OPEN SKIES - bull****! Australian Industry protected from cheap imports?

[1a sound asleep]

Qantas/VA as Australian airlines NEED protection from these cheap "imports". You say its an open market? WHY

Try buying a car overseas, even if it complies to ADRs here. For example buy a BMW IN the UK and import it at a $50,000 saving over Aussie costs. Try buying a Harley in the USA at 50% under the Aussie cost and importing it. You cant register and use those vehicles here, simply because the local industry is protected.

So why are the airlines allowed open slather on any route they want? Look at Emirates being limited to routes in Europe and Canada. If Emirates wants to fly to Australia tell them they are must fly into Cairns, Gold Coast and 1 flight a day into capital cities. Its called protecting Australia industry and jobs - just like they do in the motor industry.

Same with the likes of Air Asia X. Wheres the import tax and gst on their tickets, just like the taxes you pay when you import a car? 40 years ago a flight to the UK was $2000, same as it is today. Back then a Holden was $5000, now its $35000. Somewhere a long the line Qantas has been screwed by this open skies nonsense. If the UK was $3000 it would still be a bargain.

If the Government can protect the motor industry why isnt the Aviation Industry afforded the same protection from what are effectively "cheap imports" ?????

Have you noticed the millions of dollars handed to the foreign companies like Ford, Holden and Toyota. Yes foreign companies handed tax payers dollars to save Australian industry.

Simple - ad $200 tax to every international flight on every airline. Then hand the Australian owned airlines a subsidy - just the same as they hand the subsify to car makers. At least the subsidy to QF/VA is going to an Australian owned and based company

Its time to start fighting the Government. These foreign airlines pay no company tax in Australia the way Qantas does AND their employees dont pay income tax the way Qantas employees do!!. What does the Government give back to Aviation? Yet it gives millions to the car makers, why? It's not all Qantas' fault it cant compete. Imagine if everybody was free to buy a new BMW off a Malaysian distributor the same way you can buy a ticket to the UK of a Malaysian airline.

I think its time unions started on the Government the way the car unions do

[teresa green]

Its time to get rid of the Govt!:(

[JMEN]

Think its time you bought a Nissan, Toyota or yeah a Proton :E

[tryhard1]

We suggested that to Senator X as a possible solution but apparently the chicago convention prohibits this form of action. But I agree, Australian based and owned airlines could still be offered some form of tax rebate by employing Australian staff and keeping their operations based in Australia. The moment however (lets say for argument) Jetstar Asia flies into Australia, they do not get any tax benefits from the government.

They should also prevent Emirates from flying Australia to NZ! Who approved this! It takes away from OZ and NZ based airlines, and places too many seats on that run!

I agree the government needs to step up and protect our companies (like most other countries do!).

[BigGun]

You can buy a Harley from the US and import it into Australia, You just need to know the right shop to comply the bike :P
Add about $7k AU on top of the price of the bike to get it to AU and get it complied and registered.

[600ft-lb]

Qantas doesn't need tax concessions for employing Australian staff.

Qantas Group EBITDAR for FY2010 was $2195million

Qantas Group Tax bill for FY2010 was $62million

I think Qantas already does VERY well as a corporation paying 2.8% tax on its earnings.

[waren9]

Tax on earnings?
I thought all companies were levied tax on profit?:confused:

[Cargo744]

I believe in the tooth fairy. Have fun gents

[donpizmeov]

You could get the protection for the airline, or the airline could start to compete. Rather than contracting and cutting service, it needs to grow. Blaming foreign carriers for QFs problems is wrong. IF QF managers concentrated on growing the company, rather than cutting costs things would be different.
Why charge extra taxes on foreign carriers that carry pax to places where QF doesn't offer services, which is at the moment almost everywhere. If you want to go to anywhere expect London or LA you can't go QF, its as simple as that.
Tourism is a big earner for Australia. The the high AUD, and the limited services offered by the national carrier, means the tourism industry relies the foreign carriers.
Taxing travelers to help compensate for cr@p management is not the way forward. Look at how many seats EK carries out of Australia every day. QF needs better equipment (772LR?) and start taking these seats back by offering services to where people want to travel.

[1a sound asleep]

I re summarise my point

The motor industry is a protected species by the way of special levies. The airline industry is not.
The motor industry is handed millions of dollars to remain competitive. The airline industry is not.

Implement a form of levy on all airline passengers and hand it back by way of incentives and subsidies to Australian airlines.

You may well call the tooth fairy but I am telling there will be no Australian based International Airline unless the Government steps in. The support of the Government is needed, other wise Qantas will just end up another Ansett

[donpizmeov]

Great idea 1a. Reward lackluster Australian airline management. Watch the airline cut costs even more. If they can get that subsidy and then only have to fly to Singapore in a 767 (maintained in china) imagine how their bonuses would grow then.
If the airline is not going to at least try and compete why should it be supported?

[Sunfish]

Yawwwwwnnnn!

Protectionist formulas protect managers and lazy employees.

How do I know this?

I grew up here from age 5 in 1955 to age 15 in 1965 and watched how we were systematically denied access to American ( and European) consumer goods on the basis of "protection".

To put it another way, I rooted a very nice girl whose father was a Knight (read Liberal party donor) whose only claim to fame was that his company made substandard consumer goods for sale to dumb Australians for inflated prices.

(She was a nice girl).

To put it yet another way: There is an Australian company not far from me that is making very schmick high tech export goods, and they don't care about the exchange rate.

