Much of the public commentary around the Qantas dispute has been so undergraduate that you would think it had been authored by the people at Occupy Wall Street. But it is Qantas itself which invited much of the negative coverage by not thinking through its tactics last week ahead of the dramatic events of the weekend.
This dispute has at its centre a pretty simple question – does Qantas management have the right to manage Qantas? Or should Tony Sheldon from the Transport Workers Union have veto power over everything from how many staff the airline employs, when and where its aircraft hangars are built, who maintains its fleet, to whether it is allowed to expand into Asia?
I am not an aviation writer but at a guess I would say that as a former senior executive at Aer Lingus and the successfully expansionist boss of the fledgling airline Jetstar, Qantas chief executive Alan Joyce knows a bit more about running airlines than Tony Sheldon.
There are a couple of unpleasant realities about modern business which, if ignored, mean that businesses will not succeed. The first is that in an open market place big businesses have to pay the going rate for chief executives. The second is that in a globalised economy smaller nations such as Australia can no longer afford to get misty-eyed about national brands operating in the manner they have always operated.
They are competing with businesses from all over the world which do things smarter, or at least cheaper, and if we fail to adapt they will simply price themselves out of being profitable.
In assessing the quality of the debate around Qantas’ actions this past 72 hours, it is Qantas itself which should shoulder much of the blame for the negative coverage it has received. In a public relations sense, there were three significant mistakes the airline and its boss made which earned it much of the flak it has received.
The first goes to Joyce’s salary. If Alan Joyce knew, as he obviously did, that the spectacular option of a staff lockout and a full grounding was on the cards, he could have managed the question of his own pay much more cleverly. Mr Joyce’s salary might be, as I said, the going rate for CEOs, but it does not alter the undeniable fact that many people regard the going rate as unjustifiable and obscene. His decision to accept a 71 per cent, $2 million payrise just days before escalating this dispute was tactically unintelligent.
There are precedents from big business as to how bosses can use their salary as a positive, none greater than the legendary CEO of Chrysler, Lee Iacocca, who in 1978 paid himself $1 a year as he embarked on a painful but necessary restructure of the car company in which thousands of jobs were lost. Joyce did not need to do anything that drastic but if he rejected his 71 per cent rise he would have looked selfless and could have brought more members of the public and his staff along with him.
Because he failed to do so this dispute is now entrenched in the public mind as a battle over pay, with a lavishly remunerated foreigner pitted against dinki-di Aussies on the bones of their behinds, even though it is not a battle about pay at all.
The second error was the decision to ground the flights with no warning, which made the dispute look less like a battle with the unions and more of a general attack on the travelling public, with 68,000 people (this one included) booked on flights in the past three days and still none the wiser as to when they will be leaving.
The third and most serious tactical error was that Qantas had failed to make the case fully in the public’s mind as to how deep and dangerous is the unions’ intransigence towards reform. When Joyce said on Saturday that the unions were killing the airline slowly, it would probably have come as a surprise to most Australians given that its profits rose last year, that it is generally very reliable, very safe, a genuine super-brand which is admired around the world.
This was the difference between this planned lockout and the actions of Patricks stevedores in 1998. When Chris Corrigan used so-called scab labour against the Maritime Union and the Howard Government cheered him on as the dogs were literally unleashed on unionised workers, the public already regarded the wharfies and their union as a militant obstacle to the kind of productivity-based industrial change which workers in every other industry had been forced to embrace.
There is not the same level of antipathy towards the unions in the Qantas context because until this weekend Joyce and the airline had not done enough to explain the type of changes they needed to implement, and the unions’ role in thwarting those changes.
Predictably enough both sides of the dispute claimed a victory of sorts after yesterday morning’s Fair Work Australia ruling putting an end to industrial action. Tony Sheldon is on a loop saying that Joyce has “trashed the brand”. What Sheldon fails to understand is that this brand has grown and been nurtured over 90 years and will probably survive a couple of days of chaos at the behest of a very combative CEO, who is playing a much longer game here than the unions are.
Joyce is banking on the fact that, in modern and largely un-unionised Australia, he can ultimately bring the public and his staff with him in his determination to run the airline himself. That is what this dispute is about.
And in Alan Joyce’s case, that’s why they pay him the big bucks.
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