooperation to maintain competitiveness.

Spanish shipbuilding companies - even the private ones - support these demands, which involve political measures that run counter to the prevailing free market trend. The Spanish government also states that it supports the demands, with the exception of those relating to subsidies.

The Europe-wide shipbuilding day of action was of unusual scale and displayed a high level of unity of action. In Spain, the shipyards not only closed on the day indicated by EMF, but unions also organised stoppages of several hours on other days. The Andalusian, Asturian and Basque shipyards were particularly radical in their protest, with workers taking the protests to the streets in order to create an impact on economic and social life. In Andalusia, they damaged port facilities for the Bazán (military) shipyard and other commercial and industrial activities. In Asturias and the Basque Country, there were many barricades and obstructions of traffic, and shipyard workers confronted the police. The conflict received daily coverage in the media and seemed likely to continue in December 1999.

So far, little concrete has been gained from the protests. It would seem that both the EU and national governments want to win time in order to introduce the topic of shipbuilding into a wider round of trade negotiations. However, this will take time and some commentators believe the only realistic short-term solution is to increase and extend current subsidies. However, there are serious doubts whether the allegedly unfair competition of Korea lies mainly in subsidies. Korean workers earn on average half as much as their European counterparts, and work 2,500-3,000 hours per year, compared with 1,600-1,700 in Europe.

Commentary

The topic of shipyards reproduces on a smaller scale the problem of world trade in agricultural products, in which the EU finances production to maintain its competitiveness in the market. It was a main topic at the unsuccessful WTO conference in Seattle in November-December 1999 (EU9912217N), and is also the great contradiction in a world divided between rich and poor.

Regardless of possible misuses of funds with other aims by certain countries, the fundamental issue is that producing certain agricultural or industrial goods is less expensive in developing countries and the "third world", owing to the lower labour costs and the lower taxation on companies. The main question is therefore whether this "social dumping" is more illicit than the "economic dumping" involved in the state subsidies that the EU provides for some of its products.

In Spain, leaving aside agriculture in which the problem is more complex, there are several sectors such as shipbuilding and coal which subsist only thanks to public aid. In favour of maintaining subsidies, one can argue that these sectors constitute essential elements for the economic survival of certain regions or cities. Against them, it could be said that they foster continuing underdevelopment in other regions of the world.

The solution is to diversify economic activities in these "single-product" regions in order to prepare them better for the new competitiveness required by globalisation. There has been an awareness of this for a long time, but it has so far failed to take shape in the form of real policies, which are far away from this solution.

All of this explains and justifies the anger and violence of the workers threatened by redundancy, because they know that job and welfare losses would be irreversible, since they would find it very difficult to change to another type of work due to their age and experience. (Faustino Miguélez, QUIT).