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           Shipping Stevedoring Port Services Hydrocarbons Diving  May-Jun 2008        |
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Address by MUA National Secretary John Coombs
Address by MUA National Secretary John Coombs Australian Institute of Management 1998 Annual Conference(16/10/98): Getting it Right: Changing the Rules of Management Managing Their Way .... Patrick has a way with people... his way or else.' So says the poster/flyer promoting the Australian film PATRICK... a suspense thriller staring Susan Penhaligon, Robert Halpan and Rod Mullinar. It could well be an advertisement for PATRICK: The Australian Stevedores for it certainly well illustrates its peculiar management style. The irony did not escape a local film buff who sent the poster to National Office at the height of what became known in popular culture as the war on the waterfront in April, this year. I have been asked to talk today about management... Managing Their Way... in the light of the recent waterfront debacle. and I start by talking about his way, Corrigan's way... Patrick's way... before looking at an alternative style of management with proven results both here, and, according to a recent overseas study, in the US. The alternative is a style of management very compatible with my way of doing things which I will also speak of at length. But back to the Patrick film poster, which illustrates so well the management style of Patrick Stevedores: What exactly then is the Patrick way of doing things? Does it work? and... Why, exactly, does the Government back it as Howard's way of industrial relations. The Patrick dispute certainly does have all the ingredients of a major thriller.... industrial mercenaries in exotic Middle Eastern settings shock troopers and commandos political manoeuvrings intrigue and conspiracy tapped phones sleek black dogs on the docks, balaclava clad guards... Images that will haunt Australians for generations to come Disturbing images but, at the same time images that made for great television, a good read, and, no doubt will some day make a Hollywood blockbuster. But while having all the drama of a box office success will the Patrick dispute really help make our waterfront more productive and more efficient? Has Patrick's radical bending of all the rules of good management helped change anything on the docks other than the Patrick bank balance? I think not. For over a decade Indeed ever since the Labor Government finalised its version of waterfront reform the Bureau of Transport and Communications Economics has been examining waterfront productivity in its quarterly publication Waterline. For commercial considerations the average company crane rates of ports, not individual terminals are listed but for those of Sea-Land which is the only stevedoring company operating a container terminal in the port of Adelaide. For two years now Since September 1996 the relatively small enterprise at Sea-Land has topped all ports for productivity measured by the number of container lifts per crane per hour. Strikes have been non-existent, business has been booming, recruitment, rather than redundancies, has been the order of the day. The Productivity Commission publication Work Arrangements in Container Stevedoring, the bible of the Howard Government, noted in its April report, this year that Sea-Land alone did not fit the bleak picture of poor productivity and poor workplace culture that Patrick and the Government used to legitimise changing all the rules on the waterfront. The report says : "Sea-Land's workplace culture stood out among the Australian stevedoring workplaces examined. Sea-Land Adelaide is characterised by substantially more positive management and employee relations and good communication..." This they attributed to three factors -
A good example is the port of Brisbane where Patrick and Sea-Land operate almost side by side. The other Sunday management at Patrick, Fisherman Island ordered the labour to do a four hour shift extension. But when the workers asked if one bloke could hop in a car and get some food for everyone 15 kilometres down the road before they worked through into the night the answer was a curt no. Little wonder the workers told him what he could do with his 4 hour extension. Compare Sea-Land On that same Sunday management asked the labour to work back two hours. As it is a a fair hike to the shops he then jumped in his car drove down the road and bought $60 of pizzas and softdrinks back to the smoko room. But that's not all. As the labour was working through until late that night he told them not to worry about a 7am start, they could come in at 8 the next morning. At Sea-Land the labour are recognised as human beings. Management listens to its workers Shares information with them Favours co-operation to the military style confrontation that has been the hallmark of Patrick management. In the words of our Adelaide branch secretary also recorded in the Productivity Commission report: "the general manager (at Sea-Land) brought the team together, he went out of his way to get work for the terminal... he instilled confidence in the workforce, there would not be a week go by when he doesn't walk in the smoko room