qantas
1 Nov 2011
A Naked Conflict Between Profits And Wages
The IR dispute that stopped the nation is a handy yardstick for gauging just how hostile our general public conversation has become to organised labour, writes Ben Eltham
"The enigma of trade is that it can make a whole country richer and yet most of its people poorer," writes US economist Dean Baker in a recent book. This melancholy conundrum is the crux of the Qantas dispute.
Baker is writing about the way trade liberalisation has eroded jobs and wages in the US manufacturing industries, but the experience of airlines in Australia is no different. Exposed to stiff gales of creative destruction in the form of the cut-throat international airline industry, even famous brands like Qantas are experiencing fierce competitive pressures. Running an airline is a brutal equation at the best of times: wages, fuel and the planes themselves make up a huge proportion of an airline’s cost structure, and there is relentless pressure on management to keep these costs under control.
In the old days, Australia’s airlines solved this problem by charging very high fares, protected by government regulations that ensured the most lucrative routes and airport slots were saved for Qantas and Ansett and kept international competitors away from lucrative domestic routes.
But nothing lasts forever, and the new strategy at Qantas is to turn the airline into a low-cost carrier, apparently by whatever means necessary. This means all the airline’s resources and capital will be ploughed into Jetstar, allowing Qantas to wither away into a legacy business carrier that flies a few remaining profitable routes.
And that in turn means driving down the wages and conditions of Qantas’ staff, by shifting pilots, maintenance and other operations offshore. It’s Offshoring 101, and it should be no surprise that the airline is undertaking it.
But nor should there be any surprise that the unions are resisting it. The underlying logic of offshoring is all about reducing the wages and conditions of a corporate workforce. The idea that unions should somehow see this as business as usual — indeed, as the only way to ensure Qantas’ survival — is neoliberal ideology, pure and simple. In the fantasy land of the business lobby, self-interest is something that only applies to management and shareholders, not to unions and workers.
The planes are now back flying and the airline and its workers are back at the negotiating table. But the real lesson of the Qantas lockout is about capitalism itself. It’s not surprising that management wants to cut costs and lower its wages bill. So why should we be surprised that unions and workers want to protect job security?
The minute-to-minute details of the dispute are revealing. By grounding the fleet at a moment’s notice, Qantas CEO Alan Joyce forced the hand of the Gillard Government. The Prime Minister was in Perth for the Commonwealth Heads of Government Meeting, which was due to break up, leaving thousands of diplomats and public officials stranded in Western Australia. Qantas must have known that cancelling half the flights in Australia was an unacceptable proposition for any government, and so indeed it proved.
As a result, the Government invoked its rights under the Fair Work Act to refer the matter straight to the industrial umpire, the full bench of Fair Work Australia, under Howard appointee Justice Giudice. After a marathon overnight hearing stretching into Monday morning, Fair Work Australia ruled that Qantas and the unions had to stop all industrial action and return to the negotiating table.
It was a victory of sorts for Qantas, which was able to shut down the rolling strikes by engineers and baggage, and a blow to the unions. The balance of legal opinion seems to believe that issues of so-called managerial prerogative, such as job security and offshoring, will not be subject to a binding judicial arbitration. In other words, the workers might get a pay rise, but Qantas will be free to continue its ambitious plans to turn itself into a low-cost Asian-based carrier.
The Qantas dispute has become a handy yardstick for gauging just how hostile our general public conversation has become to unions and organised labour. Much of the media has covered the dispute as though it is a litmus test for the Gillard Government’s industrial relations legislation, the Fair Work Act. While it certainly is this, the foundation of the dispute is much simpler than arcane legal arguments about protected action and managerial prerogative.
Here is an old-fashioned showdown between organised labour determined to negotiate to protect the interests of workers, and a company management determined to use any means at its disposal to break that union power, in order to drive down the costs of its labour and make more money. This dispute could have happened in any earlier industrial relations regime: yes, even under Work Choices.
And yet much of the media seems unable to understand this dispute for what it is: the naked and unpleasant conflict between wages and profits inherent to capitalism. For instance, the rolling industrial action by the Transport Workers Union and the licensed aircraft engineers has been widely portrayed as holding a gun to the airline’s head, or threatening it with a "death by a thousand cuts". On the other hand, when the CEO shut down an entire airline because his enterprise bargaining negotiations weren’t going well, this has been justified as a bold tactic to resolve the industrial action and bring the dispute to arbitration.
In reality, of course, the notion that Alan Joyce had no alternative but to lock out his workforce and ground the airline is absurd. There was an alternative: Qantas could have kept negotiating. Perish the thought, it could have even accepted the demands of the three unions, which amounted to below-CPI pay rises and a commitment to keep Australian jobs onshore.
Indeed, as Bill Shorten pointed out on Lateline last night, if Qantas was really committed to bringing its workforce with it on its low-cost journey, it should have started three years ago. "Qantas has had 1150 days to persuade some of their workforce, who are intelligent, educated, dedicated professionals, that things need to be done differently," he said.
But Qantas clearly didn’t want to persuade its workforce. Indeed, its actions over the past few days seem to have confirmed that it has been pursuing a premeditated strategy of open warfare with its unions. If Qantas truly wanted to engage with its workforce, why did it lock out its pilots, whose industrial action has so far amounted to nothing more militant than making announcements on aircraft intercoms and wearing different coloured ties? The reason Qantas decided to ground its fleet was not because it had no alternative. The reason was because the unions were winning.
It seems clear that Qantas has in fact long been preparing for this action. The appointment of Alan Joyce himself may well be part of this strategy. Joyce’s background before Jetstar was in low-cost, de-unionised airline operators in Europe. In contrast, the man who many think should have got the job, John Borghetti, seems to be pursuing a much friendlier industrial relations strategy at the helm of Virgin Australia.
The man ultimately responsible for appointing Joyce is Qantas’ chairman, Leigh Clifford. Clifford is a veteran industrial warrior with a background in some of Australia’s most bitter industrial disputes of the 1990s, including Rio Tinto’s Robe River conflict. There are many who believe he is actively driving the current round of union-busting under Alan Joyce.
The other thing that shows us this dispute is about union-busting is that the sticking point on the negotiations is not wages, but rather job security. Unions want a say in how the airline operates, for instance by guaranteeing that Qantas flights will be flown by Qantas pilots. If you think that sounds reasonable, you’ve obviously not been listening to Alan Joyce. For Joyce and Qantas’ management, conditions like these are an unacceptable intrusion on the right of the management to make tough decisions. Joyce and Clifford obviously decided it was better to bring the crisis to a head than to cede any authority in the running of the airline to their staff.
But is Qantas’ new low-cost Asian strategy necessarily the right one? And is it necessarily bad for unions to have a seat at the management table? The hard-line economists and management theorists say no, of course. And yet in Germany, all companies with more than 500 employees must have staff representatives on their board as a matter of law. Despite this, Germany still manages to be an industrial and manufacturing powerhouse.
No, the real lesson of the Qantas dispute is about capitalism itself. In a system of brutal competition, unscrupulous managers and owners will do whatever it takes to drive down wages and grow profits. That’s what they’re paid the big bucks for.
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Posted Tuesday, 01 November 11 at 2:08PM
Leading organisational change can be done, but it’s quite a different approach to what Joyce and Clifford pursue.
In “Blue Ocean Strategy” (Harvard Business School press) it’s called “tipping point leadership”, and a good example they use there is William (Bill) Bratton as New York’s chief of police - he changed things for the better for community and police officers, in a really short time and under serious budget constraints. He’d already done similar things at a number of other gigs.
Posted Tuesday, 01 November 11 at 2:11PM
Hiro Sugita
Is it possible for affected QANTAS customers to sue the QANTAS management for secondary boycott?
Posted Tuesday, 01 November 11 at 2:26PM
Dear Ben,
Well said; sad but true.
While Qantas on one hand is taking hardline free market approach, it’s worth remembering that of all Australian-based airlines, they are still the major beneficiary of Intergovernmental agreements. As you breifly stated - “In the old days, Australia’s airlines solved this problem by charging very high fares, protected by government regulations that ensured the most lucrative routes and airport slots were saved for Qantas and Ansett and kept international competitors away from lucrative domestic routes.”
This is actually still happening. The current arrangements go back to 1944, when Allied nations gathered for the first conference aimed at organising international civil aviation, and which gave birth to the current governing body, ICAO. In 1944, the USA put up a lassaiz-faire proposal for total freedom of movement for passengers and civil aircraft. Europe in particular were concerned that the US would dominate the markets, so the US proposal did not get up. This failed proposal is known as the “fifth freedom”, or “onwards rights”, which holds that any airline can pick up a passenger of any nationality at an airport in any country. Without this freedom, we actually still have a protectionist system; the protectionism operates in favour of airlines considered to be a nation’s “flag carrier”. In Australia, historically and currently, this is overwhelmingly Qantas. Where airlines are part or wholly government owned, this is easily rationalised - airlines are critical strategic and economic infrastructure and need government support. The support in question is the negotiation of bilateral trade agreements with other nations for the exchange of rights to use the “fifth freedom”. As an example, Singapore Airlines have been desperate to get a piece of the Sydney-LA route, but the Australian Government has continued to lock them out on Qantas’s behalf.
