Tuesday, June 4, 2013

Wow! 150 Words about Cosco!!!

I have, on many occasions, stated my opinion that the Cosco investment in Piraeus is the prototype of foreign investment which Greece needs: tripling business volume in the first 2 years of operations in the midst of an overall economic depression; investing several hundred MEUR into a new port; expected to add 2,5% to Greece's GDP by 2018.

Well, it could be worse. That sort of successful foreign investment could be ignored altogether. The good news is that it is not being ignored altogether. Instead, the Ekathimerini devoted a grand total of 150 words to that 'success story'.

Not so in other publications. The blog of Leonidas Vatikiotis invested over 2.000 words into explaining why the Cosco investment is just one perfect example of introducing 'Chinese sweat shop standards' into the Greek labor market. It is an interview with a so-called 'disgruntled employee'. A former small businessman who had gone bankrupt and who was looking for a job in a depressed labor market. He landed a job with Cosco. Hardly on board, he decided not to work for management but, instead, against it. By all normal standards, a sure approach to get fired; which he did. And now he is letting off steam. By all normal standards, a standard reaction.

Why does no one explain in detail what Cosco really did so far? Wouldn't a foreign investment which might contribute 2,5%% to GDP in 5 years from now deserve detailed analysis? Is it really a prototype for what Greece should focus on or is it a text book example of what Greece should stay away from?

It is really quite amazing how much discussion takes place on rather irrelevant issues and how much really important issues are literally being ignored!!!


  1. To be fair, Cosco is avoiding its responsibilities. But then, that is China's advantage over the West. They are simply cheaper than everybody else - and in a world that only thinks of price this is the end result.

    I can imagine the management's reaction, and it is typical of the situation that existed in the UK. The management hadn't a clue (most of them still don't) and the unions made the most of it. The problem was that whole industries became inefficient and for one reason or another ceased to exist.

    However just pounding people - lower wages, longer hours - does not always deal with the real problems.

    It is the same level of thinking that leads people to imagine that being cheaper will immediately make their goods attractive.

  2. Even if one subtracts parts of the story for dissatisfaction of a dismissed worker, there seems to reign a regime worse than capitalists?

    Of course it must be analyzed in detail, but what do you personally think?

    H. Trickler

    1. My personal opinion is that a foreign investment of such magnitude and importance for Greece deserves very much objective information and communication. Otherwise, we are all dependent on brief articles here or there to form our best guesses, which is not good enough. I think it would certainly be appropriate for a Greek newspaper to assign a couple of investigative journalists to do a complete review of the project with all the pro and con voices.

      As regards this disgruntled former employee, a person who starts a new job and who starts right away to work against management instead of for it is - regardless how valid his case may be - not a credible source of information to me. So I simply discard everything he says but would hope that someone would get at the bottom of this.

      Cosco is operating in Greece and subject to Greek laws, particularly Greek labor laws. I could only consider them as a 'good' foreign investor if they fully complied not only with the letters but also with the spirit of Greek labor laws. To investigate whether or not they are doing that should not be such a complicated project. Sometime last year, a Greek journalist told me that average salaries at Cosco were 1.700 Euro/month. Well, that is something which could easily be confirmed, as well as other aspects of their personnel policies.

      There is a lot at stake here both for Cosco as well as the Greek government. Somewhere I have read that Cosco-Pireaus is so far the largest Chinese investment in Europe. They ought to know that they have something at stake here as regards reputation as foreign investors. And the Greek government must understand that if they were to blow it with such a major investment by permitting investors to get away with improper practices, they will severely undermine and damage any future arguments in favor of foreign investments.

      I have written about foreign investment (particularly about Special Economic Zones for foreign investment) for 3 years now. One of my major points from the start has been: corporate governance of foreign investors and/or in Special Economic Zones must be exemplary! If the 'Greek ways of doing business' started taking roots, it would be self-defeative. The same goes for any 'Chinese ways of doing business'.

    2. Your attitude looks a little blue-eyed? If lack of safety does endanger lives of employees immediate action looks quite appropriate.

      Obviously Greek media are not at all investigative and I see quite a number of current problems due to this situation.

      Most probably the upper management of Cosco is not even informed because they might otherwise take care of their reputation.

      H. Trickler

  3. OK lets try to get to the bottom of this. Start at the bottom of the article. Mr Gogos is the head of one of the major marine unions (the others are Stephenson, PNO and the
    Engineer/Machinists). The heads of these unions (Communist party members) were found to pay themselves 14000 Euro/month. They are also the Communist party enforcers in the docks. The Communists extort political money by threatening strikes against shipowners, especially the ones using Piraeus as home port.(Hence the unwillingness of the Communist party to reveal its financial backers). The most extreme example of this was the blockading of the two italian RORO ferries in Korinth a couple of years ago that developed into an international incident.
    COSCO does not pay such money. The end result is that the Party income from the port is going down at a time when the depression is reducing political money everywhere. The Communist party is behind in the payments to its cadres. Hence the dislike of COSCO.
    Safety. Don't believe anything you hear. The safety of a serious port is enforced by insurance companies (usually Lloyd's) and P&I clubs. If the crane operator does not follow safety regulations and the insurers get whiff of it, the said operator will simply go out of business. A ship will never get under an uninsured crane. To get an idea of the sums involved, the last time I was involved in a crane accident (in Rotterdam) the claim was for 150 mil US dollars. Nobody plays loose with this kind of money. The crane may be uncomfortable but never unsafe.
    The strange layering sructure of several employment agencies is probably real. It is used by many foreign investors in Greece (usually the ones that must invest in thd country for political reasons) to bypass the Greek employment laws that are often designed to allow the above mentioned political extortion. The companies that I know using this system, eg Siemens, pay pretty well, but they take no shit from various Vatikiotises. As far as COSCO it seems that only communists and sympathizers believe and repeat that COCSO is a salt mine. I have never heard a reliable source suggesting Chinese pay and conditions.
    As far as I can tell Mr. Vatikiotis is a member of the loony nationalist left ie PASOK circa 1980. The interviewee is probably associated with the Communist party. Do not be confused by the fact that the man was a businessman. Construction, the docks and the Athens wholesale foodmarket are Communist party fiefs and I know of many a small businessman in Greece that are card carrying communists.

    1. Thank you for this informative comment. It is points like these which should be written about in the Greek media (I had to go all the way to the NYT to find a decent article about Cosco).

      But much more than that. Foreign investment is a subject laden with Greek prejudices. Thus, it is crucial to 'educate' the public about the pro's and con's of foreign investment. Foreign investors are not foreign investors; there are the ones which fit and there are the others.

      I would guess that the Greek government itself is still on a learning curve as regards foreign investment. Thus, to make something like a case study out of the Cosco investment could only be good for all parties concerned. One figures out what one likes about the Cosco investment and tries to do more of that in the future. And one figues out what one does not like about it and tries to do less of it in the future.

      The Greek media go overboard when it come to issues like IMF-multipliers, debt sustainability, etc. etc., but when it come to the real economy, they are dreadfully silent.

    2. The reason nobody talks too much about COSCO is the one you mentioned:prejudice. And when we talk about something that affects the whole country we are talking about a political problem. Hence the latest effort by the Greek government to control the communist port unions that are trying to again cause havoc during tourist season is important.