Historic shipyard feels effects of globalization

Historic shipyard feels effects of globalization
EU demands that Poland stop subsidies in Gdansk


By VANESSA GERA
Associated Press

GDANSK, POLAND — The giant green cranes still tower over the shipyard where Lech Walesa and his Solidarity movement launched the peaceful anti-communist revolt that electrified the world in 1980.

But that moment in history is doing little to save the aging facility in Gdansk, despite the enormous national pride it evokes in Poles.

Today, the cradle of Solidarity is struggling to stay alive.

The European Union demands that it give up state subsidies, and there are accusations of political meddling by the Polish government.

Workers in dirty overalls still weld and paint the hulking commercial ships, but output has shrunk drastically. Only 3,000 people toil at the place that employed 17,000 in its heyday.

Some Polish officials warn that the pressures threaten a shipbuilding industry that has flourished for centuries on this northern coast.


1980 strike
The Solidarity trade union emerged from a 1980 strike at what was then called the Lenin Shipyard. The strike and Solidarity's recognition by the government led to an ultimately successful effort to undermine the Communist regime, which collapsed in 1989-90.

Walesa, a former electrician at the shipyard, has called its struggles a personal blow.

"The shipyard, where all our victories were born, was left to face its own fate," Walesa told the Dziennik newspaper.

The yard has become one more in a series of battlefields between the EU and Poland, which has proven to be the bloc's most assertive new member under its conservative and nationalist leaders, President Lech Kaczynski and his twin brother, Prime Minister Jaroslaw Kaczynski.

The European Commission has said the government must either work out a restructuring plan for the yard, or have it return millions in state subsidies received since Poland joined the 27-member bloc in 2004.

Andrzej Buczkowski, vice president of Stocznia Gdansk, the state-controlled company that runs the shipyard, said the government has paid $11.5 million in aid to keep it afloat since Poland joined the EU in 2004. The EU says the figure is $68 million.


Against EU rules
According to the EU's competition rules, governments are not allowed to keep businesses afloat that would fail on their own. The EU has called for the Gdansk yard to reduce its capacity by closing two of its three slipways, the broad platforms next to the sea where the ships are assembled; Poland wants to keep two.

Closing three "is too much — the price would be too high," Buczkowski said. "This would mean the end of the Polish shipbuilding industry."

The problems at the Gdansk shipyard are often blamed on growing competition from Asia, where wages are lower.

But Buczkowski said that is only a small part of the problem. Internationally, shipbuilding is booming and Poland could cash in thanks to know-how and skilled workers — but first its state-controlled shipyards would need to be modernized, something that Warsaw has failed to do.


'A seller's market'
For shipbuilders, "this is a seller's market. For the first time since the Second World War, the shipyards are deciding if they want to build for someone or not because there is such a queue of customers, such demand," Buczkowski said. "But while it is booming and blooming in the world, the Polish shipbuilding industry is in such a misery as it never was."

The best way out, he said, is for the shipyard to be privatized — a step that Warsaw is planning. Potential buyers are Ukraine's Donbass, which already has a 5 percent stake in the company, and Italy's FVH.

The government has resisted deep restructuring due to the nostalgia that surrounds the site and out of fear of cutting jobs amid Poland's high unemployment.