The point of all this? Qantas is still considered our “flag carrier”, and benefits substantially from bilateral trade agreements. (I’d be interested to know if the DFAT charges Qantas for this service; or better yet, charges them brokers’ trail!) This also denies opportunities to Virgin. If Qantas continues to become less and less Australian, is is right that they still be the prime recipient of these government arrangements, which to me sit uncomfortably with the free market ideology so successfully employed by Qantas. Then of course there’s the cultural and emotional factors surrounding the Qantas brand; I’m hearing a lot of grumblings along the lines of “take the kangaroo off your tail”. But that of course is the task of branding and marketers: to create emotion, where there is none. Anyone else feel slimy, like they’ve just been “Gruen’ed”? All in all, Joyce, as an outsider, may have underestimated how Austrlians my turn on Qantas due to wounded pride. Personally I’ve always had great service on Qantas, but at the end of the day it’s just another global business that I use but caution myself against having any emotional investment in, in case of nasty situations like have just occurred. As you so correctly point out Ben, global capital will do whatever it takes.
The Qantas Sale Act 1992 still requires no more than 49% foreign ownership; lobbying to change this can’t be far off.
Posted Tuesday, 01 November 11 at 2:32PM
QANTAS is seen by most as a proudly Australian company, our gift to the world. Their marketing department has spent probably billions of dollars and saturated the market with oh so many nauseating advertisements supporting and convincing one and all of that perception.
They have always sugar coated the reality of QANTAS pricing itself above ordinary Australian’s budget and travel plans.
The last paragraph of the article above is correct and valid in probably most all business dealings, but with QANTAS it is different.
To bonus an Irishman 5 million while expecting him to de Australianise and/or de unionise QANTAS is not on. Niaeve as I am about business and greed, for mine QANTAS is the line in the sand for corporate bullying in Australia.
Posted Tuesday, 01 November 11 at 2:35PM
Another reason for the Saturday announcement would have been that the stock markets were closed… otherwise the uncertainty would have certainly caused a dip. As it was, the outcome from the tribunal made the traders rally Monday morning - kind of like a recovery without a dip. quite odd really, but that’s the stock market for you. not connection to reality.
Posted Tuesday, 01 November 11 at 2:44PM
Q: What does QANTAS stand for?
A: Queer And Nasty, Take Another Service.
Posted Tuesday, 01 November 11 at 2:49PM
Ever since the Industrial Revolution enabled capitalism to thrive, bosses have been screwing workers. It began with the women and kids down the mines.
Gradually, unions were formed and, eventually, the workers gained some rights and a half-decent wage. Then unions gained the upper hand and began screwing bosses and, for periods of time, gained high wages and ridiculous conditions.
Then bosses began moving their operations offshore to take advantage of lower wages and material costs and their profits soared while their workforce diminished and along with it, labor and production costs. At the same time, easy credit enabled the workforce to buy things they otherwise couldn’t afford.
Now we are in a situation where wealth continues to move upwards towards the pockets of the rich and, in many places in the world, there is high unemployment with many folk owning houses which are worth less than what they owe.
The capitalist system has reached its use-by date and things will continue to get worse, especially for the lower and middle classes.
It is time to change the system to one where there is economic and social equality for everyone and greed is made a crime against humanity!
Posted Tuesday, 01 November 11 at 3:47PM
Nobody would seriously doubt that Qantas is in trouble, and that part of the reason is that airlines from countries which have very little affinity with Australia, which employ staff at the lowest possible wages, and which ave no need to earn profits, have been allowed to compete.
I can understand why we would allow airlines from Hong Kong, Malaysia, and Singapore to fly into Australia - we have long trading relationships, and they are tourist destinations (and provide tourists to Australia). They are on the way to Europe and represent a convenient break point in travel. But why should countries like Qatar and UAR be allowed to cannibalise the business? They have no affinity and very little trade with us and are not serious tourist destinations.
This is not to gainsay the fact that Qantas has been terribly inept in it’s handling of its staff and public relations. If everyone in the airline was expected to make a sacrifice, at least Joyce and Co could start from the moral high ground. But we have a situation where the Chief Executive receives a 71% increase in remuneration, bringing his total remuneration to forty-one times the average manpower cost for all Qantas employees. Other senior staff have also benefited, given that total Executive remuneration increased by 62%.
Meanwhile the company adopts a confrontational approach to demands by employees for much lower increases.
Perhaps if the Senior Executives were to show more restraint in the face of the problems that the company faces, other employees might be more conciliatory in their claims? Glen
Posted Tuesday, 01 November 11 at 4:27PM
It should be Joyce is joyous because he’s screwed and wrecked Qantas for my own self greed. Typical Pom even though he is an Australian citizen (They must have been asleep or on holidays when they granted Joyce Australian citizenship)
Posted Tuesday, 01 November 11 at 4:38PM
DG, I think greed is a crime of humanity rather than a crime against humanity. I don’t see many people laying down their advantage for the benefit of others, least of all the new money mum and dad shareholders. Sadly there will be no Jesus or Siddhartha in the current economic and social climate.
These pronouncments are exciting but I sense a lack of practicality in some of your demands sport. You know, the difficult questions of who would go about rounding up the greedy and putting them against a wall. Also when the new leaders became greedy (and we know they always do) who will round them up?
QANTAS of course is trying to do a Patricks and will increasingly be lauded by the monied class while scorned by the workers. I welcome it as a return to reality and a rejection of the fiction long trotted out by corporates that everyone benefits when companies do well.
Joyce’s increase in pay is insulting but no more or less so than the other examples of wealth accruing to a powerful few. No doubt the board and shareholders are as pleased as punch that he cares nothing for the social and national role of the airline.
I was interested to hear him talking about the unions trashing the brand. It seems obvious to me that all the things the brand is based on - safety, personality, Aussiness, cleanliness and effectiveness are the very things that will suffer (at least in perception) when the jobs go offshore.
In this sense the unions are more concerned about the long term sustainability of the brand than Alan. At some point he will piss off to further screw the Irish economy and never think twice about the legacy he left the nation and the company. Clifford, on the other hand, will stay to fuck over another group of Aussie workers and should be given the finger whenever we see him in the street.
Posted Tuesday, 01 November 11 at 4:40PM
Are you saying, Grumpy293, that Alan Joyce is Australian?!?
And we worry about who we let in off the boats. For shame!
Posted Tuesday, 01 November 11 at 4:51PM
There are other reason to mourn the loss of Qantas International as an Australian-based business. Allow me to scare the shit out of you on safety grounds.
We must critically assess the role of culture, corporate culture, and corruption in some of our neighbouring countries. I’ll name examples - Indonesia, Vietnam, India and China. (Arab countries have similar problems - it was with good reason that two Emirates pilots resigned and never set foot on Arab soil again after a near-hit in Melbourne two years ago - they would have been flogged. True, they f*cked up big time, but flogging is not a Safety Management System, or a useful product of an effective legal system).
1. Culture: Numerous crash investigations have highlighted the role of culture in poor safety outcomes. Some cultures do not have an environment where juniors can openly question the judgement of a senior. “Don’t embarrass the Bupak in front of his staff”. This affects decision making in the cockpit and in the maintenance hangar. The Jogjakarta crash is a recent example. And note, his conviction was overturned. If attempting to land on a wet runway at double the airspeed at the threshold is not criminally reckless, then I have no faith in that legal system to influence good aviation safety outcomes.
2. Corporate culture: An attitude of saving face and the need to meet targets can have real outcomes on what happens in the hangar. Did the right part get installed? Is the oversight and sampling that supports the signature on the maintenance release sufficiently robust, or even genuine? (Interestingly, even Qantas took 18 months to weed out an engineer with fake quals…. VERY scary.).
3. Corruption: Take everything I said at points 1 & 2, and multiply the likelihood of an accident by the amount of money involved…..
If you offered me the choice of travelling on an aircraft registered in Australia, maintained and crewed by personnel who work in an environment where safety is paramount, where people can speak up without the influence of manners or fear, where engineering, training and checking is subject to rigourous independent regulatory oversight and audit, where fatigue is managed according to science and human factors analysis and not corporate pressure (ask any truckie about this), and where corruption is pursued and prosecuted without fear or favour, then I’ll take this every time over an aircraft from a jurisdiction where I can’t be confident of these factors.
So if you want cheap flying, be careful what you wish for. There’s an industry saying: “If you think safety is expensive, try having an accident.” There are many in the industry who are worried that the low cost airline model will find this out the hard way. Motorcyclists have another saying: “$10 helmets are for $10 heads”. SI think you get what I mean….
Posted Tuesday, 01 November 11 at 5:37PM
The best article I have seen so far on this issue and the wider issues underlying it - congratulations. And as Jazzmaster_George also points out the implications for the risk of flying with Qantas in the future are very serious indeed - pretty much whatever policy Qantas now follows other than a complete change in policy to build sensible and harmonious staff relationships, which seems very unlikely indeed.
