GD..Under performance, greed & incompetence?
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GD..Under performance, greed & incompetence?
I had the aggravating experience of hearing this corporate goose in action on Monday. It is almost embarrassing to listen to this smooth tonged board room lizard languish in his despot style of control. Let's face it Qantas hasn't exactly been the leader in maker the right corporate decisions over time. More than external incidents have left the Q holding the golden goose. Let me say at this point this attack on GD is from a corporate performance level and his ethical corporate standards, I am sure he would be a great guy to have a few beers with and the watch Turvey Park take on Temora at Wagga Oval but his under performance and almost unethical treatment of staff and stakeholders is unbelievable. I ponder where could Qantas have been today under a Gerry Harvey type performer.
The most distasteful conduct by GD has been his continuous degrading of Qantas and the competitive nature of our industry. Year after year the staff and shareholders endured 911, Sars, Oil, Low Cost Carriers yet surprise surprise the profits continued to flow at industry high levels. Qantas made the reports in both aviation and financial periodicals. Yet trusty GD continued the doom and gloom philosophy to ensure he kept wages pressure low in all segments of his employ. Then came the statement that staff and customers were of little concern, shareholders were #1 and after yesterday continue to be number one. This attitude against all mainstream corporate icons who valued there staff's skills, loyalty committed to a corporate social responsibility.
Add to that the insatiable remuneration appetite that the hierarchy has maintained. Up to and including 2005 I recall the average staff wage increase was less than 3% per annum. It that stage the executive board members had increases of 14-30% p.a. Yes per annum I said. While we have seen similar headlines in corporate Australia nothing would match the unequal treatment of staff and executives that was happening at the red room. Unfortunately there were no Ricardo Semler, Gerry Harvey or Richard Branson amongst Q executives, nor a drop of ethical standards or the fairness, our fathers and probably their fathers embraced as founders of this great country of ours.
This recent comparison using 2007 Annual reports shows the more evidence of the under performance and over rewards occurring within the big Q. The much smaller competitor of Qantas, Virgin Blue is a simple example of the greed that exists in one boardroom while not in another. Don't get me wrong rewards can be used effectively if used fairly.
Revenue V: 2169m Q: 15165.7m Qantas yards ahead, as we would expect.
Net Assets V: 743.5m Q: 6195m
Profit achieved to Net Assets V: 29% Q: 11.6% (Less than half) This shows how efficiently net Assets were utilised to produce a profit. BG outperformed GD by a country mile.
Cash flow from Operating Revenue V: 18.7% Q:15.5% Obviously cash flows in service industry should be high however again BG get more from his staff than GD.
Profit from Revenues V: 9.9% Q: 4.7% Once again BG outperforms GD by more than double finding more profit from available revenue in percentage terms.
KPI of CEO remuneration to profit/rev (Note the lower the better)
V: 13.78 Q: 141.35 Finally the reward meter. The higher the number the more the CEO remuneration is nonaligned with declared profits.
Say no more..... GD don't expect an invite to Australian Story. GD you are very average.
So what can be done. Not much actually. Shareholders have observed a CEO undersell an iconic company only to be caught out by other greed players who wanted to have two bites of the pie at the last minute. The whole plan collapsed and the share price rose to where is should have been before a takeover offer. MJ fell on her sword and now GD takes the accolades for the price rise. (give me strength) This occurred in a political environment where similar parallels have occurred. Business has grown, profits have soared, investment is at all time highs. How is your bank account? Can your sons and daughter afford their first house? Why is it we have low interest rates but high cost of living and less disposable income. Because the GD philosophy is not isolated. Where has this economic boom taken us? Do you see your family and friends more, do you have more holidays, has your quality of life climbed at the same rate as the economic boom that Mr Howard would suggest?
