Qantas. Still Call [Insert Off-Shore Maintenance Facility Here] Home

What a debacle.  I wish I didn't understand, but unfortunately I think do.  The bottom line, to use an apropos phrase, is that Qantas wants to shaft pay and conditions and use off-shoring to boost profits.  As an amoral corporate entity whose only reason for existence is to make money, that is entirely rational.  However, the company doesn't use those words.  Profit is bad for PR.  So they say that they need to do this to "compete" because Virgin and the other low-cost carriers are not as unionised and pay their pilots, engineers and ramp staff less.

So how is Qantas doing?  Well, in 2010, they made a couple hundred million dollar profit.  Obviously, the institutional shareholders think that the CEO was doing a good job as they voted him a couple million dollars in extra pay this year.  This is despite the fact that the share price is down.

Now I am not a fan of unions, and sometimes they go overboard.  But is it not unreasonable to ask for a pay rise when the company is profitable?  After all, the CEO seemed to find it eminently reasonable to accept a 71% pay hike.  And given that management has the power in negotiations, and the only weapon at the workers' disposal is their labour, is it not unreasonable that when there is a breakdown of negotiations that the employees take industrial action?  Especially when the "industrial action" taken by the pilots was simply to issue announcements about their claims over the intercom after take-off?

Qantas has massively over-reacted.  Even ignoring the massive disruption to passengers, this lockout punishes all of the Qantas employees; even those not part of the unions taking part in industrial action.  Given Qantas' dominant position in the domestic airline space, with more than 50% capacity eliminated with no notice, how is this not just the management version of the thuggery they accuse unions of?  As I saw a quote somewhere, the Qantas management are holding the nation hostage to get their way in an industrial dispute.

I also find it unbelievably hypocritical for some right wing, free-market nutters who are against big government wanting the self-same government to intervene, interfere with the statutory industrial arbiters, overturn their own legislation to "resolve" the dispute - which to their mind means shafting the union.  These people will then blame the same government should Qantas succeed and then move its operations off-shore, which seems to be the company's long term strategy anyway.

I have a horrible feeling that the CEO of Qantas, with the rhetoric he is using, believes that he needs to destroy the company in order to save it.  And to be honest, in the long run, will the 60,000 stranded passengers care that this is a tactic of the management in response to union demands and ultimately blame the unions?  I doubt it.  The vast majority of these passengers won't care a jot.  But they will remember that Brand Qantas screwed them over, and while many domestic travellers won't have much choice due to the effective duopoly in the airline business, this will be another blow to the part of Qantas that is losing money, namely the international travel part.  Thus giving further "justification" to the argument that restructuring, wage and condition cuts and off-shoring are necessary.

There is no way that this is going to end well.  And I leave you with the fundamental questions I have.  Is it unreasonable for workers to ask for a larger share of the profits (and remember Qantas is turning a profit) when the CEO takes a pay rise for, seemingly, the same reason?  How much profit is enough?  (Silly question, I know)  And finally, if it is perfectly acceptable to decry "union thuggery" that impacts passengers during a work stoppage, how can you reasonably defend the actions that the CEO has take in response?

I'm just glad I'm not scheduled to fly this week.

Cisco Smart Install

I have been doing some blogging at the Packet Pushers Podcast site over the past few months.  Yesterday I had published a post on Cisco Smart Install that includes a Youtube video.  It is long and boring, so you may not want to see it.

Prohibition

I just finished watching the Ken Burns series "Prohibition".  Ken Burns' stuff has a particular style to it, and it doesn't click with some people, but I loved his series "The Civil War" and "Baseball".  I really recommend this new series.  It resonates today, and not in just the equivalent modern-day prohibitions with their organized crime, bootlegging and hypocrisy.  The way a series of single-issue zealots managed to hijack politics and legislatures to get their program through is downright scary, and we can see it in politics now, especially in the US.  The last episode ends by implying that for nearly three-quarters of a century, the lessons of unintended consequences from such political manipulation learned in the twenties and thirties have kept this kind of thing in check, but I fear the absolutists who want to legislate morality today have forgotten the lessons of history.  It would do them good to look past the sensationalism and "glamour" of the Hollywood version of Prohibition, with its gangsters and speakeasies and actually think about why, after nearly a hundred years of fighting for Prohibition, it lasted only thirteen years and left destruction, crime, and contempt for government in its wake.

Worth watching.

Annoyances

After a session with the personal trainer this morning, I am feeling sore and tired and it is hard to move about.  I haven't posted much in the past couple of weeks as I am ploughing through some CCIE Lab preparation workbooks, but two things really annoyed me in the past couple of days.