There can be no doubt that Qantas is due for a serious decline over the next few years and also no doubt that it is directly the result of the policies of Joyce and his Board. Qantas management have ‘trashed the brand’ and appear also to have trashed the foundations of the company’s historical success.
Posted Tuesday, 01 November 11 at 5:44PM
Nice to get some more detail on this issue - just wanted to add something in line with David and Dr Dog - I think this issue gives us a snapshot of the best and worst of capitalism. Airline prices have stayed the same for twenty years making it accessible to the majority of the population. During the same time nothing has been done about environmental externalities. It should be clear to everyone that corporate managers can only deliver so much and the ‘insiders with suits should be left to run things’ school of thought needs to be overhauled. The answers will not be simple though Ben’s example of Germany’s participation of the workforce on company boards seems like something that the ALP should have had on its agenda long ago. Across the spectrum of public views its time to realise that the neo-liberal agenda is going to take us, very predictably in the direction it has for the last 25 years - in many sectors we are going to get great value for money but our quality of life, like QANTAS, like Australia is going to be hollowed out from the inside. We have had a quarter of century of every kind of reform - now its time for some CORPORATE Reform.
Posted Tuesday, 01 November 11 at 6:30PM
Cue the anti-capitalism rants…
Ben, two major issues here:
You’ve not given appropriate attention to the most crucial question of all. Is Qantas INTERNATIONAL a viable business without off-shoring?
Dick Smith - a man that sunk millions into a questionable Aussie job focused manufacturing business - say no. He’d have closed the business 3 years ago.
He might be wrong, but it’s at least a debatable topic. Unless of course you are saying it’s a 21st century union’s role and responsibility to demand subsidized business units within multinational corporations for the sake of job security? This would be a ridiculous notion.
I agree that labour deserves a seat at the management table. I also agree that capital gets excessive economic rents relative to labor. However, any ethical future within capitalism will have to be a “shared value” future.
Shared value means that if unions are going to be involved in management decisions, they must be looking to shareholder and community value (in this case low airfares) as well as it’s own wages and job security. Demanding that Qantas subsidise Qantas International for the sake of workers is not “shared” value at all.
I’m not saying Qantas management aren’t trying to heist the unions of more power and jobs than is necessary - they are and must be held accountable - however, most of the unions demand no offshoring whatsoever. This is ludicrous.
My second issue is your neglect of the role of the Australian consumer. Most of us consider cheap fairs to be the priority over Australian job security. We’ve exhibited this same behaviour in almost every trade exposed industry and those jobs have left the country.
Why are these jobs any more sacrosanct? We have a very low unemployment rate, so obviously most of those people found work elsewhere…It wasn’t greedy corporations that did this but everyday Australians and there purchasing habits.
Posted Tuesday, 01 November 11 at 7:24PM
Ben
To correct your last paragraph - in a system of brutal competition, management and owners have to do whatever it takes to keep their prices competitive by keeping costs down otherwise they are assuring themselves of eventual destruction.
Your definition of “unscrupulous” is a curious one. I would have thought there was a clear obligation on management (as an agent of the business owners) to keep the wages bill as low as possible after allowing for the overall business objectives of the company. To cause them to be higher than they need to be would suggest that management is in effect giving money belonging to the shareholders to the employees. This would indeed be unscrupulous.
Businesses exist to keep their customers happy. Whilst it is nice (and often beneficial) if they can keep their employees happy at the same time, the customer is the priority. Unhappy customers = death of a business eventually.
As LukeMr alludes the Australian flying public want low fares and lots of destinations, not premium fares/less routes. The reality is that these customer requirements are not well served by the traditional Qantas arrangements.
This is the real lesson about capitalism in this case. The customer will always win out eventually. Sure Qantas could look after its employees first and persist with different maintenance arrangements to its competitors, 100% local labour and a higher wage structure. However the reality is that a competitor will step in to provide the service the customers want and this will lead to Qantas’ eventual demise - benefiting neither shareholders, nor employees.
To use another example - the mainstream print media could persist with their traditional business models in an effort to protect the entitlements of the relevant employees. However the reality is that it won’t stop them losing customers to all those pesky internet based independent media sites who are busily trying to steal away their customers (and consequently print media jobs).
Perhaps we need to legislate?
Posted Tuesday, 01 November 11 at 8:49PM
Betty
Shades of Peter Weir, Patricks and the wharfies! Sack bully boy Alan Joyce save pm his millions for salary/bonus and send him back to Ireland - I don’t want him and I’m a member of
Qantus Frequent Flyers. If he stays as CEO I’ll be flying Singapore Airlines.
Posted Tuesday, 01 November 11 at 10:10PM
Qantas has been on the slide for some time now, long before this industrial dispute. Planes suddenly dropping, some returning with insufficient fuel, others with mechanical problems, the 380 with an engine blowing up. I decided to fly Cathay Pacific to China earlier in the year, even though it meant paying more, just so I could be more certain of getting there.
As for Alan Joyce, he doesn’t care about Qantas. He wants Asian Airlines. He’s a petty power monger with a touch of politics thrown in. Good luck to him. But there are many others who can already provide a far better service than Qantas ever has or could. He’s happy to play God and ground the airlines, damage the economy and cause international transport chaos. Fun, fun,fun. Well good for him. We weren’t using his shabby planes anyway.
Posted Tuesday, 01 November 11 at 10:12PM
Ben,
i wonder about when you say that this dispute is an inevitable dispute between wages and profits arising from capitalism, whether this gives us room to condemn captialism, or whether it is simply an acceptable side consequence.
Posted Tuesday, 01 November 11 at 11:13PM
Isn’t the real “dispute” (as you call it) between prices and wages?
If a business makes no profit (or insufficient profit) it ceases to exist. It is not really much of a “dispute” when one side (in this case - capital) can simply pick up their bat and ball and go home.
The real clash in this case is between Australians who want cheap airfares and Australians who want their jobs protected (some of whom may also be amongst those wanting cheap airfares of course).
Interestingly I wonder how many of our union leaders are voluntarily paying a premium for their flights to protect the jobs of their members?
Posted Tuesday, 01 November 11 at 11:34PM
David Grayling posted Tuesday, 01 November 11 at 2:49PM
“It is time to change the system to one where there is economic and social equality for everyone”. Sounds good! The question is “HOW”?
As Dr Dog correctly stipulated : “Greed is a crime of humanity rather than a crime against humanity”.
Right. That’s the very reason why change is so difficult to achieve. “Greed” is always going to rear it’s ugly head. There will most likely always be individuals who are “richer” than others. The best we can hope for is to narrow the gap and moderate the obscene excesses as well as lifting everyone above the “poverty line”.
In Australia luckily we have a head-start to reach this goal. The infrastructure is in place. All it needs is an educated informed public and a responsible media (which at present do not exist). In order to meet these demands a government has to be elected on those terms.
For a start:
Step 1. Media reform (report facts not fiction)
Step 2. Educate the public (stop the “dumbing down” process)
Step 3. Elect only politicians who sign a charter containing these basic public demands.
If anyone has any better “practical” ideas, let’s hear them!
Posted Wednesday, 02 November 11 at 12:30AM
Perfidious
If, as you say, “businesses exist to keep their customers happy” then the actions of Qantas management in grounding the entire Qantas fleet and destroying goodwill/trashing the brand are surely nothing other than “unscrupulous”.
Posted Wednesday, 02 November 11 at 4:35AM
Further to my post on Tuesday, 01 November 11 at 11:34PM
If “GREED” (for power, fame or fortune) is indeed one of humanity’s strong motivators than it is incumbent on us as a society to curb, channel, direct and yes, to some extent reward it.
These statements were made earlier:
“The real lesson of the Qantas dispute is about capitalism itself. In a system of brutal competition, unscrupulous managers and owners will do whatever it takes to drive down wages and grow profits”.
and
“The capitalist system has reached its use-by date and things will continue to get worse, especially for the lower and middle classes”.
Let’s examine these comments.
If true, and capitalism does not serve us well what do we replace it with?
Communism?
Socialism?
Any other ‘ism?
Any idea?
So far many “glib” statements have been made. Maybe I missed it but has anyone seriously attempted to find “practical” solutions to our underlying dilemma?
Over to you!
Posted Wednesday, 02 November 11 at 7:33AM
The issue of Joyce’s wage increase is not a problem in itself as far as I’m concerned. I just think every single other Qantas employee should have automatically received a 70 percent wage increase as well - for no discernible reason.
The trade union leadership (or rather its members) will pay the price here for not being as ruthless as Joyce and his flunkies. Unions need to be tough and not adhere to public opinion all the time - just like Joyce. And unions should have been more pro-active in building international links and assisting workers overseas. Because once workers in the Third World have the strength to impose decent wages and conditions there will be no “off shore” and nowhere companies like Qantas can hide. As it is, unions are paying the price for conservative nationalism.
In terms of “greed being good”, few people say that when their house has been burgled and their stuff stolen. Talk about glib statements.
Posted Wednesday, 02 November 11 at 9:24AM
JennyN
Apart from the fact that Joyce and Clifford seem to regard their employees/ workers with contempt, my concern is that they don’t seem to be making very good decisions about Qantas’ long-term future. They are intent - and have been for sometime - on destroying Qantas International but there is no guarantee that their low cost offshore alternative will succeed, given the number of other low and full-service airlines in the region.
