Saturday, 7 January 2012

Bleeding Out

 Fonterra's Off

We have blogged several times on the crisis confronting the Ports of Auckland.  As its unionised labour force hold the company to ransom via the strike weapon, shipping clients are moving their business elsewhere.  The Port is in a vicious circle. 

Normally when the returns to shareholders are under threat the owners of the business either capitulate to the strike threat (and so kick the can down the road until another day of reckoning) or they get tough and break the union.  In this case, however, the owner is the Auckland City Council which is replete with left-wing old-style luddite socialists.  Better to have a Port that fails commercially than allow anti-union actions to be taken.

This, from Damien Grant:

The Ports of Auckland. Photo / Dean Purcell It's time to stop port rort

By Damien Grant
Jan 1, 2012
If you want evidence that privately owned firms are better run than those held captive by the state, you need look no further than the Ports of Auckland.  Last month, its CEO, Tony Gibson, wrote an embarrassing article in which he admitted that his primary competitor, the Port of Tauranga, was more efficient, more profitable and that despite paying unskilled dock workers $91,000 a year, he was unable to make them do more than 26 hours of work.

Can you imagine the CEO of Westpac writing in the New Zealand Herald that his staff were less productive than those of BNZ, that they were paid too much and he could not get some of them to put in 40 hours?  Gibson needs to look no further than the example set by Alan Joyce, the CEO of Qantas. When his unions threw a wobbly, he grounded the fleet. Joyce showed courage, stared down the union, took some short-term heat but saved his airline. . . .

The Ports of Auckland is owned by Auckland Council, where councillors voted 12 to nine to back the port's management, with left-wing troglodytes such as Sandra Coney and eight others voting to support the union. I'm not meaning to be disrespectful (okay, maybe I am) but working on the docks is not skilled employment. Knowing how to remove an appendix is skilled. Moving a container is something someone with basic literacy and functioning limbs can learn over the course of a few weeks. . .

Gibson should sack the entire workforce and start again. At $91,000, there will be no shortage of applicants, even if he has to fly them in.  He will not because his political masters will not let him. . . .
Meanwhile Fonterra, New Zealand's largest exporter by a long country mile, has decided to ship its weekly exports out of Tauranga and Napier, removing them from Ports of Auckland.   This from Stuff:
The dairy giant yesterday said it would move its export shipments – worth $27 million a week – from Auckland to Port of Tauranga and Port of Napier from the end of this month till further notice. . . .  Shipments of Fonterra products brought in $100,000 in revenue a week for the Auckland port. "The co-operative made this decision to ensure certainty of supply for its international customers," Fonterra customer supply chain general manager Dave Christie said.
Port of Tauranga is going to win big time out of this.  And good on it. 
Port of Tauranga chief executive Mark Cairns said the opportunity to ship Fonterra's products was a chance to show it could handle the job. "We have been in talks with Fonterra for a long time," he said. "We've been strong competitors with Ports of Auckland for that business and this is just a development along the way."  Port of Tauranga is the largest port by cargo volume.

Meanwhile Auckland is learning a thing or two about Marxist class warfare and the hidden costs when local bodies or government owns and operates businesses. 

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