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Issue # 1401      4 March 2009

Weir dismissals: same old tactics from a global company

Some workers get the sack, the rest must work overtime

At the outbreak of the WWI Sir William, later Viscount, Weir had to endure a workers’ committee on the shop floor of his family’s engineering works in Glasgow as part of a national deal between government, unions and employers to move men from the factories to the killing fields, and replace them with unskilled and semi-skilled labour, mainly women and older men.

As the war progressed industrial and political militancy grew in the working class throughout Europe, and the example of 1917 Russian revolution inspired fear in much of the British establishment. Weir was one of those who threw his financial support into right-wing anti-socialist groups, such as the Freedom of Britain Movement, to thwart the growing influence of left wing ideology and trade union strength in the British working class.

Ninety years later the Weir Group is a large global corporation, servicing mining, energy and defence sectors, and employing more than 8,000 staff around the world. Its turnover in 2008 was around $1.4 billion, and its operating profit close to $170 million. Its Australian subsidiary’s turnover was more than $300 million. Until recently, it employed 950 employees throughout Australia, including more than 400 at its national centre and manufacturing plant in Artarmon, Sydney.

Weir has just issued dismissal notices to 40 of its Artarmon workforce, citing as its reason the global downturn and its expected effect on its major customer in Australia, the mining sector. Weir has a monopoly on the manufacture of mining pumps in Australia.

Weir projects a progressive image into the global marketplace, but its workers at Artarmon are mainly non-union and employed under a regime of a low base wage and minimum hourly rates, which they supplement with virtually permanent and compulsory overtime of 15-20 hours a week, to make a living wage. This maximises their exploitation and affects their work-life balance significantly.

The Artarmon plant is divided into six sections, with workers confined to their own sections, and working staggered shifts. This makes it difficult for them to mix or communicate and serves as a major hindrance to any workplace organisation.

Weir has made no effort to give workers access to unions, or to let unions into the workplace. The result is very low union density (about 10 percent are in the union). There are no shopfloor stewards, workplace committees, or union meetings on the premises and little solidarity. Workers are “scared” and “untrusting” with the looming prospects of sackings.

Roughly half the Weir workforce at Artarmon is permanent and worked there for 10 or more years. Many among these workers would have welcomed a redundancy package and early retirement, but none were offered to them. The remainder are a mix of permanent and casual workers.

While only one in ten workers at Weir is in a union, it seems that about half those sacked are union members. In particular, all of a small group of unionists (Australian Manufacturing Workers’ Union) who had spoken out against the treatment of one of their fellow workers were issued dismissals.

Weir calls the process it has just undertaken, hand-picking redundancies – where management gives each section supervisor the choice of who they get rid of, a measure open to discrimination and favouritism. Like the non-union contracts Weir makes its workers sign, it is handing out dismissals without any negotiation with the workers, while shutting unions out of any role.

Weir is trying to fool its workers by pretending this downsizing is temporary and in response to an expected downturn in its market sector. It reassures them its order books are full, and there will be plenty of overtime, but it must prepare for a future fall in profits.

If Weir had long term plans that included its present workforce, or if the union was able to establish a significant voice for Weir workers, management’s first response to a downturn would be to reduce overtime, rather than decimate its workforce. This has been a common response to the current recession by companies around the world, where they want to keep their workforce. Yet Weir is downsizing even as it maintains high levels of overtime in the workplace.

Weir’s claim that it is downsizing in response to an expected drop in demand most likely hides a deeper strategy, consisting of at least one of two prongs:

• Like many other “forward thinking” companies Weir is gearing up to automate its production processes to reposition itself for the next economic upswing. Having earned record profits and paid out record dividends in 2007-08, it is under pressure to make these rates of return the new norm and this can only come by drastic restructuring;

• Like many other global companies and companies going global, Weir is preparing to shift and outsource at least part of its production to a cheaper labour market. In this case Weir has recently established operations in both India (Bangalore) and China (Shanghai).

Such a strategy ensures that one way or another, Weir will in the near to medium future, reduce its Australian manufacturing workforce to a remnant of those currently employed.

The dismissed workers are talking of organising a picket outside Weir to draw attention to the company’s action. They want to reach their fellow workers to warn them all their jobs are in danger if they don’t show unity and organise.

They are in discussion with the AMWU to help build a campaign that reaches out to workers and the community, highlighting the dangers this recession holds when companies start sacrificing jobs to maintain record profits.

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