to talk to people." The Productivity Commission report quotes Sea-Land ceo Andy Andrews as follows: "We took a different approach. We listened. good communication is 50 per cent listening. I had a lot to learn. Management is a learning process. You can't go by the book... At the end of meetings we have financial presentations of performance and anyone can go along. it's open to questions, scrutiny, costings, whatever. all the rumours are thrown on the table.." In short workplace democracy is alive and well at Sea-Land Australia. Far from blaming and berating his workforce for poor productivity compared to Sea-Land terminals elsewhere in the world, management analyses why there is a discrepancy He notes different conditions, the lack of computer stowed vessels, full exchanges of cargo, programming of portainers. Arm in arm, union and company representatives visited the top Sea-land terminal in Hong Kong which had nearly double the productivity of Adelaide. They talked. They listened and they implemented changes that added an extra 3-4 boxes an hour to crane productivity almost overnight... Without going to the commission much less the courts Without dogs, industrial mercenaries, corporate restructuring scams, mass sackings. Without spending millions of dollars in taxpayers' money on secret plans or government loans to buy out workers. Remarkable? a fluke? an exception to the rule? Not at all. A recent US study reported in Scientific America magazine August, 1998 edition draws much the same conclusions Indeed, the study found that the most productive enterprises were achieved at unionised workplaces. It found productivity was highest where unions and management co-operated and worked together. When this was not the case productivity plummeted. As this is a new study I will risk boring you, by going into more detail. This new analysis of economic data this nationwide US survey shows that productivity is the hallmark of unionised workplaces. Lisa M Lynch of Tufts University And Sandra E Black of the Federal Reserve Bank of New York believe the new catchcry may well be unionise or perish. Economic Darwinism, the survival of the fittest, championed by hard nose tycoons, could well put an end to autocratic bosses and regimented workplaces. For the first time solid data is available on which management techniques work and which don't. The US Census's Education Quality of the Workforce National Employer Survey first conducted in 1994 collected data on business practices from a nationally representative sample of more than 1500 workplaces. Lynch and Black correlated the survey data with other productivity statistics. They compared non union companies with limited profit sharing and without formal quality enhancing methods to the average unionised establishment and found that the average unionised establishment recorded productivity levels 16% higher than the baseline firm whereas average non union companies scored 11% lower. That's a 27 % productivity plus for the union shop. The reasons? Most union shops adopt formal quality programs where workers discuss workplace issues share in firms profits and do their jobs in self managed teams And just in case you think the high productivity is due to management performance not unionisation Lynch and Black prove you wrong. Adoption of the same methods in non-union establishment only yielded a 10 % improvement in productivity. The gains were double in well run union shops. The moral of the story? Unions may well be the panacea for companies wanting to break out of the productivity doldrums. I must add, however that the research also found that unionised workplaces still following the adversarial line recorded productivity 15 per cent lower than the baseline a result even worse than that of the average non-unionised workplace. This is essentially the Australian experience. In its summary of findings on workplace culture on the Australian waterfront the Productivity Commission report concludes and I quote: "Adversarial relations between management and employees pervade most of the Australian container stevedoring workplaces examined. This is manifested in:
Sea-Land, however, was the exception to the rule... Sea-Land management listens to the crane operators and take up their suggestions. Workers listen to the company financial reports the budget, the return on investment and the reasons for stevedoring contracts being either won or lost ... And many more have been won than lost. There have been no serious accidents Port productivity continues to go up costs go down Old equipment including cranes dating back 30 years works around the clock with only 1 per cent downtime compared to as high as 15 per cent in other ports. Why? because Sea-Land listens to its workers and does regular maintenance on its equipment to keep it working. This is in stark contrast to how things have been going at Patrick:- Strikes, go slows, falling profits A record low crane rate Record deaths Indeed Patrick boasts the only two work deaths on the Australian docks in the past year. As if Patrick is gambling on a miser hand in the stevedoring game. Far from a New Age caring, sharing manager the SNAMs if I can coin a phrase at Sea-Land Patrick chairman Chris Corrigan has been described in