They could just do what the managers of so many other large Aussie companies have done - destroy the airline, and like Fosters we lose another Australian icon, due to narrow-minded ideology, poor management and poor decision-making.
Posted Wednesday, 02 November 11 at 10:06AM
The CEO is responsible - for both profitability and workplace relations. Had Joyce limited his pay rises in line with those of employees I’d have a bit more respect but a 70% pay rise whilst Qantas is in trouble is outrageous. What were the shareholders thinking to approve it?
Posted Wednesday, 02 November 11 at 10:45AM
I am somewhat surprised that I still have access rights. Have not attempted for some months.
Couple of days ago I tried to give Ben some money for his lunches etc. , as I do appreciate his entries. No go! The web site will not accept that I live in a country area, NOT a big city with house addresses.
Not unusual for quite a few web sites, but damned annoying. Time some of these Big City organisations woke up that us Aussies do not all live in ‘Ants Nests’
So sorry Ben, but I am not able to support you.
I also absolutely refuse to have anything to do with Pay Pal (not totally necessary in this instance, I note) having had very bad contact with them in the past. They ARE another big Greedy Capitalist Corporation.
As for QANTAS, I have never flown in their aircraft. Have no likely-hood of doing so. But I have a very suspicious mind where Big Greedy Corporations are concerned, and evidence seems to point to QANTAS Board and Management having cooked up this scenario many months ago, for the express purpose of destroying the Unions concerned. Plus of course Joyce’s Big Dream of running low cost airlines all over the East, and letting QANTAS wither on the vine, or probably sold off as a money loser in the mid term. In the meantime, they will gut every bit of sustenance they can out of it into their new intended enterprises.
As for Unions having poor PR, this is a consequence of Economic Rationalism having held sway now for 30 odd years, having taken over the so-called Labor Party when Paul Keating was Treasurer, so now the ‘workers’ have no friends whatsoever. This so called Fair Work Australia is indeed a slightly toned down Work Choices, but what else can one expect from Julia Gillard? It will come down on behalf of QANTAS, on the side of Big Business as it will always do, mandatory from the way it has been set up and the people in it. Big Business Media, especially Murdoch, will always be on the side of Big Business and dead set against workers, so they will work tirelessly to denigrate workers. QANTAS (Joyce) worked with the Abbott camp, with Big Business organisations, and Big Media ( and that includes the ABC) to bring on a coup, doing as much as they could in the process to destroy the Unions and the Labor Government. Paranoia? I do not think so!
I listened to ABC Radio and TV in the last couple of days ( I never touch Commercial Radio or TV) and almost without fail it was pro QANTAS management, and very much against Unions, even spreading total bulls**t as part of the story.
Also, just as an aside, I heard last night that the PM of Greece had decided to do what no Right Wing Organisation could ever expect, and take the latest tranche of ‘bail-outs’ and the subsequent destruction of most of Greece’ Society in massive social dislocation to the PEOPLE in a Referendum.
Shock Horror, the ‘commentariat’, mostly economists, screamed their heads off, the end of the world is nigh! This just can not be done, the people of Greece must just lie down and think of God or someone as they are screwed, and must certainly NOT have a say in their mortification. Fran Kelly agreed with everything they said, encouraged them. The along came one commentator who just about dropped Kelly from her seat, who said well done Papandreau, best thing you could have done, the people must have a say in their future, this is DEMOCRACY, and the Markets and the Raving Economists can go blow. Markets did they usual, collapsed all over the world, in the USA, where they whinged loud and long about Greece (this same US that proclaims Democracy for the World??!!) and our Aussie Labor pollies (who are not real happy about Democracy either) also cried in their breakfast milk.
I know, I moved off the subject of QANTAS, but I see connections, and also with the Occupy (City) Movement, where we are all getting bloody sick of being at the total beck and call of Markets, Greed, Big Capitalism etc.
I also note that Big Business, and the people they pay and control, the pollies, are moving world wide to close down this nasty little Movement as quickly as possible, before it can gather steam, as it threatens their World Control. Perhaps not yet quite what the Generals are doing in Eqypt or what Syria (Assad) are doing to their people, but there are people who wish they could get away with that sort of action. The Mayor of Melbourne appears to be one of them.
I note also that the Zionists in (Palestine) and the USA and other places in the world controlled by World Zionism are screaming long and loud about Palestine being admitted to UNESCO. Does this indicate that perhaps the Yanks are ‘losing it’ at last. That they are no longer the Greatest Nation On Earth??? Ho Boy!!! Again, we are being hit by unquestioned PR ‘crud’, our Media failing us again. Dazza.
Posted Wednesday, 02 November 11 at 11:11AM
LukeMR and PR -
Qantas says the international division is losing money. It also reports a profit of half a billion dollars and cash reserves of $3 billion.
So there’s no question that Qantas can afford to subsidise its international division if it wants to. Further, as Ben Sandilands has pointed out, the decay in the international division has as much to do with Qantas deliberately taking planes off routes and diverting resources to Jetstar as it does with international competition.
Secondly, the international division funnels passengers into the profitable domestic route and is a keystone of the lucrative frequent flyer business.
Finally, none of this is really material to my main point, which is that its completely logical for unions to campaign to keep jobs in Australia with their concomitant wages and conditions.
Let’s address the point about Australian consumers. We want cheap airfares. Yes, we do. But the demands being made here by the unions are for only modest pay increases, below inflation in the case of the baggage handlers. The pilots are not asking fior a pay rise at all. In fact Barry Jackson pointed out recently that Jetstar pays its pilots comparable rates to what Qantas does for the A330. So really, this dispute is not about whether Qantas can continue to offer competitive airfares. That’s a smokescreen for what it is really about: union busting.
Posted Wednesday, 02 November 11 at 1:42PM
Fair enough Ben. Your points about Jetstar and funnelling passengers into lucrative domestic routes etc. are both valid, I just think it’s a crucial discussion and largely left out of your article.
I agree that there is “union busting” going on, but I think the hard line stance of unions are partly to blame.
“its completely logical for unions to campaign to keep jobs in Australia with their concomitant wages and conditions.” This is not the kind of thing that is going to keep unions relevant in the modern global economy.
As I said in my original comment, unions must operate under the principle of “shared value”. They must give some weight to the company’s shareholders and consumers just as a company needs to be pressured/encouraged/forced to take a broader view of it’s concept of value.
A broader view of value does not mean management should subsidise a less profitable business unit for the sake of the labor force ALONE. It MUST deliver business value.
Fortunately, I believe it can. But where is this kind of attitude and talk from unions?
Shareholders and consumers are not interested in subsidising Qantas International to keep people working in Australia. They are on the side of management.
Unions need to be flexible on the issue of SOME off-shoring and spinning off SOME routes into a low cost carrier business model.
The question is: behind closed doors, have unions been flexible? Are they presenting their case in terms of the “value” their Australian workforce offers? One would hope so.
Posted Wednesday, 02 November 11 at 2:17PM
Ben
Qantas are undoubtedly attempting to “union bust”, as are the unions attempting to “Joyce bust”.
No-one blames workers for wanting better job security, higher wages or anything else. The question is whether their aims are realistic or whether by accepting them Qantas will simply commit itself to a gradual death as they are out-competed.
Qantas are clearly not taking planes off routes for the purpose of hurting themselves (well they could I guess but that would be pretty weird). The purpose of replacing Qantas flights with Jetstar is simply to enable them to compete effectively. Air travel has become a glorified version of train travel and there simply aren’t enough customers willing to pay a premium for flying Qantas.
As you say - this is not a fight over wages. That is small change compared to Qantas management wanting the ability to run a low-cost airline in the same style as that of their modern day competitors.
They will either win the battle and be able to compete effectively or the unions will win and the current employees will do well until the time comes that Qantas dies its inevitable death.
PR
SandMurray - Qantas have always been hopeless with customers. Another reason they can’t be charging premium fares and hope to survive. I refused to fly them for years - even if they were cheaper.
Posted Wednesday, 02 November 11 at 2:23PM
Thanks for another thought-provoking article, Ben. Unfortunately, they are the same provoking thoughts. I agree to a greater or lesser extent with JazzMG, Betty, Xeroxcliche and Dazza. And Dr. Dog.
My immediate reation on hearing the tactic announced was to recall Reith and Patricks. I was angered that none of the current affairs / news outlets I heard seemed able to summarise the negotiations to date, and the demands by both labour (in several areas: pilots, baggage handlers and others) and management. It seems that the drama of the tactic hit them like a blow to the head so that they could think of nothing else, such as “Why is this happening?” Let alone, “Has anything like this happened before? Recently? When?”
But my greater dismay concerns the actual narrative. A few correspondents have mentioned this. Why do we accept that maximising profit, by any means, is the only defensible aim of any corporation? It seems to me that this is the view propagated by most of the astonishingly rich 1%. A respectable triple bottom line is notably absent from the annual reports of companies committed to maximum profit and minimum responsibility. They seem to have forgotten Henry Ford’s advice to pay the workers enough that they can afford to buy your products. But of course, when you own the banks, you can lend them the money, then crash the economy, then demand that the government restore your fortunes. Increasingly, I believe, real power resides with those who own the companies which are larger and richer than many governments. We voters only elect those we put between ourselves and the corporations to negotiate on our behalf.
