Qantas And Australasian Globalisation

Australia is many decades behind New Zealand in coming to terms with globalisation. This was very clearly evident when, with the grounding of Qantas, the countries personalities shouted naked racist slogans against Asia.

The phrase of the aftermath was ‘Asianisation’.  Mostly spluttered from the Transport Workers Union’s Tony Sheldon ‘stand by the workforce, the Australian brand of Qantas and not have it Asianised’. Dick Smith’s (The erstwhile electronic store chain chap) polemic rant was memorable. “When I get my private jet serviced in Dubai it’s half the price of Australia because it’s all bloody Pilipinos!” I know if these tirades were uttered in civilized New Zealand these opportunists would be in a Fairtrade recycled doghouse. In Australia they are championed.

These instinctively racist comments were a reaction to a long standing dispute with Qantas management who are planning to greatly expand their outsourcing to Asia. The first dispute of this transition was in 2006 when Qantas outsourced a fair size of their IT to Tata Consultancy Services to the loss of 300 Australian jobs.

Joyce, the CEO of Qantas, insists that if outsourcing is not disallowed by the Unions, Qantas will not only be half it’s fleet size by this time next year they will ultimately perish.

This is true. A global business cannot survive by being hijacked by a local workforce who insist on being paid inflated wages out of sheer nationalism and sentimentality.  This hurts my unhinged lefty sentiments but it is a cold fact.

Australians are outraged by the outsourcing of services for their airline but only 18 per cent choose the airline to travel abroad because for $50 bucks less you get to travel on an airline with hostesses that don’t resemble scrum props and don’t have the charm of a country pub bouncer. For Asia does it better.  And if it’s a few bucks cheaper fair dinkum working Aussie families feel the flying kangaroo can go and get made in to Russian sausages.

It’s no news that India is the world’s outsourcing capital. It is 60 per cent of the countries GDP (Only employing one percent of the population). Finding enormous success with a business model that could be paraphrased as ‘Half the price, twice the size’ they have cornered an elliptical market.

India aircraft engineering service will be candidates for the further Qantas outsourcing contracts.  They already have an enormous IT contract with the company.  India could very well be the saviour of Australia’s greatest international brand. Will India be the saviour of the sacred Holden?

In the very same week as the unprecedented news blitz of outsourcing woes for Qantas, Holden announced that several jobs would be lost to future outsourcing.  Could Tata be a manufacturing candidate? They would have to be as they have saved Jaguar Land Rover. But that reminds us of the cultural challenges of outsourcing.

If you are a Top Gear fan you would have cringed at those pompous twits cringing at their countries icons Land Rover and Jaguar being manufactured by an Indian company.  As an Australia will launch in to his best Peter Sellers Indian accent when they discuss telephone banking.

These cultural challenges are compounded by Australians holding a deeply inherent belief that being overpaid is a God given right. Especially employees of a company, such as Qantas, that is perceived as an Australian institution rather than a business. A local Mum and Pop milkbar rather than a global business.

The old instincts of protectionism will never die and I am starting to believe  that a return to hugely expensive protective tariffs can not be discounted.  The Western experiment with globalization  has largely been  a mixed bag. The current European crisis is a symptom of this. Europe, like Australia, has relocated it’s manufacturing base to the emerging nations and no matter how well you dress this fact in free trade communities, like the Eurozone and the proposed APAC model, we have lost our means of production which is the fundamental foundation for the nurturing of wealth.

A return to those uncompetitive days is not impossible when you hear Australians hyper allergic reaction to not only jobs been lost but more often previously generous salaries and conditions being dramatically reduced.

But the Qantas shareholders don’t give two samosas. They voted overwhelmingly for Joyce’s plans because they want a dividend and they don’t care if that bonus is dressed in a sari and has an accent.  Australian shareholders would make vegemite in a Kolkata hospice if it was cheaper and they thought they would get away with it.