Staff will continue to be compared to a lower labor cost models from under developed countries and outsourcing staff will continue in technical and non-technical areas. The 787 and 380 will likely been maintained overseas of by a third party. Qantas staff numbers will recede while Jetstar business will grow. Contract work will also grow. GD will move on shortly and enjoy his retirement. His legacy will be shareholders stand above all other stakeholders in a business, above staff and customers. He will be remembered as the CEO who took the 'home' out of Qantas. He, who took the 'spirit' from our company.
Who will we remember? We will remember those Australians with compassion for the social structure and individuals, achievers in sport, medicine and business, the compassionate ones who gave without expectation. Watch Andrew Denton's "Enough Rope" occasionally, it will give you faith in our wonderful country but don't expect GD as a surprise guest.
The most distasteful conduct by GD has been his continuous degrading of Qantas and the competitive nature of our industry. Year after year the staff and shareholders endured 911, Sars, Oil, Low Cost Carriers yet surprise surprise the profits continued to flow at industry high levels. Qantas made the reports in both aviation and financial periodicals. Yet trusty GD continued the doom and gloom philosophy to ensure he kept wages pressure low in all segments of his employ. Then came the statement that staff and customers were of little concern, shareholders were #1 and after yesterday continue to be number one. This attitude against all mainstream corporate icons who valued there staff's skills, loyalty committed to a corporate social responsibility.
Add to that the insatiable remuneration appetite that the hierarchy has maintained. Up to and including 2005 I recall the average staff wage increase was less than 3% per annum. It that stage the executive board members had increases of 14-30% p.a. Yes per annum I said. While we have seen similar headlines in corporate Australia nothing would match the unequal treatment of staff and executives that was happening at the red room. Unfortunately there were no Ricardo Semler, Gerry Harvey or Richard Branson amongst Q executives, nor a drop of ethical standards or the fairness, our fathers and probably their fathers embraced as founders of this great country of ours.
This recent comparison using 2007 Annual reports shows the more evidence of the under performance and over rewards occurring within the big Q. The much smaller competitor of Qantas, Virgin Blue is a simple example of the greed that exists in one boardroom while not in another. Don't get me wrong rewards can be used effectively if used fairly.
Revenue V: 2169m Q: 15165.7m Qantas yards ahead, as we would expect.
Net Assets V: 743.5m Q: 6195m
Profit achieved to Net Assets V: 29% Q: 11.6% (Less than half) This shows how efficiently net Assets were utilised to produce a profit. BG outperformed GD by a country mile.
Cash flow from Operating Revenue V: 18.7% Q:15.5% Obviously cash flows in service industry should be high however again BG get more from his staff than GD.
Profit from Revenues V: 9.9% Q: 4.7% Once again BG outperforms GD by more than double finding more profit from available revenue in percentage terms.
KPI of CEO remuneration to profit/rev (Note the lower the better)
V: 13.78 Q: 141.35 Finally the reward meter. The higher the number the more the CEO remuneration is nonaligned with declared profits.
Say no more..... GD don't expect an invite to Australian Story. GD you are very average.
So what can be done. Not much actually. Shareholders have observed a CEO undersell an iconic company only to be caught out by other greed players who wanted to have two bites of the pie at the last minute. The whole plan collapsed and the share price rose to where is should have been before a takeover offer. MJ fell on her sword and now GD takes the accolades for the price rise. (give me strength) This occurred in a political environment where similar parallels have occurred. Business has grown, profits have soared, investment is at all time highs. How is your bank account? Can your sons and daughter afford their first house? Why is it we have low interest rates but high cost of living and less disposable income. Because the GD philosophy is not isolated. Where has this economic boom taken us? Do you see your family and friends more, do you have more holidays, has your quality of life climbed at the same rate as the economic boom that Mr Howard would suggest?
