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Irresponsible bosses

October 30th, 2011

I’m out of the country at the moment, and possibly missing some nuance. On the other hand, I’m old enough to remember the ill-will the unions built up in the 1970s, with snap stoppages designed to inflict maximum disruption on the public and thereby maximise pressure on employers to settle quickly and on the government to broker a solution. The announcement, without warning, of a lockout by Qantas seems to be straight out of the same disastrous playbook. Even if it works, it must surely kill off any political goodwill for Qantas in the future, or at least as long as the current management is in charge. That’s bound to be costly given the importance of political decisions on things like landing rights for airlines, and the favourable treatment Qantas has had in the past (partly a leftover of its days as a national flag carrier).

Can anyone make a case that Joyce’s action makes sense?

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  1. Catching up
    October 30th, 2011 at 08:40 | #1

    Well I have not heard a justifiable case yet. Qantas has set out to harm as many as possible.

  2. Ikonoclast
    October 30th, 2011 at 09:37 | #2

    The Qantas Pilots site puts the alternative view to the management view.

    “To protect their flying, Qantas pilots, through their professional association, AIPA (Australian and International Pilots Association), are pressing to get a ‘Qantas flight/Qantas pilot clause’ included in their new three-year enterprise agreement.

    The clause would guarantee that all Qantas, or ‘red tail’, flying would be performed by Qantas pilots or by pilots on conditions equal to the Qantas pilot agreement. In this way, AIPA hopes to remove the incentive for Qantas management to outsource Qantas pilot work.”

    http://qantaspilots.com.au/

    Please view this site. Don’t miss the highly amusing video about Qantas’s JetConnect (NZ) subsiduary. Behind this amusement you will note the serious points about deceptive advertising, false branding and devious avoidance of Australian awards and pay agreements.

    In summary, the Pilots (and other staff at Qantas) are making the points;

    1. Safety will be compromised by the management initiatives “to replace Australian Qantas pilots with outsourced and offshore alternatives”.

    2. “This move is not in the interests of pilots, passengers or, ultimately, profits.”

    3. Management are inflexible and deaf to concerns about safety, fair conditions and fair remuneration.

    4. “Qantas pilots have not taken industrial action since 1966. Yet this year, 94 per cent of pilots voted in favour of taking Protected Industrial Action. ”

    We ought to note CEO Joyces new 71% payrise of approx. $2.1 million to $5 million. The Qantas pilots are seeking 2.5% over 3 years according to one source I found.

    In my opinion, the Qantas Management move is deliberately designed to break up Qantas and move all its business to Jetstar and JetConnect. At the time Jetstar was created, I predicted that this was the long term strategy and it would happen. (Not sure if I predicted it on this blog or not.)

    Air safety has been badly compromised in the US by pushing domestic pilots’ wages so low many have second jobs and are flying tired. Regional airline pilots’ salaries in the US vary from $16,500 to $60,000. This is abysmal money for the long training and high responsibility. Do we want to send Australian Aviation down this path?

    Current market valuations put Qantas’ value at about $7 billion (tops). The Future Fund (another lunacy but that’s another story) has over $72 billion in it. Easy solution, government can buy 100% Qantas back at market price and resolve this event so it does no further damage to the Australian economy.

    Strategic assets are too important to leave in the hands of private enterprise.

  3. Quentin R
    October 30th, 2011 at 10:43 | #3

    To answer “Can anyone make a case that Joyce’s action makes sense?” needs details of his employment agreeement.

    He may be rewarded for limiting operating cost growth. He may be rewarded for growing Jetstar and JetConnect even at the expense of “Qantas” flights (Ikonoclast prediction, above). He may be rewarded for limiting flight disruptions caused by union action, and he thinks that if he escalates the problem, it will be resolved quicker and on more favourable terms [and even the delays may not be counted as "due to union disruption" because he initiated it - check fine print in employment contract].

    If he is seen as championing the long term survival of Qantas, and if, in the future, the government tries to remove favourable treatments, then his comment that the Government is harming Qantas and the Australian economy may carry more weight than the Minister.

    I think John Q is asking do Joyce’s actions make economic sense. For anyone getting paid $5 million (according to Ikonoclast) “employment contract sense” will provide more justification than “economic sense”.

    Is Joyce’s new employment contract in the public domain? Philosophical discussion about the role of employment contracts in economic optimisation could follow, somewhere else.

  4. JoeG
    October 30th, 2011 at 10:58 | #4

    Ben Sandilands at Plane Talking is worth a read.

  5. October 30th, 2011 at 12:21 | #5

    Alan Joyce has probably doubled his value on the employment market.
    His actions make sense. They are courageous & “crash through or crash”. But it makes very good sense.

    His acumen is recognised by the number of small & large businesses who support his decision.

    The unions were holding the airline to ransom (lord only knows what they were hoping to achieve, don’t those blokes want a job?) and did not intend to bargain in good faith. They were making demands of the company that were not their (union) decision to make.

    The travelling public was being inconvenienced by strike disruptions to service. (Forward bookings apparently down).

    Added to the airline being forced to compete in an “open skies” arrangement, whilst still having to kow-tow to Australian unions, pay rates & conditions.

    It is about the survival of Qantas. We’ll now see if he’s got stamina to match his acumen.

  6. October 30th, 2011 at 12:25 | #6

    Most commentary speculates that the long-term plan is to gut the Qantas operation and expand Jetstar the new domestic Qantas, with various franchised operations in various overseas locations doing the international trips.

    The question here is how the current brouhaha helps Qantas get there.

  7. October 30th, 2011 at 12:27 | #7

    Robert: That question has been burning in the back of my mind since I learned of the grounding. “Joyce is up to something (with that as his goal), what could his master plan be?”

  8. Ikonoclast
    October 30th, 2011 at 12:54 | #8

    @Steve at the Pub

    If Australian wages are pushed down to Asian levels , there will be less aggregate demand for all goods… including beer.

    What you are really arguing for SATP, is the economic contraction of Australia into a 3rd world economy.

  9. Doug
    October 30th, 2011 at 13:00 | #9

    Qantas might be up for all sorts of legal action. The question is when did they decide to close down services? I have seen it suggested that any tickets sold by Qantas, after that decision was made, for flights after the close down decision became operative might be subject to action by consumers on the grounds that the airline was taking money for services that it knew could not be delivered. Any legally informed people out there who could comment on that proposal?

    Timing is brilliant with Melbourne cup on Tuesday and Joyce having just landed himself a nice multi-million dollar payment last week. I don’t reckon that the public at large is going to be too thrilled at that combination of circumstances.

  10. Donald Oats
    October 30th, 2011 at 13:01 | #10

    Ikonoclast and Quentin R make several very good points, and hopefully summarising accurately, the major point is this: the CEO Joyce can delegate to less senior people the task of creating the strategy for busting the pay dispute, with careful and beneficial regard to Joyce’s contractual agreement as CEO! How is that for a circus trick? Get senior management to come up with the strategy that benefits you personally by the maximum amount possible!

    If only the rest of us could get day jobs as good as that one…

  11. October 30th, 2011 at 13:07 | #11

    Ikonoclast, I’m not arguing for anything. I’m stating the facts of the matter. That is the situation Qantas is faced with. Competing against competitors who do not have the same cost & other millstones slowing them down.

  12. Ikonoclast
    October 30th, 2011 at 13:11 | #12

    A common statement about workers is “It really isn’t up to them to dictate how the airline should be run.”

    This notion that workers should have no say in how a business is run is plain nonsense. Workers make a business what it is at least as much as the capitalists and their managers. All large businesses (over 300 workers) should have equal representation on the board from workers and from owners. Decision making should be at least equal between workers and owners. The workers bring their minds and bodies to work everyday and make it work. The capitalists just “own” the business. What is this specious concept of ownership which involves no attendance and no personal effort just the mere possession of “chits” which say they own it? It’s a socially inculcated fiction that capitalist owners own anything. These chits or shares are always created by appropriating part of the value of the workers’ work.

  13. October 30th, 2011 at 13:24 | #13

    Ikonoclast: That is fine, provided the workers are prepared to take a financial hit (say a 50% pay cut & wholesale retrenchements sans payout) when the company hits a rough patch. If you own the decisions, you must own the consequences.

  14. October 30th, 2011 at 13:26 | #14

    In such scenario workers would also be prohibited from resigning, they’d have to stick around to share in the outcome of their decisions.

  15. Donald Oats
    October 30th, 2011 at 13:43 | #15

    Yeah, the notion that workers just rock up and go home is not the reality. Workers do the work and that is a fact. This notion that business is less than a partnership is a particular ethical failure, rather than a necessary fact. This ultra-competitive BS makes for people who want only for themselves, be it power, money, or the influence borne of the two. How sad.

