The decision by Pacific Brands to sack 1850 employees - 281 of them in Wollongong - and move operations offshore to low pay regime China has thrown the spotlight on executive salaries.
Pacific Brands CEO received a pay upgrade of three times her original salary when she got the top job in the company, bringing her renumeration to about $ 1.8 million.
Many consider this level " outrageous ", but in all fairness it is probably a reasonable level considering the responsibility involved in heading up a company of the size and complexity of Pacific Brands.
Compare that with the CEO of Telstra - who gets about $ 13 million a year - and the CEO of Macquarie Bank - who gets even more. These pale into insignificance compared with the pay showered on the CEO's and directors of many overseas corporations. Is any human being worth that amount of money ?
Malcolm Turnbull of the Liberal party suggests making any pay offer subject to the approval of shareholders at the annual general meeting of the company.
Sounds good in theory - but there is a real danger of human emotions being used as a weapon and good companies facing the impossibility of attracting a highly skilled CEO because of an unreasonable pay level being imposed.
A tactic previously used by protest organizations such as Greenpeace and PETA has been to buy at least one share in a target organization. This allows a representative to legally attend an AGM and address the board, presenting whatever grievance is current.
A skilled orator could easily sway Mum and Dad investors to howl down a reasonable pay offer and cripple the chances of a vibrant company from attracting the right applicant.
The problem is that executive renumeration is steadily rising and in many cases has reached unreasonable levels. What irks many people is that huge salaries are often being paid to CEO's and board members of companies which are performing poorly - and in some cases making incredible losses. When a failed CEO quits the scene - in many cases he or she departs with a " golden parachute " of millions.
The government has little legal room to control salaries, except within the domain of government organizations. It is the private sector which must show restraint and reign in excess, but the only way to create a level playing field seems to lay with the media.
The watch dog would seem to be the financial guru's who oversee company results. They are the very people best equipped to determine what is fair renumeration in any given situation, and their comment in the financial pages of newspapers should be a guide for investors considering that company.
In the end it comes down to the little people who buy shares. If a company is vastly over paying it's top people - then that is a good indication to avoid investing.
Reputation and prospects are the lure for investors money, and if a company is getting a bad press because of huge extravagances that should become the mechanism for creating discipline.
Public approval is the formulae for electing governments ! It should also be the tool for disciplining the decisions of public companies !
Saturday, 28 February 2009
Friday, 27 February 2009
A changeing lifestyle !
Way back in 1956 when television started in Australia many pundits suggested that the era of newspapers was doomed. They were wrong !
What they failed to take into account was that television news is composed of short " bites " with no backup substance. Newspapers on the other hand, treat the subject in depth and this appeals to serious readers.
Now it seems that newspapers are again under threat, this time from a combination of the economic downturn - and the Internet !
Newspapers have been steadily increasing in subscription price and this - balanced against advertising income - is the key to profitability. Inflation will continue to increase the cost of newsprint, ink and labour and at the same time the recession has sharply reduced the pool of advertisers.
Job losses and the fragile economy will see many people cut back discretionary expenditure - and having a daily newspaper delivered is sure to be one of the costs to be reviewed.
The number of households with a computer has been steadily increasing and the ratio of people computer literate expands as the age demographic inches upward. This is where the threat to newspapers increases.
It is one of life's ironies that most newspapers can be read free on-line. It seems a natural progression in hard times that the savvy will cut out paying for something that they can view free.
The newspaper world is worried - and looking enviously at Steve Jobs successful innovation of persuading music fans to pay one dollar a tune to download music - and Jeff Bezoz scheme to sell electronic versions of books and novels.
It seems a natural progression that the delivered daily paper will change format and present an abbreviated form of news - with the invitation to pay a small subscription to view a vastly expanded news service on their on-line format. Serious thought is being given to devising a means of charging for access.
We will probably see some daily papers contract to a thrice weekly edition, and many may cease publication entirely.
Advertising will still play a big part in profit and cost, but change is on the way and a decade from now the newspaper world will be vastly changed from the present.
Whether that is a sign of progress will be a moot point !
What they failed to take into account was that television news is composed of short " bites " with no backup substance. Newspapers on the other hand, treat the subject in depth and this appeals to serious readers.
Now it seems that newspapers are again under threat, this time from a combination of the economic downturn - and the Internet !
Newspapers have been steadily increasing in subscription price and this - balanced against advertising income - is the key to profitability. Inflation will continue to increase the cost of newsprint, ink and labour and at the same time the recession has sharply reduced the pool of advertisers.
Job losses and the fragile economy will see many people cut back discretionary expenditure - and having a daily newspaper delivered is sure to be one of the costs to be reviewed.
The number of households with a computer has been steadily increasing and the ratio of people computer literate expands as the age demographic inches upward. This is where the threat to newspapers increases.
