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The Forum > Article Comments > When unions fly too high > Comments

When unions fly too high : Comments

By Daniel Bradley, published 14/10/2011

Qantas unions have every right to negotiate for wages, but not to try to run corporate strategy.

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Listening to the public discourse of this dispute, I hear a Qantas management that is determined to trample the unions; a management that hasn't learned from the pilots' dispute 20 years ago [or the Patricks dispute]; a management that thinks it's OK to offshore jobs; a management that thinks it's OK to undermine work and conditions with its secondary minimal service companies; one that's arrogant enough to award itself while denying the people who actually keep the airline flying. It's a management that has no respect for its workforce and their representatives, one whose ideology is the primacy of managerial prerogative over inclusiveness [the lost corporate memory of forward-thinking managers further down the line who gave baggage handlers their heads in saving the airline millions of dollars by designing an efficient system of loading aircraft]; a management that probably lost some time ago the strong employee loyalty that the airlines once enjoyed and never understood.
Posted by Seamus, Friday, 14 October 2011 7:14:38 AM
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There are a number of inescapable truths in this article. Unfortunately, the really important bits are entirely unrelated to the author's target - the unions - but instead illuminate the key issue, which is Qantas' consistently poor management, over many years.

"The reality... is that the international arm of Qantas is close to a basket case and has been for years."

Ummmm, right. So the answer is to absolve management from any responsibility in creating this "basket case", and instead find ways to i) protect management's jobs by outsourcing as much as possible and ii) force the unions into a corner, so you can blame them for everything.

The author pretends a little even-handedness.

"Qantas haven't been perfect through this process. They made a glaringly amateur tactical error in their campaign by awarding a significant pay increase to their Chief Executive Alan Joyce"

And that's the only thing they got wrong? Oh, please...

What about the long string of wrong decisions on their fleet mix, and its impact - in both the short and long term - on maintenance costs? Not to mention the Board's decision to order early-life models from both Airbus and Boeing, which is always a risky strategy (as proven in this case by the A380 scare, and the long delays to the Dreamliner), but in this case compounded by the fact that they had no fallback e.g. the deployment of 777s, which have performed brilliantly for Qantas' competitor airlines.

Much as I dislike the tactics employed by the unions in this case, which seem designed to maximise the impact on passengers, their complaints that the company has carried a huge overhead of incompetent managers for so many years, deserve a wider hearing.

The announced restructuring is simply a way in which attention can be drawn away from management's serial blundering. It's the oldest trick in the book, beloved of con-men everywhere - "look, over there..."

If Qantas ends up in the hands of an overseas company - which seems the only possible logical outcome - then it is management that should be pilloried, not the unions.
Posted by Pericles, Friday, 14 October 2011 8:52:06 AM
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Wait a minute, this is the same author who was arguing not three days ago that 'if you pay peanuts, you get monkeys'. Apparently a bad thing in the parliament, but just fine when it comes aeroplanes.
Posted by The Acolyte Rizla, Friday, 14 October 2011 11:16:35 AM
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Acolyte Rizia your tenuous link of two entirely different subjects is poorly considered.

It is ridiculous to imply that my argument that we should be paying our most senior politicans market-competitive salaries, in any way discounts the validity of my view that Qantas have the right to run their business as they see fit: keeping in mind they already pay their staff more more than jetstar, virgin and tiger.

Nice try, but that's a particularly long bow you're drawing there.
Posted by daniel: spinspun, Friday, 14 October 2011 12:30:21 PM
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Pericles, you are quite correct in one way. Yup, lots of poor
management decisions were made at Qantas. The place used to be
Govt owned after all, some of the old Govt dept methods of doing
things, would have remained for a while.

But you would also have to concede that good management is about
dealing with the here and now and a plan for the future, not about
crying over spilt milk.

http://www.businessspectator.com.au/bs.nsf/Article/Qantas-IR-Jetstar-union-airlines-Virgin-Fair-Work-pd20111014-MLULR?OpenDocument&src=sph

This is an interesting take on the dispute, with some of the
historical information required, to understand it a little better.
Posted by Yabby, Friday, 14 October 2011 1:40:37 PM
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Daniel,

I concur. But if better wages and working conditions equates to better workers - the essential thesis of your peanuts and monkeys argument - how can unions negotiating for better wages/conditions be regarded as a bad thing? Unless, of course, you just don't like unions.

