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Poland: On The March Again In Gdansk (Int'l Edition)


International -- Int'l Business: POLAND

POLAND: ON THE MARCH AGAIN IN GDANSK (int'l edition)

The shipyard's bankruptcy has Solidarity seeing red

`All I want to do is retire. I've seen this mess [go on] too long," says Stefan Lodzinski, 55, a Gdansk shipyard electrician. He's one of the 5,000 Gdansk workers forced to take a two-month unpaid leave starting June 20. That's when the Polish government, which owns 60% of the ailing shipyard, forced it to file a bankruptcy petition.

This mess won't go away anytime soon. The fate of the shipyard--the birthplace of the Solidarity movement--is now a hot political issue for President Aleksander Kwasniewski, who heads the Democratic Left Alliance party (SLD) of former Communists. On June 21, the Solidarity union organized a march in Warsaw to protest the bankruptcy. The union is also trying to block the bankruptcy in court. Union officials claim they have found an investor who might save the yard--but will not provide details.

These actions will test the resolve of the Kwasniewski government to push through tough restructuring. Solidarity founder Lech Walesa, who lost the presidential election last December, shied away from cutting off subsidies to the worst corporate performers. But to prove that the SLD is serious about reform, the Kwasniewski government has vowed to administer a stiff dose of free-market economics to the state companies that need it.

So far, the SLD has announced it will shut down 18 money-losing coal mines. Yet other daunting tasks remain. One example is the state-supported Bank for Food Economy (BGZ), now in disastrous shape after an unrestrained lending spree to farmers. SLD officials want to reorganize the bank but face opposition from the Peasant Party, a coalition member of the government and an advocate of easy credit for farmers. Says Kwasniewski, "The restructuring of Polish industry is a much broader issue than the Gdansk shipyard."

The SLD might have to back off from these delicate tasks if it mishandles the situation in Gdansk. June opinion polls show that support for the SLD has slipped from about one-fourth of the electorate a year ago to some 18%. To erode SLD support further, Solidarity officials are charging that the shipyard closing is a nasty act of political revenge.

MAJOR LOSSES. The government's response is that the yard's executives were poor managers who won contracts with low bids that ignored high labor costs and inflexible work rules. Thus losses can run as high as $7 million on every ship built. Recently the union came up with a proposal that would save 5,000 jobs out of 7,000. But Privatization Secretary Wieslaw Kaczmarek rejected it as unrealistic, favoring instead a plan to lease the yard to a new company that will keep on only 2,500 workers. "Applying more Band-aids--subsidies and special protections--can be dangerous for both sides," he says.

Kaczmarek also points out that Solidarity workers at two other major Polish shipyards, in Gdynia and Szczecin, have cooperated in restructurings that have restored the yards' competitiveness. Ex-Communists pointing to profits? Poland really has gone through a revolution.By Peggy Simpson in Gdansk


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