    Anyway, to the point at hand: Joyce is betting a great deal upon his effective shutdown, for it alienates him and the senior members of the sitting government. To fully appreciate why Joyce would do this, especially given the fact that he has entered a dispute with sections of the business, the employees of which are not in a negotiation period until some time next year, shouts from the rooftops: Follow the Money! What has Joyce got to gain personally? Why is he (apparently) unconcerned with the downstream ramifications of disrupting so many other businesses who are not a part of the dispute, purely collateral damage of his personal actions? What motivates this behaviour by Joyce? What is the next business ambition of his?

    Million dollar questions, for sure.

  16. Donald Oats
    October 30th, 2011 at 13:45 | #16

    Workers do own the consequences, just not the profits.

  17. Robert Wiblin
    October 30th, 2011 at 13:50 | #17

    “The clause would guarantee that all Qantas, or ‘red tail’, flying would be performed by Qantas pilots or by pilots on conditions equal to the Qantas pilot agreement. In this way, AIPA hopes to remove the incentive for Qantas management to outsource Qantas pilot work.””

    I can see this is in the pilot’s interest, but why on Earth should the public oppose the importation of cheaper piloting services from overseas? It’s a simple free trade issue.

    “Air safety has been badly compromised in the US by pushing domestic pilots’ wages so low many have second jobs and are flying tired.”

    Evidence?

    “Regional airline pilots’ salaries in the US vary from $16,500 to $60,000. This is abysmal money for the long training and high responsibility. Do we want to send Australian Aviation down this path?”"

    If it’s bad money for the long training and high responsibility people won’t be(come) pilots and the wages will increase again. I’m not in favour of denying foreigners job opportunities to protect the privilege of people who happen to be born in the same state as me.

  18. rog
    October 30th, 2011 at 14:36 | #18

    The airline business is a complex beast, with plane ownership being split up between various third parties, motor by motor. Joyce reflects the hard edge of the business and he was hired to make Qantas work as a business not a symbol of goodness. If Qantas fails there are plenty of other money managers who will fill the void on their own terms. The unions better wake up and do a deal.

  19. Jill Rush
    October 30th, 2011 at 15:40 | #19

    Joyce has taken a big risk – worthy of betting on an outside runner like Americain in the Melbourne Cup. He wants this action to force the Fairwork Australia to close down negotiations with the unions and to make a determination. It is certain that this did not require a shut down of the airline.
    He also wants to force the government to support him in the national interest and it appears that his strategy has worked.
    In the long term I don’t think he cares too much for the Australian workforce and is prepared to have them become collateral damage as Qantas moves into Asia with cheap labour and minimal controls on operations. No doubt this is predicated on the view that Australians are few and the Asian market is expanding.
    I agree that long term if we see Qantas as just another airline then he will lose many government contracts where departments pay a premium for bureaucrats to fly with Qantas. The real winner is likely to be Virgin which if it continues to show interest in its customers will replace Qantas as the preferred national carrier as many people will have a long memory about this stunt that Joyce has pulled. The fact that he has made headlines around the world for his action which has distressed so many people shows that rebuilding the now damaged brand will probably be beyond him because he shows little understanding of human psychology and brands. His Board should have pulled him into line but appears to have an equally flawed view of how this will play out long term.
    His gamble is that people will quickly forget and fly Qantas anyway – even if the planes are flown and serviced via Asia.

  20. October 30th, 2011 at 15:48 | #20

    Jill, the first half of your comment is spot on.
    The second half seems suspiciously like a subjective anti-boss statement. Keep in mind that Virgin pays less than Qantas, works the staff harder, outsources more work to overseas, and is less unionised than Qantas.
    Keep in mind that the unions have been destablising Qantas for weeks, & gave no indication they would change their ways.
    Qantas is having to compete in a global market, but is expected to use overpriced & inefficient Australian labour. Quite a problem. One faced not only by Qantas, but it does have one advantage, it can move overseas.

  21. rog
    October 30th, 2011 at 15:59 | #21

    I don’t agree that the unions have been destabilizing for weeks, they have been negotiating with Qantas over a deal for many months. At least, they thought that that they had been.

  22. October 30th, 2011 at 16:05 | #22

    Rog, my business is heavily tied to Qantas, I’m acutely aware of delays, etc. There has been plenty of destabilisation over the past few weeks.

    Negotiating? Most of the claims are ones that couldn’t be made with a straight face. The union gave no indication that they were prepared to bargain in good faith. Bold moves for blokes whose jobs are in a precarious industry, facing ruthless competition from overseas. One can only conclude that they just plain don’t want a job.

  23. Fran Barlow
    October 30th, 2011 at 16:12 | #23

    The term #workjoyces is now doing the rounds on twitter

  24. Fran Barlow
    October 30th, 2011 at 16:17 | #24

    It will come as no surprise that I stand 100% with the unions against attempts by QANTAS management to break their working conditions and ultimately the unions that underpin them. I would add that even were I not on the left, the last thing rational people want from people operating aircraft is low morale or the thought that if customers think worse of the brand, they will mainly blame people that the staff hate.

    It seems to me that the unions ought to respond to the provocation by QANTAS by offering

    a) to negotiate without preconditions and demanding that QANTAS show good faith and withdraw their lock out.

    or

    b) failing that, suggest that both parties maintain the status quo for 21 days and then meet — implying that they are willing to see their lockout and raise them three weeks.

    During this time, the unions should run a strongly negative and very substantial campaign based on QANTAS management trying to turn QANTAS into something like Ryan Air in an attempt to profit gouge, cut corners on safety, overwork staff and screw the public as well as their staff. Anything that forces the share price down and prejudices goodwill goes in. The semi-educated Joyce thinks his lockout can “inflict pain” on the staff. Within hours the predictable Reith was letting fly on #theirABC on how to do IR.

    Well let’s see who blinks first! I’d like to see the union movement club together to ensure that QANTAS workers were not put under undue pressure to settle by raising funds to support the staff. I think many of us would agree to chip in each fortnight to make this happen. This could be the start of a substantial fightback for the labour movement.

    that all said …

    I believe that this matter shows that the experiment with privatisation of QANTAS started under Hawke-Keating has been a failure. While it gave the government a momentary revenue bounce, the longterm consequence has been a steady decline in the quality of the airline, its international standing, and now as we see, a decline even in its claim to be the national flag carrier. Who would have thought back in 1988 that the head of the airline would see shutting it down as consistent with its longterm wellbeing. That Joyce did this on the day after a 71% pay rise simply underlines the absurdity of the position. His 96% stockholder approval vote for the “renumeration” (sic) package was actually cited by him on Inside Business as evidence that “management” had the backing of the shareholders for this war on QANTAS staff.

    Despite being on the left — some would say the far left, I have no particular predisposition in favour of state ownership of businesses providing goods and services. It seems to me a good general rule that states should stick to “core business” and I construe that fairly narrowly. The less the capital requirements, the more the service is about meeting purely discretionary needs and wants, the more plausible it is for small groups of people to make arrangements to get the goods and services produced and distributed at adequate quality, the more it looks like something that the state ought to regulate rather than operate.

    Airlines are an odd one because they almost always operate beyond the the boundaries of a single jurisdiction, require large amounts of capital, some of which would have their sunk cost amortsied over 20 years or more, have to carry massive liability and impose very heavily on the commons. It’s not feasible in most markets to have more than a handful of carriers and all of these have to be multiply regulated in something like real time in order to minimise the risk of catastrophe. That makes them, in many respects, greatly different from, say, train services or supermarket chains, but much more like banks.

    As a general rule, I still think it would be tidier if most airlines were privately operated, but I wouldn’t make a fetish out of it and it seems to me that every major economy ought to have at least one state-owned and operated carrier, even if one wanted to have its operations audited and reported upon at arm’s length from the operating state. Joyce complains that rival airlines have access to cheap state-backed loans and other advantages. It seems to me that if Joyce is right, then perhaps QANTAS should be returned to public ownership.

    I think re-acquisition, would, on balance, be a very good use of public funds, because we could begin to repair the damage to QANTAS that has occurred since the sale and also begin even to make it a ‘greener’ airline. That is obviously going to require some new capital and some changes in organisation. It would also be nice to get rid of those schysters running it. Apparently about 43% think re-nationalisation would be a good idea.

    If the share price keeps falling, then the cost of such re-acquisition will decline.

  25. Sam
    October 30th, 2011 at 16:33 | #25

    I pretty much agree with you Fran, but I’m surprised that you aren’t in favour of most nationalisations just as a general principle. I thought you wanted “Communism on a world scale.” How is that consistent with private ownership of the means of production?

