Qantas Outsourcing Heavy Maintenance?
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Qantas Outsourcing Heavy Maintenance?
So heavy maintenance outsourcing is back on the table.
I guess you could see this coming a mile away. When will you LAME'S understand that even if you give QF management your first born and offer to halve your wages, they will still want more and more?
Outsourcing goes in cycles. Industry is just waking up to the fact that outsourcing IT has not produced the expected savings for a whole host of reasons, the main one being that it is now part of a company's core strategic competencies.
Aside from that, while the initial economics of an outsourcing deal can be made to look very attractive, the devil is in the detail.
I was general manager, systems integration group, for a certain company that did outsourcing and let me tell you what we did once the deal was signed with a certain large customer.
The first thing we did was to begin a program to remove anyone who understood IT from our client. That way there was nobody who could contradict the advice we offered, or find fault with the quality of what we provided or it's cost. We ate their brains. Management colluded with us in this because after all, it was their decison to outsource wasn't it? There were also some very large and flashy one off cost savings in letting all these people go.
The next thing we did was the standard IT (and other contractors) trick. We stuck rigidly to the black letter of our contract. Anything else the client wanted was an "extra". As computer technology has a life of about three years or less, pretty soon almost everything was an "extra" and the original IT was "legacy systems". Furthermore, a huge amount of detailed knowledge about the tricks of maintaining the clients systems were lost when his people left. We had to relearn these tricks or replace the systems - at the clients additional cost of course.
It took our client about four years to realise what we had done to him - removed all his IT capability completely and made him totally reliant on us. We had sucked about $40 million out of him by then.
After he realised his error, he had to hire, at very great expense, an entirely new team of IT strategists and specialists to try and retake control of his own It agenda. It took them a further two years to pry our grubby little fingers loose by wich time we had removed another $20 million from his purse.
QF is nuts to try this, the deal will look great on paper but its five years down the track that the nasties will come out, by wich time the culprits will be gone of course.
You can outsource stuff that is non critical and has no strategic impact to your business provided that there is a thriving and widely based market for the stuff you are outsourcing. Photocopiers and cleaning come to mind - there is no vendor "lock in".
Anyway my position is that QF is QF because of its engineering as much as anything else, and treating it as just a "brand" is plain stupid.
I guess you could see this coming a mile away. When will you LAME'S understand that even if you give QF management your first born and offer to halve your wages, they will still want more and more?
Outsourcing goes in cycles. Industry is just waking up to the fact that outsourcing IT has not produced the expected savings for a whole host of reasons, the main one being that it is now part of a company's core strategic competencies.
Aside from that, while the initial economics of an outsourcing deal can be made to look very attractive, the devil is in the detail.
I was general manager, systems integration group, for a certain company that did outsourcing and let me tell you what we did once the deal was signed with a certain large customer.
The first thing we did was to begin a program to remove anyone who understood IT from our client. That way there was nobody who could contradict the advice we offered, or find fault with the quality of what we provided or it's cost. We ate their brains. Management colluded with us in this because after all, it was their decison to outsource wasn't it? There were also some very large and flashy one off cost savings in letting all these people go.
The next thing we did was the standard IT (and other contractors) trick. We stuck rigidly to the black letter of our contract. Anything else the client wanted was an "extra". As computer technology has a life of about three years or less, pretty soon almost everything was an "extra" and the original IT was "legacy systems". Furthermore, a huge amount of detailed knowledge about the tricks of maintaining the clients systems were lost when his people left. We had to relearn these tricks or replace the systems - at the clients additional cost of course.
It took our client about four years to realise what we had done to him - removed all his IT capability completely and made him totally reliant on us. We had sucked about $40 million out of him by then.
After he realised his error, he had to hire, at very great expense, an entirely new team of IT strategists and specialists to try and retake control of his own It agenda. It took them a further two years to pry our grubby little fingers loose by wich time we had removed another $20 million from his purse.
QF is nuts to try this, the deal will look great on paper but its five years down the track that the nasties will come out, by wich time the culprits will be gone of course.
You can outsource stuff that is non critical and has no strategic impact to your business provided that there is a thriving and widely based market for the stuff you are outsourcing. Photocopiers and cleaning come to mind - there is no vendor "lock in".
Anyway my position is that QF is QF because of its engineering as much as anything else, and treating it as just a "brand" is plain stupid.
