Sunday, 13 November 2011

Qantas And Australasian Globalisation

Australia is many decades behind New Zealand in coming to terms with globalisation. This was very clearly evident when, with the grounding of Qantas, the countries personalities shouted naked racist slogans against Asia.

The phrase of the aftermath was ‘Asianisation’.  Mostly spluttered from the Transport Workers Union’s Tony Sheldon ‘stand by the workforce, the Australian brand of Qantas and not have it Asianised’. Dick Smith’s (The erstwhile electronic store chain chap) polemic rant was memorable. “When I get my private jet serviced in Dubai it’s half the price of Australia because it’s all bloody Pilipinos!” I know if these tirades were uttered in civilized New Zealand these opportunists would be in a Fairtrade recycled doghouse. In Australia they are championed.

These instinctively racist comments were a reaction to a long standing dispute with Qantas management who are planning to greatly expand their outsourcing to Asia. The first dispute of this transition was in 2006 when Qantas outsourced a fair size of their IT to Tata Consultancy Services to the loss of 300 Australian jobs.

Joyce, the CEO of Qantas, insists that if outsourcing is not disallowed by the Unions, Qantas will not only be half it’s fleet size by this time next year they will ultimately perish.

This is true. A global business cannot survive by being hijacked by a local workforce who insist on being paid inflated wages out of sheer nationalism and sentimentality.  This hurts my unhinged lefty sentiments but it is a cold fact.

Australians are outraged by the outsourcing of services for their airline but only 18 per cent choose the airline to travel abroad because for $50 bucks less you get to travel on an airline with hostesses that don’t resemble scrum props and don’t have the charm of a country pub bouncer. For Asia does it better.  And if it’s a few bucks cheaper fair dinkum working Aussie families feel the flying kangaroo can go and get made in to Russian sausages.

It’s no news that India is the world’s outsourcing capital. It is 60 per cent of the countries GDP (Only employing one percent of the population). Finding enormous success with a business model that could be paraphrased as ‘Half the price, twice the size’ they have cornered an elliptical market.

India aircraft engineering service will be candidates for the further Qantas outsourcing contracts.  They already have an enormous IT contract with the company.  India could very well be the saviour of Australia’s greatest international brand. Will India be the saviour of the sacred Holden?

In the very same week as the unprecedented news blitz of outsourcing woes for Qantas, Holden announced that several jobs would be lost to future outsourcing.  Could Tata be a manufacturing candidate? They would have to be as they have saved Jaguar Land Rover. But that reminds us of the cultural challenges of outsourcing.

If you are a Top Gear fan you would have cringed at those pompous twits cringing at their countries icons Land Rover and Jaguar being manufactured by an Indian company.  As an Australia will launch in to his best Peter Sellers Indian accent when they discuss telephone banking.

These cultural challenges are compounded by Australians holding a deeply inherent belief that being overpaid is a God given right. Especially employees of a company, such as Qantas, that is perceived as an Australian institution rather than a business. A local Mum and Pop milkbar rather than a global business.

The old instincts of protectionism will never die and I am starting to believe  that a return to hugely expensive protective tariffs can not be discounted.  The Western experiment with globalization  has largely been  a mixed bag. The current European crisis is a symptom of this. Europe, like Australia, has relocated it’s manufacturing base to the emerging nations and no matter how well you dress this fact in free trade communities, like the Eurozone and the proposed APAC model, we have lost our means of production which is the fundamental foundation for the nurturing of wealth.

A return to those uncompetitive days is not impossible when you hear Australians hyper allergic reaction to not only jobs been lost but more often previously generous salaries and conditions being dramatically reduced.

But the Qantas shareholders don’t give two samosas. They voted overwhelmingly for Joyce’s plans because they want a dividend and they don’t care if that bonus is dressed in a sari and has an accent.  Australian shareholders would make vegemite in a Kolkata hospice if it was cheaper and they thought they would get away with it.

I have mixed feelings. I see the way forward intellectually but in my heart I am frightened for I see great hardship for Australasia being thrown from the nest and flying in a turbulent  world. And if I brutally honest I too feel greatly attached to the undeserved privilege that we have enjoyed but not acknowledged. In this country, with it’s astronomical mineral wealth, the Saudi Arabia of the Pacific.

But I do greatly look forward to the global economy drowning out the racists, that have surfaced in this dispute, and dragging them, kicking and whining into an Asian century.

A positive start would be for Joyce to bide by his vision and outsource the entire Qantas management to Asia. For the companies experiment with outsourcing to Ireland is a strange failure and no Indian CEO would ground his fleet voluntarily.

1 comment:

  1. Its interesting to see the massive difference in the perspectives of the shareholders to that of the employees. It is no secret that australian wages are over inflated and the correction has to happen someday. I guess just the way most of manufacturing got outsourced to China over the years, somehow the maintenance services will too. Although, I believe that any high end or specialised discipline should stay in Australia. Knowing the low salaries on offer and the standard of mass produced engineers from mostly sub-standard colleges being sometimes run in few rooms and a shed, I am not yet fully confidant to trust the Indian workforce with business and life critical services.