SR Technics jobs massacre – Joe Higgins Demands Re-nationalisation

by Sceptic Wed May 20, 2009 21:15

If its profit making it should be possible to get a buyer for it or to buy it yourselves - if it’s such a sure bet why not? Otherwise set up a new firm to harvest all this profit. There are no barriers to entry this industry and enterprise would be attracted if there is really profit making potential. However it important that risk capital is provided by the business owners whether that be a traditional ownership structure or a co-op. Not by the State where it would be frittered away for sure and then political pressure applied for more on a continuing basis no matter how weak the business case. That would be a B&I Line scenario. Its also vital to realize that its not necessary worth keep this business going at any cost. One can measure the social costs and benefits but there will be a low inflection point where it is not worth risking state funds.

But the real problem here is the legacy IR issues I suspect. That is why Shannon Aerospace s thriving and these problems come up in Dublin.

by Left Tue May 19, 2009 17:45

Can our right wing ideological friend "Sceptic" please pull himself out of his academic view of competition and join us in the real world. SR Technics is a profitable firm. Surely it's in all our interests to keep it going and then plough profits into health, educaiton, transport and other services?

"Sceptic" prefers to see hundreds of skilled workers thrown on the dole and our services loose out.

by Fergal - none Mon May 18, 2009 22:40

Septic is right there is a clear difference between a workers' cooperative and a nationalised firm.As I introduced the idea into the debate I deliberately suggested state funding as raising "capital" is one of the major difficulties facing cooperatives.Ideally the money should come from the workers and the larger trade union movement but it was a tongue in cheek comment.Surely about 0.5% of the 7 billion given to so called private banks could get the ball rolling at SR Technics,is that 35 million euros?
Don't really get the new owners having "no incentive to be commercial" as owning and running your own firm should be incentive enough.As for not "having experience of running such entities",hard to give this much credence as the current owners,I imagine,consider themselves experts but as Septic himself suggests their expertise has led the firm to the wall.
Nationalisation v privatisation that old chestnut!Sincerely believe there is a third way .... worker run cooperatives with public services run by workers and users.
A few thoughts,,
The French railway system(SNCF) seems more efficient than the British one yet it is still state owned.
What does this prove or show?
It is estimated that following the privatisation of water in England thousands were cut off from the water supply(failure to pay) thus being denied access to clean drinking water...a fairly simple if fundamental human right.
Closer to home the ESB recently announced that it was going to create thousands of new jobs while Eircom is to seek redundancies.Which firm is privately owned?

by Sceptic Mon May 18, 2009 20:49

Obviously there is a mixed social market economy, regualtion as to standards, consumer protection and the like, the law of contract and the primacy of law in general. There is a perfectly respectable case for the public ownership and provision of health and other essential services. But taking failing private sector firms which are not providing such services and where other firms are providing them adequately is not sensible. That approach to industrial policy has been empirically tested over decades and found very wanting. It is an apparently easy and populist solution to put forward by far left agitators and academic malcontents but it has no objective support outside of these circles for this or related sectors.

by Sceptic Tank Mon May 18, 2009 13:13

"The market is, broadly speaking, an efficient means of exchange – to describe it as “anarchistic” as Joe Higgins does and as the likes of Trotsky did before him is really to argue for a command economy where a central political authority decides on allocations of wealth according to its own expediency. One could just as easily argue that democracy in anarchic, as Trotsky also did, and thus a strong communist party dictatorship is required to avoid leaving the big political issues to the free play of “anarchic” political groupings and the whimsy of volatile voters. We know where that idea led to."

So there you have it - either we allocate all goods and services through market mechanisms, or we are on the way towards a centrally planned economy where "a central political authority decides on allocations of wealth according to its own expediency", i.e a communist dictatorship.

Hang on a minute though - in many European states, health care is provided by a free public health service, with no input from the market - access to health care isn't based on your ability to pay, it's based on your rights as a citizen. Is that a step towards totalitarian dictatorship? Or a popular, common-sense approach that works vastly better than health care systems based on private provision, such as the truly "anarchic" American system?

So already it seems things are a bit more complex than Sceptic will allow - some forms of public ownership work very well and have strong popular support, well beyond the ranks of the Socialist Party and similar organisations. There are some things that nobody wants to leave to the "anarchy of the market" (except Mary Harney, I suppose). Whether or not public ownership is a good model for SR Technics or other firms is open to debate, but we can put the "public bad, private good" argument to bed, nobody really accepts it and it has been totally discredited by the collapse of the private banking system (not surprising that you should want to cordon that off and not allow it to raise any questions about the merits of private enterprise, but it won't be so easy to stop people asking those questions after private enterprise has given us the biggest crisis since the 1930s.

by Sceptic Mon May 18, 2009 12:51

The market is, broadly speaking, an efficient means of exchange – to describe it as “anarchistic” as Joe Higgins does and as the likes of Trotsky did before him is really to argue for a command economy where a central political authority decides on allocations of wealth according to its own expediency. One could just as easily argue that democracy in anarchic, as Trotsky also did, and thus a strong communist party dictatorship is required to avoid leaving the big political issues to the free play of “anarchic” political groupings and the whimsy of volatile voters. We know where that idea led to.