  26. TerjeP
    October 30th, 2011 at 16:38 | #26

    John – plenty of discussion at Catallaxy and also an interview with Joyce on The Bolt Report if you want the alternate perspective.

    http://ten.com.au/boltreport.htm

    I’m not fully up to speed and I’m reserving judgement for the moment but Joyce made it sound like a lockout was somehow necessary under the fair work legislation in order to force an arbitrated outcome. He says they are losing $200 million per annum on their long haul operations and it has to be reformed. Others have said that Qantas is worth more if you break it up and ditch the red kangaroo part of the operations.

    It’s also my understanding that senior pilots at Qantas are paid up to $500k and even if they were forced to take the lower international rate they would still be on exceptional pay rates. Not that they have been asked to take a pay cut.

    Joyce also said he and the board thought the AGM would lead the unions to be reasonable if the shareholders were behind the board. On most resolutions the board got in the order of 97% shareholder support instead of being rolled as the unions had predicted. However the unions were unmoved by this outcome.

  27. Freelander
    October 30th, 2011 at 16:54 | #27

    Hopefully, a class action will quickly happen against Joyce and the Qantas directors for not acting in the interests of the Qantas shareholders.

    There are two ways that this astounding action has not been in shareholder interests. The first is that this irresponsible action could be argued to have damaged shareholder value. Indeed, if taken while trading was happening an immediate drop in shareprice is likely to have taken place. As it is that can be expected on monday, assuming trading in Qantas is not halted. To bolster this argument presumably research support could be found to demonstrate the negative impact on the Qantas brand name that has resulted from this action. Second, many shareholders in Qantas are also Australian citizens, for these shareholders the action was not in their interests not only due to the impact on their financial returns from their shareholding but also due to the impact on the Australian economy and the impact that would have on them in many other ways. Rational shareholders would not support a company they own shares in engaging in precipitous action which damages the economy on which they rely, even if that action had little negative impact on their financial returns from that company. Someone who is not Australian, and will probably leave Australia once they leave the CEO job probably cares little about the damage done to the Australian economy.

    Something that also should be investigated is whether the directors and CEO have been discharging there duties properly as directors and also their duties to the ASX. One question would be whether the ASX has been kept properly informed. Under that heading, the claim made by Qantas management via the ASX that union action was costing $15million odd per week should be examined. The question there is whether union action was costing Qantas that money or the ways Qantas management were choosing to react were costing that amount, assuming the estimate correct, which it may not be. The earlier cancelling of domestic flights was not necessary. Qantas’ international flights could have been cancelled which is exactly what Virgin has been doing so it can put on extra domestic flights as disclosed recently in Crikey. Misleading the ASX is serious, so this should be properly investigated.

    The confected actions of Qantas management seem to be designed to force the government to change policy and allow the airline to be sold off-shore. Whether good policy or not, the CEO of a public company, especially a foreign CEO, a person not elected to any political office in Australia, ought not to be determining the policy of the Australian government in any area.

  28. Gipsyland
    October 30th, 2011 at 16:55 | #28

    @Steve at the Pub uses the well-worn management line that the environment in which the company operates is dictating the pace of change. This is no doubt true in Qantas’ case, where the formerly state-owned airline is up against either heavily subsidised state flag carriers or dirt cheap lowest-cost operators.

    The problem is that over the last thirty years at least, the cost of restructuring seems to have fallen disproportionately on the workers while the benefits of restructuring have gone almost entirely to management. That Joyce is practicing this dichotomy mid-dispute just shows how blaze management have become to their own hypocrisy.

    Saul Eslake has a remarkably sensible piece on this in the Age this Saturday drawing attention to market failure in respect to the distribution of income and wealth and hence the decline in social equity while pursuing ever increasing productivity.

    It may well be the union intransigence may well bring down a particular company in the short-term, but the ideological war being fought by management will almost certainly bring a pyrrhic victory in the longer term, when, out of necessity, the oppressed majority will rise up to remove the privileges stolen by the minority, with unreasonable violence likely from both sides unfortunately.

  29. Freelander
    October 30th, 2011 at 17:30 | #29

    @TerjeP

    “… Bolt Report if you want the alternate perspective.”

    Most of us look elsewhere when we have a taste for fiction.

  30. October 30th, 2011 at 17:38 | #30

    Freelander, your post seems to be written without being mindful that the shareholders are actually SUPPORTING the actions of CEO Joyce.

  31. Freelander
    October 30th, 2011 at 18:04 | #31

    @Steve at the Pub

    Glug… Glug….

    Your post seems to be written without being mindful that their is no evidence that the shareholders are actually SUPPORTING the actions of CEO Joyce.

    Joyce only got support from the ‘institutional’ shareholders and they are not shareholders at all. I have super, you have super, but someone else uses our shareholdings to get to vote for people like Joyce. They are not the owners of our super. Similarly with most other types of institution shareholdings. The government also has shareholdings and is the owner on our behalf. The government as shareholder can and should sue Joyce and the directors for their tropo activities.

    The problem with Joyce, ‘institutional’ shareholders, and various others who nominally represent our interests in that they don’t. They represent their own interests. It is the old story or ‘other people’s money’. They really don’t care about that money. All they care about is how they can get money themselves, whether that has the side effect of making us rich or poor is of little interest to them. If they can plunder our wealth to make a dollar they will. And they will use of shares to vote for big pay increases for each other because they can.

    Glug… Glug… You’re beer is getting cold. Stick to what you are good at… Glug… Glug…

  32. Gipsyland
    October 30th, 2011 at 18:15 | #32

    And another thing. If the board of Qantas want to run a cheap outsourced international airline from Asia then they should lose all Australia’s national landing rights. I’m sure they would be far less enthusiastic if they had to line up at the end of the queue for the crumbs.

    Or the Australian government could put a price on special privileges Qantas has received (as it should have with BHP and Newcastle) and demand a return for the Australian taxpayer when those privilege are capitalised, particularly in Qantas case when they take the form of government license. That would curb the shareholders for the rape and pillage of the company’s history for short term gain.

  33. Donald Oats
    October 30th, 2011 at 18:16 | #33

    Qantas holds no emotional interest to me, meaning that which airline I fly with is not a matter of the brand, or who or what owns it. I’m just surprised that a CEO would fly his own plane without a parachute…Then again, perhaps he saw the government as “weak” and expects the government to do the heavy-lifting for him. He could be right, but it is one heck of a gambit. Perhaps he is hoping his next job will be in the USA, where they like the “toe-cutter” approach to industrial relations.

    Running a business, or ruining a business?

  34. Sam
    October 30th, 2011 at 18:25 | #34

    @Freelander
    But it’s good when beer gets cold!

    God I hate that my super shares supported a grub like Joyce. It’s just outrageous. The only Qantas plane he should have anything to do with is the one taking him back to Ireland.

  35. rog
    October 30th, 2011 at 18:28 | #35

    Over the years I have got to know Qantas staff, from hosties, stewards, ground engineers and up to senior pilots and not one has ever had a good thing to say about Qantas. One senior pilot went to Singapore Airlines – the way that they look after their staff put Qantas to shame. All his kids fly planes from Asian based airlines. Most australians fly with other lines. Qantas is sinking under bad management and Joyce will find a better position somewhere else.

  36. Ikonoclast
    October 30th, 2011 at 18:28 | #36

    The Qantas brand is pretty much destroyed now. This is courtesy of the Board of Directors of Qantas.

    http://www.qantas.com.au/travel/airlines/board-of-directors/global/en

    Management will fold the Red Tail part of the business into Jetstar. Then Jetstar will fail too. This will Keating’s and Joyce’s legacy.

    The Government could rescue Qantas as essential national infrastructure by buying it for about $6 billion to $7 billion. That is chickenfeed in national budget terms. Just take it from the pointless future fund, the place where government money goes to die instead of working for the people.

  37. Freelander
    October 30th, 2011 at 18:30 | #37

    @Donald Oats

    Don’t worry, Joyce seems to have his $5million parachute well and truly packed. Like a variety of others who have driven businesses into the ground while his staff may have to remain strapped in all the way down to their terminal destination, Joyce will float softly down. No doubt his parachute is amply proportioned to support the gold he is also packing in his saddlebags. Another hit-and-run CEO getting wealthy while destroying shareholder value. Much like the history of Telstra. Time goes on but so little changes.

  38. Freelander
    October 30th, 2011 at 18:35 | #38

    @Sam

    For his beer to be getting colder from neglect it has to have been warm in the first place which is a reflection on the pub and the drinker who frequents the pub! Some like warm beer. Not I.