It is one of life's ironies that most newspapers can be read free on-line. It seems a natural progression in hard times that the savvy will cut out paying for something that they can view free.
The newspaper world is worried - and looking enviously at Steve Jobs successful innovation of persuading music fans to pay one dollar a tune to download music - and Jeff Bezoz scheme to sell electronic versions of books and novels.
It seems a natural progression that the delivered daily paper will change format and present an abbreviated form of news - with the invitation to pay a small subscription to view a vastly expanded news service on their on-line format. Serious thought is being given to devising a means of charging for access.
We will probably see some daily papers contract to a thrice weekly edition, and many may cease publication entirely.
Advertising will still play a big part in profit and cost, but change is on the way and a decade from now the newspaper world will be vastly changed from the present.
Whether that is a sign of progress will be a moot point !
Thursday, 26 February 2009
The agony and the ecstacy !
Today two very different events took place in Australia.
One thousand, eight hundred employees of garment manufacturer Pacific Brands learned that they will be unemployed because their firm is moving manufacturing to China.
Pacific Brands is the source of iconic Australian clothing labels such as King Gee, Berlei and Bonds.
In the five years since 2000 the Federal government has injected $ 72 million to prop up local garment manufacturing by Pacific Brands, but the economic recession has proven to be the last straw, making the low wage regime of China irresistible.
Sadly, the demise of the Bellambi unit this July will be followed by the closure of Unanderra in February of next year, leaving two hundred and eighty one Illawarra people out of work - from 1850 people to be retrenched Australia wide.
The vast majority of the Pacific Brands employees are women and they are highly skilled cutters and machinists. There is almost no chance of a similar job utilising these skills in the almost defunct Australian clothing industry.
No doubt the government will offer retraining schemes, but the big question will be - " Retraining for what purpose ? "
It is obvious that this closure announcement is just the tip of an unemployment iceberg ! If there are more people looking for work than jobs offering it is hard to see how retraining can increase job opportunities overall !
At the same time Pacific Brands employees are digesting this bitter news the port of Sydney is welcoming the world's biggest and newest cruise liner , the Queen Mary 2.
This floating palace is on a ninety day world cruise with fares for lucky passengers around the $ 26,000 per person mark.
There are still wealthy people in this country and many have decided that the wise course is to spend some of it - while it still has value !
There are grim times ahead as more of the Australian work force will find out in the months ahead, and many economists are keeping very quiet about the almost certainty that the world will face a huge round of inflation.
The developed countries are going heavily into deficit to try and cushion this recession and in all probability that debt will become beyond their capacity to repay. When that happens, logic dictates that inflation will run out of control, bankrupting those on superannuation and those who put money aside for a rainy day - but increasing taxes and government income - and shrinking the amount owed.
Perhaps those about to be handed a pink slip should indulge themselves with their termination payments - rather than wait to watch it shrink to nothing before their eyes !
One thousand, eight hundred employees of garment manufacturer Pacific Brands learned that they will be unemployed because their firm is moving manufacturing to China.
Pacific Brands is the source of iconic Australian clothing labels such as King Gee, Berlei and Bonds.
In the five years since 2000 the Federal government has injected $ 72 million to prop up local garment manufacturing by Pacific Brands, but the economic recession has proven to be the last straw, making the low wage regime of China irresistible.
Sadly, the demise of the Bellambi unit this July will be followed by the closure of Unanderra in February of next year, leaving two hundred and eighty one Illawarra people out of work - from 1850 people to be retrenched Australia wide.
The vast majority of the Pacific Brands employees are women and they are highly skilled cutters and machinists. There is almost no chance of a similar job utilising these skills in the almost defunct Australian clothing industry.
No doubt the government will offer retraining schemes, but the big question will be - " Retraining for what purpose ? "
It is obvious that this closure announcement is just the tip of an unemployment iceberg ! If there are more people looking for work than jobs offering it is hard to see how retraining can increase job opportunities overall !
At the same time Pacific Brands employees are digesting this bitter news the port of Sydney is welcoming the world's biggest and newest cruise liner , the Queen Mary 2.
This floating palace is on a ninety day world cruise with fares for lucky passengers around the $ 26,000 per person mark.
There are still wealthy people in this country and many have decided that the wise course is to spend some of it - while it still has value !
There are grim times ahead as more of the Australian work force will find out in the months ahead, and many economists are keeping very quiet about the almost certainty that the world will face a huge round of inflation.
The developed countries are going heavily into deficit to try and cushion this recession and in all probability that debt will become beyond their capacity to repay. When that happens, logic dictates that inflation will run out of control, bankrupting those on superannuation and those who put money aside for a rainy day - but increasing taxes and government income - and shrinking the amount owed.
Perhaps those about to be handed a pink slip should indulge themselves with their termination payments - rather than wait to watch it shrink to nothing before their eyes !