To put it yet another way:: as a former industry adviser to the State Government, "I admire your sentiments, but you are misinformed".

[Captain Sherm]

Protection costs jobs. It does not create them.

Lack of a second Sydney airport costs jobs. By artificially protecting the QF operation it costs more jobs by insulating the airline from the real effects of sub-optimal decisions.

donpizmeov is right. The best form of protection is to build a competitive company and grow it. An inconvenient truth for many is the fact that in starting Jetstar domestic in Australia management actually took a bold pro-active step to protect mainline yields and have a value focused cost-effective product to serve a growing segment. They have done the same with QF Link. The fact that the way they did things with JQ is hard to swallow is another point. The concept is excellent "a value focused cost-effective product to serve a growing segment"

Now imagine had they done that with each of the CitiFlyer and Long-Haul businesses too....."a value focused cost-effective product to serve a growing segment". And with Qantas Services (IT, Catering, Handling) Engineering and Qantas Training too.

All this could lie ahead. And should. And eventually will. But protection will slow growth, protect poor managers and send jobs off-shore. That is a reality. Another inconvenient truth maybe. We all need to face the opportunities presented by paradigm shifts, not hide from them.

[Baileys]

If Australian airlines had a convenient route structure and service that was good I would make a huge effort to fly Australian every single time.

But I'm buggered if I am going to pay extra for crap service, crap routes, old planes. Forget it. I am never going to fly Jetstar - ever. Run a decent full service airline and they wouldn't need subsidies because you would have customers. When Managers seem to not care about service, pilots, staff and maintenance - I'm gone - you have nothing left. I don't care one bit about your profits and I don't care about frequent flyer miles - profits will come naturally when you do a good job.

Welcome to the crap world of globalization. (I do admit that VA are getting there with the Etihad connections.)

[600ft-lb]

Tax on earnings?
I thought all companies were levied tax on profit?

Correct.

Amazing in the sense that in $2billion cash EBITDAR only $60million is paid in tax. Thats great, I wish my after deductions bill was only 2% of my earnings. They have a very active balance sheet that maximizes cash income and reduces tax payable. Good on them, the accountants they have employed have set the business up to save most of their EBIT as cashflow to invest in the business.

It's just a shame that the cash they are making on the Qantas brand is being reinvested into a low cost carrier employing people on 3rd world conditions.

To see the extent of the so called losses by the Qantas segment and the profits of the Jetstar segment, Qantas leases quite a number of aircraft to Jetstar. The depreciation on those aircraft is realized on the Qantas side of the balance sheet. The cost associated with the leasing is eliminated at the end of the day because its an internal money transfer.

So whose balance sheet looks good ? Who is left holding the depreciating asset impacting 'profit' and who is left with a rosy balance sheet ?

9 x A330's at a minimum. Who pays depreciation ?
How many A320's are owned by Qantas subleased to Jetstar ? Who pays depreciation ?
How many A320's are leased from Jetstar Asia to Jetstar ?
As others have pointed out how much money did Jetstar Asia make in profit by leasing aircraft to Jetstar (oz) ?

It must be really good fun being an accountant being able to make the balance sheet look the way you're told to make it look like.

All we need now is a 'muffins' column as they are the highest yielding product in the group apparently.

[1a sound asleep]

Protection costs jobs. It does not create them.

Really? So we shouldn't be paying $14KG for Bananas from QLD after the cyclone and instead importing Phillipines bananas and paying $3KG?

We should just let the Chinese into farm our lands for themselves? Maybe we should just let them in and do the mining jobs as well?

Australia with no protection is an Australia where Australians are unemployed and that is exactly where long haul Qantas crew is heading. Fine to keep blaming QF management but it's not ALL their doing, the same way the QLD banana growers didnt cause the cyclone.

The difference is the Government wont let in cheap import bananas but they will let in cheap imported airlines.

If you keep down this pathway of a blame war with QF management and a failure to see the wider picture and a game of blame this is all going to end horrifically.

[Metro man]

Let's return to the days of two airlines flying the same aircraft type for the same fare at the same times on Australian domestic routes while we're at it.

BNE - SYD $350 one way, no thanks.

If QANTAS had it's act together it could market itself on quality and safety, charge more than the competition and still be profitable. Sadly it's been run into the ground and its reputation and brand trashed.

Tell me why I should get on a geriatric B747 with a known engine problem (Rolls Royce) and accept a product well below the standard of the competition at a higher price ?

In a free market customers turn away from inferior products and services, those supplying said products and services either lift their game or go under.

Hyundai are an excellent example of this, twenty years ago their cars were a joke, unreliable and poor quality. Now they are beating Toyota and top European brands.

[donpizmeov]

1A, when something is on its death bed, you either make it better or put it out of its misery. To prolong the pain just makes things harder on all involved. In the QF case I suggest the way forward is to re-equip and compete. If management and directors think its better to kill it off then your gripe should be with them.

[Arnold E]

Well here you go. A system that not everybody has worked in, but I have.
So you think you are getting better cars cheaper now? Wow are you mssinformed.
Ok, give me a direct comparison.
The Austrailian car industry was killed for what purpose? and please dont tell me there is an Austrailian car industry left. There was once apon a time where Aust had the capability to build a car from go to whoa, but this no longer exists, we assemble cars only. :yuk::yuk:
If we are using the car industry as an example, then Qantas should be shut down tomorrow with no regrets. Tell me what protection there was for Aussie cars going into, for instance.Malaysia, where the Proton can come into Oz with 10% tariff, yet try an export an Ozzie car to Malaysia, and please, all you experts, tell me what the tarriff is into Malaysia.

