TO PARAPHRASE DICKENS, “It was the best of times for CWC, it was the worst of times for Barbados.”
Employer 1: It was less than eight months ago that the Cable & Wireless Communications said it had agreed to purchase Columbus International Inc. for USD1.85bn.
CWC’s CEO Phil Bentley, at his Thursday news conference in Barbados, said it was all going according to plan. Apart from the purchase cost, that plan will cost an additional US$110 million in “one-off cash costs” over the first three years after the acquisition.
But by the start of the third year, fiscal 2017-85, cost “synergies” of US$85 million are expected to, well, flow in every year. And how, you may ask, will that be accomplished?
In part through cutting staff. US$50 million is expected to be saved, says the document sent to CWC shareholders last November, in “rationalisation of overlapping headcount in back office, sales and marketing and customer service roles,” among other things.
So by saying upfront that it will be reducing its salary costs through redundancies by a large percentage of US$50 million over three years, and by asserting since then that it has been meeting with the unions representing its workers in the region, CWC has so far headed off union unrest. And while that may not last forever, so far it’s kudos to the company.
Employer 2: Nearly three years ago, Barbados’ Minister of Finance said that a team of senior officers in his ministry had come up with a list of 18 statutory entities ripe and ready for plucking with the hand of reorganisation. While not named, the finance minister said they spent close to $130 million per year and provided just over 1 600 jobs between them.
Operational synergies between these organisations would save Government significant sums in transfers and subsidies. “This is to be achieved through the merging of some, and elimination of others of the organisations,” he said.
Nothing happened along these lines. Instead, six months later, in a panic to show the IMF that is was doing something, around 3 000 workers from the National Conservation Commission (which may or may not have been on the list) were sent home, with protests from the National Union of Public Workers that the protocol of “last in, first out” (LIFO) had not been followed. In fact, some claimed it was more a case of DIBO (Dems In, Bees Out).
The Budget delivered in June took another shot at it: CARTAC had been brought in, and a new micro-management plan was to be set up to make the entities owned by the Government perform to expectations.
But not 18 of them, just five, which were identified as the Transport Board, Barbados Agricultural Management Company Ltd, the National Housing Corporation, the Queen Elizabeth Hospital and the Barbados Port Inc.
Right after the Budget speech, a Government entity not mentioned at all in it forcibly retired 13 employees. And officers in the Customs and Immigration departments said they would not “go gently” into what to them was “that good night” – being transferred to the new Barbados Revenue Authority.
The NUPW ramped up its pressure and the rest is now history. A huge protest which saw the Barbados Workers Union team up with the NUPW on the streets of Barbados, perhaps for the first time in history, and the elevation of its two new youthful leaders as trade unionists to be reckoned with.
All thanks to the intransigence of Employer No. 2.
And so we have a tale of two employers – one reporting to shareholders who have real money in the game, and can do something about its management if they act incompetently, and another whose “pretend shareholders” vote once every five years based on promises that do not actually have to be delivered, and where incompetence may well be a virtue.
Pat Hoyos is a journalist and publisher specialising in business.