  39. Freelander
    October 30th, 2011 at 18:38 | #39

    Sam :

    …God I hate that my super shares supported a grub like Joyce. It’s just outrageous. The only Qantas plane he should have anything to do with is the one taking him back to Ireland.

    Wouldn’t it be ironic for an Irishman to be ‘transported’ back to Ireland as a convict! Not that I am engaging in wishful thinking.

  40. October 30th, 2011 at 18:52 | #40

    “Glug.. glug.. glug.. stick to drinking.. etc etc” Crikey, I had forgotten what a class act you are Freelander.
    If you wish your comments to be (a) read, and (b) taken seriously by other commenters, it is advisable to display maturity beyond that of junior high school years. Just sayin’.

    I prefer adult discussion (back to the ignore bin for you).

  41. October 30th, 2011 at 18:54 | #41

    Good point Ikonoclast. What does the govt gain from rescueing Qantas?
    What demands should Qantas be forced to concede to?
    Qantas is actually making a quid (small one) & if the CEO is to be believed, it is one of the better performing privatised national flag carriers in the world.

  42. Ikonoclast
    October 30th, 2011 at 19:00 | #42

    @Steve at the Pub

    I was against all the privatisation when it happened and I still am. Most of what was privatised should be renationalised. However, in the case of Qantas, I am in two minds. The company is now wrecked, the brand is wrecked (by management) and all airlines will collapse anyway when fuel prices skyrocket due to peak oil.

  43. Ken_L
    October 30th, 2011 at 19:07 | #43

    SATP # 5 can you elaborate on why you think Joyce’s actions are ‘courageous’? As in ‘able to face and deal with danger or fear without flinching’? I presume he cleared his actions with the Board before implementation – a pretty reasonable presumption in the circumstances – and they will be either effective or not depending on management’s strategic objectives. But trying to make him out to be some kind of corporate hero just seems inane.

  44. October 30th, 2011 at 19:12 | #44

    We’ll go back to sailing ships & stagecoaches? Hmmmm … (not looking forward to that)

    Correct me where I am wrong, but I have been living with the belief that apart from those who actually salivated at the thought of buying shares in it, (& those who stood to gain by brokering the deal) the privatisation of Qantas had very little support.

    I don’t rush in to agree that the company is wrecked. Any more than is any other self-funding airline.
    Nor that the brand is wrecked. The bulk of the masses may sit around & bleat about what has just happened with Qantas, but they aren’t the backbone of the flying customer base. The masses fly only occassionally (if at all) & choose their airline by price, price & price.

    The backbone of the customer base is more likely to see the current…er.. event as a welcome catalyst for stability. It hasn’t been funny the past few weeks, & nothing I read or heard comforted me any, until I heard of the grounding.

    There was (from me) neither glee nor mourning at the grounding, merely the same grim mood as when bin Laden was killed, that an essential but unpleasant deed had been performed. (“Good, now we’ll get the dispute sorted out one way or the other & at least we’ll all know where we stand!”)

  45. October 30th, 2011 at 19:16 | #45

    Ken_L: By “courageous” I mean he’ll be the most reviled man in Australia.
    He’s also started something that he cannot stop, & cannot have been sure of the outcome.

    Anyone who has proactively started, or escalated outta sight, a dispute – one that has ramifications for the rest of your life – will know what I mean. Once you’ve started the ball rolling you can’t take it back. (Sort of like Greg Chappell & the underarm delivery).

    Corporate hero goes without saying. The grounding has certainly achieved that for him. But that is a collateral thing.

  46. JoeG
    October 30th, 2011 at 19:20 | #46

    I’ve been saying for years that there will be few airlines left in 2016, mostly because oil will be so expensive by then (the first manifestation of peak oil, if you like). Mostly people laugh at me, the governments wouldn’t allow it they say. But how many people in Lindsay fly more than once a year, I say to them. But then the world-wide recession comes along, and I think maybe I’m wrong.
    Then along comes Joyce, and now I reckon 2015.

  47. October 30th, 2011 at 19:49 | #47

    Pr Q said:

    Can anyone make a case that Joyce’s action makes sense?

    He obviously has the board eating out of his hand.

    The QANTAS board does not seem to be blessed with great financial foresight. They tend to be led around by the nose by management, going by their recent ill-fated venture into private equity leveraged buy-outs, which luckily collapsed on the eve of the GFC. The Australian reports on the the debt-tipped bullet that QANTAS dodged, through no feat of its own:

    THE collapse of last year’s $11 billion takeover offer for Qantas was a near miss for the national airline, which today would be struggling to remain competitive if its private equity predators had succeeded in their debt-funded bid.

    The Qantas bid, driven by the ailing Allco Finance Group at the peak of private equity takeovers, would have increased the airline’s bank debt more than four-fold to $10.7billion.

    Analysts said that, at best, Qantas would now be drawing on cash reserves to pay weekly interest bills of $20million and would have embarked on a massive cost-cutting and asset-sale drive to cope with the downturn striking all airlines.

    At worst, one said, the national icon could have become “a crippled airline that a cynic might suggest would end up in government hands”.

    IIRC, this is the fate that befell Alitalia? In any case, this is yet another example of managment looting the national assets, as occurred in the NRMA or spectacularly, in the case of the oligarch’s gigantic LBO of post-Soviet Russian mineral resources.

    More generally, the choice of a foreigner to lead a national icon is not exactly a good look. Joyce is not Australian, so perhaps he doesn’t understand how we do things here, these days. He also seems to have a bad case of “small man” syndrome. Likewise Trujillo behaved like a capitalist pig with his snout in the trough of Telstra.

    They all awarded themselves grotesque remuneration in the midst of corporate decline.

    Maybe there is a lesson here, that getting foreigners to do jobs Australians can do is not such a good idea after all.

    More generally, the globalization of labour and capital markets is vastly over-rated, leading to the squeezing of the national working class and the enriching of the global owning class.

  48. hc
    October 30th, 2011 at 19:50 | #48

    Qantas provides an internationally traded service in competitive international markets. Baggage handlers earn $80,000 per year (Ask school teachers what they think of that !) while some pilots are paid over $500,000. What on earth could Joyce do other than what he has done?

    Your post John and many of the comments above deny basic realities.

    Australia needs to have good air links to the world and the only way this can happen is on the basis of a service that is competitive in our region. It is simply a case for free trade and rent-seeking trade unionists cannot deny Australians a decent service on the basis of self-destructive arguments that will not work.

  49. Ken_L
    October 30th, 2011 at 19:56 | #49

    SATP # 44 maybe you are right, but lots of union leaders called strikes over the years that made them reviled, and I don’t think anyone considered them courageous. And of course CEOs are supposed to make decisions where they cannot be sure of the outcome – I mean isn’t that why they get paid the big bucks? Anyone can make good decisions when the outcomes are known in advance.

    Qantas has leveraged its corporate power to try to achieve the outcome it wants. Let’s not turn it into some kind of morality play. And anyone who sees this minor dispute as a significant event has obviously forgotten (or never read about) the way industrial disputes used to be resolved in this country as a matter of course. But we all lived to tell the tale, even those of us who remember flying RAAF flights Sydney-Melbourne in 1989.

  50. October 30th, 2011 at 20:02 | #50

    Joyce deliberately wants to either destroy the unions or destroy QANTAS. Either way heads he wins, tails we lose.

    Jetstar will pick up QANTAS domestic business (it has already changed its marketing to move from a budget to a more up-market traveller). So no big down-side domestically.

    Internationally, QANTAS will either defeat the unions and franchise into an international airline operating out of lower-cost Asian jurisdictions. Or QANTAS will fold, which would have happened anyway had it continued with its present labour cost structure, against cheaper Asian competition.

    I am betting that prices will not go down once the domestic market contracts, QANTAS was only cutting its own throat competing with Jetstar.

    Another iconic Australian brand bites the dust.

    Like I said, globalization is not really doing anything for the average Australian, it just benefits foreign workers and capitalists.

  51. Bobalot
    October 30th, 2011 at 20:05 | #51

    To all the those who keep saying that the unions have “forced” this grounding, I have one question:

    Why was there no advanced warning for the 80,000 passengers in the air? If this was the route that Qantas management has decided to break the unions, surely they could have allowed the public at least a few weeks notice? Even the unions in their apparent 6 hours of industrial action over the last 8 months gave some notice to the travelling public.

    No, this stoppage was designed for maximum pain for the travelling public. Completely unethical.

  52. October 30th, 2011 at 20:06 | #52

    Harry,

    It may be true that QANTAS baggage handlers and pilots are over-paid. But the same can be said in spades for QANTAS management.

    Bosses are acting like vandals, just moving in, sacking and looting the companies they run.

    I don’t agree with communist or fascist ideology. But I am starting to understand why such irrational ideologies emerged in the first place, given the limitless greed of global managerial and financial classes.