I find it impossible to like Alan Joyce. With his fat, pouty mouth and his whiney voice, he resembles a child who has just spat its dummy over the side of its pusher and is now clamouring for his nurse to pick it up and restore it to him.
Posted Wednesday, 02 November 11 at 5:49PM
I’m not sure I agree with the black and white nature of the “conflict” as expressed by many contributors and the the author.
I hope that both unions and Qantas management can strike a middle ground:
- Unions to think of their workforce more in terms of value added to the business (one that MUST attempt to make a profit off all business units) and;
- management to take a broader view of what value a predominantly Australian based workforce and Qantas branded fleet can bring.
Perhaps I’m being overly optimistic. But at least Qantas is a company in which the community and government have a lot of leverage, and therefore an increased ability and mandate to demand sanity on both sides.
Posted Wednesday, 02 November 11 at 7:23PM
And just look at who knew all about it three weeks ago but didn’t tell a soul. Joey Look-at-me Hockey. What a buffoon! Is he just doing his usual big-shotting or, if he did know (and I can’t imagine why anyone would tell him anything), why did he not consider it his national duty to inform the appropriate people to avert it?
Posted Wednesday, 02 November 11 at 9:27PM
Perfidious Rex
You said
If a business makes no profit (or insufficient profit) it ceases to exist.
I say:
Then why give somebody a 5 million wage/salary increase.
The point everybody missed is that Thatcher and Reagan started the Privatise everything, bull.
Before WW2 we had Hyake the Austrian he gave us Free Market Enterprise without any controls, this led to the 1930 depression.
After the war Campbell took over and he believed we needed Free Market Enterprise with government controls. This Idea led to Governments starting their own Enterprises. Qantas, Commonwealth Bank, Coal Board, wool Board, GIO, Ampol etc. etc. This was used to control high prices and therefore inflation.
Thatcher and Reagan collapsed it all, union busting followed when there were no Government owned jobs left for unionists to hide in.
They tried to do the same with the Railways, but a train fell of the tracks, people killed and well its no longer like Telstra, Post Office or RTA.
To understand what and why Qantas happened, what it was all about, the Privatisation, you have to go back much further then the end of your noses, you have to read and understand History.
We the Australian workers had to pay for our own Pensions back in about 1963 when the Government put a 2% levy on our income/Taxes. Why did we end up with Super and what happened to all the other money.
We are always being lied to because most of us only care about sucking Piss, fast cars and faster women.
They can tell us anything and did. Look at Nick Greiner, the Green slips and GIO, we got conned, because most Australian fools wouldn’t know if our bums were on fire, becaused most of us didn’t care, can’t be bothered reading, we are all talkers here, opinionated.
China ownes the world, it ownes America, it feeds our economy. It is a one Party, Communist mentality.
Germany was a Socialist Democracy for many years it is better then us. The Harvard Business model and capitalism is dead or dying. The only reason we didn’t go down with America and the rest of the Grubby Nations is because we are 10 years behind the rest. We followed because most imigrants who came here from the 50’s on came here because they were escaping socialism in Europe, they came here to get rich quick, because Australia was still the land of the rip off, thats why we followed the Yanks down the S……Shute to oblivion. Just like Marilyn Monroe we have a big hose hanging out of our Bum, we think its life support, but its in fact killing us.
Bleeding Media Junkies, we have always listened to False Prophets and Liars. It used to be known as the Good Aussie Yarn, it has come of age and its Lies, lies, lies. And we swollow it.
Posted Wednesday, 02 November 11 at 9:37PM
Perfidious-
Have a read of Jane E’s scenario. It might seem scary to you but I think we need to put this dispute into perspective and stop pretending it’s a level playing field in negotiations between unions and management. From what I know the union demands are modest. Why the belligerance from the top end? Simple greed? Fuel for global feudalism? Arrogance? Assumed superiority?
And just for the record - I feel safe and looked after while supporting the national economy to some extent with Qantas.
Posted Wednesday, 02 November 11 at 9:49PM
Jane E
Reith and Patricks, The sell offs, Telstra, Com Bank etc. Its been a long time coming. Corporations are like supertankers/Ships, Big Ones, they take a long time to manoeuvre, shift a lot of Product/wealth, but when they crash like the Titanic. Look out.
Well the good ship Capitalism has just hit an IceBerg called low wages and record debt, no one is spending, their already too deep in debt.
Its all happened before, we just forgot to read about it and if we read it we didn’t understand it. It didn’t have Pistons or wheels and wasn’t made to be drunk, to get us drunk, so who cared. We were Hero’s right, they told us, Girls love a Hero.
And again: Students guide to World History 1789-1979.
The last GFC or the one before or the one Before that.
So great was American mass production that industrialists and retailers fostered the fascinating device of ‘instalment buying’ or hire-purchase which allowed people to go right on buying and using goods which they could not pay for at the time of purchase. The vast expansion of business was reflected in the buying of shares on the New York and other stock exchanges. Every year brought more eager, adventurous buying until by 1928 there was as much excitement and risk-taking on the exchanges as in the gambling rooms of Reno. Why not? Share values were rising quickly, so Mr. Middle Class American had only to buy now, hold a while, then sell at a handsome profit.
Businessmen, bankers, politicians all gave their approval - it was as much part of the American way of life as radios, aspirin and T -model Fords. Stockkbrokers, imbued with the spirit of get-up-and-go, helped their clients to buy shares on an instalment system. Tales of overnight fortunes made by smart investors became the favoured conversation at social gatherings. In 1928 and 1929 there was a mania of speculation.
The World Depression 1929-33 is usually taken as beginning with the slump of share prices on the Wall Street Stock Exchange, New York, in October 1929. It reached its depth in 1932 after huge banks in Austria, Germany and elsewhere went bankrupt. Forty million wage-workers lost their jobs… . Before we come to a general study of the causes of the Depression let us look at its human aspect through an imaginary ‘case history’ of what bappened to many Americans.
Harley K. Loman was a salesman. Since his discharge from the army in 1919 he had earned good money; indeed, after 1924 when he took to selling radios, which were then a novelty, his income was extremely good. By 1928 he owned a new Chrysler car and a brick home in a prosperous suburb; he was preparing for the expensive business of sending his twin sons to a college at Rhode Island. At this time, like hundreds of thousands of middle class Americans, he was excited by the prospect of a ‘little gamble’ on the Stock Exchange where fortunes, according to the newspapers, were being made every day.
Loman’s broker advised him to buy shares in an expanding, go-ahead aluminium firm which was marketing expensive kitchenware of toe most modem design. He raised 10,000 dollars - ‘the life’s earnings,’ he said ¨and bought, with the aid of a loan from the broker, shares worth twice that amount. He would make instalment-payments on the loan, and the broker promised to watch for an expected rise in the value of the shares, then sell profitably so that in perhaps six months the ten thousand might become twelve - ‘something for nothing,’ as the broker put it, confidently.
But before the plan worked out, the Wall Street Exchange panicked in October, 1929. General Aluminium shares dropped a third in: value and the broker advised immediate sale. The loss was stunning. After repaying his loan, Loman’s original $10,000 was down to $3,000. This he mainly applied to sending the boys to college; but now he had no reserves.
Radio sales dropped alarmingly, bringing him trifling commissions. His wife, frantic to make ends meet, budgeted for the simplest food; week-end trips in the car were stopped, as were visits to the theatre; the family avoided buying new clothes - or buying anything but essentials. Though Loman was on the road for twelve and more hours a day he sold few radios.
In September his boss called him in: the firm was in difficulties, his services would no longer be required; perhaps if things .improved …. He stagge~ed home to an hysterical outburst of fear from hIS already overwrought Wife. Every moment of the next three weeks he spent chasing work. Finally, he took on door-to-door selling - of kitchenware of the cheapest kind. His sons saw the year out at Rhode Island, but they could not return there in 1931. Instead, they joined the thousands who were searching for work. Only in April did one of them get a jop, in a department store. Loman sold the car for a fifth of its former re-sale value. His wife took on small jobs of sewing when she could get them … and the Depression went on worsening.
There were Lomans all over America, some better-off, others worse.
Factories and shops had stacks of goods; millions of needy people wanted them, but lacked the means to buy them. Here was poverty in the midst of plenty. How had this insane condition come about?
AND NOW THE TITANIC AND QANTAS IS SINKING, as before they dump staff etc. etc. etc… and here we go again, around and around, my God let me OFFF, I’m getting DIZZY.
In another 10, 20, 30 years its another GFC another company going broke, laying off workers, finding cheaper labour, materials, finance etc. to survive the WANK!
Posted Wednesday, 02 November 11 at 10:10PM
ben.eltham
Posted Wednesday, 02 November 11 at 11:11AM
You are a bloody Genius, i’m definately going to become a member of N.M.
This time off reporting is exactly what we need, facts, facts and more facts. I have listened to too much dribble, people going over old bull.
