Once-bustling Port of Liverpool turns a profit after 7 lean years
At the Mersey Docks & Harbor Company, employees have become fed up with retirement parties. They are expensive, noted one office worker, thinking of the usual collections for gifts.
But ''redundancies'' through early retirement or severance pay are one way the Port of Liverpool reached a landmark position last year - profitability after some seven years of red ink.
A few months ago the port manager, Mersey Docks & Harbor Company, declared a trading profit of some $8 million last year, compared with a loss of almost $12 million in 1982. Volume of shipping was up to 10.7 million tonnes (long tons), compared with 9.3 million tonnes in 1982.
Mersey Docks officials clearly feel the port has turned the corner from decades of retreat to a future of expansion. ''We are buoyant,'' said James Fitzpatrick, chairman of the company, which is 25 percent owned by the government. The remaining shares are traded on the London Stock Exchange.
The Port of Liverpool was hit severely in the postwar years by several things. Jet aircraft wiped out the passenger liner business. People preferred to fly across the Atlantic in six to eight hours, rather than spend a few days on a ship. Containerization sharply reduced general cargo traffic, and required far fewer dockworkers. Fast highways across Britain slashed intercoastal shipping. Membership in the European Community (EC) shifted trade to southern ports. The decline of the British Empire further reduced shipping.
Just since 1975, Mersey Docks has had to reduce employment by 7,000, down to about 2,500. (At its peak, Liverpool employed 24,000 dockers.) Moreover, other companies using the port have shut down or cut back their operations, costing more jobs. Tate & Lyle, for instance, closed a sugar refinery that used imported cane as a raw material. With membership in the EC, Britain switched to domestic beets for its sugar supply. Consumers are paying more for sugar, but farmers have prospered.
In the view of management, the port is still overmanned by about 300 of its 1 ,500 stevedores. Mersey Docks hopes to buy off some of these dockers with a program announced late last month by the National Association of Port Employers. Dockers willing to give up their jobs - guaranteed under union agreements - are being offered severance pay ranging up to $33,750 for those with 15 years of service and over.
Such severance payments are expensive. The government provided Mersey Docks $ 9.8 million in repayable severance grants during 1983.
But there is a feeling here that the shrinking process is about over, that the port should experience growth from now on. For one thing, trade with North America has picked up with the economic recovery in both the United States and Canada. For another, the port has behind it the modernization and concentration of dock facilities close to the mouth of the Mersey River.
A third factor is the declaration of Liverpool as a free port. The government of Prime Minister Margaret Thatcher early this year named six foreign-trade zones - the ports of Southampton and Liverpool, the airports of Prestwick, Belfast, and Birmingham, and the industrial area of Cardiff, in Wales.
Liverpool free-port manager Frank Robotham claims an advantage, in that his operation will cover an area of 650 acres, far larger than any of the other free ports. This, he reckons, should enable some companies to set up warehousing facilities here with the advantages of free-port status. As long as goods do not leave the port area, they need not pay customs duty, European Community agricultural levies, or value-added tax. This can mean a substantial saving in cash flow and interest payments. Of course, if the goods are subsequently shipped outside the Community, none of these levies are ever paid.
The free port is scheduled to start operation here Oct. 1. Over the long run, Mersey Docks hopes for a 5 percent boost in its turnover and tonnage through the free port. More important to the city, it hopes to add hundreds, perhaps even thousands, of jobs in warehouses or manufacturing facilities within the free-port area. Mersey Docks itself would probably not need many if any extra workers.
A fourth element in the recovery of Liverpool port has been labor stability. For many years, the port suffered from strikes and walkouts that proved expensive and troublesome for shippers. The port acquired a bad reputation.
For about 24 months now, however, the port has lost few hours to ''industrial action.'' In 1982, the port lost some 200,000 man-days because of labor disputes , almost all in the first half of that year. Last year, workers left their jobs for less than 100 man-days. This year the time lost has been modestly higher because of two one-day sympathy strikes for employee actions elsewhere in the nation.
One reason for this stability is a two-year contract with the Transport and General Workers Union. In Britain, one-year contracts generally prevail. Management hopes to conclude a second two-year contract later this week that will include provisions for changes in work practices that should improve productivity.
Another reason is improved communications between management and labor. Chairman Fitzpatrick has been interviewed regularly for videotape by a prominent TV personality, Brian Redhead, in a no-nonsense manner. These tapes and printed publications have apparently impressed the workers about the seriousness of the competition the port faces from other British or continental European ports.
Mr. Fitzpatrick maintains that the continental ports are subsidized by their governments. He asks whether the British ports are too gentlemanly in their competition and need state aid. ''We must make sure we are not being left at the post,'' he said.
Since the Thatcher government's goal is to reduce government subsidies, any further special aid seems unlikely. The government did just write off $40 million in loans to Mersey Docks, leaving the port in better financial shape to tackle the competition.