the media variously as... "bloodless and aloof"'and "A rotten liar" Far more colourful language but not language suitable to this venue is used to describe him on the docks. Even Mr Corrigan's lieutenant from Bankers' Trust Rob Fergusan told the SMH's Good Weekend magazine recently that Mr Corrigan's people skills are deplorable ... an observation borne out by Mr Corrigan's fantastic outburst at an international cargo-handling conference in Sydney, this May where he threatened to replace his workforce with robots! Yet, for what can only be ideological reasons the Government still holds up Patrick as the model stevedore and model management which all others should emulate. The Minister for Workplace Relations says he is delighted with the results Patrick has obtained and urges other companies to follow suite. You may (have) hear(d) today Mr Corrigan insisting that there was no other way than his way and that he alone has got results. That it just was not possible to achieve reform any other way. I disagree And I am in good company when I question Patrick's management style. Some of our leading minds and most eminent people over 100 including Desmond Tutu, David Suzuki, Dorothy Hewitt, Mark Tonelli, Jack Thompson, the list has been published. As well as Academics, exporters and management consultants not to mention Federal and High Court judges and Frank Costigan of royal commission fame have all questioned the wisdom the ethics and the legalities of the Patrick model. We had a petition of 1000 academics condemn the lockout Actors, artists, writers, even church leaders swelled the ranks of the community assemblies. As Professor Stephen Deery, University of Melbourne told ABC Radio on July 1 a management strategy built around trying to suppress or defeat a union is divisive There are much more preferable routes to improving productivity and performance. Insiders Defectors from the Patrick camp tell horror stories of poor management on the ground. Gabrielle Gouch a consultant in productivity improvement with a Masters degree in chemistry and PhD in Applied Science once worked at Patrick measuring efficiency. She told ABC Radio National (on May 17) that according to her detailed on the job analysis just about everything except the crane operator determined how fast boxes could be moved on or off a ship. Professor Peter Turnbull, University of Cardiff on ABC TV's Lateline earlier this year explained the UK and NZ experience of de-unoinising the waterfront only served to encourage cowboy operations fly by nighters. Certainly, there are savings on labour costs Admittedly, so But in the UK and NZ experience this does not necessarily flow on to port users (LateLine February 20). Dr Clive Hamilton from the Australian Institute in Canberra did ground breaking research based on formulas devised by Drewry Shipping Consultants in London and was even able to convince wharfie bashing commentators like John Laws that low productivity wasn't all the fault of the workers. Patrick shipping supervisor Alan Knight went one step further, laying the blame at the feet of senior management He made news on February 27 when he announced he had resigned from the Patrick "in disgust" because of a failure by management to address day to day operational and maintenance problems. which caused long delays in shipping. He said he was "fed up". You may also remember just before the mass sackings - the lockout of April 7 - the Australian Peak Shippers' Association blasting Patrick management Frank Beaufort actually called for Patrick and I quote "to get out of stevedoring." He told ABC Radio there would always be problems on the Australian waterfront so long as Patrick remained in the industry. Chris Corrigan was he said "a finance guru" who knew nothing about shipping. The management style of Patrick and Sea-Land could not be more different. Here we do not have the new age caring and sharing employer, but a former banker described in a feature in The Australian as a man who developed his management style on a nearby farm by exercising the awesome power as a pubescent boy firing other kids he considered did not work hard enough. Not only can Patrick be accused of being autocratic undemocratic and unproductive... The term bad management took on a whole new meaning when the union took the dismissal of its members to the Federal Court accusing the company of being in breach of the law. Justice North in his April 21 decision found an arguable case on the evidence provided that the cancellation of the labour supply contract, the appointment of administrators, the complex intercompany transaction which led to the lock out of over 2000 employees on the night of April 7 was done merely because the hapless workers were members of a union the Maritime Union Action in breach of the Workplace Relations Act and a breach of employees contracts of employment. Justice North also found evidence And I quote... "That the Patrick owners and other companies in the Patrick group, together with others, agreed on these unlawful acts as part of an overall plan to replace the workforce with non union labour. "This means that there is an arguable case that Patrick owners and Patrick employers have engaged in an unlawful conspiracy." Justice North stressed