Trying to impress us with their business sense.
Students guide to World History 1789-1979 was written years ago, all of this need not and should not have happened. Its all there in black and white. The names and dates have changed, its a different deck of Cards but its still a poker game or better still a Game of Chess.
We are the Pawns, disposable, collateral damage.
13000 Aust. die due to Medical Negligents every year, almost, where is the war. We have a war on Terror.???
We get old, we stop consuming, we get in the way, we are useless, Drop Dead, who cares.
The undertaker is happy, rich. Thats Business.
Good Bye! For now.
Have to go to work, make money consume or they’ll kill me, i’ll be useless. Good for Baby sitting??.
Posted Wednesday, 02 November 11 at 10:11PM
Ben
This time should be Type.
Posted Wednesday, 02 November 11 at 10:21PM
GocomSys, I under estimated you, that was brilliant.
Posted Wednesday, 02 November 11 at 11:29PM
Sand Murray
Surprisingly I actually agree with a fair bit of what Jane E has to say.
The point here is that none of us are really in a position to understand how crucial it is to Qantas to be able to take maintenance functions offshore/change the way they do maintenance on new aircraft.
However it is (to me, at least) reasonable to assume that Qantas management is in the best position to make this judgement. It would appear from their actions over the weekend that their judgement is that it is “extremely important”.
Hence I am not sure what (and others on this thread) are expecting? Management have said they need to be able to make these changes and the unions have said “no way”. The unions have held their breaths for 7 months and finally management has said “enough is enough”.
Whether they took the right course of action from a branding/customer perspective is another question altogether but it would seem that management felt they needed to “do something” to break the stalemate.
To quote GoComSys - what are the “practical ideas” that the Joyce-bashers are suggesting as alternatives to resolve the stalemate?
- go and ask Tony Sheldon really really nicely?
- engage the support of the Govt to negotiate with the unions on their behalf (LOL)?
- pray nightly that Tony Sheldon just wakes up one morning and agrees to drop the union demands?
I am guessing the bulk of the “Joyce-bashers” really just wanted him to fold to the unions demands. I am also going to guess though that a decent proportion of these same people would be amongst the first to call up and whinge about any Qantas price hike when Virgin and others are offering lower fares! PR
Posted Wednesday, 02 November 11 at 11:42PM
Jackal
Alan Joyce may or may not be worth his $5m. Not knowing either him or his importance to the company makes it difficult to say whether this is money well spent.
In the scheme of things (and on a mathematical basis) compared to annual “manpower/staff related” expenses of $3.7 billion in 2011 I don’t think Alan Joyce’s salary is going to make too much difference to either shareholders, customers or employees. PR
Posted Thursday, 03 November 11 at 6:44PM
Exactly. That’s why they can afford to pay their employees a decent wage and to listen to their employees who actually run the show from the ground up and in the air.
Joyce might sound like a sexy asset stripper to some or a joke to others but to ground the airline was a reckless act and an insult to industrial negotiation processes in our country.
Posted Thursday, 03 November 11 at 10:20PM
Not sure which bit your “exactly” refers to?
My understanding is that Tony Sheldon is not an employee. What are the employees saying? Given he seems to be strongly incentivized to improve Qantas’s results, I would have though Joyce would take any employee suggestions to improve performance fairly seriously (and possibly reward them for it).
And isn’t it just possible that there are employees of Qantas and its suppliers and customers (who have their own jobs to worry about) who are just a little bit happy that the ongoing uncertainty of the dispute has been eliminated despite the inconvenience of the weekend’s events?
Posted Friday, 04 November 11 at 3:04AM
Betty
Australia did quite well during the recent GFC, but Ireland didn’t.
Ireland needs the business acumen and financial genius of Alan Joyce far more than we do here. Maybe his style and tactics for leadership will be more appreciated back there too. We don’t want him or his bully-boy style.
We in Australia have gone along way beyond his methods of leadership.
Lured by Qantus Triple Frequent Flyer Points - not likely! I want assurance of Australians maintaining, flying and serving the planes!
Posted Friday, 04 November 11 at 5:15AM
Perfidious Rex what are you on about.
Do you just come here to waffle and impress us with your supposed business knowledge. A little bit of knowledge is a dangerous thing.
The question is are we as a nation being exploited, the working classes did not create the GFC.
We just cause the problem with high unemployment because we can’t stop breeding.
Ben Eltham layed it all out for you, no further discussion or opinion required. Do we want to be and carry on being a Capitalist RIP OFF NATION. If you were to bother reading instead of being just a talker you would have read this and hopefully understood.
“But is Qantas’ new low-cost Asian strategy necessarily the right one? And is it necessarily bad for unions to have a seat at the management table? The hard-line economists and management theorists say no, of course. And yet in Germany, all companies with more than 500 employees must have staff representatives on their board as a matter of law. Despite this, Germany still manages to be an industrial and manufacturing powerhouse.
No, the real lesson of the Qantas dispute is about capitalism itself. In a system of brutal competition, unscrupulous managers and owners will do whatever it takes to drive down wages and grow profits. That’s what they’re paid the big bucks for.”
The Harvard Capitalist System is dead and Dying.
Boofheads over here haven’t caught on because we are 10 years behind everyone else in thinking, business or any other. Thats why our banking sector survived, we were heading in the same direction as the Yanks. But because we follow, the Yanks once again ran of the road and we managed to stop in time, but our mentality is the same as the Yank Capitalists and the owner of the Titanic, I own the ship, I SAY FULL SPEED AHEAD. Yet people are doomed, Profits Privatised and losses Socialised.
Their are no ethical, moral or Inteligent Thinkers here, the only reason why we do well is we are miners and somebody wants what we mine.
Posted Friday, 04 November 11 at 1:54PM
The grounding of QANTAS would never have happened had it not been privatised.
The reason QANTAS can charge more, is because it is one of the best quality airlines in the world, with an excellent safety record.
It is not just good luck that QANTAS has such an excellent safety record, but rather it is based on a highly skilled workforce, second to none.
A highly skilled workforce that deserves to be treated fairly by QANTAS, as do the flying public.
Isn’t the brand name QANTAS based first on it’s highly skilled workforce, (since the management and the shareholders rely on them for the smooth operation of their business) and so then as a consequence of the high calibre of employee, the QANTAS name represents safety and reliability.
I’d like to see the QANTAS name remain an Australian by transforming itself into a luxury airline, based on it’s quality of service.
And that probably means plowing more profits back into the company and very little profits left for shareholders.
So the survival of QANTAS is in the hands of management and the shareholders and the decisions they make about where QANTAS profits ultimately go.
Posted Friday, 04 November 11 at 11:27PM
Jackal
If I have understood correctly the jibber you have managed to slot in between emotional leftist rants, I agree with some of the points you make.
However I’m not quite sure who you are suggesting did “cause” the GFC? Murdoch? Alan Joyce? George W Bush? (actually he probably did have a bit to do with it - appointing Greenspan and all).
So what’s your solution Mr Jackal? Actually, baby steps, perhaps let’s start with a suggestion even?
We know now that you don’t want to be a Capitalist RIP OFF NATION. What do you want us to be? PR
Posted Sunday, 13 November 11 at 7:22AM
Perfidious Rex, go and read a great Book.
“Globalization, Global Justice and Social Work”
and read what has happened to our Social Systems when we Privatised for “Wealth Creation.”
Read what it says about “Cracks in the Neo Liberal consensus” on page 208?
Or.
The rest must be Targeted, means tested and kept to a minimum of provision lest the burden threatens,
“Wealth Creation”
They must remain consumers of food at all cost, but they must not be allowed to see that they are a burden to wealth creation or more correctly, hamper the Governments ability to channel Tax money towards “Wealth Creation.” Why hamper.
77% of all Australians earn their money from the Tax payer in some way or form. Nurse 100%, Butcher who sells to the Nurse between 10 and 80% depending on how many Government payed people buy his products.
Infastructure Companies and their employees like Serco earn 100% of their wealth from the Tax payer.
Only 36% of Australians are in full time Employment and paying Taxes full time.
A lot of these people get 100% of their income of the Tax payer and pay 33% Tax back through their income Tax. So the Tax System is actualy in Deficit, so where does the Government get the short fall. The mining Taxes/Royalties, selling OUR Resources overseas.
People just don’t realize how corrosive of our once great society this Privatisation, Dog Eat Dog World, has become.
Yes, they Parade their over rated, Glamourised, Marilyn Monroe’s with their Platex support Bra’s and Panty Girdle’s, who are in fact nothing but Obese Bimbo Junkies to make this Capitalist System look good. Then try and hide the fact that she died from a Cocaine Enema with a 2” hose up her rear.
Its great when you are now the Footballer who drives around in a 350 Thousand Dollar sports car.
Or the Guy that now lives on the North Shore because his Company now makes the Number Plates that our Inmates in our Jails used to make to pay for their incarceration which the Tax Payer now has to do at great cost.
This cost to Society became Transparent because Jails were Government Dept., so they try to Privatise the Jails to hide the true costs, until they too become the next Qantas or Telstra Saga because the CEO opens all the Jails, lets murderers out onto the street because the Profits are not coming or as great as they wanted.