It has still not been demonstrated that taking this firm into public ownership is going to make it a commercial success. There is only hearsay from vested interests that it is profitable or can be so. There is no prospect that the State becoming involved would enhance its profitability or that the State’s capital would be remunerated. There also seems to be confusion between nationalisation and a worker owned cooperative. The two are not the same thing indeed to some extent are mutually exclusive and a hybrid – a workers cooperative with the State providing the capital but not having a shareholder’s controlling stake - would merely be a recipe for an even worse ongoing haemorrhage of State cash in to the future than a anaemic semi State subsidy junkie. This firm cannot even win contracts to provide its main services to the airlines which share its airport when it is owned by an experienced operator in this market. How on earth can it be expected to be viable with new owners with no incentive to be commercial and with no experience of running such entities? Moreover relocating to Zurich is hardly relocating to a lower wage cost area – it is relocating to a much less troublesome IR environment however. The Shannon Aerospace example is telling - what is undermining this firm is the IR legacy issues at Dublin Airport. The unions behave as if they are still in the public sector and this is a formula for collapse in this industry.

Muddying the waters by bringing in nationalisation of the banks is not convincing. There is no reason for State ownership of this type of industrial concern. The record at least in this part of the world is dismal. Collapse of banks brings the rest of the economy down with them and destroys the reputation of the sovereign entity behind the banks thus preventing the State from financing its social, health and other services from foreign borrowing as at present. Thus there is a case for temporary ownership of banks but this is based on preserving the economic sovereignty of the State, not any ideological attachment to public ownership which has no followers except for the Joe Higginses of this world and his fellow travellers. These are assertions which must be challenged.

by Fergal - none Sun May 17, 2009 23:27

A workers' cooperative would,in my humble opinion, ensure democratic control of SR Technics.This is based on the simple and obvious assumption that those working there know the work inside out and would be more than capable of "doing it themselves".
Joe, completely agree that the fat cats shouldn't get a bean,but I'm not sure how you can take SR technics out of "the anarchy of the market" as some contracts probably come from the so-called private sector.
Sceptic,you seem to believe your own propaganda,a workers' cooperative can make a profit but does completely different things with it,unlike the fat cats!
As for"indefinite state ownership for loss-making commercial concerns is no answer in this day and age"even the Right doesn't believe this anymore eg Anglo-Irish bank here and Northern Rock across the water(New Labour is centre-right)

by Left Sun May 17, 2009 18:23

"As regards SR Techics the problem would appear to be that it is uncompetitive in a competitive industry" - Sceptic

Sceptic, SR Technics is profitable. It's just that the company's multinational owners want to extract even more profits by moving the work to a place with lower wages. It's a classic "race to the bottom". In fact SR Tecnics have had order book full up for a few years to come. It's very busy and also very profitable. The nationalisation that Joe Higgins argues for is one that is not like the bureaucratic companies that have existed in the past. They are arguing for a company run by the workers and in the interests of providing services to the community. Nationalisation would also plough profits into health and education.

Sceptic, you don't have a clue what you are talking about. Go back and read your Evening Herald or Sunday Independent.

by Sceptic Sun May 17, 2009 16:55

The problem with nationalization is that it does not resolve the problem of a loss making concerning. If a concern is loss making to the point of commercial unviability it will close in the normal course of events – sad but inevitable. However in public ownership its loss making will continue forever as the taxpayers will have to subsidize its losses. The entity ceases to be a national asset and becomes a national liability. This is what happened with a number of commercial semi states where local political vested interests where able to keep concerns like NET, the Verolme Shipyard, the B&I line and Irish Shipping open for years after they should have been suit down costing the exchequer hundreds of millions.

As regards SR Techics the problem would appear to be that it is uncompetitive in a competitive industry. Nationalization won’t solve that. Nor was it feasible anymore to have had the TEAM business owned by Aer Lingus – its losses would only have pulled Aer Lingus down with it. It was the correct thing to do to hive it off as a stand alone business proposition. Given its genesis this it is not surprising that this entity failed at some stage It did not take any great insight to predict that in 1997 or thereabouts. Its interesting that Shannon Aerospace, in the same business but lacking the IR legacy issues of SR Techics, has no such problems. One does not hear of endless labour disputes, sit ins and hearings at the Labour Court, LRC and NIB like is a hallmark of anything is or in SR Technics was in State ownership. Indefinite State ownership of loss making commercial concerns is no answer in this day and age.

by Joe Higgins Sat May 16, 2009 22:14

Interesting idea, however, the reason we demand full nationalisation on the basis of democratic control is that we think that these industries should be completely taken out of the anarchy of the market. Also, we don't think the fat cat bosses should get compensaiton. Small share holders, yes, but not the rich bosses who have made millions off the backs of workers already.

by Fergal - none Thu May 14, 2009 14:38

Would it not be possible to turn it into a workers' cooperative by
1 the workers taking over the site
2 getting "recapitalised" by central government
3 a subscription fund set up by ICTU
One problem,there are others, with renationalisation is that a new government might simply privatise it again.The same should happen with Waterford Crystal