Staff will continue to be compared to a lower labor cost models from under developed countries and outsourcing staff will continue in technical and non-technical areas. The 787 and 380 will likely been maintained overseas of by a third party. Qantas staff numbers will recede while Jetstar business will grow. Contract work will also grow. GD will move on shortly and enjoy his retirement. His legacy will be shareholders stand above all other stakeholders in a business, above staff and customers. He will be remembered as the CEO who took the 'home' out of Qantas. He, who took the 'spirit' from our company.
Who will we remember? We will remember those Australians with compassion for the social structure and individuals, achievers in sport, medicine and business, the compassionate ones who gave without expectation. Watch Andrew Denton's "Enough Rope" occasionally, it will give you faith in our wonderful country but don't expect GD as a surprise guest.
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A succinct and accurate post.
He is an underperformer who only posesses the large mouth of a marketer.
His industrially driven policies are no match for quality. He has missed the continued assault by Emirates, Etihad and Singapore.
Year by year increment by increment they continue to encircle Qantas.
The answer?
Grow a low yield unproven "brand" at the expense of the mainline. The mainline product provides the yield. It is yield that provides the revenues for this poorly spoken uneducated yob to waste on some industrial wank fuelled by Oldmeadow's 20 year old vision of aviation.
He will be put out to pasture, as he is as old as history.
The scary part if his legacy will be that when the real numbers of J* are revealed from behind the clever veil of accountancy, it may well be too late. Cost is but one part of the profit equation. Importantly it is the transparency of this cost as it relates to "group" assets that is important. Something sadly missing in the accounts at Qantas.
He is a sad individual with ittle going for him who has, due connections been promoted far above his level of competence.
He is an underperformer who only posesses the large mouth of a marketer.
His industrially driven policies are no match for quality. He has missed the continued assault by Emirates, Etihad and Singapore.
Year by year increment by increment they continue to encircle Qantas.
The answer?
Grow a low yield unproven "brand" at the expense of the mainline. The mainline product provides the yield. It is yield that provides the revenues for this poorly spoken uneducated yob to waste on some industrial wank fuelled by Oldmeadow's 20 year old vision of aviation.
He will be put out to pasture, as he is as old as history.
The scary part if his legacy will be that when the real numbers of J* are revealed from behind the clever veil of accountancy, it may well be too late. Cost is but one part of the profit equation. Importantly it is the transparency of this cost as it relates to "group" assets that is important. Something sadly missing in the accounts at Qantas.
He is a sad individual with ittle going for him who has, due connections been promoted far above his level of competence.
PAF
I think the post was to illustrate the gross inequity of GD's remuneration to the performance of the company when compared to another airline. In every area he falls well behind, I don't think cutting pilots or other staffs wages is going to make that much difference.
I think the post was to illustrate the gross inequity of GD's remuneration to the performance of the company when compared to another airline. In every area he falls well behind, I don't think cutting pilots or other staffs wages is going to make that much difference.
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This demise of industry and “modern” life began centuries ago when at the beginning of the industrial age corporations were given the rights and freedom of humans beings. A corporation is nothing but a process linking owner, employee, and customer. All equally important because they are human. The pigs are in the farm house and have been for a centuries, growing arms and legs, there is only one way all this will end. Mother nature always kicks in and puts everything back into balance. We could start in our own backyard and remember what airmanship once was.
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The problem with the Dixon era is no-one on the board has questioned his initiatives. Apart from James Strong there is very little aviation industry knowledge.
They've basically acted as his cheersquad.
'Lets spend millions updating the classics'......'sure'
'Lets order A330's with floors that can't support sleeper seats'...'ok'
'Lets spend millions on Australian Airlines as a 'trial' and see what happens'....'yep'
'Lets bracket fuel costs with staff costs to make em look bad'...'alright!'
'Why don't we just get rid of heavy maintenance'....'You da man!'
'Lets hear it for Geoff! Bonuses all round!!'
They've basically acted as his cheersquad.