There is a lot more to this Qantas thing, it goes much deeper, it goes to the root of Globilisation, Privatisation. The warning bells should be ringing, but the Media is too stupid to ask those fundamental questions.
What was and is Economics for, the individual and/or society
Go to http://www.chrismartenson.com/crashcourse
view the 20 odd power Point Presentations.
Trade between Villages was the first form of Business, but because the Barter system was not very efficient at trading goods, a form of trading currency was necessary.
The world had no problems while we used Gold, it is when we created Currencies and gave Banks the right to lend money into existence, that we began to fail and our inflation crises showed its ugly head.
The world began to fail many years ago and its the Harvard Business Model thats Failing, Nixon, Reagan and Thatcher put the final nails in our worlds coffin.
We must take Industrialization into the equation and how it caused the population explosion that has now reached 7 Billion, if these have 2 Children each
they become 14 billion, give and take, birth losses and old age deaths.
All of these people want Jobs, Cars and Women or Man and the right to Pollute the planet.
Posted Sunday, 13 November 11 at 8:13AM
Perfidious Rex reply to your post.
Posted Friday, 04 November 11 at 11:27PM
Perfidious Rex very clever and smart mouthed, but you are forgetting that this is NM not the Government. You and I are not Politicians argueing during Parliamentary Time.
NM is Media, good Media, but Media that allows us all to exchange knowledge and facts and the relevance of those facts to the overall picture of life as an Australian in a Globilised world.
You ask:
However I’m not quite sure who you are suggesting did “cause” the GFC? Murdoch? Alan Joyce? George W Bush?
My Reply to your stupid question:
All of these idiots you just mentioned are part of the Neo Liberl Agenda.
The “cause” of the GFC and all other GFC’s that came before and given to us by the Yanks, is a lack of understanding of History. Lack of Understanding of History by people like you.
How many times have I mentioned The Students Guide…………….Blah…blah…blah.
The “cause” is not one individual it is the Harvard Business Model, the Neo Liberal Consensus. It is some individuals belief that Cities, society, Countries are due to or were created by the power of one, a wealthy Individual, a powerful individual.
Cities started life as Villages, formed by individuals who came together as equals and friends, like minded people, because one of their number was pregnant and could no longer be Nomadic. They settled while the rest of the tribe moved on, because nature could not feed them all in this one location. Thats how the Nation of Poland was formed.
Trade or Business developed between several such Villages and only then did banks etc.. appear.
Our worlds demise started when we gave banks the right to lend money into exsistance, in other words our Debt creates currency that disapears when turned or traded into Gold. The price of Gold at the moment reflects the amount of money that Disapeared out of the world economy and was the driver behind the GFC.
The GFC is basically a lack of currency because it turned into gold.
The world had no inflation problems when we used Gold to trade, it was currency or the creation or cycle of its creation that caused, causes, debt and inflation or Booms and Busts in the so called business cycles.
Its all relevant and dependent, the problem is that because we breed we are all now dependent on the very thing that causes our demise and our demise will come as we run out of resources to plunder for free.
Free oil made the west, the loss of it will destroy us. You can’t mine without oil, those 500 ton dump trucks need fuel and when you need to move 500 tons of dirt to find 1 ounce of copper you get inflation.
Thats what Alan Joyce is telling u but 4 a differnt reason, yet its the same.
Its either low profits or subsidising by Tax payers, the car industries have tried Joyce’s trick for years. But at the end of the day somebody needs to employ somebody or retail collapses as well.
Thats why we get the above scenario
jackal01
Posted Sunday, 13 November 11 at 7:22AM
Basicaly the joy of traveling by plane is over, its cheaper on TV. The Turkish Economy needs travel that you and I got to pay for in either taxes/subsidy or higher fares just because young people want to find out what it was like for the working classes to die at Galipoli, just to keep our rich, rich while somebody elses rich morrons got flogged and the plunder could go on for a few more years, while mothers cried over their loss and for what, to end up with this.
Posted Sunday, 13 November 11 at 9:01AM
13 November 2011
So what do we always end up with.
Read what follows and see what part of this History Qantas now falls into.
Each government tried to save its own national economy and gave little thought to the world economy. By means of high tariffs it protected its own industries from the competition of other nations, helping thus by ‘economic nationalism’ to bring about a catastrophic fall in international trade.
Is this what Allan Joyce really wants/wanted Protection from other National Carriers.
Isn’t that what the 3 Amigos wanted with that other Privatised Government Dept turned Corporation.
protection/Guaranteed Profits at Tax Payers expense.
Isn’t that the same thing the Car Companies always wanted. So how good is Private really or is it just a wank for Individuals who want to look popular with Bimbo’s, Marilyn Monroe’s, Glitz and Glamour.
That’s what sells with the Media isn’t it, phone scandals.
Students Guide………….Blah….Blah…
Economists in search of reasons for the Depression, which soon became world-wide, found so many ‘factors of instability’ in the 1929 economy that their explanations often did more to bewilder than to enlighten the public.
(i) Speculation.
(ii) Periodic Cycles of Business
(iii) Overproduction - or Underconsumption
(iv) Economic Nationalism. Economists knew that every country needed exports - partly in order to unburden itself of surpluses, but also to make use of resources with which it happened to be richly endowed or for which it could efficiently tool-up an industry. The interdependence of national economies increased with every passing year; a criss-crossing of international trade was vital to the prosperity of all. But every country wanted to export rather than to import goods, to be a creditor rather than a debtor. This was especially so because during World War I most countries of Europe had become indebted to other countries, particularly to the United States. They carefully limited their imports so that the volume of international trade was much less than it would have been in free conditions. As soon as the Wall Street slump occurred, American bankers, in financial difficulties themselves, began to call in loans they had made abroad, and this induced other countries to restrict as much as possible their imports from the United States. Then in 1930 American manufacturers, demanding protection against cheap goods coming from abroad, secured the passing of the Hawley-Smoot tariff which was so high as to make it practically impossible for other countries to send goods to the U.S.A. This started a terrible tariff-war, with every country trying to raise a tariff wall against foreign goods. By 1932 international trade had slumped to 40% of its 1929 value and to 74% of its physical volume. In a vain bid to look after their individual interests the nations had embroiled themselves in a generally disastrous situation.
(v) Protracted Agricultural Crisis.
3. ATTEMPTS AT REMEDIES
(i) Measures Taken by Firms. President Hoover’s hope that businessmen would themselves find a way out of the Depression was not justified by events. Each firm thought of self-survival rather than the interests of the economy as a whole. Unwanted employees were dismissed so that by 1933 there were 15-17 million unemployed; millions more were reduced to part-time work, whilst others worked longer hours than before for the same or reduced wages; and the general level of wages dropped considerably. Firms also strove to reduce their own purchases, carrying on with old machinery and plant as long as possible.
(ii) Relief of Acute Distress. Churches and charitable organizations were the earliest in the field to relieve immediate distress. Later, governments in most countries began to make unemployment payments. These were never more than a few shillings for the purchase of food - ‘a dole,’ as it was popularly called. Some governments also provided forms of ‘relief work’ by which the unemployed were given short periods of work at low pay on projects such as road-making, soil conservation and reforestation, which did not compete with industry.
(ill) Planned Destruction of Surplus. In a bid to end overproduction and restore prices, some goods were actually destroyed. This was especially seen in agriculture: cotton was ploughed under in the United States, wheat was burnt in Canada, coffee dumped in the sea by Brazil. Such actions brought an outcry from the needy, and governments preferred to restrict planting and output rather than risk unpopularity by destruction of existing goods.
(iv) Massive Growth of State Regulation. By far the most important efforts to curb the Depression were made by governments. The doctrine of laissezzfaire went overboard as every government introduced a host of measures to regulate and stimulate its economy. The best-known example of this was the New Deal of Franklin D. Roosevelt who became President of the U.S.A. in 1933. State measures might include: liberal spending on unemployment relief, an extension of pensions and all manner of ‘social services’, great schemes of public works on roads, schools, harbors, parks, forests and dams, subsidies to ailing industries, loans to other industries, defence spending, and so forth. Moreover, the government could exert much control over the economy by strengthening its powers over banking, thereby regulating the rate of credit, which in turn helps to regulate the business cycle. (Here the theories of the most famous economist of the period, John Maynard Keynes, became important.) Government regulation, however, did not always aid recovery. Each government tried to save its own national economy and gave little thought to the world economy. By means of high tariffs it protected its own industries
334
from the competition of other nations, helping thus by ‘economic nationalism’ to bring about a catastrophic fall in international trade.