I have mixed feelings. I see the way forward intellectually but in my heart I am frightened for I see great hardship for Australasia being thrown from the nest and flying in a turbulent  world. And if I brutally honest I too feel greatly attached to the undeserved privilege that we have enjoyed but not acknowledged. In this country, with it’s astronomical mineral wealth, the Saudi Arabia of the Pacific.

But I do greatly look forward to the global economy drowning out the racists, that have surfaced in this dispute, and dragging them, kicking and whining into an Asian century.

A positive start would be for Joyce to bide by his vision and outsource the entire Qantas management to Asia. For the companies experiment with outsourcing to Ireland is a strange failure and no Indian CEO would ground his fleet voluntarily.

Diwali:1,000 Bottles Of Pepsi, Roulette and Delhi Police

My memories are Diwali in Delhi are as colourful as the celebration. As a student of Delhi University, I celebrated this festival with gusto and on one memorable year with 1,000 bottles of Pepsi, a roulette wheel and the Delhi Police.

The catalyst for this adventure was an amazing man called Chintu Chawla, proud resident of Rajouri Garden and entrepreneur extraordinaire. Like many Sikhs, he made the best of friends and the worst of enemies. Despite his outwardly aggressive Delhi persona that involved charismatic tirades of Punjabi abuse that would have made Laloo Prashad blush, he was big-hearted to a fault and wept every time we had a chicken slaughtered. Despite his habit of loudly threatening drivers that cut him off with dire sexual consequences to their next of kin, I sentimentally remember him threatening to kill me if I swore within a kilometre of Bangla Sahib, the great Sikh temple of Delhi.

I had been fortunate enough to be befriended by Chintu in Sri Venkateswara College when I was still struggling to spell it. I soon found out, before the days of Twitter or even mobiles, that he was a human social media hub and knew everything that that was going on in West Delhi. To a supernatural extent. “Nirula’s at D-28 were raided last night by the ITO. They had 3 crores under their mattress!”; “My cousin’s bhabhi’s grandfather owns three illegal rifles and last week shot a monkey!”

Chintu not only knew everything that happened, he desperately wanted to be there when it did. That meant long laughter-filled nights jumping off and on the Mudrika (Ring Road bus) or if we were lucky, in his family’s temperamental Maruti 800, chasing down the latest Old Monk and water get-together or in this case, the latest high stakes Diwali “Flash” game.

Twenty years later I can very clearly remember Diwali flash parties at the Chawlas. Even then the joint family was an institution under attack, but the Chawlas had gallantly swum against a strong tide of change, and a matrix of relatives lived in a huge house in D Block. Diwali would see the lounge filled with enormous Sikhs, constructed with stiff Patialas and paddling pool sized servings of butter chicken, jealously nursing their two dealt playing cards. They looked like a range of the Himalayas with two dwarfed checker-patterned billboards on the side of each mountain.

Punjabis are a jovial lot but when money is involved, there can be an sudden air of intense seriousness and uncharacteristic silence. The tradition of gambling during Diwali was no exception. It was a very serious business indeed, with little eye contact between poker faces, just a flurry of suspicious side glances and nonchalant throws of money into the pot.

This mesmerising meditation would be broken by truly violent eruptions of cheating accusations and heart-stopping drama. Not for the faint hearted! On my first few visits to the Chawlas I thought they were suffering an almighty ongoing row and confided this to Chintu who doubled over laughing and said, “ Nei yaar, that’s how Punjabis talk only!”

Chintu may have had a protective instinct for condemned chickens, but I soon found this didn’t extend to his fellow man. Diwali night in the streets of Rajouri garden is to relive the Lebanese civil war, on a bad night.

It is beyond description. India has not heard of occupational health and safety, and her fireworks are not the effeminate crackers of my youth. They really should be stored in ammo dumps under armed guard.These annually claim thousands of fingers and under our command, made enormous holes in aluminium billboards advertising VIP underpants.