'Lets spend millions updating the classics'......'sure'
'Lets order A330's with floors that can't support sleeper seats'...'ok'
'Lets spend millions on Australian Airlines as a 'trial' and see what happens'....'yep'
'Lets bracket fuel costs with staff costs to make em look bad'...'alright!'
'Why don't we just get rid of heavy maintenance'....'You da man!'
'Lets hear it for Geoff! Bonuses all round!!'
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Originally Posted by Reeltime
'Lets order A330's with floors that can't support sleeper seats'...'ok'
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I am no friend of GD but my information is that the A330-200 floors could take Sleeper seats, but it would take a gutting of the interior to do it. So they don't.
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Owen Stanley:
Mate I don't wish to be rude but I don't think you could even explain (or understand) the effect on debt vs. equity to a publicly listed company let alone the effect of the pricing of factors of production for an airline.
If you don't agree or understand the cost of factors of productions for airlines and the effect of labour inputs on profit from revenue don't ask for an explanation on an internet forum.
I can recommend a few courses for you - PM me for them if you wish. I can provide you with some Masters level courses that will explain everything for you although I fear you wouldn't even gain entry.
As much as you wish it isn't that simple. What I will say is that is if you increase the cost of labour it has a significant effect on profit from revenue. Especially for a company with the payroll of QF. Many factors don't have a 1:1 relationship (i.e. $1 more means $1 less profit)
If you wish to look at what people think of the way QF has been managed take a look at the current share price (since the private equity takeover failed).
Mate I don't wish to be rude but I don't think you could even explain (or understand) the effect on debt vs. equity to a publicly listed company let alone the effect of the pricing of factors of production for an airline.
If you don't agree or understand the cost of factors of productions for airlines and the effect of labour inputs on profit from revenue don't ask for an explanation on an internet forum.
I can recommend a few courses for you - PM me for them if you wish. I can provide you with some Masters level courses that will explain everything for you although I fear you wouldn't even gain entry.
As much as you wish it isn't that simple. What I will say is that is if you increase the cost of labour it has a significant effect on profit from revenue. Especially for a company with the payroll of QF. Many factors don't have a 1:1 relationship (i.e. $1 more means $1 less profit)
If you wish to look at what people think of the way QF has been managed take a look at the current share price (since the private equity takeover failed).
Last edited by Pass-A-Frozo; 25th Sep 2007 at 14:31.
Peete:
Errrrrr...............no. The joint stock company was invented by the Venetians around 1300 AD. To do two things that it still does extremely well today:
(a) Manage RISK, by allowing people to spread their assets over a number of companies and therefore reduce their overall risk levels.
(b) Provide a vehicle for undertaking commercial ventures that require more money than any one individual posesses or can borrow.
This facilitated the growth of the Venetians trade since the sinking of one ship no longer spelled ruin for a particular merchant.
The enabling technology for the joint stock company was double entry bookeeping (every credit must be matched by a debt or debit), invented by Luca Pacioli around 1300AD, and at whose tomb in San Sepulchro I have lit a candle and said a prayer.
PAF:
My, my, you keep harping about your education in the business world PAF, yet of course your knowledge only comes from theory. Furthermore the subject on which you are prattling is about an hours read and not difficult at all. Sounds to me like you are simply behaving like an intellectual snob - recommending courses indeed!......
.....but in any case you conveniently miss the point - which is a discussion of the obscene amounts paid to Senior Management who are managing an underperforming airline.
Care to comment on why QF's returns are so low PAF?
Lets hear your wisdom about return on capital employed, fixed and variable, direct and indirect costs???????
Care to talk about contribution margins - probably QF's most closely guarded numbers?
Didn't think so.
his demise of industry and “modern” life began centuries ago when at the beginning of the industrial age corporations were given the rights and freedom of humans beings. A corporation is nothing but a process linking owner, employee, and customer. All equally important because they are human. The pigs are in the farm house and have been for a centuries, growing arms and legs, there is only one way all this will end. Mother nature always kicks in and puts everything back into balance. We could start in our own backyard and remember what airmanship once was
(a) Manage RISK, by allowing people to spread their assets over a number of companies and therefore reduce their overall risk levels.