Need I really point out that unions have just as much right as Qantas to conduct their business as they see fit, within the bounds of the law?
Posted by The Acolyte Rizla, Friday, 14 October 2011 2:47:32 PM
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The question is not so much the spilt milk, Yabby...

>>But you would also have to concede that good management is about
dealing with the here and now and a plan for the future, not about
crying over spilt milk.<<

...but whether the people who spilt it have actually learned from their mistakes. And frankly, I don't see that they have. Which makes this claim, from the Business Spectator article you cited, something of a joke:

"...the value of Qantas is not in the flying of aircraft as such but the intellectual property and expertise existent in Qantas management... On evidence this is enormously flexible, innovative and with a global perspective."

On what evidence, I wonder?

So far, the evidence points to an expensive lack of due diligence on their decision processes. Painting that as "flexible and innovative" is nothing but PR spin - like calling Vladimir Putin a champion of democracy. You have to squint really hard to see it.

It's interesting too, that the article gives no thought to the cost of trashing the brand entirely. British Airways must be giggling their socks off, especially as they are leasing the Heathrow slots that Qantas no longer have an interest in.
Posted by Pericles, Friday, 14 October 2011 4:01:36 PM
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*but whether the people who spilt it have actually learned from their mistakes*

To answer that one Pericles, one would need a detailed understanding
of the personalities involved running Qantas. Was it Dixon, who
decided what? None of us really have that kind of insight.

The way I understand it, Joyce was given the job, because he
turned Jetstar into a business which earns as many hundreds of
millions a year, as Qantas international loses. So they would be
using that model in terms of potential for 4 billion Asian customers,
rather then 22 million locals.

Fact is Qantas simply can't compete with Air NZ, Emirates and SQ.
Their costs are too high, people won't pay a premium for Aussie
pilots. Its a whole new game.

So it makes sense to wind down their Qantas international operations,
stop losing 200 million a year, and focus on where profits can
be made. That means 1000 job cuts, which is what the unions are
really on about. They want job security but in today's business world,
your job is only as secure as the company being viable.
Posted by Yabby, Friday, 14 October 2011 4:52:25 PM
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How many times do unions have to make the same mistake? When the cost of a strike to the company is extremely high, the unions are almost bound to destroy it. The strike weapon is always used to excess.

The history is long, & continuous. Just a few examples could start with the British motor industry. The unions thought Leyland was too big to be allowed to fail. It wasn't. The only motor industry in the UK today is foreign owned, so the profits are exported.

Australian shipping was another. The unions got incredible work conditions, but then the work, with the industry dried up.

Then the British coal industry went.

Of course Ansett is so close to Qantas that it's obvious.

More recently the US motor industry has had to be bailed out. Retirement & health care benefits, given in good times, had finally added just too much overhead for the companies to handle in the rough.

So many of these industries were subject to ridiculous claims, in the very good times. Poor management gives in to the claims to keep the doors open, but find what they have given is not sustainable, in a bit of a down turn.

One of the next to be in trouble will be our own booming mining sector. It won't take much of a drop in the terms of trade, for many of the miners to find the present cost of labour can not handled.

If only wage negotiation was a two way street. I can see no reason why workers should not share in a bonanza when it's available, but sometimes negotiations should lead to a reduction in wages. This would allow increases to be given readily then removed at times of industry stress.

Yes I know, pigs might fly, too.
Posted by Hasbeen, Friday, 14 October 2011 5:12:43 PM
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will some Australians never learn ?
Posted by individual, Friday, 14 October 2011 6:55:58 PM
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Where is Peter Reith, his attack dogs and balaclava clad pilots and engineers when you need him?
Posted by Neutral, Friday, 14 October 2011 10:00:27 PM
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I don't know what Pete's up to these days, but his attack dogs and thugs appear to be on indefinite loan to the constabulary.
Posted by The Acolyte Rizla, Friday, 14 October 2011 11:32:17 PM
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This is why the jobs are being shifted overseas. It is not just the lower cost, it is the better work ethic.
Posted by Shadow Minister, Saturday, 15 October 2011 6:52:09 PM
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