  53. rog
    October 30th, 2011 at 20:07 | #53

    What is the source of pay rates for baggage handlers?

  54. Ken_L
    October 30th, 2011 at 20:07 | #54

    ‘Another iconic Australian brand bites the dust.’

    It’s called creative destruction. Can anyone really swear honestly their lives are poorer for the loss of Arnott’s biscuits or Chesty Bond singlets?

  55. October 30th, 2011 at 20:08 | #55

    Ken, I’ve been in plenty of union meetings, & “foresight” is not a word I’m inclined to use in the same paragraph as “union leader”.
    CEO’s generally understand the outcome of their decisions (they can be sacked, after all)
    Union leaders rarely face the consequences of their decisions, well, their decisions to strike anyway.

    Qantas certainly is using its corporate power, and the union isn’t happy to discover they’ve been seen & then raised some (quite some actually).

    HC: Yes, some pilots are paid over $500,000 and I imagine both of them are very happy with their salary. The average for Qantas pilots is much much lower. 1st officers get less than Captains, & pilots are paid by the type of aircraft they are endorsed for. An A380 Captain draws the big money, but a 1st officer on a bus-run (say between Adelaide & Sydney) while drawing a healthy salary, is flat to draw a 6-figure salary.
    Every flight has a captain & 1st officer. Thus half of the pilot pool isn’t in the “top grade” salary bracket to begin with.

  56. hc
    October 30th, 2011 at 20:23 | #56

    Jack, Qantas was losing $2m a day with the union actions. How does paying Joyce an extra $2m hurt compared to the unionist sabotage. I was caught up in the action myself as I flew around the place last week. Travellers were switching to Virgin and to other ways of getting around.

    The issue of executive pay here – however objectionable – is second-order to the overall economics of the carrier and to the fact that on international routes it is uncompetitive.

    SATP, The salaries are higher than those at Virgin And they are not going on strike. The pilots earn a packet and, let’s face it – they are not much more skilled these days than a bus driver. The technology does it. The hostesses on board and the cabin staff are waitressing. That’s it.

  57. October 30th, 2011 at 20:24 | #57

    Ken L @ #3 said:

    It’s called creative destruction. Can anyone really swear honestly their lives are poorer for the loss of Arnott’s biscuits or Chesty Bond singlets?

    I can see the “destruction”, but the “creative” bit is still below the horizon. Maybe you are referring to creative accounting.

    The sacked workers from Bonds might mutter something under their breath. Especially when they saw what management drew in bonuses for issuing all those pink slips.

    I dont suggest that all Australian firms should be defended from Asian competition at all costs. Undoubtedly most manafacturing had to go rather than put up a hopeless competition against the awesome might of Chinese manafacturing.

    But the example of Joyce shows pretty clear that “Australian” management have essentially “gone global” and no longer consider the national interest when making decisions. (As distinct from the case when Australian firms were essentially grounded to the national jurisdictionand the bosses had to retire in this country.)

    Nationalism costs time and money but it pays off in the long run. Do you think that our new global over-lords will throw us a straw if we are drowning? We are on our own, boyo.

    QANTAS is finished as an Australian owned and run airline. We have blown yet another part of our patrimony.

  58. Ken_L
    October 30th, 2011 at 20:37 | #58

    Jack I haven’t flown Qantas for years – it’s overpriced, with crappy service and moth-eaten old planes, at least on the routes I fly. It can either reinvent itself as an airline that makes sustainable profits (creation) or go out of business because customers prefer airlines that offer better value for money (destruction).

    I really don’t see any ‘national interest’ considerations. Haven’t we grown out of this idea that any self-respecting ex-colony has to have a ‘national airline’? Lots of other countries seem to get by without one. I simply cannot see what all the fuss is about.

  59. Freelander
    October 30th, 2011 at 20:59 | #59

    @JoeG

    I have to agree with you Joe. A great rationalisation world-wide is about to take place in the airline industry and the remaining players will be better able to exercise market power. Won’t be good for employees; won’t be good for travellers; probably won’t even be all that great for share-owners. Will be good for overpriced CEOs and other spongers who populate Boards of Directors.

    Won’t be good either for the baggage handlers who earn “$80,000″ a year (for the same hours worked by school teachers) and who are driven to work each day in chauffeured limousines complete with solid gold tires. They and unicorns will need to retire to the pages of comic books. Lets simply bring out our knee-jerk bigotries and bash a few unionists.

  60. Freelander
    October 30th, 2011 at 21:06 | #60

    With most companies there is little national interest to consider except general considerations concerning which foreign country is owning it (due to the leverage ownership can give a country to meddle in internal affairs including the making of Australian laws, example, tobacco). When it comes to essential infrastructure that would cause great disruption were it to be suddenly to shut down (incidentally the type of disruption we have at the moment with Qantas) there is a national interest. A company owned by foreigners or by some foreign entity will shut down in an instant for commercial or other reasons regardless of the impact on Australia. That need not be a problem if there are plenty of alternatives. Where there are not it can be a huge problem as we are seeing at the moment. That is what national interest is all about.

  61. Freelander
    October 30th, 2011 at 21:08 | #61

    @hc

    There is no evidence, except the dubious assertions of Joyce, that Qantas was losing a cent due to union actions. If you want to believe Joyce’s assertions I do have some swamp land for sale that might interest you?

  62. Freelander
    October 30th, 2011 at 21:13 | #62

    Great to know that airline pilots are ‘not much more skilled’ than bus drivers. Of course, driving a bus requires considerable skill even if it doesn’t pay well. That said, flying a jet airline requires considerable skill and training. On the other hand, teaching at a school or university might seem to require a piece of paper, or several pieces of paper but from the state of education both at many schools and numerous universities teaching at either doesn’t require much skill or education. At least the lack of both is not so quickly fatal as it can be for passengers of a bus or plane.

  63. Catching up
    October 30th, 2011 at 21:36 | #63

    “It’s called creative destruction. Can anyone really swear honestly their lives are poorer for the loss of Arnott’s biscuits or Chesty Bond singlets’

    After working in both when young, I am glad that my children do not have similar experiences. Especially working for Arnotts.

    We still seem to have plenty of work and cheaper food.

  64. Ken_L
    October 30th, 2011 at 21:43 | #64

    Freelander Qantas is already 40% foreign-owned. The statement that ‘a company owned by foreigners or by some foreign entity will shut down in an instant for commercial or other reasons regardless of the impact on Australia’ is just xenophobic nonsense bereft of any empirical support whatsoever. Labour and capital will make use of whatever tactics are available to them to help achieve their objectives. The notion that either party is motivated by some devotion to ‘the national interest’ (whatever that means) is romantic nonsense. There are arguments for prohibiting industrial action (i.e. both strikes and lockouts) in essential services but I’m buggered if I can see what the level of foreign ownership has to do with them.

    There has ALREADY been ‘a great rationalisation world-wide … in the airline industry’ and a bloody good thing too. It didn’t lead to oligopoly but the reverse. What do you want, a return to the days when Ansett and TAA ran identical timetables with identical planes courtesy of a government licensing system that allowed them to charge ruinous prices? People have never had it so good when it comes to cheap, readily-available air travel. I don’t mean the situation is marginally better than 20 years ago; it is orders of magnitude better. Predictions that we are about to see everything go pear-shaped might be correct, but some rational argument in favour of that proposition would be more persuasive than bald assertions based apparently on nothing more than deductive speculation.

  65. October 30th, 2011 at 22:04 | #65

    the thing that i find interesting is to study the shareholding of qantas

    the majority of shares are owned by banks

    and they are the same banks that gave us the GFC

    and that have been guilty of rather slimy activities in the past – Asian crisis for one

    and i recall who were the mercenaries that signed up to fight the Maori wars – Irish

    whatever anyone might have to say about Qantas employees – and i know a few of them and yes they are way overpaid for their effort compared to those who are not so lucky

    but

    if anyone thinks that the shareholders of qantas are in any way whatsoever ethical, caring, considerate or fair

    you are on the wrong planet

    these are the banks remember?

    banks – they control most of the world – they do not care about anyone except themselves and their shareholding is a map of incestuousness that was most aptly described by Taibbi as a vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money

    anyone who defends the qantas management over the employees on any basis whatsoever – no matter how bad the employees might be – is either a shill or a fool or ideological maniac

    pop

  66. Freelander
    October 30th, 2011 at 22:39 | #66

    @Ken_L

    It is not xenophobic nonsense because it has happened before. And, I thought obviously, but maybe not, I am talking about the company being ‘foreign owned’ as for example, Beyond Petroleum is identified as being British, while Exxon is identified as being American. When the headquarters are in another country and that is where the company came from the decisions are typically made from that country’s perspective and with the help of that government’s resources, including their secret services, like for example, the CIA in the case of the US. If you think ownership doesn’t give leverage I think you are being a little naive. BP was treated the way no American company would have been treated, indeed the way Haliburton, which was the company to blame anyway, when there was a trifling oil leak in the gulf of Mexico. Likewise, Union Carbide because it was American owned didn’t have to many problems in India after Bhopal, at least not the problems an Indian company would have had or a Pakistani company would have had. Of course, I could be wrong, and these example could simply be nonsense. Or maybe not.

