QF94:
Clipped, whichever way this EBA went, the fuse has been set, and the eventual shutdown of maintenance within QF is inevitable. The ball was set rolling in 2005 with the shutdown of HM in SYD, and went to the "overflow" centre in AVV. Now that QF has set up a joint MRO in Malaysia, which is supposedly for "overflow" work, we will see the eventual demise of AVV. One only has to look at the various places QF is now getting its work done where they have set up maintenance facilities.
The failure of the APA bid last year hastened the actions we have seen from late last year till now. As SP stated in his letter, QF had a massive "fighting fund" to break us one way or another. The revenue lost and damage to our reputation was a consequence QF management was prepared to wear. The financial loss incurred over the last few months was far greater than the 5% we were asking for, and possibly the wage cost (approx $360 million) across the company that GD was complaining about.
There was an article in Saturday's Sydney Morning Herald where GD stated that in 10 years time, QANTAS will still be around, but there won't be so many aircraft flying the QANTAS colours. The rest will be flying the colours of Jeffstar.
Sad but true, but at least we showed our resolve to the company that we aren't the easy pushovers they took us for.
The eventual shutdown of maintenance at QF is
NOT inevitable. Just ask anyone who has EVER had a joint venture in Asia how it has panned out.
Your ENTIRE argument rests on the assumption that Asia is always going to be a financially advantageous location to do stuff, which, I assure you, is not a safe assumption.
By moving operations overseas, you are exposing yourself to three additional sources of risk for your business. The first is sovereign risk - which is about the attitude of the Government in the designated country towards your country and their attitude to one of their companies doing work for you.
The second is the business risk associated with relying on an overseas facility. This is about what happens to you if they go belly up. This can be ameliorated if there are numerous suppliers to choose from, so that any failure can be quickly fixed by substitution.
The Third is commercial risk - which is about competition and your ability to choose another supplier if you believe you are being gouged.
These risks must be managed if you are to succeed in outsourcing, and there are an infinite number of ways you can screw it up.
Furthermore, QF has just shown via the ALEA EBA process that it is unable to manage risk - specifically the risk associated with your decision to ban O/T.
So here's one for you QF 94, what happens to QF when all those little guys in your Malaysian MRO decide to have their little EBA session? You all ready know the answer - QF is F***ed.
Don't believe the bull**** about Australia being expensive either. As Asian living standards rise, their cost advantage disappears.
And don't discount the fact that one advantage of overseas outsourcing is all those lovely business trips for senior management - and no, I'm not joking. One senior QF manager, with a wife and two kids in Sydney, regularly "stays overnight" with a female acquaintance of mine as he does his "rounds" of various bases each month.