that the Workplace Relations Act protected the individual rights of employees to belong to a union if they so choose and that the court should perhaps be more ready to protect such rights than merely financial interests. As subsequent events were to prove 9 judges including 6 High Court judges essentially agreed with him. Let me stress 10 out of 11 judges in the highest courts in the land found Patrick guilty of bad management in the most literal sense of the word. So why the Patrick model? Well you may ask. The government ignored the court rulings the academics the Patrick defectors the groundswell of public opinion. It dismissed the Sea-Land model Any such references in the Productivity Commission was buried towards the back as was the analysis of factors influencing productivity outside the control of unions or management. It laughed off the Drewry formula and it dismissed the findings of the Australia Institute outright. Instead, Government spin-doctors went on and on about big bad unions. As did Patrick. My argument is this.... in our world of globalisation social costs are rarely factored into the equation. Management should have as much to do with morals, ethics, justice and democracy as it does with profits. Companies now have more clout than nation states In 1996, the top 200 multinational companies had combined annual sales bigger than the combined economies of 182 of the worlds 191 economies (Anderson and Cavanagh). One of the contradictions of business is that while free enterprise is sometimes made synonymous with free world with democracy. Company directors and CEOs unlike union representatives, unlike politicians are not elected and are increasing left to dictate not only their own terms but our lives our communities even our parliaments. "Industrial democracy" once a buzz word is no longer in vogue. In a recent speech at this very institute co-author of The Global Trap Dr Hans Peter Martin pointed to financial markets as the driving force behind downsizing. Dr Martin asserted that while companies are making record profits world financial markets are now a greater danger to world stability than nuclear weapons. "They not only tell us as shareholders what to do they not only tell companies what to do, they tell governments what to do" Dr Martin said. He warned of the 20:80 society of new technology requiring only 20 per cent of the worlds' population to produce all our goods and services while 80 per cent are abandoned are the untouchables living in crime and disease infested ghettos. And the social consequences are already becoming obvious. Dr Martin tells us that California now spends more money on its prison system on security systems on keeping people away because they are not needed than on education or health. You see there is something that Peter Reith and I have in common. We both stand for election we are answerable to our electorate. Sometimes I would like it to be otherwise I must confess. An Australian political system without the conservatives would make my life much easier as would skipping next year's union ballot. No doubt Patrick managers enjoy freedom from the electoral process No doubt they would like companies without worker representatives But this is democracy So why stop at the factory gate? Why stop at the boardroom door? Despite all the evidence to the contrary Patrick chairman Chris Corrigan still claims his way is the only way His way has been a great success. And in some ways he is right. Patrick fortunes are now on a high. Despite paying millions in court costs and damages Despite poor relations and antagonisms persisting at all Patrick enterprises. despite having to fudge the figures and re-invent the equation for measuring crane productivity to get results, Mr Corrigan, former merchant banker can boast that the cutbacks in labour about one in 4 workers if you count the casual employees have yielded wonderful results. Yes, Mr Corrigan can boast to his shareholders $40 -$50 million annual savings in labour costs - enough to recoup all his loses from his multi-million dollar failed Dubai training debacle court costs and damages the public relations disaster loss of business and damage to equipment caused by his ill trained, inexperienced, non union workforce He now boasts he will recoup these losses in less than one year. BUT there has been no serious talk of lowering stevedoring costs for port users or faster vessel turnaround times for ship owners or better communication and democracy and safety on the job for workers only the hollow boast of higher profits and greater unemployment reflected in market confidence and higher share price in Lang Corp parent of Patrick Stevedores. So what? I hear some say. What is wrong with that? he got results he made profits shareholders will benefit and productivity is in most ports better than before. Could it be the academics, the US report, the Productivity Commission, the courts are all wrong. Could it be I'm wrong. Australian ports could become more efficient and less strike prone, Patrick's way. But at what cost? Mussolini may well have made the trains in Italy run on time... But that is not what history will remember him for. War on the Waterfront articles
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