A very astute series of observations Kieth. I've made the argument before that the union movement has been emasculated progressively since the 70's so that it has been effectively outlawed in all but name only. Howard's IR law were the final nail with only a very limited allowable matters to be included. Clauses that prevent or constrain outsourcing, offshoring or corporate sleigh of hand transmission of business (example Network under the guise of LINK) cannot be included in agreements, nor will FWA agree to Protected Industrial Action over such issues. The principle of
Managerial Prerogative (Managers run the business as they see fit, labour has no right to be any part of the decision making) has been affirmed by the High Court. Managers run the business, labour does as it is told.
Negotiations are now a set piece play, and once an agreement is locked in place it is essentially illegal to withdraw labour. The right to progression in this industry DOES NOT EXIST.
Given the enormous asymmetry in power and clout this hands managers, it is no surprise that in like in many industries manager sought to extract this advantage to the hilt with very large short term cost savings and maximise profit. If you pick up any basic finance text (Corporate Finance, Ivo Welch
Chapter 2, free on his
website), the Time Value of Money is emphasised as the key driver of the modern world.
We begin with the concept of rate of return, the cornerstone of finance. You can always earn an interest rate (and interest rates are rates of return) by depositing your money today into the bank. This means that money today is more valuable than the same amount of money next year. This concept is called the time value of money (TVM)—$1 in present value is better than $1 in future value.
Translation: A buck today is so much more valuable than a buck and change next week.
This is exactly what we observe in Aviation, companies have failed to invest and return the cost saving and profit to reinvest in the their businesses beyond the absolute minimum - lack of training pilots is a prime example. That is what the major shareholders wanted. They wanted the cost savings converted to the present value through increased returns. For every $ saved in headcount and reduced training, a manager can take that $ buy back the stock, hence raise it's price and enable the shareholder to capture in increase capital gains, the value having be transferred from the employee.
Managers don't see the fact that they extinguished and exploited the entire industry, extracting every last morsel out the system as a problem. They simply see offshore pilots paid less than the Australian market rate and look to exploit that resource. Pilots are not human beings to the managers, they are just a series of skills to be acquired at the cheapest price. Pilots are simply widgets to be moved around, trained and used as sparingly as possible in the short term.
As long as they have compliant clients in the Federal Parliament who they can upgrade, wine & dine at the Chairman's lounge (which if a Union did, would be seen as corrupt misappropriation of member funds) and they can source labour elsewhere, they will have the rules changed. I have trouble distinguishing between the mafia & senior executive in this industry.
Failing to do so would incur enormous costs to rebuild to the local industry, because they represent a very large component of it, and the heaviest burden would fall on them. Unfortunately, the global industry has changed in the meantime, with managers globally all working from the same model assuming that they could all pull the same play. This is unsurprising, given this has been the finance driven Modus Operandi since the late early 80's LBO junk bond "Greed is Good" era. Unfortunately for the shareholders (mostly the worker with Superannuation accounts, oh the irony), the managers failed to correctly assess the demographics loss simultaneously with the expansion away from large aircraft to smaller point-to-point business model and Chinese market exploding. In my view, the industry is facing at least two decades to rebuild. They will have a great deal of trouble attracting and retaining the skills they need for the foreseeable future with the pay available elsewhere. Residency and citizenship is really the only carrot they have.