No less than six labor disputes have been declared at Israel railways recently, over outsourcing, pay grades, new standards for locomotives, and other matters. Every time the railway workers go on strike, they do it in the name of another cause, so that the public has completely lost interest in their aims. Whether or not the workers committee intends it, the strike has become perceived as an end in itself and not a means to an end.
In fact, behind all the changing grounds for strike action, there is one main reason for the chaos on the railways, and that is the decision to outsource part of the maintenance of rolling stock. The other disputes are sideshows; at best they are ways of exerting additional pressure to achieve the main goal: stopping privatization and its consequences, chiefly diminished power for the workers committee and for organized labor in the company. Histadrut (General Federation of Labor in Israel) chairman Ofer Eini managed to get implementation of outsourced maintenance postponed, and it is thought that a compromise can be reached that will satisfy the two sides, although not the Ministry of Finance, which seeks full privatization, but the workers committee wouldn't wait for Eini. He was supposed to meet Minister of Transport Israel Katz tomorrow, but it seems that a two-day wait was too much for rail union leader Gila Edrei and her friends.
The workers' fear
So what is all the uproar really about? The management of Israel Railways, actively encouraged by the Ministry of Finance and backed by the Ministry of Transport, sought to set up a new maintenance operation that would be run by the company that won the tender to supply new railcars to the company, namely Bombardier, a Canadian company with extensive international activity. The intention was to give Bombardier all the new railcars and leave maintenance of the old rolling stock in the hands of the existing maintenance operation. That operation was meant to die a natural death, while the new, private operation would grow in time.
The rationale looks simple: the manufacturer of the railcars will know better than anyone else how to maintain them, certainly better than Israel Railways, with its many shortcomings. When we asked whether Boeing aircraft were maintained by Boeing technicians, on the same principle, we received a negative answer: Boeing provides support services, training, and introduction of systems and procedures, but El Al workers do the maintenance. Bombardier also concedes that in various countries it provides partial services, along the lines of those provided by Boeing to El Al, but the company, and all those involved at the Ministry of Finance and the Ministry of Transport, as well as Israel Railways management, prefer a full outsourcing model. On the face of it, the bullying behavior, and the stupidity, exhibited by the railway workers committee this week shows exactly why they have this preference.
Israel Railways' proposal
The brick wall placed before the rail workers has recently started to crack. Israel Railways management announced that it was ready for substantial compromise, whereby the Israel Railways maintenance division would maintain the new rolling stock, while the new operation would maintain only the old IC3 cars. If, up to now, handing the new railcars to Bombardier for maintenance was perceived as a management stratagem designed to starve the existing maintenance division of work as the years went by, the new proposal indicates the opposite. Bombardier found it hard to swallow the pill. The company consented, for lack of choice, but sought to keep responsibility for important repairs to the new cars in its hands. The workers committee did not bother to respond to the proposal.
The Histadrut's proposal
Meanwhile, the pressure builds. In November 2011, Israel Railways started to commission the first of 150 new Bombardier railcars. The total number of cars will rise by 60%, and the Israel Railways maintenance outfit will collapse. Even today, it's a sub-standard operation, with no ISO certification, and no quality control or investigation of failures. In order to provide an adequate standard of service before the collapse occurs, one of just two approaches must be adopted: that of the Histadrut, or that of Israel Railways management. The Histadrut proposes stopping the running down of the maintenance division, recruiting more manpower, buying suitable equipment, and adjusting labor agreements to accommodate all of the management's demands: efficiency, flexible working hours, performance-related compensation, and a "stick-and-carrot" model, i.e., incentives for teams and workers who meet targets, and fines for those who don't. The management, as mentioned, proposes outsourcing, alongside the existing maintenance division.
The emerging compromise
Ultimately though there is a third approach, the compromise approach, which in all likelihood is what we will get. Under this approach, Israel Railways will be allowed to buy services from an external company, on a partial outsourcing model, one that will ensure that the Israel railways maintenance division will not wither and die. Such an agreement will not be for a few years only, but for a period of 15-25 years at least.
Over the years, Israel Railways workers have already given up the ticket offices, platform services, and track work. It is not clear that it is right to demand that they should also give up rolling stock maintenance. It was only at the beginning of this week that everyone was talking about how contract workers should not work in what is termed the core of the business. The core of the railway business cannot just include engine drivers.
For their part, the workers need to change their outlook. If they don't listen to the moderate voice of the Histadrut, and behave like a criminal gang, they will very quickly find themselves in a process of general privatization. Now let's see who will play the responsible adult and get everyone's feet back on the ground.
The railway in numbers (in 2010):
- Average gross monthly salary: NIS 18,675.
- Net loss: NIS 165.2 million.
- Passenger journeys: 36 million.
- Government subsidy: NIS 376.5 million.
Published by Globes [online], Israel business news - www.globes-online.com - on February 15, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012