Skyrockets were designed to be fired vertically, but West Delhites find a well-intended horizontal launch very satisfactory, and in the direction of a neighbour’s face, infinitely more satisfying! Multiply that by a thousand neighbours, slash combatants, and you have some idea of the ferocity the celebration evokes. The exhausting swing of my emotions from an instinct of self-preservation, fighting a strong impulse to dive head first in to the ditch, and the wonderfully liberating experience of firing kilos of gunpowder at young families. 

In hindsight, I can see why Chintu is such a good survivor. Though we nearly didn’t survive the following year’s Diwali.

Chintu, naturally entrepreneurial, had heard on his amazing radar that people were making a small fortune in the Diwali fairs selling the new multinational soft drinks. Thick as thieves, we pooled resources and in no time we were riding in a truck, the proud guardians of 1,000 bottles of Pepsi.
Setting up our stall in Green Park mela, it didn’t take long to realise we were in deep trouble. We had been duped into believing we would have the monopoly, and our prices plummeted from a level that would have seen the proceeds purchase a year’s supply of Old Monk from the Army Canteen to a level that would have seen a year’s supply of ruthless ridicule.

We hadn’t even dented the skyscrapers of Pepsi crates which formed a towering backdrop to our depressingly quiet stall, in a furiously busy fair. That night we barely slept as we nervously pondered how we were to sell more bottles, and I had never slept on Pepsi crates before (because we couldn’t risk any bottles being stolen). It was a tricky manoeuvre as we hadn’t sold more than six crates and we were dangerously high off the ground.

The next day, despite his deep reservations, Chintu listened to me and we made a clowns face with holes for eyes and a mouth to charge punters to take a chance at throwing a ball through and claiming a Pepsi as a prize.

This was reminiscent of my later business decisions. I clearly should have seen that establishing a game, where our fiscal survival was dependant on Indians not having any cricket skills, was not sound. We got rid of quite a lot of Pepsi, but it was next to free. Cricket guns with seriously strong throwing arms consistently found their mark and in no time the hardboard clown, to their great delight, was firewood.

Then Chintu looked dangerously preoccupied, genius was in motion. As genius is a slip away from madness, we found ourselves at a toy shop buying a miniature roulette table.

Incredibly, we moved the supplies to Lajpat Nagar where we slept again on the crates and I have a very clear memory of wrapping myself up against the swarm of mosquitoes in a cloth street sign for woman’s unmentionables in Central Market, and drifting off to the calls of the night watchman as he made his rounds.

The roulette table was the hit of the fair and we didn’t know where to put the bundles of cash that were being thrown at us. Chintu had had the courage to give the wrong odds without our customers knowing any better. We could see ourselves hosting a party to end all parties in no time at all.

Then as I greedily looked down at the glorious piles of crumpled notes ready to sweep yet another avalanche into our money box, I only just missed having all my fingers broken.

A lathi (truncheon) was brought down with such force on our table that the roulette wheel flew into the air, closely followed by Rs 100 notes and the grasping hands of their owners. A Jaat constable who looked like a well-made public building screamed a string of abuses that even Chintu, though now open-mouthed and decidedly paler, couldn’t help feel some admiration for it’s colourful delivery.

Chintu trembled, “Bhaisahib, please come to the side and we can work this out!” The cop erupted, “Do you think I am dishonest cop?” We all shook our heads furiously, indicating ‘no’.

“If I take money, I take it front of the people!”

Twenty years on Chintu lives in Torronto with his beautiful young family. It’s a joy to phone my brother and remember those cherished days. It’s with sadness I won’t be able to wish him Happy Diwali with a big Punjabi hug.

You can take the boy out of West Delhi but you can’t take West Delhi out of the boy. For that I am very grateful because for some he was the worst of enemies but for me he always made the very best of friends.

India Emerging, Australia Submerging.