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Quote:
"QF is nuts to try this, the deal will look great on paper but its five years down the track that the nasties will come out, by wich time the culprits will be gone of course."
WITH THEIR BONUS'S!!!
"QF is nuts to try this, the deal will look great on paper but its five years down the track that the nasties will come out, by wich time the culprits will be gone of course."
WITH THEIR BONUS'S!!!
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Does it seem funny to anybody here that, after Qantas spent vast sums of money building a new heavy maintenance facility in brisbane, and a few pennies on Avalon, that they are prepared to throw all that away and move to China?
I think that anybody could see that the writing was on the wall for Sydney heavy maint. There is only so much acreage at mascot and the heavy maint. shed is a logical choice to move. However, following the capital expenditure involved in Avalon and particularly Brisbane, where is the logic in throwing all that away?
My next question is; does anybody have any idea what changes will be required in the current arrangements to retain these jobs in Australia? Mr Dixon will sing long and loud that changes to the status quo are desparately required. Will he please inform the world as to exactly what they are? People are sick and tired of being threatened and blackmailed. Yet, when pressed for further detail as to what a group of people has to do to maintain their livelihoods, all we seem to get is silence.
I for one am very flexible when it comes to workplace agreements. However, I cannot understand people who proclaim that drastic change is required in a workplace yet refuse to spell out exactly what those changes are.
As a person who has already been thrown onto the scrapheap once in the past few years, I am prepared to bend over backwards to try and maintain jobs in this country. My worry is that no matter how much I give, I will never be able to compete with some slave in China earning one dollar per hour.
Hopefully, sense will prevail. Qantas will consolidate its heavy maintenance in Brisbane and Victoria. If the IR changes go through, people will have to swallow some changes to working conditions. However, jobs will remain in Australia. I hope. If a decision has already been secretly made to do otherwise then Mr Dixon is a far more cruel individual than anybody would believe.
Plenty of people who have only worked for the one company their whole life may be tempted to call Dixon's bluff. I wouldn't. Under this federal gov't. he has all the aces up his sleeve. Only thing one can do now is wait for the next federal election and boot the liberals out. Dixon will be long gone by then. Resting on his many millions in the bar of his Wagga pub. Good luck to him. Just hope that a future Gov't. will reign in some of these changes that are coming and bring back some sanity to workplace relations in this country.
I think that anybody could see that the writing was on the wall for Sydney heavy maint. There is only so much acreage at mascot and the heavy maint. shed is a logical choice to move. However, following the capital expenditure involved in Avalon and particularly Brisbane, where is the logic in throwing all that away?
My next question is; does anybody have any idea what changes will be required in the current arrangements to retain these jobs in Australia? Mr Dixon will sing long and loud that changes to the status quo are desparately required. Will he please inform the world as to exactly what they are? People are sick and tired of being threatened and blackmailed. Yet, when pressed for further detail as to what a group of people has to do to maintain their livelihoods, all we seem to get is silence.
I for one am very flexible when it comes to workplace agreements. However, I cannot understand people who proclaim that drastic change is required in a workplace yet refuse to spell out exactly what those changes are.
As a person who has already been thrown onto the scrapheap once in the past few years, I am prepared to bend over backwards to try and maintain jobs in this country. My worry is that no matter how much I give, I will never be able to compete with some slave in China earning one dollar per hour.
Hopefully, sense will prevail. Qantas will consolidate its heavy maintenance in Brisbane and Victoria. If the IR changes go through, people will have to swallow some changes to working conditions. However, jobs will remain in Australia. I hope. If a decision has already been secretly made to do otherwise then Mr Dixon is a far more cruel individual than anybody would believe.
Plenty of people who have only worked for the one company their whole life may be tempted to call Dixon's bluff. I wouldn't. Under this federal gov't. he has all the aces up his sleeve. Only thing one can do now is wait for the next federal election and boot the liberals out. Dixon will be long gone by then. Resting on his many millions in the bar of his Wagga pub. Good luck to him. Just hope that a future Gov't. will reign in some of these changes that are coming and bring back some sanity to workplace relations in this country.
