Money, hypocrisy and airlines

Posted: October 30, 2011 in Uncategorized
Tags: , , ,

This Quantas dispute has gotten so out of hand, it simply isn’t funny. And the root of it all is money.

We have a CEO, Allan Joyce, who demanded and received a $2 million dollar pay rise, an increase of some 71%. The total bill for senior executive and Board remunerations increases that passed through the recent Quantas shareholder Annual General Meeting is something like $38 million. I understand that there was considerable opposition to this on the floor of the meeting but it still passed. How? Through the votes from the institutional investors – that are controlled by yet more of the same fat cats.

It is one continual, ridiculous round of grossly over-paid executives all looking after each other at the expense of everyone else. Something has to be done but in all honesty I am not sure what the answer is. Small investors can scream as much as they like but they are still essentially powerless in these large corporations in the face of the large blocs of shares controlled by institutional concerns.

The job of CEO is to keep a company running properly. Yet it seems pretty much every level of the Quantas workforce has disputes with the Quantas management lead by Allan Joyce. In those circumstances it is hard to see how he and the rest of his management team could be considered to be doing his job well at all, let alone justifying a $38 million worth of pay rises.

In what at first glance may seem at first glance to be a knee-jerk reaction, on Saturday Joyce grounded the entire Quantas fleet around the world. But since then it has been reported that plans were in train to organise this late last week such as booking thousands of hotel rooms around the world for the passengers who were about to be stranded. Yet news of those intentions was kept away from concerns such as the Australian Stock Exchange, not to mention the poor sods of passengers who might have been able to make other arrangements.

Talk about heavy-handed overreaction. Are these the actions of a CEO justifying a $2 million pay rise? It should be further noted that the decision to ground the entire fleet was not in response to what had been done by the unions or what was being done, but supposedly because of what they might do.

Documentation has allegedly appeared that shows quite clearly that these plans were in place days ago. Quantas management has claimed that the date on the document in question was a clerical mistake, that there was no decision at all about grounding the fleet until Saturday morning.

Anyone prepared to take a bet that someone within the Quantas organisation will eventually come out and admit that there was no clerical error at all? That the date on the alleged document was quite correct i.e. that Joyce and co simply lied?

The government reaction to this escalation of the Quantas dispute has been to force all parties to appear before the Fair Work Australian commission. Prime Minister Gillard has publicly at least, refused to lay blame but instructed both parties to cease their industrial action and allow the conciliation processes under FWA to take place. This will be a major test of both that legislation and the Prime Ministers authority.

I suspect that Joyce may have now in fact over-played his hand. To continue the poker analogy, he has gone all in, expecting his opponent to fold, only for the other player to call his bet, along with other players joining the game.

It should be further noted that the earlier union industrial action was not an overnight whim. It was the product of lengthy yet failed attempts by the unions to bring the Joyce management to the negotiating table. The spin from Joyce and co about this all being the sole fault of the unions should be disregarded.

The biggest hypocrisy in this whole affair however comes from former Industrial Relations Minister in the Howard government, Peter Reith, who has come out condemning the Prime Minister for forcing Quantas and the unions to the FWA commission, claiming that government should never intervene in such affairs. What? Oh give me a break. This coming from the Minister who was directly involved in the waterfront dispute in the mid-1990s as part of his openly declared intention of breaking the unions. What incredible hypocrisy!

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