Now you have really wound me up, please tell me what, for instance, was the difference in price and features of say, a 1970 BMW here in Oz. If it comes to that, tell me how good a 5 series beemer is compared with a statesman now days.

[Metro man]

The Australian car industry died because just like the British car industry, it couldn't compete with the better and cheaper Japanese alternatives.

Should I be forced to support the domestic industry's inferior products when I can get a better quality import at a lower price ? A small domestic market couldn't support the local industry by itself and the cars weren't good enough to compete abroad.

US car industry is also on it's knees despite the massive home market, it couldn't succeed on it's own turf because it didn't make the cars people wanted.

There may be a case for protecting fledgling industries early on but ultimately they must stand on their own feet.

Who wants to drive an XF Falcon and watch a CRT TV with VHS video when better is available.

[oicur12.again]

"So we shouldn't be paying $14KG for Bananas from QLD after the cyclone and instead importing Phillipines bananas and paying $3KG?"

What about providing bananas from QLD at $3kg instead of $14kg?

[tail wheel]

US car industry is also on it's knees despite the massive home market, it couldn't succeed on it's own turf because it didn't make the cars people wanted.

Perhaps US manufacturers could not compete against imports but that does not explain why Honda produces more vehicles in the USA than all their other factories world wide and BMW produces many of it's vehicles in the USA including exclusive manufacture of the Z3 sports (and produces many models in South Africa).

Germany's population is only 81 million, four times the Australian market and one third the US market and it's labour cost is similar to Australia, yet it has a thriving vehicle manufacturing and export industry, including BMW, Mercedes, Audi, Volkswagen, Porsche, Rolls Royce, Bently, Bugatti, Ford and GM Opel. How can Germany, with it's relatively small domestic market and high labour costs, support so many profitable vehicle manufacturers? Production efficiency and proactive export development perhaps?

Even in the UK, when local car manufacturers have been acquired by overseas companies (Rolls Royce, Bently and Daimler by German companies and Jaguar by Tata of India), after technological investment those companies return to profit.

Do you think the state of the Australian vehicle manufacturing industry may also have something to do with our local (and imported) industry management decisions, lack of investment in efficient, modern technology, the quality of the products we produce and our inability to market our products internationally?

Why is the European large ship building industry again thriving and able to compete against Asia with it's lower labour costs? France is now a major builder of cruise ships, including Cunard liners and the QMII. Investment in modern design and efficient construction technology perhaps? Where has our ship building industry gone?

Why does Europe, with it's high labour costs, again dominate the technology and manufacture of high speed, cost effective rail transport, when the Australian rail industry languishes in slow, inefficient, pathetic 1940's technology?

Why does Europe have a thriving electronics and white goods industry and can compete against Asian imports, when our electronics and white goods industry - AWA for example - are all but non existant? Even the Kiwis, population 4 million, make and export better white goods than Australia (Fisher and Paykel). Why did we sell the Victa Airtourer to New Zealand, then buy back over 100 aircraft?

Why are we digging up Australia and shipping the raw products overseas instead of value adding our exports? What will we do when we've exported all our iron, bauxite, coal, uranium and LNG/CSG?

Why is our cattle and sheep industry dependent almost totally upon live exports, rather than exporting processed meat, wool and leather products? Why are all our abattoirs going broke when overseas abattoirs are thriving, processing our Australian live meat production?

Why must Qantas move off shore to access lower labour costs when other western world airlines (AIG, Southwest Airlines), with similar labour costs, are profitable? How can Europe, with it's relatively high labour costs, have a successful aircraft manufacturing industry - Airbus and RR for example - and European airlines maintain their aircraft in Europe, when Qantas must send our aircraft for maintenance to developing and low cost countries, with questionable standards and practices? Does Qantas pay GST on their aircraft parts and labour sourced overseas when reimporting their repaired aircraft, or is that another hidden financial benefit? Why are the two largest Qantas shareholders (J P Morgan and HSBC) local off shoots of overseas financial institutions, when we have a strong finance industry and billions invested in super funds here in Australia?

Why have all our Australian innovative developments - the cochlear implant, orbital engine and DME for example - all moved off shore for production?

Why do we allow our Governments to obscenely over regulate and micro manage our industry and industrial relations arrangements, whilst providing little incentive for R&D, investment in modern technology and export development and promotion? Why do we accept without question, CASA taking twenty three years so far and counting, to produce a set of aviation regulations? Why do we accept ever increasing tax levels for no return on our investment? Why do we believe a couple of hundred politicians in Canberra, most with no real world business experience or acumen, know better than us how to build our businesses and spend our earnings?

Why is our Government reducing it's investment in vocational and tertiary education and hell bent on turning every TAFE college, technical college and university into a profitable commercial enterprise? Why is the failure/non completion rate of Australian apprenticeships around 60% (or successful completion rate around 40%) when as a nation we have a deplorable trade skills shortage and must deplete developing county skills to provide our skilled work force? Why do we have a deplorable hospital system and must import nurses and doctors to meet our need, when we should be training our own kids?

Why is our Government investing $43 billion of your tax money in a monopolistic national fibre optic network and guaranteeing higher internet and communication costs when, given the right environment and appropriate encouragement and non cash incentives, our private enterprise should be making the investment, probably at less than half the capital cost and lower, competitive user charges?

