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WHY IS TCL MANAGEMENT STILL IN PLACE? by Sylvan Wilson

posted 22 Mar 2012, 14:18 by Gerry Kangalee   [ updated 22 Mar 2012, 14:41 ]
Sylvan Wilson, recently retired from Yara, was the President of the Yara (former Fedchem) Branch of the Oilfields Workers' Trade Union. He was a long standing member of the OWTU's General Council, a former Vice President of the OWTU and acted as Chief Labour Relations Officer.

Comrade Wilson is widely respected throughout the labour movement for his wide experience. He led two of the longest and bitterest struggles in the 1980's against Federation Chemicals - the 1980 strike and the 1986 lockout.

He is well known for his meticulous preparation for negotiations and is one of the originators of the Social Wage concept that the OWTU developed in the 1980's.
Comrade Wilson is deeply knowledgeable and passionate about workers' pension funds.
It never ceases to amaze me how certain statements become fact and “scientific” analyses simply based upon the status of who makes the statement and more so the regularity of their repetition.

For instance, if you ask many people why workers should not demand higher wages and take militant action to further their cause; one of the answers you are most likely to get is that the world is in financial turmoil and workers are losing their jobs in droves and those employed are accepting wage cuts.

The most common example that is cited is Greece; a similar “analysis” is made about the strike at TCL. That is the received wisdom. We hear that TCL is submerged in debt and is precariously poised for a hostile takeover so that it is madness for the workers to take strike action.

All of TCL’s collective agreements have expired between 2011 and 2012. This means that the last salary increase enjoyed by the workers was over FOUR YEARS ago. In TCL’s
audited financial statement of 2010 its Auditors had this to say under the heading “Emphasis of matter”

Emphasis of matter

“Without qualifying our opinion, we draw attention to Note 26 in the financial statements which indicates that at year end the Group was not in compliance with certain loan ratio requirements and as such was in default of its obligations under the loan agreements.

Subsequent to year end, on 14 January 2011, Trinidad Cement Limited publicly declared a moratorium on all debt service payments due by all entities in the Trinidad Cement Limited Group (TCLG). Subsequent to the declaration, debt service payments falling due have not been made. Most of the debt agreements are therefore in default either through non-payment of interest and principal or due to cross default clauses.

Lenders can therefore initiate legal action to demand immediate repayment of outstanding loan obligations which the TCLG is not in a position to immediately meet. This condition, along with the matters set forth in the Note 26; indicate the existence of a material uncertainty that may impact on the Group’s ability to continue as a going concern.”


Consequently, it is crystal clear that the company’s financial crisis has absolutely nothing to do with the workers’ strike action as it had defaulted on its debt payments since 2011 and the company’s position as a “going concern” was in jeopardy more than a year before the workers took strike action.

Indeed, a review of the company’s accounts will reveal a management style that appears to have an addiction to massive debts. In 1998 the company’s long-term-debt (LTD) was $327 million; this skyrocketed to $1.2 Billion in 1999. The LTD was reduced to $848 million by 2004 only to explode once again to $1.1 billion in 2005 and peaked at $1.44 billion in 2008.

Company’s borrowings detailed on pages 68- 73 of its 2010 financial statement reads like a horror movie with its medium and long-term debt at a weighted average exceeding 8%. The Auditors note 26 found on page 88 reveals the dire straits the company is in.

The Clico debacle of wanton disregard in spending public monies has been well publicized; however the affliction of delusions of grandeur and mismanagement were not confined there but was seen in other insurance companies and the banking industry and can be diagnosed here also.

TCL’s accounts show that in 2004 the company recorded profits before taxation of $199 million and paid an ordinary dividend of 20 cents. By 2010 the profit turned to a loss of $148.3million and the company has not paid any dividend since 2008. The Company’s share price has plummeted from over $12.00 to less than $2.00; and yet the same management is firmly in place.

How is it that the only lessons we can learn from foreign corporate behaviour is about the sacrifices to be made by the working class and the poor? How is it that local managements are not made to walk the plank like their foreign counterparts when they steer the company onto the rocks? Where are the voices of the share holders, members of investing pension plans, who have lost millions of dollars on their investments? Is it not clear that the very same disease that has crippled your investment is the same one that the workers are bravely fighting?

Two hardware stores have come out and explained their actual cost to buy cement from the factory to supply their customers with one claiming in a paid advertisement that his price has increased by 38% since last December. TCL’s general manager has publicly stated that the company’s T&T operations are quite profitable. Why then is there the need to constantly increase domestic prices? Is it due to the massive debt service obligations? Are the local consumers of cement or the workers of TCL responsible for that debt?

Some time ago I witnessed a few employees who were also shareholders of the company engaged in a very heated debate about whether they should dispose of their shareholding or not. They were quite clear that there was no hope in the current management and some were of a mind to sell and collect whatever they could get, while others were arguing that from a financial standpoint it is wrong to sell shares when prices are low. View this and the other debate about whether cement should be imported or not.

The only point that is made for imports is the price that is charged by TCL for cement. It seems clear to me that that the plight of the workers, shareholders, consumers and hardware dealers are all one and the same and require the same solution. It is crystal clear that once that management remains intact the auditor’s warning about the company’s continuance as a “going concern” will remain in jeopardy.

A takeover of the company by a foreign entity can only happen if sufficient shares are placed on the market. In the Cemex takeover attempt it was recognized that the government by virtue of its control\influence over NIB and UTC, and Republic Bank by virtue of its trusteeship of pension plans, played a pivotal role.

Today it boils down to only the government which now has control of Republic Bank coming out of the Clico fiasco. It seems to me while the Minister of Labour has an important role to play with the symptom of the strike, the Minister of Finance in his capacity as Corporation Sole has a more critical role in dealing with the disease via the Boards of Directors at State run entities with large TCL shareholdings.
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