  67. Jill Rush
    October 30th, 2011 at 23:49 | #67

    There seems to be little doubt that in the long term Joyce has used up any capital he had with the government. Anthony Albanese was most unimpressed that he wasn’t briefed about this action by Qantas prior to it occurring and other Ministers have been cited as comparing it to industrial terrorism. The lawyers behind it have prior form with Rio Tinto and the Waterfront dispute. The Board has individuals including the chair who have similar experience. There seems little doubt that they are happy to have the Government as collateral damage in their union busting. Whether they are found to be in breach of any aspect of the law will no doubt play out in the days to come.
    However in the short term they will have achieved their goals of ensuring that a decision is made in the next three weeks.
    What is less certain is the claims that Qantas are making about their financial position and whether Qantas is paying for other pet ventures of the board with Qantas money.
    However for those who have thought about the “Occupy” movement there is plenty in this action which fits the 1% versus 99% scenario. The pay rise for the CEO, the failure to let shareholders know about the well advanced plans the day before they were announced and the absolute disregard for the lives and plans of the passengers and the misrepresentation of the staff of the airline.

  68. Freelander
    October 31st, 2011 at 00:16 | #68

    @Jill Rush

    I wouldn’t be surprised if some in the opposition had been briefed before, or at least a former Liberal minister. The whole thing is as smelly as some of the activities in relation to the wharves under the previous government, like, for example, companies getting out of paying their workers entitlements by creating a labour hire company which had no assets which then on-sold the services to the stevedore companies. I am always amused by people who are well paid who whine about a baggage handler allegedly getting the grand sum of $80,000, presumably after overtime, doing an unpleasant manual labour job, which I certainly wouldn’t want to do, but are unconcerned by some rat giving himself a 71 per cent pay increase when he is already obscenely overpaid. Lets face it, $80K is not a lot for a family to live on nowadays. Driving a bus wouldn’t be a lot of fun either. No wonder there is no respect for the status quo. Little wonder the British rioted or that there is the Occupy Wall Street movement.

  69. plaasmatron
    October 31st, 2011 at 03:14 | #69

    A few have noted already, that the argument of “competing with Asia” is incorrect. Qantas has special treatment in the Australian market. I think Joyce doesn’t care if the Qantas brand is trashed in Australia. Aussies usually just fly the cheapest anyway. The real aim is to steal one of the most recognizable brands in the world and flaunt it in the asian market. Anyone who has observed how the new middle classes of China, India and Russia consume has seen that it is all about the brand. If you don’t know what quality is, because you have never had the opportunity to compare, then you will buy the recognized brand. Qantas will cease to operate in Australia (or provide a token service) to use the iconic red tail in Asia, with asian pilots, asian crew and asian engineers.

  70. October 31st, 2011 at 05:11 | #70

    TWENTY LARGEST SHAREHOLDERS as at 20 August 2010
    Shareholders % of Issued Shares
    1. J P Morgan Nominees Australia 23.61
    2. HSBC Custody Nominees (Australia) Limited 19.97
    3. National Nominees Limited 16.63
    4. Citicorp Nominees Pty Limited 9.95
    5. ANZ Nominees Limited 2.90
    6. Cogent Nominees Pty 2.85
    7. AMP Life Limited 1.47
    8. Australian Reward Investment Alliance 0.95
    9. Bond Street Custodians Limited 0.67
    10. Queensland Investment Corporation 0.57
    11. Pacii c Custodians Pty Limited 0.56
    12. RBC Dexia Investor Services Australia Nominees Pty Limited 0.30
    13. The Senior Master of the Supreme Court 0.23
    14. UBS Wealth Management Australia Nominees Pty Limited 0.22
    15. Argo Investments Limited 0.15
    16. Suncorp Custodian Services Pty Ltd 0.12
    17. Ming Hao Trading Pty Limited 0.11
    18. UBS Nominees Pty Limited 0.10
    19. Neweconomy Com Au Nominees Pty Ltd 0.10
    20. ANZ Executors & Trustee 0.08
    total: 81.54

    now go look at this

    http://www.newscientist.com/article/mg21228354.500-revealed–the-capitalist-network-that-runs-the-world.html

    look at that first and largest shareholders and tell me that they are not pulling (at least some of) the strings

    whatever this is all about it is important not to leap to support “the shareholders” or think in anyway that the poor shareholders have been impacted badly by this

    the most likely response to it today will be a share price jump of 4%

    these are banks remember – recall the archetype from childhood imagery – the evil banker stroking his mustaches as he watches the train approach the innocent damsel tied to the tracks

    remember “the grapes of wrath”

    banks

    evil

    if governments truly represented the people they would all as one start publishing sets of playing cards like those used in Iraq

    with the executive officers of all those listed 147 companies on the cards – with the CEO of Goldman Sachs as the Ace of Spades

    they would need sets – the Gold set – top scumbags, silver set – next lot of scumbags and so on

    then we could all seek rewards from the state for bringing in these leeches dead or alive

    ah well, it’s a colourful dream

    pop

    ps, oh and yes i haven’t forgotten that the other scumbags at the top of control are the executives of the military-industrial complex

    as all should know from how happily Australia rushed to support them in their nasty wars – good places to sell their wares to us tax payers to keep us safe from the evil terrorists

    p

  71. Fran Barlow
    October 31st, 2011 at 05:18 | #71

    @Sam

    I pretty much agree with you Fran, but I’m surprised that you aren’t in favour of most nationalisations just as a general principle. I thought you wanted “Communism on a world scale.” How is that consistent with private ownership of the means of production?

    It’s consistent with the view that communism isn’t something that can be built in the face of material scarcity. It’s not something that is on the short or even medium term agenda.

    In politics, one plays the cards one has as best one can, rather than try doing things that would require cards we don’t have and haven’t yet designed, still less produced.

    As things stand, states are not inclusive, and it follows that their control of production is not an expression of popular control either. Some tension and pluralism in the system is thus desirable.

  72. rog
    October 31st, 2011 at 06:13 | #72

    @The Peak Oil Poet I think you will find the same style of investment in Qantas competitors, it’s all swings and roundabouts. Plus they will be in on the service industries including snack foods, car parks.

  73. October 31st, 2011 at 06:19 | #73

    @rog

    no doubt of that

    my point being that there has to be something in it for them – the question is what?

    what is the game plan here? i’ve seen various suggestions

    is this a power play?

    a “set an example” strategy?

    or a “let’s show you Australians what we can do to your biggest brand so you don’t get out of line”

    a betting game between top tier players just for fun?

    “follow the money” so who profits from what outcome and how?

    as John posted where’s the sense?

    pop

  74. TerjeP
    October 31st, 2011 at 08:14 | #74

    I must say I’m a bit surprised by the anti Irish tone in some of the comments here. It’s one thing to disagree with the decisions of the Qantas CEO but surely his ethnic heritage is irrelevant to how Qantas is managed. And calls for him to be sent back to Ireland when he is legally resident in Australia are rather totalitarian in outlook. Whilst not everybody here is speaking in such terms there does seem to be a high degree of tolerance or indifference towards this overt racism. Surely an intelligent debate shouldn’t entail such base forms of hatred. Irish should not be used as a pejorative term.

  75. Freelander
    October 31st, 2011 at 08:16 | #75

    Twenty largest owners are institutional shareholders or owners using other people’s money. The ordinary punters whose money they are using don’t get any votes when the ‘shareholders’ vote. Those voting using other people’s money simply vote for what is best for them rather than the real owners of the shares. In the AGM, the real shareholders who voted with the shares they actually owned were against the board and the pay rise for Joyce, and the institutional shareholder vote, with the shares being held on behalf of others who had no say in how those shares voted, voted for the managerial class getting more gravy through increased CEO pay and increased Director pay. No wonder they manage to rape and pillage shareholder value and send the executive managerial class pay through the stratosphere.

    Why does Joyce need a pay rise? What is his opportunity cost? He was promoted to the position from within Qantas. Is there really a queue of others trying to hire him to work for them for $5million a year? I think not. His pay is hardly ‘market’ determined. His pay is the type of pay rate you get when you get a bunch of pals setting their own pay rates. They are all using other people’s money so no wonder they think its fine to pay themselves so handsomely.