Why do we have an over regulated finance market, RBA dictated interest rates and a protected, monopolistic banking industry, when the cost of money should be driven by market forces of supply and demand? Why are bank interest rates double the prime rate? We allow the market to dictate the value of our Australian Dollar but totally regulate our interest rates?

Despite having a FIRB review process, why are we selling our only profitable export companies, including our resource industries, to overseas interests? Why do we need a $71 billion carbon tax - to produce even more revenue for our Government to "invest" in their pet schemes?

The cost of labour is a very significant factor, but is it the only factor influencing the viability of our Australian industry and commerce? Do we need protection of our industries against imports and foreign labour costs, or do we need a far more flexible, innovative and proactive commerce and industry environment, in partnership with our Australian work force, with far less intrusion by Government?

Why do we need to import our company Board Members and CEOs from overseas, Mexico, the USA, Ireland? As Australians, are we so dumb, incompetent and incapable of managing and growing our own businesses?

Why do we have a national "tall poppy syndrome" culture? Why do we criticise and denigrate our home grown entrepreneurs like Gina Reinhart, Twiggy Forest, Lindsay Fox, Dick Smith and others who invest in Australia, employ Australian workers and often personally contribute generously to our society? What is so wrong and obscene about "having a go" and accumulating wealth?

Why are we allowing our Government to accumulate unnecessary and obscene debt levels and deficits for very little real growth or improvement in our Australian quality of life? Why don't we demand value for money?

Why do we blame low overseas labour costs as an excuse for our own inability to show innovation, enterprise, lack of technological investment and inability to develop export markets?

Perhaps low cost Asian labour has less to do with our ailing industries, than our own lack of investment in technology, onerous inflexible and invasive Government regulation and inability to efficently compete in a modern world?

We inherit our world and caretake it for our children.

At the present rate, there won't be much for them to inherit except a lunar lanscape of holes in the ground, decrepit industry, no agricultural industry and a net importer of food, a mountain of debt and a third world economy!

Think about it!

[D.Lamination]

Tailwheel is spot on!


:mad:

[Wunwing]

We do have a mechanism to protect our international aviation industry, its call the International Air Services Commission or IASC. It can be found at

International Air Services Commission (http://www.iasc.gov.au)

The way it works is that Governments world wide own the international rights, not the airlines who are in theory "lent " these rights for a period. The rights are created under bi-lateral agreements between governments. In Australia's case the negotiation is a multi department negotiation where many factors come into play. However the 2 basic organisations that are always present are DFAT and DOT.

When new rights are negotiated, the allocated period expires or the rights are handed back, the IASC has a hearing to reallocate the rights. In the past these hearings were widely advertised and submissions from interested parties were encouraged. However the grounds for comments are limited to those listed on their web site and can be changed by the Minister.

The last Ministerial criteria issued was in 2004.The section of interest to all in our industry is "General Criteria for Assessing Benefit to the Public". Included in this area is an item of great use to employees if we choose to use it. "Industry Structure.
(e) The Commission should assess the extent to which applications will impact positively on the Australian Aviation Indiustry."

This paragraph was inserted in the early days of the deregulation process when AIPA,ALAEA,FAAA and the ASU were taking an interest at the political level.At the time AIPA employed an economist who together with a couple of Com members actively participated in commenting on all IASC determinations.This team was particularly successful in their task in most cases backing Qantas but not always.There were times when the Ansett pilots in particular and also Qantas were not impressed, but it was AIPAs job to represent their members and they did it well.

With the demise of Ansett, AIPA decided in their wisdom (unwisely in my opinion) that there was no longer a real threat and wound the project down. The economist was let go. To the best of my knowledge the whole process has not been picked up again.

So the question is, given the history, why are the Aviation Industry not again participating in the IASC allocation process? The legislation allows for industry participation and indeed it took a lot of time and money to establish that right.The history is there in the allocation statements on the website. The process is there on the website. All that is needed is the will and the continuous effort.

However the only way that by experience this works, is for all the Associations to work together so they sing from the same song sheet. The AIPA process worked because they spent money on someone who could produce documents in economic speak and had a Phd after his name so the public servants couldn't discredit him. There was also a massive effort into establishing working relationships with the IASC and DOT. The process took a lot of time and money but it worked.I don't see why it won't work again.

OK so that takes care of code sharing and outsourcing. If you are not clear how, then think opposing in the IASC every traffic determination that the Qantas group applies or any other Australian airline for that matter, where the whole operation is not Australian.Having opposed it in the IASC then seek maximum publicity about your submission.

As far as open skies and allocation of foreign carriers, that requires a regular presence in Canberra.The Associations have to have the same level of presence as the Airlines do. Think Government Relations Dept. That also is achievable but as I said earlier you will have to spend money and be there for the long term. This kind of relationship is expactly that, a personal relationship between individuals and it has to be consistent and long term.
Again this worked in the past but for whatever reason was let go.

Wunwing

[ACT Crusader]

Excellent post wunwing.

I'm interested that some have chosen the auto manufacturing sector as a comparison. Yes subsequent govts have poured money into the sector, but it's hardly for the industry to "stay competitive" but rather to stay afloat. Let's not forget political expediency either!!

Talk to anyone in the know in that sector here in OZ and there has been more non-production days over the last few years despite ACIS and the "green car fund" providing millions.

The biggest "killer" in my opinion to the industry was the tariff reductions. But consumer power is often what govts will look at in my policy decisions like this.

Where its not tariff barriers there are free trade agreements, bi-lateral or multi-lateral deals. It all starts to get complex very quickly....

