Monday, October 31, 2011

Nationalise Qantas Now!

Just days after receiving a 71% pay rise of around $2m, Qantas CEO Alan Joyce, without warning, grounded the entire Qantas air fleet in an employee and customer lockout.

His tactic was to create a crisis which threatened the Australian economy thereby requiring the intervention of the Australian Government which convened a compulsory conference of Fair Work Australia, the national workplace relations tribunal.

In a marathon sitting, FWA rejected the option of a 21 day suspension of industrial action and took the harsher decision, supported by the Gillard Government, to terminate the disputes between Qantas and three unions.

The FWA decision underscores the lack of industrial and workplace rights enjoyed by Australians. It grants limited rights to “protected” industrial action, but only during and related directly to a bargaining period. And as Qantas workers now know, even those limited “protected” rights can be taken away at the whim of FWA.

Joyce is the front man for Qantas and the Qantas Board’s decision to up his pay to $5.1m per year was quite rightly taken as an affront by working class Aussies. Imagine earning $50,000 per year – quite a good wage, and many are below it – and then doing your sums and working out that it would take a full 40 years of slaving your guts out to amass what Joyce has been handed as an annual pay increase! That’s close enough to an entire lifetime of work. To earn the equivalent of Joyce’s total annual salary, that same worker on $50,000 would have to start working the day he/she was born, and not stop for 100 years!

We’ll come back to this disparity a little later.

Qantas: A private company loyal only to profit

Qantas badges itself as the ultimate Aussie icon. It boasts the flying kangaroo symbol, the Spirit of Australia slogan, and the I Still Call Australia Home theme song.

In 1993 the then government-owned flagship carrier was privatised by the neo-liberal wolf-in-sheep’s-clothing, Labor Prime Minister Paul Keating.

Foreign investors were allowed to own up to 49% of the ASX-listed company and today control about 38% of its shares.

The top four shareholders are giant multinational investment corporations (JP Morgan Nominees Australia, HSBC Custody Nominees Australasia Limited, National Nominees Pty Limited, Citicorp Nominees Pty Ltd) through whom most foreign equity in Qantas is channelled. These four big institutional investors control 71.06% of Qantas shares. The top twenty shareholders (0.014% of total shareholders) control 80.36% of the shares.

At the other end of the scale are the “mom and dad” shareholders who protested at last week’s AGM about Joyce’s management tactics and the failure of the company to provide dividends over the past two years.

The smallest shareholders – owning up to 1,000 shares each – number 51,449, or 38% of all shareholders. This 38% owns a mere 1.03% of Qantas shares. In the next category, there are 63,734 people owning between 1001 and 5000 shares. They constitute 48% of shareholders but only own 7.03% of shares. These two categories of small shareholders constitute 86% of all shareholders but only control 8.06% of the stock.

This is the reality of so-called “people’s capitalism”. The vast majority of shareholders can be totally opposed to Joyce’s tactics and the financial rewards which come his way but their will is frustrated and blocked by the tiny handful of big institutional investors who align themselves with foreign capital and its plans to bust Australian unions and relocate the company offshore.

The Qantas Board: hand-picked for the class struggle

It would be wrong to concentrate on Alan Joyce alone. He can be sacrificed if he remains on the nose. It is the composition of the Qantas Board that shows how its personnel have been selected with an eye to waging a vicious class struggle against its employees and against what might be loosely described as the Australian national interest.

The full list of the eleven Board members and their other directorships and interlocking corporate and social interests can be found here: ( )

First there is Qantas Chairman Leigh Clifford who was first appointed to the Board in 2007. He had been with mining giant Rio Tinto for 37 years. The multinational giant waged industrial and political war against the mining unions in Western Australia's Pilbara region and then attacked the coal unions in the Hunter Valley. One of its tactics, under Clifford who personally broke union picket lines, was to impose a lockout and threat to sack 430 striking miners.

No wonder an October 31 report in the Murdoch rag, the misnamed “Australian” states: “Qantas's lockout looks to have come straight from the playbook of accomplished union-buster Rio Tinto, where Qantas chairman Leigh Clifford spent his executive career.”

Another former Rio Tinto Director is Richard Goodmanson, born in Australia but with dual Australian and US citizenship. Goodmanson was President and CEO of America West Airlines, a budget carrier, from 1996 until April 1999. During his tenure at America West, the airline achieved the highest rate of growth of any hub-and-spoke major carrier in North America, but at a cost to employees and to maintenance standards.