First, when I am at the supermarket checkout, it annoys me to no end when the person in front does not put the little plastic divider thing on the conveyor behind their stuff so you can start unloading yours.  How hard is it to extend that small courtesy?  It is sitting right there.  It is particularly annoys me because I am pedantic when unloading my trolley.  I group the cold stuff together, then the fruit and vegetables, keeping cleaning products and such separate.  It makes things so much easier to unpack and put away upon returning home, and these inconsiderate people make me rush to place my shopping on the conveyor whereupon my careful strategy falls apart.  This complete absence of civilized behaviour deserves the strongest possible sanction, in my humble opinion.  Perhaps a dozen lashes, or for them to be stuck in checkout queues forever behind people requiring price checks on items at the far end of the store.

But the other thing that annoys me, and my apologies if you have them on your vehicle, are those damnable "My Family" stickers.  You've seen them.  These things can cost four dollars each!  For a piece of plastic.  One each for the father, mother, kids, dogs, cats - I've even seen a freaking goldfish in a bowl.  These things cause an irrational red mist when I see them.  Part of it is that every one of the stickers is smiling like a gormless brain-dead moron, putting a sanitised face on what is probably the reality within that eight-seat minibus filled with psychopathic ten-year-olds.  Another part is that I have an aversion to putting stickers on vehicles in general.  But I think that the main reason is that I am sure someone has made, if not a fortune (four dollars each!), at least a tidy sum out of this somewhat obvious, yet totally useless idea.  This putrid display of familial harmony and pride is another example of the undeserved success that comes with having a useless idea that seems to land upon a gullible public at the right time in the right place.  Pet rocks.  Furbys.  Facebook.

Of course, my dismissing of the idea as useless is the reason that I'll never get rich.  I'm not the creative type who will look at something and conclude that this will be something people will want, and pay money for.  However, maybe "put-the-plastic-divider-thingy-on-the-conveyor-you-inconsiderate-doofus.com" will go viral and I'll make my fortune with Google ads.

The Fall of Empire and the Indifference to the Suffering of Others

I've posted before that I think the United States is on the decline.  However, in the space of a week, the illustration of the depths to which it has sunk has come to the fore.

In a Republican Presidential debate last week, Rick Perry was asked a question about his record in Texas where he has presided over two hundred executions, and whether he had any concerns that any of the people executed may have been innocent.  A legitimate question, given that there is significant evidence that at least one innocent man has been  put to death, and that Perry impeded the investigation into the circumstances.  Putting that to one side, before the question was even finished, at the point where the number of people executed was mentioned by the host, the crowd cheered and whistled.  Perry said he had no concerns, and that "if people come into our state and kill our citizens" they will face execution.  More applause.

How artfully framed.  How beautifully Christians-to-the-Lions.  The so-called Republican Party faithful, the "pro-life" party, enthusiastically cheering the deaths of criminals who have been defined by Perry as "not us".  Somehow, they have come in from the outside and killed "us".  So vengeance equals justice.  And if the accused haven't received a fair trial, or are innocent, or are mentally retarded, who cares?  Kill 'em all and let the Lord sort 'em out.

Say what you like about capital punishment, but for me this is always the biggest issue for me.  An imperfect legal system can lead to the innocent being put to death in my name.  I believe some criminals deserve death, but until perfect safeguards against this type miscarriage of justice can be put in place, then the risk is too great.  We can compensate someone falsely imprisoned.  We cannot compensate someone wrongly executed.

But this post is not about the death penalty per se, or even about Perry's lack of conscience about the lives he has taken in the name of the people of Texas.  It is about the reaction of the crowd.  And so, we come to the next debate.

The host asked Ron Paul a hypothetical about a healthy person who has no health insurance and gets badly sick.  Who pays?  Paul started to go on about how that is a risk that people take, that the government should not have to take care if them.  Of course, this ignores that fact that many people in the US, such as the poor or unemployed, aren't taking a risk - they simply cannot afford insurance but aren't poor enough for Medicaid.  Or that in some cases insurance doesn't cover some conditions, leading people into debt and bankruptcy.  The host went on to ask, "should society just let them die?".  And this is where things left me disgusted.

People applauded, and some shouted "Yeah!".  Paul went on to say no, that in the past churches and charities looked after those who could not afford health care.  Yeah, see how well that worked out in the past.  We have programs like this paid for by taxes because relying on charity failed to help all in need.

