Posts Tagged ‘Quantas’

Will the fat cats turn?

Posted: October 30, 2011 in Uncategorized
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The end result of the Fair Work Australia hearings last night was pretty much as predicted. Quantas has been told to get its planes back in the air and the unions told to go back to work. The two sides to the dispute have 21 days to resolve their differences although either side may apply for an extension.

What has not been resolved is the intractability and hypocrisy of a senior management regime that gleefully accepts obscenely large pay rises while essentially refusing to negotiate pay rises for staff. In the case of the pilots’ union, they aren’t even asking for a pay rise.

For the thousands of people stranded around the world by Alan Joyce’s heavyhanded descision to ground the entire Quantas fleet, this is no doubt a good decision and I entirely empathise with them. I dare say I would have been one very unhappy camper if I had been one of those stranded.

There is however a significant point that Joyce has won. Under these orders, the unions no longer have the right to take industrial action which places the position of power firmly on the Joyce side of things. This despite the fact that Joyce’s action on the weekend caused fair more disruption than any union industrial action of the past couple of months. While I would certainly not want to see a return to the bad old days when it seemed every other day some union or other was striking because there was too much butter on the sandwhiches or some similarly silly thing, the only power the working stiff really has is that of collective action. With that removed, their bargaining position immediately becomes that much weaker.

So far we have not heard any opinion from the institutional investors who hold such important blocs of shareholder votes. How are they responding to the damage that will surely be done to share prices in the wake of Joyce’s actions on the weekend? Are they going to continue to back their fat cat mate or will they start turning on him?

Money, hypocrisy and airlines

Posted: October 30, 2011 in Uncategorized
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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!