- - Thursday, September 17, 2015

WARSAW, Poland — Thirty-five years ago it was a symbol of defiance of communist oppression. Fifteen years ago it appeared to be a victim of remorseless capitalist competition.

Today, the former Lenin Shipyards in Gdansk, where a rebellious electrician named Lech Walesa and his fellow workers helped give birth to the Solidarity movement, is a symbol yet again, this time of a flourishing Polish shipbuilding industry that has survived and unexpectedly thrived in a brutally competitive industry.

After the collapse of Poland’s socialist economy following the dismantling of the Soviet empire 26 years ago, the Gdansk shipyards seemed on the brink of bankruptcy, technologically far behind rivals in Europe and Asia. But despite today’s sluggish global economy, Polish shipbuilders have hired thousands of employees in recent years, bringing the $2.6 billion industry’s workforce to around 31,500, according to the Association of Polish Maritime Industries.

“I have been working in a shipyard for the last three years,” said Adam Wojcik, a grinder in Crist Offshore, a Gdansk shipbuilder. “This is a tough and very tiring work but surprisingly rewarding. I have a contract with no end date, which is rare nowadays in Poland. I am planning to buy a car soon, and only part of it will be covered by credit.”

Driving the growth is worldwide demand for the advanced ships that Polish shipbuilders now produce. Eschewing container and tanker ships that inexpensive Asian workers produce en masse, Polish firms have focused on oil rigs, specialized cargo ships that carry wood, chemicals and wind turbines and advanced ship repairs.

“We moved from producing big numbers of ships of low market value to manufacturing complicated, technologically advanced vessels,” said Jerzy Czuczman, director of the Association of Polish Maritime Industries. “Diversification and specialization of production is our main advantage.”

It wasn’t always this way. The former Soviet Union once accounted for almost 60 percent of Polish ship sales. The collapse of communism in the early 1990s nearly destroyed the industry. The big facilities — the Lenin site was renamed as the Gdansk Shipyard — laid off thousands of workers, gutting a way of life in northern Poland.

The global financial crisis seven years ago was another shock, with shipbuilding employment reportedly falling by half in just a year as global demand withered. The crisis, incidentally, coincided with revelations that the Polish government was giving the shipyards subsidies that were illegal under European Union rules.

Those subsidies reflected how Warsaw wasn’t addressing the competitive marketplace in shipbuilding, said Jerzy Tabor, a lineman who lost his job in the Gdansk Shipyard in 2008.

“For many years no one cared about the shipyard — its technological development, the safety of workers, new customers,” said Mr. Tabor, who has since retired. “Our company could not compete with cheaper producers like China, and no one had any plan for competing with the West.

“Politicians were only promising a great future for us, but the truth is they did not care,” he added. “They were simply afraid we would go out in the streets if we knew how bad the situation was.”

Privatizing push

In recent years, however, the Polish government has privatized most of the shipyards, forcing them to become competitive or perish. Today they export around 90 percent of their products to clients around the world.

Remontowa Shipbuilding is one of the best examples of the transformation. Established in 1945 by the Polish government, its 8,000 workers generate $600 million annually under private management. The company’s Gdansk Ship Repair Yard is one of the biggest facilities of its kind in the world, specializing in ship conversions — turning a conventional tanker into a shuttle tanker, for example — as well as repairs and new builds, from Canadian ferries to buoy tenders in Britain.

Remontowa now reinvests 30 percent of its profits into research and development, said the company’s chief executive, Andrzej Wojtkiewicz.

“The philosophy of the company and the industry is to find niches in the market and find ideas how to fill them,” he said. “We do not want to compete with China. They specialize in producing large ships, with their main advantage being steel processing. We want our products to have high added value, like technologically advanced systems.”

Not all the old jobs have come back — in part a reflection of the more efficient, more focused operational approach. The Lenin Shipyards employed over 20,000 workers. Today the docks employ about 2,000 workers, and Gdansk city officials earlier this month signed an agreement to create a new modern art museum on a portion of the old shipyard grounds.

Still, specialization has reaped dividends. Polish shipyard companies generated around $3 per kilogram of materials in the 1990s, said Mr. Czuczman. Today, a kilogram represents around $15 in value after construction.

Other privately owned, niche-oriented Polish companies are also doing well these days. Stocznia Safe in nearby Gdynia built one of the first hybrid electric-diesel tugboats in the world. Marine Projects, based in Gdansk, specializes in luxury sailing and motor yachts, custom-built for individual customers, and Sunreef Yachts, also from Gdansk, is a world leader in luxury catamarans. Vistal from Gdynia built a smart bridge for Copenhagen that adjusts according to the force of the wind.

Growth has improved labor relations in Poland too. There are almost no strikes among shipyard workers these days.

“We used to be the loudest in expressing our demands, just after the coal miners,” said Piotr Raczak, who works as a welder in Remontowa Shipyard. “We have the work, and we get decent money.”

“Prospects for the future are good too — new contracts signed by the company assure us that our jobs are stable,” he added. “No one is talking about crisis anymore. The company is hiring, so people don’t need to search for work abroad.”

Not all the yards are experiencing success. Around 200 miles away from Gdansk, the shipyard in Szczecin bounced back from the collapse of communism, but then went bankrupt in 2002 and laid off 6,000 workers. The Polish government then renationalized the facilities. Today Szczecin is in the process of liquidation.

“The main problem lies in politics,” said Mr. Czuczman. “The managers were politically appointed and therefore care more about satisfying politicians than about bringing profits and winning new markets in the post-communism reality. The company’s assets were not used optimally.”

The government’s role in shipbuilding has always been a hot topic in Polish politics, from the days when Mr. Walesa, then a dissident trade union activist, was agitating against communist leaders on the docks in the 1980s, up to when he became the first directly elected Polish president.

In May, when he was a candidate running for office, President Andrzej Duda waded into debate over the shipyards, calling for the country to revamp the industry.

“A nation of 38 million, living in one of the largest European countries, with a long coastline, even for strategic reasons, cannot afford not building ships here at home,” Mr. Duda said last month at an event celebrating the anniversary of the Gdansk Agreement, a deal between protesting shipyard workers and the then-communist government that led to the creation of Solidarity on Sept. 17, 1980.

But shipyard managers said politicians like Mr. Duda can often misunderstand the market.

“If someone in Warsaw says that Poland does not build ships, that is true,” said Mr. Czuczman. “We do not build ships. We mainly produce vessels that are more advanced than ordinary ships. In the ‘90s, we sold tons of steel in the form of ships. That’s a thing of the past now.”

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