As for aviation, there is the Chicago convention, the 'free skies' between OZ and NZ and overaching govt policy on aviation which suggests competitiveness and "safety" are the dominant parameters.

At the end of the day when it comes to "outsourcing" ultimately it's govt policy and legislation which sets the parameters. Whether we like what QF have done, ultimately if there is an environment where creating low cost carriers and employing foreign based crew to fly into OZ is legally allowed then ultimately it's the parameters that need to change.

[Sunfish]

The Australian automotive manufacturing industry does exist, and is competitive.

[ACT Crusader]

Competitive as in it exists or competitive as in makes good profit and is sustainable?

[Pappa Smurf]

Dont know about now but in the 70,s not many Germans built BMW,s.They were mainly Turkish workers then.

[limelight]

I think we all have it wrong. Stop the complaints about overseas competition. At my age (and I suspect a lot of you are near me!) I want SERVICE and QUALITY, and I am prepared to pay for it.

If we take the airline example, I want to get to my destination quickly, in clean, well maintained aircraft. I am off to Greece shortly, so why would I travel QF? They can only satisfy maybe two of my criteria.

And don't get me started about the retail industry, it is all very well having a new store, but if your staff know jacks**t about the product you have lost me.

Industry has to stop blaming everyone else for their worries, it is the company executives who are not delivering.

Someone tell that to AJ ?

[Captain Sherm]

Well written Tailwheel. Excellent post.


And more recently and focused on QF, Limelight. Well said.

Having recently travelled Business on Qatar's B777 and been very impressed with the price and service I had a quick look at Limelights forthcoming trip to Greece.

Assuming one way travel in Business (restricted fare) on August 31 here's the comparison:


Qatar: B777 to Dohar, then A321 to Athens. A$5295, total time 21 hrs, 05 minutes.

Qantas, 1 stop to London on a B744 then transfer to BA A320 to Athens. A$8437 and 29 hrs 20 mins.


Yes, just an anecdote, but when I had to get to Rome recently and at short notice, in Business, that's the sort of quick 5 minutes at the keyboard result you get. It was my first time with Qatar and it was extremely pleasant. The Business Class terminal in Dohar was wonderful. Yes, had to bus it from the 777 to get there but they even had a business class luxury bus.

That's the situation out there and QF's long-haul EBA salaries have little to do with it. Yes, I think that highly paid S/Os are an obsolete concept, but it doesn't really matter when your competition has a better route structure by far and aircraft such as the B777-300ER and 200 LR that use 30% less fuel and maintenance as well as lower landing charges-and, a much more attractive in-flight product, including a decent size IFE screen and, miracle of miracles, a tray table that didn't tilt when I put my laptop on it!

Protection usually protects weak managers, not the consumer.

Just a thought,

Best wishes

Sherm

[Metro man]

Tail wheel is largely correct, Australia needs to get smarter or go back to just being a primary producer.

Why do we have fruit rotting on trees because farmers can't find the labour to pick it ? It's not worth it for the locals, they get more on the dole. How about a guest worker scheme ? Plenty of cheap labour available overseas, pay them the award and charge the employer a small levy so that an Australian will always be cheaper but someone will always be available.

Help business by reducing regulations and taxes, identify areas where Australia can compete and concentrate on those. Some offshoring may be necessary where the expertise is not available locally or the cost is prohibitive.

Virgin have shown that Australian airlines can deliver a competitive product and respond to the demands of a changing market. Nice new aircraft, friendly staff, attractive fares and innovation by going after the premium traveller with the services he wants. If they can do it why can't QF ?

[neville_nobody]

If they can do it why can't QF ?

Because QF management make more money and get kickbacks by destroying their own airline than they do managing it and making gradual long lasting improvements.

Australia is being destroyed by short term thinking meanwhile long term thinking cultures like the Chinese and the Arabs are moving in and taking over our industries and farmland.

[Animalclub]

How about a guest worker scheme ? Plenty of cheap labour available overseas, pay them the award

It's alreasy happening. Some PNG residents are now in Australia under this scheme.

[Wunwing]

The comments about the poor quality of the product may be justified and if they are, some of the blame can be sheeted home to overseas outsourcing without appropriate quality control. If the supply was sourced from within Australia, there are many ways that the product can be improved despite airline management.

On thinking about the subject I suspect what has happened is that for many years, in one large airline at least, the management thought that they were running the show but they weren't. Certainly in the large airline that most of my career was in, the employees and the unions ran it (well) through a complex web of personal and professional relationships which just bypassed the managers. From that we achieved a good product despite some real rubbish instructions from on high. When all the services were outsourced the managers actually had to manage and they weren't and aren't up to it.

To save this industry, the first stage is to get as much as possible back into Australia. When we have achieved that, the next stage is to sort out the management mess.

The only way to get the work back in Australia is via the process of my earlier post. But for that to work every group in the industry will have to pull together.Up to now that has proved impossible because of lack of trust and the divide and conquer of the employers.

Wunwing

[breakfastburrito]

Certainly in the large airline that most of my career was in, the employees and the unions ran it ( well) through a complex web of personal and professional relationships which just bypassed the managers. From that we achieved a good product despite some real rubbish instructions from on high. When all the services were outsourced the managers actually had to manage and they weren't and aren't up to it.


This is an extremely important insight. There are two components, the first, employees's have succeeded in spite of management. The second is the outsourcing loses this inherent "goodwill".