The Australian Governments main defence in the sacking of 1000 BlueScope workers was that this was a painful symptom of an ongoing economic transition. But this transition is been treated as a magically vague happening and not explained for very strong political reasons. Australians don’t want to hear that India and China are fast becoming their economic superiors.

For the Government to fully explain the implications of this ‘transition’ would be political suicide. To enlighten the electorate that Australia has been reduced to a quarry for booming Jamshedpur steel furnaces would make Gillard’s chances of reelection impossibly even more remote.

The Australian public is simply not ready to take on the reality that the United States is no longer our obvious choice for snuggling up to in a new Asia Pacific. With our Uncle Sam looking increasingly senile how long can Australia unquestioningly endorse American policy and as Professor White of ANU says, ‘turn around, point up to the US and say ‘I’m with him.’

Australia is an obedient ally of the States. I don’t belittle that in the unhinged lefty sense. If it wasn’t for the US, Australia would have predated it’s Asian destiny by many decades. We forget how many 19 year old GI’s died in malaria infested Papua jungles ensuring a resource starved Japan didn’t set up shop in Newcastle.

Australia will be forever grateful and of course culturally identify more with her North American cousins. But the US’s faltering economy and her ditzy expeditions in the Middle East have exposed a shrunken dog with a deafening bark.

The US economy has proved shockingly fragile. The myriad of reasons given to why it can’t shake it’s unrelenting string of crisis are unconvincing. Few are brave enough to talk of the elephant in the room. The US doesn’t produce it consumes.

This model has been enthusiastically taken up by Australia. 25 years ago, 20% of Australian GDP was from the manufacturing sector today that is halved. Only one in 20 Australians are involved or connected to the manufacturing sector.

Our economy is overwhelmingly service based. We have become latte servers and pizza deliverers. We serve one another in a closed loop with the assistance of coffee machines and pizza ovens all made almost exclusively in China or India.

This is of course globalization. Where you are rewarded for your competitiveness not your country club. Where as a lefty I take an eccentric view.

I believe that globalization is more beneficial to countries that have been excluded form the world’s economic engine. Strongly tempered with the West taking advantage of the sickening reality of child labour exploitation and the virtual non existence of labour law implementation.

For the West could not have seen the writing on the wall. They could not have foreseen how the well India and other Asian giants have risen to the challenge. They have embraced globalization with a rabid enthusiasm.

This has left countries like Australia, who dreamt that their products were infinitely superior and would find new massive markets, looking non plussed. They never dreamt that they would become the market.

Australia’s economic position can now be equated with pre independence India. Gandhiji would lead huge rallies burning Manchester woven clothes made from Indian raw cotton. Gandhiji saw that the paralysis of the Indian economy stemmed from India exporting her raw materials to be almost exclusively processed in England then insultingly imported back into India to be purchased by her then British ruled masses. Not unlike Australia exporting raw materials like coal that is then used to make steel in India that is then imported into Australia at a massive added value.

Australia’s economy rests treacherously heavily on this model. 90% of the diamonds from Australia’s Kimberley mine find their way to Indian traders who polish the stone s in centres like Baroda. Again adding a massive value to a resource that was sold in Australia at a fraction of it’s final Mumbai showroom price or indeed it’s Sydney showroom price.

Australia has all but resigned to the reality she cannot compete in manufacturing. She is still a force in innovation but I feel this century will be characterised by India and China shedding their well deserved nicknames of copycats and show the world they have a also have a strong creative spirit with future ground breaking research and development.

This new Indian innovative spirit may break Australia’s back. For if an Asian laboratory with increasingly huge budgets, searching to solve over reliance on Australian resources, finds a steel substitute, Australia will be banished to an economic wilderness. The demand for coal and her own steel manufacturing would plummet. In an age of windmills and macbooks the whole process of steel manufacturing seems medieval crude and is begging to be replaced by a new competitive material.

With these future prospects Australia will have to decide whether to keep snuggling up to Uncle Sam and be a detached quarry or partner with India and become once more competitive.