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?
John Quiggin 
Well I have not heard a justifiable case yet. Qantas has set out to harm as many as possible.
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.
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.
Ben Sandilands at Plane Talking is worth a read.
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.
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.
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?”
@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.
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.
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…
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.
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.
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.
In such scenario workers would also be prohibited from resigning, they’d have to stick around to share in the outcome of their decisions.
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.
Workers do own the consequences, just not the profits.
“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.
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.
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.
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.
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.
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.
The term #workjoyces is now doing the rounds on twitter
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.
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?
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.
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.
@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.
@TerjeP
“… Bolt Report if you want the alternate perspective.”
Most of us look elsewhere when we have a taste for fiction.
Freelander, your post seems to be written without being mindful that the shareholders are actually SUPPORTING the actions of CEO Joyce.
@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…
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.
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?
@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.
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.
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.
@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.
@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.
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.
“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).
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.
@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.
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.
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!”)
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.
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.
Pr Q said:
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:
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.
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.
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.
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.