Management
and Union Relationship in a Global Economy- The Case of GNIC
Below are excerpts from a
presentation made by Mr. Clinton Williams CEO at a conference held by the Government
of Guyana/CAGI/ILO and the TUC at Ocean View Convention Centre on May
28th-29th, 2002.
WHAT IS GNIC?
On November
1,1995, Guyana National Industrial Company Incorporated a model joint venture
company comprising a Private Sector company Laparkan Holdings Limited on the
one part, and the Workers, Management and Unions of the then state owned entity
Guyana National Engineering Corporation Limited, assumed responsibility for the
operations and management of the newly privatized GNIC. The agreement entered
into with government was for a twenty-five (25) years lease of the
Infrastructural Facilities viz: Land,Buildings,Drydocks, Slipways and Wharf and
for the acquisition of the machinery and equipment , tools and certain
categories of inventories. The initial shareholding structure of the company
was 40% Laparkan, 40% by Employees/Unions and 20% reserved for Strategic
Investor to be identified . The company’s authorized share capital at
incorporation was set at G 150MN and its current shareholding structure has
since been modified to 60% Laparkan and 40% Employees/Unions.
The Company
can be categorized as a mini industrial conglomerate with the following as its
major areas of operations: Shipbuilding and Repairs, Port Operations
and Project Management.
The Company’s
vision statement is “Leaders in the
Industry we serve” and its mission is to “To optimize all business potentials in areas of Engineering,
Manufacturing and Shipping for the benefit of our Customers, Employees,
Shareholders, the communities in which we serve and the entire Guyanese
nation”.
PERFORMANCE HIGHLIGHTS:
The Company
made a 300% increase in annual turnover by 2001 with an operating profit
of G$20MN last year compared to losses
during the last year of performance of the predecessor company GNEC There was a
20% increase in Employment of the workforce from 233 in 1995 to 278 in 2001 and
correspondingly a more than 200% increase in wages and salaries over the
pre-privatization level.
The
resuscitation of the Apprenticeship and Trainee Skill development program has
resulted in the development of over 100 graduates excluding specialized
training for external agencies such as SIMAP, the Ministry of Youth Culture and
Sports and the recently established Guyana Training Agency (GTA) which together
has produced in excess of 150 Trainees to date.
Notwithstanding
the initial problems encountered in meeting our capitalization requirements, we
have progressively increased the net worth of the company by 250% to G$359MN over the period.
Correspondingly the Return on Capital Employed and Equity has moved from a
negative unit to 11.5% and 3%
respectively by 2001. Contributions to government’s revenue via lease
payments and
direct taxes amounted to over G$500 MN as at 2001.
GNIC have
also made substantial contribution to Sports and Culture in the form of the
development of National Cricketers and Footballers through the operation of a
Sports Club as both a training and leisure facility not only for our workers
and their families but the public at large.
UNION MANAGEMENT RELATIONSHIPS AND MAJOR
CHALLENGES FACED BY THE COMPANY
Traditionally,
there has been and continues to be two recognized Unions for the workers, The
Guyana Labour Union (GLU) and Clerical and Commercial Workers Union (CCWU)
representing the technical workers and wharf operators and clerical and
supervisory workers respectively.
The
objectives of Private Enterprises are somewhat diametrically opposed to that of
a Trade Union, in a typical business environment. The corporate and capital structure
of GNIC has attempted to circumvent this myth by the inclusion of both
stakeholders at the policy decision levels as the following composition
portrays:
National Engineering Company-Board of Directors Guyana Labour Union &
Clerical & Commercial Workers Union, 2 Non Management and 3 Management
Representatives
4 National
Engineering Company
Representatives
Guyana National Industrial
Company-Board of Directors 4 Laparkan Representatives, 3 Invited (Public)
The Vice
Chairman of Guyana National Industrial Company Incorporated Board has always
been a Union nominee, the late Mr. Gordon Todd former President of CCWU
followed by Mr. Carvil Duncan, Secretary of the GLU and current President of
the Guyana Trade Union Congress.
It follows from
the above that the Union’s involvement as a contributor in the formulation of
company policies and strategies, performance evaluation and control measures
has forced a conciliatory approach to decision making , particularly in cases
where unpopular and/or critical decisions were to be made.
GNIC had to fashion an
appropriate Industrial Relations climate consistent with the change in the
ownership of the company. One of the major difficulties to plague us, is our
inability to forge an effective attitude within the workforce, which is more
consistent in the display of workers dual role as a shareholder, as well as an
employee. The company recently formulated disciplinary procedures after over
five years of persistent efforts. In this practice, the Unions were involved in
the process every stage and the final arbiter is the Board of Directors.
Additionally, we have only recently completed a comprehensive Administrative
Practice covering the entire Human Resource Development spectrum, which is
currently under review by both Unions.
The absence of a capital market
in Guyana did pose a problem in garnering resources to fund the Employees Share Capital Issues. This situation has been somewhat reduced
with loan financing of an Employee Share Ownership Plan (ESOP) by Hand-In Hand
Mutual Life Insurance Scheme and by a recent government decision to offer some
incentive to allow workers to purchase shares previously allocated.