    Qantas’ strategy was clearly targeted at the travelling public and the economy timed to cause maximum disruption both because of CHOGM and the Melbourne Cup, and because it was done without warning. A strategy to blackmail the government and the ‘independent’ umpire to take away the union’s right to industrial action, and to ultimately further its goal of taking the airline out of Australia and off-shore. The action wasn’t directed at putting pressure on the union because they knew the government and ‘independent umpire would have to step in immediately. And, in that Joyce has won. The union’s right to industrial action has been taken away permanently. Qantas management can continue to not negotiate, to not negotiate in good faith and the union has nothing to bring them to the table for good faith negotiation. Victory for blackmail.

    It is clear that Qantas management has been pursuing a long drawn out provocative strategy of bad faith negotiation to try to provoke an over reaction by the union. Having not succeeded in that it has engineered the government and ‘Fair Work’ Australia to step in and de-fang the union so it can continue its union busting tactics. The 1 per cent aims to once more crush the 99 per cent, helped on its way by a piece of successful blackmail.

  76. TerjeP
    October 31st, 2011 at 08:26 | #76

    Dick Smith was interviewed by Alan Jones this morning and he was extremely critical of the PM for not being up front with the Australian people. Much of what he said is summarised in the following article:-

    http://www.canberratimes.com.au/news/local/news/general/smith-is-amazed-airline-has-survived-without-paying-lower-wages/2340521.aspx

    His main point seems to be that you can run airline policy for the workers or you can run airline policy for consumers but you can’t have your cake and eat it. It is government policy that leads Qantas to need to compete with cheaper alternatives and consumers are voting with their feet for those cheaper alternatives. I don’t agree with Dick Smith in his sentiment for protectionism but at least be is logical about the policy choice available and honest about the fact that Australians would be hostile towards the higher airfares such a policy would entail.

  77. Freelander
    October 31st, 2011 at 08:29 | #77

    @TerjeP

    My hero, stepping in to protect poor old $5million dollar man from people who have nothing against the Irish but have plenty against a rat regardless of nationality. You, Andrew Bolt and Alan Jones, my trinity of heroes. Always there to protect multicultural Australia and our rich diversity. And, no doubt a protector of the likes of Sol Trujillo, another blow-in, another carpet bagger, another CEO who destroyed shareholder value and did very well for himself in the process. Someone of Mexican heritage who has a much in common with the average Hispanic as poor old Irish Joyce has with the average Irishman. Two victims who really need the likes of the trinity to rush to their defence.

    Well, my heroes will always be there to right any wrong, but leave any injustice left untouched, unless, of course, it happens to some rich right-wing icon, that is, someone they aspire to be like.

  78. Freelander
    October 31st, 2011 at 08:31 | #78

    Dick Smith with his regularly tropo views is hardly worth taking seriously. But, oh. He is rich too. Better show him some unearned deference.

  79. TerjeP
    October 31st, 2011 at 08:42 | #79

    Freelander – if people want to hate Joyce or Trujillo because of their actions then fine. However articulating that hatred via reference to ethnicity or national origin isn’t endearing. It’s crass. Ethnicity isn’t relevant to the actions of either Joyce or Trujillo. It shouldn’t enter the debate. Although it is perhaps predictable that some people can’t resist resorting to prejudice and seeking to exploit it.

  80. Freelander
    October 31st, 2011 at 08:49 | #80

    @TerjeP

    Yes. I soo agree with you Terje. You, and Andrew and Alan. Always there to put the ‘latte’ sipping liberal tolerant view on behalf of rich and powerful victims. They really need you, Alf Garnett and Archie Bunker leaping to their defence. Unless they happen to lose all their money, in which case they won’t need your defence at all. And maybe they won’t hold their breath, in that case, waiting for it.

  81. Ken_L
    October 31st, 2011 at 09:02 | #81

    ‘When the headquarters are in another country and that is where the company came from the decisions are typically made from that country’s perspective and with the help of that government’s resources, including their secret services …’

    Nice laugh to begin the week. I thought that bloke sitting next to me on BOAC that time I flew to London looked like M … and at least now we know now why ASIO needs so many people. What do they do I wonder … bug the boardroom at Virgin and report the goss to Qantas with invisible ink? It explains why all those yank airlines went bust years ago; we all know the CIA is a hopeless joke.

    If this is the level of discussion on JQ’s blog I can’t begin to imagine what’s happening at places like the ‘Daily Telegraph’. I hope somebody somewhere is documenting the decline and fall of the blogosphere as a place for rational discourse. It will provide valuable insights into the human condition for future generations.

    Meanwhile I will continue to fly Singapore Airlines, despite the fact the excellent service is apparently due to Lee Kuan Yew’s spies and not, as I foolishly used to think, to competent management.

  82. Tom
    October 31st, 2011 at 09:11 | #82

    Bosses who asked for market liberalism (a.k.a. free trade) thinking that the market is efficient are now asking for protectionism policies or trying to force China to implement market liberalism because they can’t compete with an economy with regulation.

    It’s purely fine to give a pay rise of 71% to a CEO of a company which it’s profits did not rise by 71% because it’s freedom. It’s purely wrong to take industrial actions against the company when the employees are asking for a pay rise much less of what the CEO receives because it’s freedom. It’s purely fine to close down company operations to force the unions to lose and cause more damage the government, economy and it’s customers than union actions because it’s freedom.

    Any get the irony here?

  83. October 31st, 2011 at 09:26 | #83

    @The Peak Oil Poet

    i note the QAN price is now up almost 5%

    am i surprised, gee, let me guess

    and i wonder just who are buying these shares to push up the price?

    and who was it that said the price would crash?

    Tourism and Transport Forum boss John Lee

    http://www.news.com.au/business/investors-brace-for-qantas-shares-to-crash/story-e6frfm1i-1226181100699

    pop

  84. Fran Barlow
    October 31st, 2011 at 09:27 | #84

    @TerjeP

    re: the “anti-Irish tone”

    I certainly reject such parochialism. This has nothing to do with Joyce’s ostensible ethnicity and I agree that it is regrettable that some have raised it in order to be able to use it to swipe at him. The reference to transportation is especially regrettable. I hadn’t seen either until I looked.

    Joyce’s malfeasance starts and ends with his role as head of a major capitalist corporation. I wouldn’t care if the CEO were John Singleton or John Elliott or Graham Richardson or Paul Keating or Dick Smith. If they were acting as Joyce was, I’d be against it.

  85. Dan
    October 31st, 2011 at 09:49 | #85

    Tom – well, that’s a consequence of the structural fissure in capitalism that Marx refers to. To the capitalist, deregulation is both necessary and deleterious.

    Terje – re. national origins and people of Joyce’s mould: I am reminded of the Irish band Primordial’s vocalist Alan Averill describing the people who led Ireland to its current woes as (paraphrasing) ‘people I couldn’t even recognise as Irish’. I think my Irish housemate would concur.

  86. Ernestine Gross
    October 31st, 2011 at 09:50 | #86

    A graduate of a French military school told me Napoleon not only introduced military ranks, which have been copied more or less in other European countries, but he also introduced the strategy of transferring French solders from their native region to other regions in France.

    The question is whether corporatist management is better understood in terms of military concepts, including an application of game theory, or in terms of the theory of ‘competitive private ownership economies’? In the latter, the behaviour of ‘the producer’ is subservient to all individuals (ie ‘consumers’, ‘workers’, ‘shareholders’, ‘borrowers’, ‘lenders’ with one person possibly occupying several empirical categories).

  87. Sam
    October 31st, 2011 at 09:55 | #87

    @TerjeP
    Bahh. There’s no racial stereotype about Irish people being greedy, incompetent CEOs. This one just happens to be, and I want him to leave. I’d also like our home-grown moronic plutocrats to go. The joke was about how the airline could fly him away, not that Joyce exemplified some racially typical trait.