Perhaps that is why management is so befuddled, despite their best efforts, management have found it difficult to kill off mainline QF because of the employee effort. Look at how much technical work goes on by the pilots union, for the benefit of Qantas. Show me any other workplace where the employee pays (union fee) to improve the safety & efficiency of their employer. This is but one example.

Excellent insight Wunwing.

[Metro man]

Look at what happened to the Swiss watch industry with the advent of quartz technology in the 1970, their sales of mechanical timepieces were decimated by the arrival of the new technology.

However they adapted and focused on quality at the high end and introduced the Swatch at the low end. The industry survived becaused it adapted to change, protection would not have helped as the domestic market could not have supported the manufacturers who exported most of their production, the Swiss having 50% of the world watch market prior to the 1970s.

The Swatch group became the worlds largest watch manufacturer and the top end brands such as Rolex continue to prosper.

[tail wheel]

Why do we have fruit rotting on trees because farmers can't find the labour to pick it ? It's not worth it for the locals, they get more on the dole. How about a guest worker scheme ? Plenty of cheap labour available overseas, pay them the award and charge the employer a small levy so that an Australian will always be cheaper but someone will always be available.

I am not opposed to the concept of guest workers where necessary, who spend much of their income in Australia anyhow.

But why do we need expensive guest workers when in other developed countries the process of fuit picking has been totally mechanised? Citrus, apples, pears, olives, grapes, bananas, stone fruit and nuts are now harvested in other developed countries by machines, very efficiently and in a very cost effective manner.

One recent TV article from California demonstrated that two workers, with two specialised machines, can selectively pick over 100 acres of premium ripe citrus fruit per day.

And where does that Californian citrus fruit end up? In Coles and Woolworths because our fruit industry won't invest in technology and innovation and can't compete on price!

Our grain and sugar industry has efficiently mechanised and is a net exporter; why can't our fruit industry modernise and efficiently produce fruit at reasonable prices, rather than being a net importer of fruit to meet the Australian demand?

Why does our meat producing industry produce world class live beef, lamb, pork and poultry at very competitive prices, but our inefficient meat processing industry can not compete in quality or price and Australia is a net importer of pork from Canada??

Why must the discerning, non price sensitive Australian business class traveller to Europe travel on a Etihad, Saudi, Singapore or Cathay to get the quality service he expects, rather than travel on our national airline?

:confused:

[Icarus2001]

How can Germany, with it's relatively small domestic market and high labour costs, support so many profitable vehicle manufacturers?

I can answer that one I think.

Because the population of Europe in 2009 was somewhere around 850 million people. All within a short (by Oz standards) travel time of the German factories.

Secondly and this relates more directly to the airline world, Germans as a population and specifically as manufacturers have a reputation for very high standards. Therefore the consumer feels confident about the product. Much like buying a ticket on a trusted carrier compared to an unknown SE Asian carrier.

This is where the analogy gets interesting. I bought a Bosch washing machine due to a price vs quality comparison. When I looked carefully I discovered it was asembled in Thailand!:)

Why must Qantas move off shore to access lower labour costs when other western world airlines (AIG, Southwest Airlines), with similar labour costs, are profitable?
A very good question. As has been said elsewhere if the pilots and cabin crew took a 50% pay cut it would not help the route structure issues, the poor IFE and the old airframes.

[Metro man]

The older ones here will remember when "Made in Japan" meant rubbish. Japanese factories turned out poor quality goods at low prices. Then they got smart, if you've already gone to the trouble of making a product ie sourcing raw materials, setting up a factory, employing and training a workforce, you can get much larger profits for a small investment in improving quality.

Spend a bit more money on design and materials and suddenly your 99cent widget goes for $5.00. Why do aircraft engineers spend so much on SNAP ON tools, $30+ for a simple screw driver bit when KMART will do a 99 piece set for that price ?

[Praise Jebus]

QF is in the service industry, and in that industry all players basically compete with technology and product. All players have access to the same level of technology so that leaves their product. Over the last decade, QF have been leaders in neither. Whose to blame for that, not the competition....

[BP2197]

Tariffs are economically inefficient. In theory terms, it is described as a dead weight loss. Deadweight loss - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Deadweight_loss)

How do you think the rest of the tourism industry would feel if this was imposed on them on top of the high $AU and weather events? Jobs in the aviation sector would come at a bigger cost to those in the rest of the economy.

As a developed economy, the way forward is a better educated population so that we can can continue to thrive whilst the lower skilled work is undertaken overseas.

Certainly liberalising IR policies would help productivity and keep Australian firms competitive but I can't see it happening under this govt.

[Sunfish]

As a former industry advisor for a State Government Department and later a CEO of a university technology transfer company I can give a little insight into this matter and also perhaps explain why Qantas is part of the problem.

The first thing you need to know is that there are quite a lot of highly profitable technology companies in Australia that are laughing all the way to the bank, every year.

Here is just one of them: ANCA - The World's Most Flexible Tool Grinder (http://www.anca.com) - they supply Boeing, GE, Rolls, GM, you name it. There are plenty of others.

You never hear an Australian business saying "Hey! Look how profitable I am! Look how much money I'm making!" do you? I know one company doing aerospace stuff where the owners and managers collect Ferraris. There is a high tech company not more than Five kilometers from here that is the world leader in making the highest of high end luxury super yacht and racing yacht hardware, but you will never know..

On the other hand, you will occasionally hear on morning talkback radio, the small manufacturer getting worked up: "I provide jobs in Australia!", "I ought to be protected from XXXXX!", "The Government is taking too much tax", "I can't get workers", "unfair competition, cheap slave labour in China" etc. etc. etc. Ever heard one of them?