I am sure this kind of barbarous survival-of-the-fittest mentality has always been out there.  Can't get a job - your fault.  Don't have insurance?  So sad.  Why should my taxes go to support these moochers?  Not a shred of human compassion or decency.  Applauding executions as if the death of a person, potentially an innocent person, is entertainment.  But now, people feel that they can act this way in public?  People can actually go out, into a crowd on national television and exhibit their heartlessness towards others.

This is pathetic.  These people will be selecting one of those eight morons on the stage as the Republican candidate in 2012.  These people don't care about the suffering of others if it affects their taxes.  These are probably the same people who want to further inflict suffering on the sick and the elderly by getting rid of Social Security, Medicare and Medicaid, just so their taxes don't have to rise.  Cheering death.  Allowing the sick to die in the gutter, or choose between food and medicine.  And in good conscience they most likely go to church on Sunday and listen to the preacher talk of the Sermon on the Mount and not see the irony.

I hate to say it, but the United States deserves all it gets if one of these people is elected in 2012.  But I hope their greedy, hateful, pathetic brand of politics dies in a ditch before it further infects our politics here.

Exam News

As most of you who read this blog already know via email, today I took the CCIE Routing and Switching written exam.  I passed with 991/1000, which was a big relief.  I was quite concerned I was not ready for this exam, but I suppose 17 years of experience and a month of solid preparation was enough.

I now need to look at booking the CCIE Lab exam.  I need to carefully consider this, as I need to give myself enough time to study.  However, the Cisco site where you go to book the exams say that the information from Pearson Vue about my written pass may not be in their database for up to 10 days.  In the meantime, I need to pull together my resources and start preparing.

I celebrated a bit with some nice Chinese food this evening, although as it tends to go, I overindulged a bit.  Back on the treadmill tomorrow.

Economics and the iPhone

Posting has been a bit light the last couple of weeks, what with preparing for my CCIE written exam tomorrow.  But I came across this article which gives a breakdown of the cost of the iPhone.  Apple makes a 64% profit on each unit.  All of the components come from Korea, Japan and Germany, and are shipped to China where workers are paid around $1 per hour to assemble.  Think about that for a minute.  Assuming a 40-hour work week (a big assumption, as working conditions in China leave a lot to be desired), at the US retail price of around $500, the average Chinese worker assembling an iPhone would have to work for over 3 months to afford the product they are assembling.  And that is if they had no other living expenses.

As the article points out, if Apple was to pay their workers ten times the rate they pay these Chinese workers, Apple would still make 50% profit per unit.  Plus the people who actually assemble them would be more able to afford them.  But Apple won't take a hit to its per-unit profit.  No company these days will.

This was the whole principle behind the business philosophy of people like Henry Ford (although a raving anti-semite and pro-Nazi, to be sure) who paid his workers well; a little less profit per unit but more unit sales makes for a sustainable business.  It it this process that builds the middle class, growing market size - a rising tide that lifted all boats.

These days, corporations, being amoral entities with the sole goal of squeezing maximum profit out of each unit have forgotten these lessons.  And so labour is a pure cost.  A cost that can be reduced by paying people as little as possible in countries where those people are desperate for any kind of work.  But the middle class will not be built in those places, because as soon as wages begin to rise, the corporation will look around for somewhere else cheaper, leaving those low-paid workers once again unemployed.  In the US, suffering high unemployment, the median household income has been falling.  Jobs that are being created are low-paid and menial.  Well-paying middle-class jobs are disappearing, and this increases the gap between rich and poor.

This is a vicious cycle.  People are paid less, the market shrinks, demand goes down.  Corporations then look to cut wages and conditions to be "more competitive", by which they mean "maintain profit levels and share price".   That is if they don't just lay people off and move their factories elsewhere.

A race to the bottom helps nobody.  Good wages and conditions in manufacturing helps society and the economy as a whole.  Demand drives the economy, but the voodoo Reaganomics of "supply side" or "trickle down" economics seems to still have the right wing in its grip.  In the US, the term for the wealthy and the corporate class in Republican politics is "job creators" and the theory is that if you give them tax breaks, they will hire more people.  Bull.  If I am in business, I am not going to hire unless people want to buy my goods and services.  And by paying people less and less, rejecting government stimulus or unemployment benefits - putting money in the pockets of people who will spend it - these people are crapping in their own nest.

I can't see why this is so hard.  Pay people well, they will buy your stuff.  Pay people poorly, they will only buy at Wal-Mart, and in the end, the only jobs left will be at Wal-Mart, at Wal-Mart wages.  But I know this is not going to happen.  Profit is the only measure that counts.  Profit drives share prices, and share prices and profit determine executive remuneration.  Say farewell to the middle class, and welcome back to the 19th Century of the working poor and the mega-rich.