There exist
some problems with respect to the mechanism currently being used for the administration
for the workers share in GNIC. National Engineering Company (NEC) was
established primarily to own shares in GNICI on behalf of the workers. While in
principle this concept is laudable as a means of protection and/or guarantee of
workers rights as bonafide owners of share in the business, there are a number
of inherent weaknesses:
- The inability of the holding Company NEC to access investment
funds in the form of equity and/or debt capital should the need arise due
to unavailability of suitable collateral to secure such funds.
- The disadvantage of worth of NEC shares compared to GNIC itself
in the absence of a capital market as viewed by any financer as form of
collateral.
The continued
widespread misunderstanding by unionized workers with regard to fundamental
difference between an investment
(shareholding) versus a saving, particularly in the light of the company’s
inability to declare dividends during the formative years of its existence.
This has presented serious problems in the administration of dismissal
decisions for all categories of employees due to the following:
§
Right
to demand back investment funds with interest.
§
Refusal
to continue to honor their legitimate debt servicing obligations for the ESOP
loan with Hand-in-Hand.
THE NEED FOR A NEW RELATIONSHIP
Finally,
the Unions have not been sufficiently proactive in the identification and
pursuit of possible available funding sources, whether in the form of grants or
concessionary loans for “Worker owned
Business”, thus addressing the critical financing needs of the company. It
is known that there exist numerous financing windows at the level of
International, Financial Institutions and the Labor Organizations in addition
to Bilateral Fraternal and Affiliate levels. It is therefore essential that an
attempt be made to pursue these opportunities in an organized and sustained
manner.
I want
to emphasize that from a management perspective, issues such as improved
productivity; efficiency and competitiveness can only be realized if both parties aggressively strive to grapple
with minimization, if not the removal of the concept of paradigm paralyses in
the workplace. This would mean that the Unions must now become exponent of a
new relationship that go beyond issues such as conflict resolutions and strike
prevention, wages and salary and improved working conditions, but assume the
role as motivator, educator and negotiator encompassing such issues as market
identification and retention, customer satisfaction, quality, reliability and
delivery schedule adherence, financing sourcing, cost efficiency, profitability
and growth.
GNIC and
GTA in joint skills development program
The Guyana National Industrial Company Inc.
(GNICI) and Guyana Training Agency (GTA) has recently entered into a joint
partnership agreement to provide skills training to better serve the interest
of the private sector and the country as a whole.
The
program is sponsored by the European Union in collaboration with the Private
Sector Commission. Director of GTA Ms.
Denise Beresford said that, the Agency’s Motto is “Enhancing Skills for Development” and stated that, there
are other programs to be introduced shortly into the curriculum. GNIC’s
Training Motto is “Empowering ourselves for the future through knowledge and
skills”. GNIC’s focus on occupational skills development has been
resuscitated since the change of ownership of the Company. GNIC has already produced
over 100 Trainees/Apprentices in addition to a quantity of persons who were
trained for SIMAP. The Company therefore welcomes this particular partnership
with GTA given that these programs can have a positive impact on the National
Skill Deficiency Syndrome.
GTA was established in May 2001 primarily to
upgrade the occupational skills level within the private sector. This focus
differentiates these programs from that of GTI and GITC, in that, the skilled
employees currently employed by certain private sector entities will be
upgraded through exposure in advanced methods and techniques in their
particular discipline. Private sector organizations can have training courses
tailored to suit their specific needs.
GNIC
will be providing classroom instructions along with practical exposures in
Welding and Fabrication Level 2, Electrical Installation Level 1 and Air
Conditioning and Refrigeration Level 2 at its Lombard Street Complex. The
courses are of one and two month’s duration respectively.
GNIC
will also make available three of its staff members to be facilitators on this
program; they are Messrs. Grafton Bernard-Jones- Technical Training Officer,
Keith Crandon – Electrical Superintendent and Basil Alleyne – Senior Welder/
Fabricator.
The
programs are targeted for small groups of 15 or can be designed on request by a
Private Sector entity.
Potable
Water for Bath Residents
GNIC
and Guywa signed another contract in November 2001 for the drilling of a potable
Water Well at Bath Settlement to supply the residents of that area with water.
Project
Engineer Mr. Joshua Silwimba said there are four (4) other wells under
construction in Regions 4 and 10. This project is a virtual extension of a previous contract to drill
28 Water Wells in Region 2. This project has been completed to the satisfaction
of the Client, in that, 21 Wells were handed over to Guywa out of 28 wells,
which were initially contracted.
It
should be noted, that some 41 holes were drilled in order to develop the 21
wells. The contract provided both an exploratory and developmental focus. We
believe, that our overall performance rate on this project exceeded the success
rate associated with projects of this nature.
Guysuco
Awards GNIC Contract for 146 Cane Punts
Having been once again provided with the opportunity, GNIC
completed 215 sugar cane punts in 2000 for Guysuco under their 2000 Punts
Fabrication Program. The Company transported the finished products directly to
the locations at Skeldon, Rosehall and Blairmont via the utilization of its
marine transportation facilities.
Guysuco
has once again awarded GNIC another contract for the construction of another
146 sugar punts. The new work program is likely to begin at the end of March 2002
with delivery date at the end of June 2002.
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