Could a self-governed workers’ movement boost Croatia’s dying shipbuilding industry?

Could a self-governed workers' movement boost Croatia's dying shipbuilding industry?

The Treći maj (Third of May) shipyard is located in the Croatian city of Rijeka, and along with the Uljanik shipyard, it forms part of the biggest shipbuilding group in the country. Its workers have engaged in several strikes over unpaid salaries this year.

(Jelena Prtorić)

“We don’t expect much from anyone,” said Marko Alviž, a worker at Croatia’s biggest shipyard, Uljanik, at the beginning of November. At the time, he and most of his 4000 fellow workers were still waiting for their September salaries. The level of optimism amongst the workers was low.

Alviž has worked in Uljanik, located in the north-western city of Pula, for the past 14 years as a ship technician. This November, for the third time this year, he and his fellow workers downed tools over unpaid salaries. One of the previous strikes took place in August and mobilised some 4500 workers from the two shipyards of the Uljanik group: the Uljanik shipyard and Treći maj (Third of May), located in the city of Rijeka. In January, a small number of workers, including Alviž, went on an unauthorised strike for a few days in January when their salaries were late for the first time.

Back in August, workers took to the streets to claim their unpaid wages while calling for the management to step down. Their demands were eventually answered: the workers were paid, and at the end of October, Uljanik Group chairman Gianni Rossanda resigned.

Rossanda was seen as a symbol of all that is wrong with Uljanik: while unpaid workers struggled to feed their families, the media published details of Rossanda’s big bonuses and photos of his luxurious villa.

Uljanik was floated on the stock market in 2012, and its workers were invited to purchase shares. Workers’ and small shareholders eventually got to own 47 per cent but had very little say in decision-making. Then, “two separate entities were floated, the smaller of which did well on the stock market and remained profitable, whilst the larger entity crashed,” wrote Andrew Hodges from Leibniz University in his research paper Workers’ narratives of blame and responsibility during the 2018 crisis of the Uljanik shipyard, Croatia. Hodges notes that Croatia’s accession to the European Union in 2013 complicated things even further. “The extent of the shipyard’s requests for state financial support and guarantees conflicted with EU competition law”.

Although last January the European Commission cleared Croatia’s state guarantee for a loan worth €96 million to help the shipyard stay afloat, state subsidies clearly didn’t represent a viable long-term solution. Thus the shipyard was pushed towards a ‘restructuring’ process in late 2017, in a bid to find new strategic partners and in desperate search of a bailout.

Shipbuilding industry as a pride of the socialist state

It wasn’t always like this. Uljanik was founded in 1856 as the main naval base of the Austro-Hungarian empire, and it endured throughout various states and regimes. During the Second World War, it served as a German naval base and was bombarded by the allies, but it was rebuilt in 1947.

During socialist Yugoslavia, Uljanik excelled in the construction of all sorts of vessels, from product carriers to tankers to container vessels. Thanks to the shipyard’s activity, the city of Pula grew, attracting workers and their families. Very often, several generations of the same family worked in Uljanik.

Shipbuilding was a point of Yugoslavian national pride. It was not only one of the most important industries in the country, but globally, Yugoslavia was home to the third largest shipbuilding industry in the world, after South Korea and Japan.

Shipbuilding was also a key symbol of the working-classes in the young socialist state. Josip Broz Tito, the president of Yugoslavia from 1953 to 1980, himself worked as a machinist and trade union activist in the Kraljevica shipyard on the Adriatic Coast in the 1920s. The shipyard eventually stopped all its activities and entered into liquidation in 2012.

The golden era of Yugoslav shipbuilding came to an end in the 1990s as a result of the war that followed the breakup of Yugoslavia, and the subsequent transition to a market economy.

Today, there are only five shipyards left in the country, with the Uljanik Group managing two of them. However, Croatia’s shipbuilding sector is still an industry of national importance. According to figures from the Croatian Shipbuilding Corporation, shipbuilding creates between 2 – 5 per cent of all jobs in Croatia (a figure that jumps to 10 per cent if you include subcontractors), contributes between 0.8 – 1.8 per cent to Croatia’s GDP, as well as 10 – 15 per cent of the country’s exports.