(v) Radical Remedies - Urged but not Implemented. Radicals, money reformers and socialists urged that drastic remedies be introduced. Some wanted a stronger state or even a dictator to take more stringent steps than were gradually being introduced (as in iv.) Others, like the Douglas Credit theorists, wanted a new scheme of currency and credit. Socialists wanted an end to private enterprise, alleging that capitalism inevitably led to a cycle of booms and slumps, and that it must give way to a planned economy which would produce to serve needs rather than profits. Many brands of socialism were advocated: simple ‘state ownership, or cooperative communities, or trade union control of industries, or worker-management of enterprises. Communists advocated state-ownership on the Russian pattern and could point to the First Five Year Plan launched in 1928 with the object of swiftly industrializing a backward country. Russia was not very dependent on international trade, though she sometimes had to ‘dump’ agricultural products on foreign markets in order to obtain money to buy foreign machinery. Otherwise her centrally regulated economy felt the World Depression less than did other countries; but, while thus showing well by contrast, her new economy was less admired than it might have been, because Stalin was currently directing a self-glorification campaign, destroying his political opponents, and collectivizing the peasants, who resisted by destroying crops and herds and thus created a vast famine in which three million people died.
(vi) League of Nations Efforts. Many attempts were made in the League to ease the crisis, but national suspicions frustrated these. Only when the lowest point of the Depression was passed did the League manage to call together the hopeful World Economic Conference of 1933. But the nations became deadlocked over the issues of lowering tariffs and restricting production, so the conference adjourned with next to nothing achieved.
So what’s behind all of this, Human Greed and the Breeders. The Breeders stocks needs jobs, they have dreams of one day being ??????? a somebody, a somebody at somebody else’s expense.
So what happened to the village of like minded people and friends who came together for a common good and grew into nations, nations of greedy individuals who believe that they are. ARE WHAT??????
Steve Jobs just died, he had 8 Billion dollars in his back pocket, given what I just said, he said the most important thing in his life were his kids.
It wasn’t the money, did he give it back???? No his kids and wife need it so that his kids can afford to breed. Who else can afford to breed at Tax Payers expense, after Qantas gets its subsidy to employ Aust. who otherwise wouldn’t have a job, could afford to breeed.
Posted Sunday, 13 November 11 at 9:09AM
So. The reality is that nobody here realy knows why your here, how you got here.
You all just talk in riddles with limited knowledge of how that stuff in you wallets realy got their, where it really came from and why your even Australian.
You all just get on the ferry boat of life and expect it to be a free ride across the river of life.
Posted Sunday, 13 November 11 at 9:38AM
You want to read something strange, read this.
Russia was not very dependent on international trade, though she sometimes had to ‘dump’ agricultural products on foreign markets in order to obtain money to buy foreign machinery. Otherwise her centrally regulated economy felt the World Depression less than did other countries; but, while thus showing well by contrast, her new economy was less admired than it might have been, because Stalin was currently directing a self-glorification campaign, destroying his political opponents, and collectivizing the peasants, who resisted by destroying crops and herds and thus created a vast famine in which three million people died.
3 Million died, should we be sad or happy about that.
If they had not died, we might have had to fight them aswell, more deaths so that we can have more births. Well, the winners anyway.
The known knowns and unknowns and known unknowns and unknown knowns.
Posted Sunday, 13 November 11 at 11:49AM
Thanks for this article Ben - it has sparked so much discussion and passionate comment!!
I think this issue is about the way big business, CEOs shareholders, boards etc seem to be able to do whatever the hell they want (for their own benefit) and answer to no one, without any consideration to social costs. The unions TRY to do something about this - they seem to be the only groups trying to combat these “inhumane uses of human beings” and not surprisingly get attacked by management and “mainstream media.”
Luke MR and P.R.- unions and the ALP came into being because of blatant exploitation of workers, labourers, everyday people by the wealthy minority - if there is no need for protection from laissez faire free market ideology - why do these groups exist? If they are greedy - at worst they are just as bad as those espousing the benefits of free market economy. P.R. you say Joyce’s pay rise doesn’t really affect anything - if this is the case why the big fuss over the tiny wage increases requested by workers? What is truly getting up your collective noses - I don’t understand what you are disagreeing to?!
You mention QANTAS needs for competitive with our “modern day competitors”- do you have no recognition of the poor human rights records of many of our neighbouring countries? If you people who see nothing amiss with what has happened cannot comprehend the social justice issues at stake here - then you display your limited values when it comes to how acceptable it is for human beings to SUFFER so that shareholders make profit and so that Australians can have cheap air fares!
Luke MR and P.R. you also seem to have an unsustantiated faith in big business operating in an honest, humane manner - any page in history will show you this does not happen! You make assumptions as to “business exists to keep customers happy” - well give us all free tickets anywhere!! Business exists TO MAKE MONEY. You say portions of society “win” with cheap travel - but large portions of society (including our global village) DO NOT WIN at all but LOSE - so is it OK by you that some profit so magnificently while others LOSE and suffer - let’s face it the cost of living is creating this demand for higher wages - the everyday person wants to make ends meet and participate in their life/society - everyone not only shareholders SHOULD have the right and ability (as structured by mechanisms within our society) to achieve/actualise this.
Read Globalisation, Global Justice and Social Work - get a dose of reality with credible statistics minus emotional hyperbole!!
the wealthiest 1% of the world’s population have as much income as the bottom 57%!!!
“…unlike previous epochs, there is no need today to declare war before eliminating human beings. Today those of us who do not belong to any power group are easily excluded, eliminated, conceptualised as disposable. The most appalling thing, however, is that humanity seems to have lost the capacity to be shocked by this.”(p16)
Luke MR, PR…do you care? Are you shocked? Do you even know what to be shocked about? You seem to be shocked by workers wanting wage risies not even in line with inflation but NOT shocked by Joyce’s wage rise?
Posted Sunday, 13 November 11 at 12:11PM
We read all the critics and yes I may be one of them - about the ability of “”free” market economies to serve the interests of all - but yes we do need alternaitves - I like that Ben mentions Germany.
Dr Dog (and D.G.) I see part of the problem is that in the name of liberating enterprise to make profit (which in theory should benefit all of society - but doesn’t, the favourite phrase of “trickle down effect” does not really occur if we look at Joyce’s wage compared to workers’ wishes) - our society is left with no mechanisms for controlling corporations and thus we see behaviour with CEOs and boards as we have witnssed with Joyce.
“Wealth creation” as the ideology to hang our society “hat” on is not sufficient for proving for the needs/interests of ALL of society - this is a meaningless policy if a SMALL portion benefit from that welath creation. Why would the everyday person care about a polcy that they see no benefit in for themselves?
How’s about using the salary capping that occurs in sports teams like the AFL and NRL to corporations and CEOs, board members etc? Laws need changing. When do citizens get to vote, voice opinions and worries. When do we get a say on how we want our society to develop? We want jobs HERE. Look whats happened to our car manufacturing industry! I want our children and grandchildren to have JOBS with wages that are LIVABLE.
David S. yes empower our unions to go global just as neoliberalism, economic rationalism and capitalism has done. Empower local diversity and culture. Make social justice issues fashionable and part of the discourse in ALL nations-mandatory at trade talks, mandatory at any international relations levels.
Sindha99 - your statistics demonstrate that the gap between rich and not-so is increasing without a social conscience - shows that a third party is needed.
For Joyce to be getting this wage rise - surely there is something else going on behind the scenes something happening underneath all this?
Posted Sunday, 13 November 11 at 12:54PM
fightmumma, fight.
Go for it:
Why is it that you do a better job of explaining things then me.
Love the read, oh, so true.
You hit the nail on the head.
Oh, “trickle down effect” was Reagans B&S line I believe and well the Yanks already know that it was all Bull.
There is almost 800 pages? in The Students Guide to History and nothing good about business or the ruling classes yet there are people around who try to tell us that we should be graetful for this S******T that they try to pass off as Democracy. Yes its better then what they have, over there, the Arab Spring, but thats only because we never wanted them to have anything better then we have. We say nothing when our Governments sell Arms and Amunitions to Dictators so that they can put down uprisings against their Autocratic Rule, Democracy gets overlooked when it suits.
The Arab Spring has been happening in Egypt since 81.
For the rest of you go to:
Mona Eltahawy: Hypocrisy rhymes with Democracy
http://www.abc.net.au/tv/bigideas/stories/2011/11/01/3352385.htm
Posted Monday, 14 November 11 at 10:06PM
Dean Baker? You must be joking Ben, Baker would have trouble even spelling the word “market” and has probably never even heard of the word “free”.
Posted Friday, 18 November 11 at 2:32PM
In a world of competing values, we have to choose which values to put our vote and our wallet into. We used to value the fairer wage efforts of Unions enough to support them with our vote and wallet. For many reasons, including our needs for (cheap) value, and our resentment of some union members being greedy or too aggressive, we are reducing our support of unions to the point where they are becoming unsustainable. It’s your vote, and your wallet.
I was a ###U Rep for 7 years, and I know it is hard to represent your colleagues without sometimes slightly crossing the company-friendly laws in IR, so I understand why Unions can appear ‘agressive’.
Union Reps and Officials have to work in poor, unglamorous, depressing, complicated conditions, like other activists.
They have to sometimes cross the law in order to remake it a fairer way, especially in regards to Industrial Relations, which under Howard was positively anti-Union. The thin line between a succesful union campaign and a failure is as thin as the line walked by creative, imaginative lawyers, so mistakes will happen.
Capitalism is indeed designed to create financial mono- &duo-polies,
and force financial considerations to be above all others, so Unions are pretty useful to the corporate world, for its sustainability-
to stop the incessant downwards pressure on costs like wages.