  88. Ros
    October 31st, 2011 at 10:28 | #88

    The Peak Oil Poet, the New Scientist article you refer to is an interesting one. (Swiss Federal Institute of Technology in Zurich)

    “Abstract
    The structure of the control network of transnational corporations affects global market competition and financial stability. So far, only small national samples were studied and there was no appropriate methodology to assess control globally. We present the first investigation of the architecture of the international ownership network, along with the computation of the control held by each global player. We find that transnational corporations form a giant bow-tie structure and that a large portion of control flows to a small tightly-knit core of financial institutions. This core can be seen as an economic “super-entity” that raises new important issues both for researchers and policy makers……”

    Global Guerillas links to paper itself

    http://arxiv.org/PS_cache/arxiv/pdf/1107/1107.5728v1.pdf

    and you can also progress to discussion of the paper initiated by one of the authors (Glattfelder) following criticism from Naked Capitalism amongst others. Forbes headlines it as “The 147 Companies that Control Everything”. Global Guerillas is a blog worth visiting regularly, has some interesting thoughts on Occupy, Tea Party and the US economy being broken amongst others.

    http://j-node.blogspot.com/2011/08/network-of-global-corporate-control.html

    http://j-node.blogspot.com/2011/10/network-of-global-corporate-control.html

    Amongst Glattfelder’s comments
    6.) What the paper isn’t

    a.) Pushing an economics or socio-political agenda.

    b.) Promoting conspiracy theories.

    c.) An exact, unambiguous measurement of real-world control.
    “Because interpreting and analyzing these kinds of data is difficult, [Davis] says, the analysis serves more as ‘an impression of the moon’s surface you get with a telescope. It’s not a street map.’” Gerald Davis, economist at the University of Michigan in Ann Arbor, quoted from here.

    d.) Alleging that the top agents are colluding.

    Just for fun include this comment from John Robb Global Guerillas. Robb is an engineer.

    “NOTE: it’s pretty telling that a paper of this importance to modern economics/finance wasn’t written by academics in economics/finance. It had to come out of the technical field of complex systems. “

    Glattfelder has a shot back at his critics “I also like the appeal to authority. Physicists, by default, cannot understand anything about economics. It’s a law of nature;-)”

  89. Ros
    October 31st, 2011 at 10:29 | #89

    According to Fran Kelly Joyce has claimed that Qantas did in fact advise several Ministers that they might have to go for grounding and lock out. The PM side stepped Fran’s question as to whether or not those Ministers had kept her in the loop.

    Freelander while one anecdote doesn’t prove Joyce’s case for damaging cost of union actions it most certainly figured in our flight choices. And while I have sympathy for those who might find their travel insurance may not cover them for delayed Qantas flight since Oct 13th, we made the booking choice in August to waste our Qantas Club membership and spend our hours sitting in crowded airports rather than the Clubs, though were moments when felt quite wistful watching the brave trot themselves in. Our choice was not ideological or price determined; it was because we had a wedding and a tour to connect with.

  90. October 31st, 2011 at 10:40 | #90

    QAN now up 7.1% and climbing

    seems like everyone loves Joyce

    he must be rubbing his hands together in anticipation of his next CEO role

    pop

  91. October 31st, 2011 at 11:08 | #91

    Lots of issues covered here http://davidhavyatt.blogspot.com/2011/10/queensland-and-northern-territory-air.html

    1. No good Govt relations strategy – only needed the credible threat of shutdown to get action, not actual shutdown.
    2. No good strategy – Qantas is still bumbling in the dark for a genuine workable strategy.
    3. Interesting question about “competition policy” in general.

  92. kika
    October 31st, 2011 at 11:08 | #92

    senator nick xenophon gave a speech last august, accusing qantas of incorrectly absorbing many of the costs of its offshoot, jetstar. could it be that qantas will be hoping to sell off a profitable jetstar, making big profits (for a few)?

    http://www.theaustralian.com.au/news/breaking-news/xenophon-attacks-qantas-management/story-fn3dxity-1226120794255
    and
    http://www.goldcoast.com.au/article/2011/10/29/361611_major-breaking-news.html

  93. Fran Barlow
    October 31st, 2011 at 11:10 | #93

    @Sam

    There’s no racial stereotype about Irish people being greedy, incompetent CEOs. This one just happens to be, and I want him to leave. I’d also like our home-grown moronic plutocrats to go. The joke was about how the airline could fly him away, not that Joyce exemplified some racially typical trait.

    That’s a sound defence against suggestions of being anti-Irish or linking them with stereotypes, but your allusion to the convict period (in which prejudice against the Irish from the English was ubiquitous), creeps back in that direction, and your rather populistic “send him back to Ireland” jibe is quintessentially parochial. That kind of stuff really is playing to the cheap seats. Your comment that it would apply also to home grown elites does balance it out, though it’s not clear where they would “go”. If one is to go to Ireland and the other merely from their job, the problem persists.

    I don’t believe you bear the Irish any differential animus but the clear othering here invites that kind of ambiguity. If the fellow is acting badly — as I think he is — then let’s just focus on that.

  94. Freelander
    October 31st, 2011 at 11:11 | #94

    @Ros

    But it was Qantas management that had been cancelling flights unnecessarily not unions. When the unions didn’t shut the airline down Joyce shut it down because he wanted the unions blamed. And many have blamed the unions. There had been no reason for him to cancel domestic flights either. Joyce could have paid overtime to have the maintenance done or he could have done what Virgin did. Virgin expanded its domestic flights by withdrawing planes from some of its international services and getting its international partners to take over those missing international flights. So Qantas could easily have done the same and would not have needed to cancel a single domestic flight. But Joyce didn’t want to do that because Joyce wanted to cancel domestic flights to inconvenience the public and so that the public would blame the unions. Joyce claimed he was ‘forced to’ but he wasn’t. The whole thing has simply been a ruse, and it worked! Maybe they should give him another 71 per cent pay increase.

  95. Freelander
    October 31st, 2011 at 11:13 | #95

    If someone comes here from elsewhere and turns out to be a scumbag, the general rule is send him back. We have enough home grown scumbags already.

  96. Ikonoclast
    October 31st, 2011 at 11:14 | #96

    @Ernestine Gross

    The mention of Napoleon is intriguing. Joyce is somewhat of a “Little General”. Now, TerjeP can take me to task for being “shortist”.

    Napoleon is regarded by some thinkers (for example, John Ralston Saul) as being the first example of a truly modern dictator. The rational, corporatist organisation of the Army, and later the Grande Armée, perhaps provided the model for modern corporatism.

    To my mind, the most salient features of Napoleon’s use of the Army and men are summed up by his boast to Count Metternich;

    “You cannot defeat me, I spend 30,000 men a month.”

    This disregard for the loss of human lives and all the other “collateral damage” was the defining element of Napoleon’s leadership. Whilst the raising of the Grande Armée was an efficient and ruthless bureaucratic exercise conducted by his functionaries, Napoleon’s carelessness, disorganisation and waste in the field was stupendous.

    Perhaps Ernestine is making a point about the dictatorial nature of Joyce’s decision making. If so, I agree. The disregard for human livelihoods and collateral damage is indeed “Napoleonic” in a petty way.

  97. Fran Barlow
    October 31st, 2011 at 11:18 | #97

    @Tom

    Any get the irony here?

    I see no irony. It’s entirely consistent, providing one keeps in mind that the slogan “freedom” when used in maintream discourse about class society is always an expression of the interest of the dominant class. Those allied with an insurgent class use it to express their own social claims.

    When used by allies of working people, the emancipatory content of the slogan is bound up with the right of working people to deprive the exploiters of their right to exploit and to ultimately transcend scarcity and therewith the wage labour system, class society and class rule. Only at this point can the freedom slogan be about emancipation in a general sense.

  98. Ikonoclast
    October 31st, 2011 at 11:21 | #98

    @Ernestine Gross

    Ernestine, I don’t understand this sentence;

    “the behaviour of ‘the producer’ is subservient to all individuals (ie ‘consumers’, ‘workers’, ‘shareholders’, ‘borrowers’, ‘lenders’ with one person possibly occupying several empirical categories).”

    I don’t understand because I do not see the term “producer” as having any different meaning from “worker”. Are not the workers the producers? Alterantively, who is a producer and how does a producer differ from a worker?

    Currently in our system it seems that the needs of workers come last. It is the workers who are forced to be subservient to shareholders, customers and managers. Under capitalism, it is the worker and worker role that is the “bondslave” of every other person and role.

  99. Freelander
    October 31st, 2011 at 11:30 | #99

    @Ikonoclast

    The Russian campaign was a great example of his profligate expenditure of his men.

    As for Joyce, it is clear he is simply the frontman. He has been raised up to the position given a pile of gold and is doing the job. Those behind him conveniently avoid the flak, and job done Joyce will be discarding this country of convenience faster than he can get rid of his Australian staff, even in his dreams. Joyce is a well paid lackey, and is a successful distraction removing the focus from those behind the whole thing.

  100. Fran Barlow
    October 31st, 2011 at 11:47 | #100

    @Ikonoclast

    I don’t understand because I do not see the term “producer” as having any different meaning from “worker”.

    I don’t believe it does, although “producer” does cover semantic ground that many would not include in ‘worker’. Is a contracted systems analyst, or self-employed dentist with a small staff a worker? Arguably so, but ‘producer’ is neater.

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