However, the importance of shipbuilding to the Croatian economy is minor when you compare it to tourism, which accounts for almost 20 per cent of the national GDP. So it should come as no surprise that Uljanik’s former management was ready to sacrifice the shipyard for the sake of tourism real-estate investors, according to Đino Šverko, a trade union representative from Sindikat metalaca Hrvatske – Industrijski sindikat (The Metalworkers’ Trade Union of Croatia).

In spring of 2018, the Croatian tycoon Danko Končar of the Kermas Group emerged as the likely new owner of Uljanik. This caused great concern amongst workers as Končar’s previous takeover of the Brodotrogir shipyard on the central Adriatic coast led to unpaid salaries and unexpected layoffs.

“First there was a talk about the construction of a marina, about transforming Uljanik into a shipyard for [the construction of] some sort of mega yachts,” Šverko says. Then, he claims, the former management tried to push forward another plan, which included transforming the Arsenal – a part of Uljanik located not far from one of the Pula’s best known attractions, an ancient Roman theatre – into prime real estate where Končar (who already owns several luxury hotels and large portions of land in Pula) would eventually build a cluster of high-end hotels.

At the time, Šverko was a member of Uljanik’s supervisory board, but he left his position in September. In doing so, “I was trying to draw attention to the fact that, if we want to save Uljanik, we shouldn’t be doing so by entering the real estate business,” he tells Equal Times.

Workers self-organisation as a response to trade unions’ passivity

For some, Šverko’s resignation came too late. He and other trade union representatives have been criticised by some workers for colluding with the management and for failing to stand up for workers’ rights.

“The workers weren’t getting enough information from the trade unions. And yet, they had their guy in the supervisory committee,” says Alviž, the ship technician. “And in January, when the salaries were late for the first time, two out of three trade unions present in the company voted against the strike,” he says. Along with three other workers who participated in the unauthorised strike in January, he created an informal workers’ association, Stožer za obranu Uljanika (Headquarters for the Defence of Uljanik), on 28 February 2018.

“We were amateurs. We didn’t really know what we were doing. We were just trying to get more information about what is happening in the shipyard and share it with other workers. So we created a Facebook page and we started distributing the flyers with the information we gathered,” explains Alviž.

The Stožer’s actions were largely inspired by similar self-organised workers’ movements in Croatia from the 1990s onward, where some more traditional trade unions were perceived as ineffective or even cooperative with the management.

The popularity of the Stožer skyrocketed after the August strike where they received widespread support from the workers, the general public, and sympathetic media coverage. Today, the association works closely with one of the three trade unions present in Uljanik, Jadranski sindikat (the Adriatic Trade Union), and Alviž says that “they enjoy the support of the majority of workers”. When asked about the rumours that Stožer is linked to local political parties and that it tries to endanger the trade unions’ position in the company, he describes them as “nonsensical” allegations. “The four of us [founding members] are apolitical. We are not representing any political party. We are here for the workers, as we are workers as well,” Alviž insists.

As the associations’ popularity grew amongst the workers, the members of Stožer started to get invitations for meetings with the management. Samir Hadžic, a warehouse worker and one of the four founders of Stožer, is now on the supervisory board.

But despite Stožer’s success in Uljanik, the movement failed to gain momentum in Treći maj shipyard in Rijeka. Zlatko Koršoš, who has been working in Treći maj for the past 29 years, describes the moment in 2013 that Treći Maj was bought out by the Uljanik Group as the beginning of the end. “Many people have left the shipyard, many of them went to look for work in Germany or Italy,” Koršoš says. According to Šverko, some 1000 workers have left both shipyards since the beginning of the year.

“We invested in the education of these people, we taught them the necessary skills, and then we let them go to work in foreign shipyards,” he laments.

For the moment, the two shipyards will remain a part of the Uljanik Group, but the future doesn’t look bright. During the August strike, the shipyards received several contract cancellations, which has basically left the Group with no new ship orders.

The workers’ most recent strike yielded positive results in mid-November when the money for three months of salaries finally got secured. However, restructuring talks with the Kermas Group seem to have hit a dead end. At the beginning of December, Končar confirmed his interest to remain a strategic partner of the Uljanik Group, but without financially supporting the shipyard, which workers deemed unacceptable, reported local newspaper Glas Istre on 3 December. As people prepare to celebrate the new year, it looks like Uljanik’s shipyard workers are bracing themselves for another strike.