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these 70 positions are they all lame positions from line 1 h245 or across the hm board.
and can any one shed light on the rumour.
that the master plan is close syd heavy by 2010 fill the remaining positons at bne heavy sell it off to become a combined boeing qantas MRO as part of deal of qantas buying/leasing 100+ b787/b777 to be maintained there.
the super a/half c chks to be done by a bigger base maint team using the remaining manpower left from line 1 h245 ---using both h245 and 271 for that purpose on a monday to fri day/ aft shift.
and can any one shed light on the rumour.
that the master plan is close syd heavy by 2010 fill the remaining positons at bne heavy sell it off to become a combined boeing qantas MRO as part of deal of qantas buying/leasing 100+ b787/b777 to be maintained there.
the super a/half c chks to be done by a bigger base maint team using the remaining manpower left from line 1 h245 ---using both h245 and 271 for that purpose on a monday to fri day/ aft shift.
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S.O.F.
as far as I'm aware, the 70 positions to which you refer are to be taken out of Sydney heavy maint. specifically. Too many people left over from the Brisbane startup (i.e. not enough "volunteers" left Syd to go to Bne).
As for your rumor, it's a new one. Today's Financial review says that the consultants have given Qantas H/Maint. the once over and from a dollar point of view, their recommondation would be to pull up stumps and move to China. However, I hope your rumor has some truth to it if it means retaining jobs in Australia.
A good piece on this topic is to be found on the back page of today's Financial review. Sorry I can't paste it here but ,if anybody get's the chance, it's an interesting read.
as far as I'm aware, the 70 positions to which you refer are to be taken out of Sydney heavy maint. specifically. Too many people left over from the Brisbane startup (i.e. not enough "volunteers" left Syd to go to Bne).
As for your rumor, it's a new one. Today's Financial review says that the consultants have given Qantas H/Maint. the once over and from a dollar point of view, their recommondation would be to pull up stumps and move to China. However, I hope your rumor has some truth to it if it means retaining jobs in Australia.
A good piece on this topic is to be found on the back page of today's Financial review. Sorry I can't paste it here but ,if anybody get's the chance, it's an interesting read.
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S.O.F. - apparently all the positions in Heavy and S.I.T. are LAMES.
Your rumour sounds like a likely scenario, I guess we'll just have to wait until February to find out.
Happy Christmas everyone.
Your rumour sounds like a likely scenario, I guess we'll just have to wait until February to find out.
Happy Christmas everyone.
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How about Outsourcing Seniour executives and CEO's to China???
just look at the instant saving by Outsourcing 1 person
How about cutting Dixon’s $2.0 (M) base, 66% performance bonus, $7.5 (M) severance package after 3 years and share bonuses.
im sure there is just as capable CEO's in china im sure willing to work for the $AU equivilent of about $50,000 PA.
just look at the instant saving by Outsourcing 1 person
How about cutting Dixon’s $2.0 (M) base, 66% performance bonus, $7.5 (M) severance package after 3 years and share bonuses.
im sure there is just as capable CEO's in china im sure willing to work for the $AU equivilent of about $50,000 PA.
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SOF can not confirm the boeing / BNE theory , but several facts FYI:
Boeing are building a number of hangars in Shanghai... whether for themselves or in partnership with a chinese MRO I do not know.
As for BNE Peter Beattie was happy to stump up 10's of millions in subsidies.. and multiplex have lost 10's of milions on the deal so QF did ok on that one (more arse than class mind you)
my guess is that the new fleet ( be it boeing or airbus) will come with total care package for C and D checks... with only up to super A (or equivalent) being done in house..
Sunfish I am with you - I would not give it even 5 years before it all falls in a disastorous heap..and it is panic staions to bring it all back inhouse... it will only take one or two serious maintenance issues for a travelling public outcry.. the press will have a field day.. by that time gregg and dixon will be directors on the board of Woolies and could not give a stuff about QF and the people they shafted, who incidentally just happened to give their entire working life to the company.
Boeing are building a number of hangars in Shanghai... whether for themselves or in partnership with a chinese MRO I do not know.
As for BNE Peter Beattie was happy to stump up 10's of millions in subsidies.. and multiplex have lost 10's of milions on the deal so QF did ok on that one (more arse than class mind you)
my guess is that the new fleet ( be it boeing or airbus) will come with total care package for C and D checks... with only up to super A (or equivalent) being done in house..
Sunfish I am with you - I would not give it even 5 years before it all falls in a disastorous heap..and it is panic staions to bring it all back inhouse... it will only take one or two serious maintenance issues for a travelling public outcry.. the press will have a field day.. by that time gregg and dixon will be directors on the board of Woolies and could not give a stuff about QF and the people they shafted, who incidentally just happened to give their entire working life to the company.