(b) Provide a vehicle for undertaking commercial ventures that require more money than any one individual posesses or can borrow.
This facilitated the growth of the Venetians trade since the sinking of one ship no longer spelled ruin for a particular merchant.
The enabling technology for the joint stock company was double entry bookeeping (every credit must be matched by a debt or debit), invented by Luca Pacioli around 1300AD, and at whose tomb in San Sepulchro I have lit a candle and said a prayer.
PAF:
Mate I don't wish to be rude but I don't think you could even explain (or understand) the effect on debt vs. equity to a publicly listed company let alone the effect of the pricing of factors of production for an airline.
If you don't agree or understand the cost of factors of productions for airlines and the effect of labour inputs on profit from revenue don't ask for an explanation on an internet forum.
I can recommend a few courses for you - PM me for them if you wish. I can provide you with some Masters level courses that will explain everything for you although I fear you wouldn't even gain entry.
As much as you wish it isn't that simple. What I will say is that is if you increase the cost of labour it has a significant effect on profit from revenue. Especially for a company with the payroll of QF. Many factors don't have a 1:1 relationship (i.e. $1 more means $1 less profit)
If you don't agree or understand the cost of factors of productions for airlines and the effect of labour inputs on profit from revenue don't ask for an explanation on an internet forum.
I can recommend a few courses for you - PM me for them if you wish. I can provide you with some Masters level courses that will explain everything for you although I fear you wouldn't even gain entry.
As much as you wish it isn't that simple. What I will say is that is if you increase the cost of labour it has a significant effect on profit from revenue. Especially for a company with the payroll of QF. Many factors don't have a 1:1 relationship (i.e. $1 more means $1 less profit)
.....but in any case you conveniently miss the point - which is a discussion of the obscene amounts paid to Senior Management who are managing an underperforming airline.
Care to comment on why QF's returns are so low PAF?
Lets hear your wisdom about return on capital employed, fixed and variable, direct and indirect costs???????
Care to talk about contribution margins - probably QF's most closely guarded numbers?
Didn't think so.
I am no friend of GD but my information is that the A330-200 floors could take Sleeper seats, but it would take a gutting of the interior to do it. So they don't.
Peter Gregg admitted that he was on the committee that made the original error in judgement, but it is interesting to note that at no stage did senior management bonuses decrease to compensate for this fcukup.
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Owen Stanley wrote along with PAF
Just out of interest, what would the Profit from Revenue figure be if GD cut QF Pilot's wages to those of VB pilots?
C'mon mate, work it out and lets us know? Give us the benefit of your vast knowledge and intelligence. Could the answer make a fool of you?
Interesting question but how do you compare like with like?
Qantas pilot's wage bill in the region of $350 million/year,
VB pilots cost some 20% less than Qantas, you do the math.
Unfortunately you would then be comparing the wage structure of 747, 767 330 and 737 pilots with that of VB's 737 drivers.
Would that be a fair and reasonable comparison?
Maybe Virgins 777 wages (when they work it out)Vs Qantas remuneration might be more applicable.
Just out of interest, what would the Profit from Revenue figure be if GD cut QF Pilot's wages to those of VB pilots?
C'mon mate, work it out and lets us know? Give us the benefit of your vast knowledge and intelligence. Could the answer make a fool of you?
Interesting question but how do you compare like with like?
Qantas pilot's wage bill in the region of $350 million/year,
VB pilots cost some 20% less than Qantas, you do the math.
Unfortunately you would then be comparing the wage structure of 747, 767 330 and 737 pilots with that of VB's 737 drivers.
Would that be a fair and reasonable comparison?
Maybe Virgins 777 wages (when they work it out)Vs Qantas remuneration might be more applicable.