A few predictions:
1. The cost of the redundancies and retrenchments will exceed budget.
2. Within 18 months, there will be more managers then there are now.
3. No work will occur in middle management circles while this policy is afoot. Frightened people don't do much work.
4. The "wrong" people will go, as usual, leaving a traumatised group to pick up the pieces after being told "work smarter not harder'.
As for Swingy's idea that the Board has every right to pursue this policy in the name of shareholder value, I respectfully suggest that this is bassackwards.
The share price reflects the amount of dividend and a premium for future growth. If the return on shareholderrs funds doesn't meet shareholder expectations then the share price falls until it does.
ie: 5% expectation, $10,00 shareprice = $0.50 dividend
!0% expectation $5.00 share price = $0.50 dividend
All other things being equal, the share price follows the dividend not the other way around. I will not explain the capital asset pricing model here.
Qantas also has some stakeholders that Qantas (and its shareholders) ignore at their peril. These include:
- The travelling public, who have, through Government, given Qf a licence to operate safe, timely RPT.
_ The general public, who have granted Qantas an effective monopoly position by keeping out other airlines "In the public interest".
Furthermore, Qantas has an effect on the general economy through the tourism industry, not to mention an effect on the balance of payments through its purchase of aircraft.
- Then there is the Defence case.
- The of course there are the employees, many of whom have given their lives to acquiring highly specific aviation related skills that are marketable to Qantas and not much else.
So yes, if Qantas decides that its only responsibility is to its shareholders, then the Government and the Australian public can rightly conclude that they have no responsibility for Qantas and open the skies to Emirates, Singapore Airlines, and anyone else who wants to come.
You can't have it both ways.