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It would be interesting, maybe it's actually available to the public, to read Mr D's contract of employment.
He would have to be responsible for a variety of things. Would there be mentioned anywhere, other than the obvious fiscal, a matter of safety. Would the "highest standards" clause be included somewhere. And then can he legally justify the move to asia.
Maybe he can.
It's all about $$$, not safety records. He would be aware that by 2010 there will be a fatal every week somewhere in the world on current trends.
One would have guessed Bali's total demise as a tourist destination a few years back, yet it had fully recovered, and will do so again.
Qf go in, insurance pays and 12 months later no one notices.
He would have to be responsible for a variety of things. Would there be mentioned anywhere, other than the obvious fiscal, a matter of safety. Would the "highest standards" clause be included somewhere. And then can he legally justify the move to asia.
Maybe he can.
It's all about $$$, not safety records. He would be aware that by 2010 there will be a fatal every week somewhere in the world on current trends.
One would have guessed Bali's total demise as a tourist destination a few years back, yet it had fully recovered, and will do so again.
Qf go in, insurance pays and 12 months later no one notices.
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SOF can not confirm the boeing / BNE theory , but several facts FYI:
Boeing are building a number of hangars in Shanghai... whether for themselves or in partnership with a chinese MRO I do not know.
As for BNE Peter Beattie was happy to stump up 10's of millions in subsidies.. and multiplex have lost 10's of milions on the deal so QF did ok on that one (more arse than class mind you)
my guess is that the new fleet ( be it boeing or airbus) will come with total care package for C and D checks... with only up to super A (or equivalent) being done in house..
Sunfish I am with you - I would not give it even 5 years before it all falls in a disastorous heap..and it is panic staions to bring it all back inhouse... it will only take one or two serious maintenance issues for a travelling public outcry.. the press will have a field day.. by that time gregg and dixon will be directors on the board of Woolies and could not give a stuff about QF and the people they shafted, who incidentally just happened to give their entire working life to the company.
Boeing are building a number of hangars in Shanghai... whether for themselves or in partnership with a chinese MRO I do not know.
As for BNE Peter Beattie was happy to stump up 10's of millions in subsidies.. and multiplex have lost 10's of milions on the deal so QF did ok on that one (more arse than class mind you)
my guess is that the new fleet ( be it boeing or airbus) will come with total care package for C and D checks... with only up to super A (or equivalent) being done in house..
Sunfish I am with you - I would not give it even 5 years before it all falls in a disastorous heap..and it is panic staions to bring it all back inhouse... it will only take one or two serious maintenance issues for a travelling public outcry.. the press will have a field day.. by that time gregg and dixon will be directors on the board of Woolies and could not give a stuff about QF and the people they shafted, who incidentally just happened to give their entire working life to the company.
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Oh, the ABC reports that the the very sensitive and careing Qantas long haul pilots are going for a 3% pay rise.... while the rest of the company employees are going to get screwed....
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as i said previously, i'm not going to feel safe nor would many other crew knowing that at 30,000ft the aircraft we're on has been maintained by cheap labour from China.
Maintenance to be done in Australia any day with Australian jobs for Australian people!
Oz
Maintenance to be done in Australia any day with Australian jobs for Australian people!
Oz
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OZCC, you are obviously totally ignorant of maintenance procedures and certification requirements. Stop worrying and be thankful that your job hasn't been outsourced.
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regarding the topic of financial analysis and number crunching the case for outsourcing QF heavy maint to china.. one can only hope that Greggs industry expert consultants (who creep around the jet base like undertakers), are aware of the cost penalty that 'Dupont' and 'Besafe' have imposed on our business. Not that there is anything wrong with working safely BUT let us hope management insist that the succesful chinese MRO who wins the business is forced to meet the same KPI's for workers comp and LTI's as QF at Mascot........ I DONT THINK SO.. I would be very surprised.... another asian worker breaks a leg, loses an eye, passes out in fuel tank.. no probs wheel him away and bring another one in ....
Voila - you have cheap maintenance.. (not to even mention the issue of work quality.. a subject to be left for another day).
Voila - you have cheap maintenance.. (not to even mention the issue of work quality.. a subject to be left for another day).