Well whenever the Minister or the Premier copped a spray from one of those on talkback radio and said "I'll have someone contact you", it was always poor old Sunfish who got that job! Let me tell you what I found every time I visited one of these businesses...

I always found plenty of Australian flags and boxing kangaroos everywhere. The factory itself was always run down. The equipment was old. The employees were untrained. The machinery and staff were incapable of producing a quality product. The owner was always hyper patriotic. When questioned about his competition and their product quality, there was invariably a lack of detail. If I raised the subject of quality and technology it was quickly ignored. This even applied to a division of a public company - they couldn't understand why their competitor from Europe consistently was cheaper! A simple look at the product, the factory and the systems explained why! What these guys invariably asked for in the end was a Government grant. So much for proud ultra conservative free market economics!

I saw other companies that were highly successful. They all had one very simple secret - they benchmarked themselves against their international competition and then set out to first match them by copying them, then doing their own R & D and finally beating them. I had guys in Thomastown
who knew that their competitor wasn't Joe Blow in Brisbane, it was Hitachi in Japan - and they were fighting over highly specialised markets that don't even exist in Australia! I have dozens of examples. Does anyone know that the worlds leading manufacturer of specialised Tobacco handling equipment is in country Victoria? Mining machinery? ?

..And you get you knickers in a knot because Chinese hand tools are cheaper? Why are you even trying to compete in such a crappy market?

And this is where Qantas comes in. To compete internationally you need to go overseas - and often. You need to send freight overseas as well. So Qantas provides a ****ty slow and expensive service - and it effects Australian jobs and growth as a result.

[waren9]

why can't our fruit industry modernise and efficiently produce fruit at reasonable prices, rather than being a net importer of fruit to meet the Australian demand?




Too busy fighting over water allocations for water that doesnt exist and red tape and paying tax to fund a north south pipeline would be my guess.

Too much time spent arguing about how it should be done rather than getting on and doing it.

[Wally Mk2]

Another 150 employees finished in the SPC fruit canning business ( to the Nth of ML as heard on the news this morning) due they can't compete with imported fruits...............christ we have stuffed a country that could have been the best!

200 years is all it has taken, Govts over the years ought to be ashamed of themselves:ugh:


Wmk2

[UPPERLOBE]

Nah Wally, it took about 160 years to build it up and the nongs in charge have been shoving the level playing field into us for the last 40 years.

Our favourite 2 big supermarket players are the ones killing off local production. Does anyone look past the price and see where stuff actually comes from?

[my oleo is extended]

why can't our fruit industry modernise and efficiently produce fruit at reasonable prices, rather than being a net importer of fruit to meet the Australian demand? The Government is too busy sitting on its hands letting the Murray River turn int a salt pan filled with rotting Carp. But don't worry, they will spend millions on consultant mates to produce long winded reports peppered with lawyer speach and wank words. Clowns.
I always found plenty of Australian flags and boxing kangaroos everywhere. The factory itself was always run down. The equipment was old. The employees were untrained. The machinery and staff were incapable of producing a quality product. The owner was always hyper patriotic. When questioned about his competition and their product quality, there was invariably a lack of detail. If I raised the subject of quality and technology it was quickly ignored. This even applied to a division of a public company - they couldn't understand why their competitor from Europe consistently was cheaper! A simple look at the product, the factory and the systems explained why! What these guys invariably asked for in the end was a Government grant. So much for proud ultra conservative free market economics!
Yep, that is the modern day Qantas !

[tail wheel]

I see SPC Ardmona retrenched 150 workers as they can't compete with import products.

Having seen an ultra modern canning facility overseas I wonder if the real reason was no investment in ultra modern, automated canning technology and 140 staff too many?

Common with many developed countries, our politicians of all shades are engrossed in the game of factional politics, rather than the art of national leadership.

Whilst I acknowledge the previous Government exercised excellent fiscal management and should take credit for our strong economy, they too had their share of failures but I don't think it was as many as the lemons the current Government has so far achieved:

The Top 50 Labor Lemons

1.. Carbon Tax – “There will be no carbon tax under the Government I lead.”
2.. NBN – $50 billion but no cost-benefit analysis
3.. Building the Education Revolution – The school halls fiasco
4.. Home Insulation Plan (Pink Batts) – Dumped
5.. Citizens Assembly – Dumped
6.. Cash for Clunkers – Dumped
7.. Hospital Reform – Nothing
8.. Digital set-top boxes – Cheaper at Harvey Norman
9.. Emissions Trading Scheme – Abandoned
10. Mining Tax – Continuing uncertainty for our miners
11. Livestock export ban to Indonesia – Over-reaction
12. Detention Centres – Riots & cost blow-outs
13. East Timor ‘solution’ – Announced before agreed
14. Malaysia ‘solution’ – Only just agreed, now blocked by the High Court?
15. Manus Island ‘solution’ – On the backburner
16. Computers in Schools – $1.4 billion blow out; less than half delivered
17. Cutting Red Tape – 12,835 new regulations, only 58 repealed
18. Asia Pacific Community – Another expensive Rudd frolic. Going nowhere
19. Green Loans Program – Abandoned. Only 3.5% of promised loans delivered
20. Solar Homes & Communities plan – Shut down after $534 million blow out
21. Green Car Innovation Fund – Abandoned
22. Solar Credits Scheme – Scaled back
23. Green Start Program – Scrapped
24. Retooling for Climate Change Program – Abolished
25. Childcare Centres – Abandoned. 260 promised, only 38 delivered
26. Take a “meat axe”’ to the Public Service – 24,000 more public servants
27. Murray Darling Basin Plan – back to the drawing board
28. 2020 Summit – Meaningless talkfest
29. Tax Summit – Deferred and downgraded
30. Population Policy – Sets no targets
31. Fuel Watch – Abandoned
32. Grocery Choice – Abandoned
33. $900 Stimulus cheques – Sent to dead people and overseas residents
34. Foreign Policy – In turmoil with Rudd running riot
35. National Schools Solar Program – Closing two years early
36. Solar Hot Water Rebate – Abandoned
37. Oceanic Viking – Caved in
38. GP Super Clinics – 64 promised, only 11 operational
39. Defence Family Healthcare Clinics – 12 promised, none delivered
40. Trade Training Centres – 2650 promised, 70 operational
41. Bid for UN Security Council seat – An expensive Rudd frolic
42.. MySchool Website – Revamped but problems continue
43. National Curriculum – States in uproar
44. Small Business Superannuation Clearing House – 99% of small businesses reject it
45. Indigenous Housing Program – way behind schedule
46. Rudd Bank – Went nowhere
47. Using cheap Chinese fabrics for Defence uniforms – Ditched
48. Innovation Ambassadors Program – junked
49. Six Submarines – none operational
50. Debt limit to be increased to $250 billion – to pay for all of this and much more

Fifty lemons is a notable achievement? :{

I could add to that:

The Qantas Sale Act - what is that?
The $90 billion Australian Future Fund - quietly spent, now all gone!
Fair Work Act - a nighmare of industrial regulation for which Australian workers gain no real benefits.

[TIMA9X]

Fair Work Act - a nighmare of industrial regulation for which Australian workers gain no real benefits.Yep, and nothing 'fair' about it, if you consider what happened to Captain SA in HKG the other week. FWA is a "lawyers playground" developed by lawyers weighed towards the employer who have the cash to stall or delay every legal procedure. AIPA did all the right things to get the PIA ratified, so they thought. It really is sad what is happening in this country, meanwhile whatever is to be announced on the 24th the government/opposition will continue to remain silent. Nick X appears to be the only politician in the country who has some sort of an idea.

[my oleo is extended]

Tailwheel, you forgot these:

51.. Billions spent on Foreign Aid to other countries ( $500 million to Indonesia alone) while sectors of out own country, including pensioners and war vets have to beg for money while the government fukc them over.
52.. Beef Industry. Baning exports to Indonesia and sending dozens of Australian farmers to the wall. And why ? Because of a typical knee jerk half arsed hair brained move aimed at protecting some political scalp.
This country is being run by a red haired clown, a bunch of inept nufties completely blinded by their snouts being buried in the trough.

Next........

[tail wheel]

This country is being run by a red haired clown

So is McDonalds and that is a very successful business.......

:} :}

Billions spent on Foreign Aid to other countries

Small change! The US Government just audited their Federal Reserve for the first time in history and discovered they had been cranking out bills, $16 Trillion in fact (not millions, not billions, but $16 trillion), to give as 0% interest loans to US and foreign banks, not approved by the US Congress.

Don't believe me - check HERE (http://sanders.senate.gov/newsroom/news/?id=9E2A4EA8-6E73-4BE2-A753-62060DCBB3C3).

And you wonder why the US dollar is headed south and we have a world recession looming?

I note these 0% interest loans, not approved by Congress, were managed through J P Morgan Chase, who also received a $390 Billion 0% interest loan.

And here was me worried about Qantas largest share holder, J P Morgan, with around $2 Billion invested in Qantas! :E

[my oleo is extended]

Tailwheel, no disagreement here !
The below Pprune thread is a pretty accurate description of what has been going on in the USA.
http://www.pprune.org/dg-p-reporting-points/456639-globalisation-debt-banking.html
I know a lot of people will say that some of us are 'conspiracy theorists' but the reality is that with a bit of time, an open mind and a lot of digging you will eventually uncover the truth. As an example, just look at a few of the QF threads, sift through the chaff and you will find a lot of interesting facts, large and small, coming to light simply by people probing, searching and digging.
So is McDonalds and that is a very successful business......
I agree that the red haired clown called Ronald does run a very successful enterprise, but the Labor red haired clown does not.
Small change! The US Government just audited their Federal Reserve for the first time in history and discovered they had been cranking out bills, $16 Trillion in fact (not millions, not billions, but $16 trillion), to give as 0% interest loans to US and foreign banks, not approved by the US Congress. Its called fiat debt. The fools have been doing it for decades, hence the eventual mess they (and we by default) are now in. Research who and what the Federal Reserve System actually is. You will be quite surprised and shocked, but it is not what it appears. Billions is small change in the USA market, for Australia with our number of people and business structure per capita it is a big deal.
I note these 0% interest loans, not approved by Congress, were managed through J P Morgan, who also received a $390 Billion 0% interest loan. Oh yes, now you are connecting the dots my friend. Try Googling these words in the same format as follows - Morgan, Federal Reserve, Jekyll Island.You will understand very quickly the connection.
‪G. Edward Griffin on the Federal Reserve System‬‏ - YouTube

How much longer will society take this ?

[ACT Crusader]

Hot off the press, NZ apples will now be exported to Australia.

OZ apple growers obviously not happy with the decision.