30 June 2005

MR WANG EXPLAINS CORPORATE REALITY

Marriage talk with Qantas resurfaces, but airlines shrug it off
June 30, 2005
Tor Ching Li

NATIONAL carriers Singapore Airlines (SIA) and Qantas Airways may be competing nose to nose in the air, but their governments seem grounded on the idea of a possible merger.

Echoing remarks Australian Prime Minister John Howard and Trade Minister Mark Vaile made last week, Transport Minister Yeo Cheow Tong told reporters yesterday that SIA should be open to the prospect of a merger with its rival.

"As commercial companies in a very competitive sector, I think it is useful to keep all options open, which includes joining in a consolidation process," said Mr Yeo on the sidelines of the launch of the Centre for Maritime Studies at the National University of Singapore.

Last Wednesday, Mr Howard had said the Australian government was looking into "the question of whether SIA and Qantas were to remain as separate companies for an indefinite period of time".

Citing the trend of a "worldwide consolidation process", Mr Yeo said both SIA and Qantas "should also be thinking of what they need to do to remain as one of the key players in the global aviation sector".


I keep thinking that everyone should know this by now. But lots of people never learn. So I'll say this one more time. Listen up carefully, folks.

Mergers & acquisitions - what do they mean for the Little Guy? Mostly it means that he's about to lose his job. And it doesn't matter that the Little Guy had the job for the past 20 years, or that he'd always been the most hardworking chap around.

When mergers & acquisitions happen, the Higher Powers don't think of people. They think of org charts. The old chart is thrown out, a new chart is drawn, and if the Little Guy's job doesn't fit on it, then he's out, goodbye, who cares if he has 20 years left on his HDB mortgage and three kids to feed.

If you're a Little Guy in SIA or Quantas, maybe it's time to wake up and start following the news a little more closely. Maybe it's a little premature to get worried now. But once you smell something more serious, you'd better sit up, pay attention, think hard, think ahead and make your plans.

Sometimes it's better to try to ship out early to a new place while you can. You get more lead time. Rather than wait to be retrenched and then find yourself competing for scarce new jobs. Against 350 of your ex-colleagues who all just got retrenched at the same time.

Then some PAP Minister will come along and say, "Oh, the jobs are gone, they aren't ever coming back, it's called structural unemployment, life sucks, but we ain't no crappy welfare system, so don't be fussy, anyway the engineers in India are 17 times cheaper than you, so you'd better start retraining as a road sweeper, but in the meantime if your HDB flat gets acquired by the government, please don't live in the void deck because that would be so unsightly and we might have to fine you."

And then there will be this really, really foul taste in your mouth.

"What, no parachute? That's just too bad."



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7 comments:

ivan said...

how bout the ever so popular, sharholder cop-out... ie. we have to think in the best interest of out shareholders.

tausarpiah said...

capitalism ... the free market ...

Rudicus said...

It's no surprise thst when mergers or big layoffs happen the stock prices go UP! It's always about what's nt he best iterest of the company, not it's employees.

On a side note, I hope this doesn't impact SIA's quality - it was agreat airline, the one time I flew it.

tosh said...

i love your blog man.

the best blogs worth reading are the insightful ones with a lil bit of humor.

keep it up!!

Eileen Chew said...

On the excuse of structural recessions: In structural unemployement, the problem seems to be that the volume of skill sets demanded do not match skill sets supplied. Then it is correct to say retraining of workers is required. To help to identify the correct skills to retrain, I'm thinking that instead of having tax benefits for these workers - for the worker might not be able to identify the skill set demanded - tax benefits could be given to corporations specifically for retraining.

This mismatch may also occur where the new skill sets demanded is not high enough to replace the old skill sets so, even if all the workers are retrained, that would not result in the economy returning to it's previous employement rate. Then encouraging the retraining of workers would not resolve the problem since it is not a problem of structural unemployement but the growth of industries. Some may advocate governments stepping in with industrial policies but as the incentives of government may not be aligned with the people I am not supportive of this idea. Then what, I don't know...

Mr Wang Says So said...

Tosh:
Thanks. It sounds a little absurd, but I love my own humour too. I keep laughing at my own pictures & captions.

Eileen:
Tax benefits for corporations to retrain sounds like a great idea. Unfortunately, the reality is that when Singapore makes it so easy to hire foreigners, companies may not that much incentive to retrain on a massive scale. So much easier to hire direct from India, China, Philippines, Myanmar, US, UK, Australia or Hong Kong, depending on what skills set you're looking for.

Kelvin Tan said...

Eileen: Google for "Norman Matloff" and "H-1B", and you will realized it might actually be age discrimination rather than skill mismatch that is causing the unemployment among those 40 year old and above.

If it is true, then retraining will never be the solution.