Operational problems reared their ugly head throughout the summer of 1998. Mechanical problems increased, unfavourable press ensued, and employee stress reached a breaking point. Union issues were becoming more and more common, for the flight attendant contract was still open. Mechanics elected the Teamsters as their representative, and were negotiating their first contract. Dispatchers had just concluded their first contract on April 13.

A well-publicized FAA fine was imposed on the airline in June. The record $5 million fine was imposed over maintenance issues, primarily oversight and changes in recommended procedures. America West admitted no wrongdoing, and half the fine was forgiven after a restructuring of the maintenance oversight procedures. Eventually, this would lead to yet another change in heavy maintenance contractors.

In March 1999, struggle broke out between America West Airlines management and its 2,400 flight attendants. The latter were arguing for the suspension of a pay freeze instituted along with a 10% pay cut in 1995 when the carrier was battling to emerge from Chapter 11 bankruptcy. According to the Knight Ridder newsagency the ultimate threat “is that the company will simply shut down”.

“Such a move -- described in a Feb. 12 memo to all employees from President and CEO Richard R. Goodmanson -- would idle 12,000 workers, ground 300 daily flights and could occur as early as Friday. It also could cost the airline $5.5 million a day in lost revenue.”

“If an employment contract isn't reached between the airline and the flight attendants by 10 p.m. Friday, the workers have threatened a series of random, last-minute strikes designed to create chaos for the airline …”

A last minute agreement between the carrier and its cabin crew did indeed “avert chaos”.

Goodmanson has had to wait until October 2011 to enjoy a good old-fashioned lockout.

Then there is Garry Hounsell, appointed to the Board in 2005. Hounsell provides a direct link to legal firm Freehills of which he is also a Board Member. Freehills are leading activists in the class struggle and were the advisors to Patrick Stevedores during its 1998 campaign to bust the Maritime Union of Australia. In April of that year, Patricks sacked its workforce and imposed a lockout enforced by balaclava-wearing thugs, dogs and coppers. Freehills has a long history of developing campaigns for some of the worst employers in Australia. It is an enemy of the working class of Australia.

Dr John Schubert is a former President of the Business Council of Australia and provides a link between that organisation and the Qantas Board. It is through such links that the ruling class constantly discusses its tactics in the war on working Australians. The BCA represents the core of the mainly multinational corporations that generate the most extreme reaction against the rights and liberties of Australian people. Schubert is also a Director of foreign multinational BHP Billiton.

Other Board members include a former Senior Ministerial Adviser to the architect of Qantas privatisation, Paul Keating, as well as persons with interlocking directorships with banking, construction, transport, finance, mining, retail….

The Qantas Board is a war cabinet of the most reactionary, best organised and openly aggressive sections of the ruling class.

Executive salaries: the great divide

The outrage over Alan Joyce’s 71% pay rise is an indication of the mood of the people. From Tahrir Square to Wisconsin, from London is Burning to Occupy Wall Street, there is a growing anger about the obscene levels of private wealth and the insecurity and uncertainty of life for those at the bottom.

The following graphs are based on US data but are indicative of international trends:

The first shows that corporate profits are at an all-time high. This is despite the economic crisis of 2007-08 and represents a half-century high point not seen since the economic boost of the Korean War. Precarious employment is on the rise, entire nations are being rescued from bankruptcy at the expense of their people’s living standards, but corporate profits are safe!

The second shows that whilst the CEOs, the board members and the giant institutional shareholders are wallowing in wealth, the working class that creates that wealth is getting a smaller and smaller share of the growth. The rapidly-falling blue line is wages’ share of the economy. Every picture tells a story!

The third shows that CEO salaries, once a mere 50 times that of the average worker’s salary, are now 350 times as much. Economically and socially, these parasites live on a very different planet to the rest of us!

The last one shows the terrible reality of the last 15 years as CEO salaries and corporate profits have sky-rocketed, whilst production workers’ wages have remained more or less static, and the US Federal minimum wage has actually gone backwards.

Occupy Wall Street indeed!

Nationalise Qantas!

The disgraceful performance of the social democrats in privatising Qantas (Keating) and using Fair Work Australia to take away workers’ rights to industrial action (Gillard) can only be righted by renationalising the company.

For most practical purposes, the only way into and out of Australia is by air. The interests of our people require a national carrier, owned and operated by the Government. If it needs to be subsidised to provide a safe and reliable service, then so be it, although there is no evidence that such a government carrier would necessarily run at a loss. Management must include the unions representing all categories of employees.

If anything is to be sent offshore, let it be Alan Joyce and his reactionary Board.

Nationalise Qantas and empower the workers!

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