Wednesday, 25 February 2009
Entering a new world !
A huge amount of money is being spent by world government's to try and head off a catastrophic depression. The expectation of ordinary citizens is that when the dust settles the banks will be lending again, industry will be hiring workers - and the world will have returned to where it was at the start of 2008.
That will not happen. Talk to the old timers who survived the " Great Depression " of the 1930's and they will tell you that the recovery was the start of a new era.
The second world war was blamed for and had an influence of changing times, but much of that change was evolutionary. For the first time women participated in the workforce - and now a woman with children as a " stay at home ", unemployed housewife has become a rarity.
Social classes levelled out. Prior to the 1930's the education of country children ended at grade school - and thus the professions were out of reach. Many city kids left school at fifteen and were absorbed by industry as labourers. The rate of pay was strictly governed by age - and women received just sixty percent of the male rate of pay.
The era of car ownership got under way - and with the start of the jet age travel became affordable to the masses for the first time.
Many aspects of the world we knew will not recover from this economic downturn - but human ingenuity will create new opportunities - and new ways of doing things. It is simply a matter of disaster for many introducing the catalyst of change.
It would be a brave person to try and describe the new world that will emerge. To many people this change will seem a natural event - much as the critical years of change during the 1950's seemed quite normal to folk at that time.
What does seem certain is that our evolvement from this fiscal crash will merely accelerate the pressure of change that was building to a head before a corrupt monetary system introduced " toxic bonds " - and brought down the house of cards.
There was a certain inevitability about this recession hovering on the fringe of depression. The period ahead will not be comfortable for many, but an era has passed and new opportunities for the wise will soon be apparent.
The casualties will be those who - for one reason or another - reject change !
That will not happen. Talk to the old timers who survived the " Great Depression " of the 1930's and they will tell you that the recovery was the start of a new era.
The second world war was blamed for and had an influence of changing times, but much of that change was evolutionary. For the first time women participated in the workforce - and now a woman with children as a " stay at home ", unemployed housewife has become a rarity.
Social classes levelled out. Prior to the 1930's the education of country children ended at grade school - and thus the professions were out of reach. Many city kids left school at fifteen and were absorbed by industry as labourers. The rate of pay was strictly governed by age - and women received just sixty percent of the male rate of pay.
The era of car ownership got under way - and with the start of the jet age travel became affordable to the masses for the first time.
Many aspects of the world we knew will not recover from this economic downturn - but human ingenuity will create new opportunities - and new ways of doing things. It is simply a matter of disaster for many introducing the catalyst of change.
It would be a brave person to try and describe the new world that will emerge. To many people this change will seem a natural event - much as the critical years of change during the 1950's seemed quite normal to folk at that time.
What does seem certain is that our evolvement from this fiscal crash will merely accelerate the pressure of change that was building to a head before a corrupt monetary system introduced " toxic bonds " - and brought down the house of cards.
There was a certain inevitability about this recession hovering on the fringe of depression. The period ahead will not be comfortable for many, but an era has passed and new opportunities for the wise will soon be apparent.
The casualties will be those who - for one reason or another - reject change !
Tuesday, 24 February 2009
An era ends !
It is interesting to think back to that time several decades ago when New South Wales was the only Australian state that permitted poker machines.
Border cities like Albury/Wodonga experienced convoys of buses bringing Victiorians for a " flutter " on the machines. In Sydney, St Georges Leagues club was the place locals took visitors to be amazed at the splendour.
The club era at it's height provided luxury that was beyond imagination for those from other states. Meals were heavily subsidized and the level of entertainment rivalled the great cities of the world - and all for a few dollars and often for no charge at all.
This was funded by the profits from poker machines. The churches and the anti-gambling establishnment railed and protested, but squandering a few dollars in the hope of a big win made people happy, and the clubs returned that money by sponsoring sporting teams - and importantly - bank rolling much of the social infrastructure that was the glue holding society together.
Then government greed began to destroy that source of profit. Poker machine taxes became confiscatory under the Bob Carr regime, followed by anti-smoking legislation that further reduced patronage.
Now the results are evident. The plethora of " little clubs " that used to be part of the suburban landscape - bowling clubs and social clubs - is withering and fast dieing. Some are making desperate efforts to keep their heads above water by merging, but the numbers are dwindling - and few can report even a break-even balance sheet.
The days of the big clubs are shortening. The mighty St Geoges Leagues club in Sydney is a mere shadow of it's former glory - and here in Wollongong Fraternity club looks to be close to closing it's doors.
The latest bad news is that Corrimal Leagues club is now in administration.
A few may survive, but because of government greed - and the recession fast changing the landscape - the days of a great meal at a very cheap price - followed by world class entertainment - is over !
Many will remember this past era as " the good old days ". Could it's passing have something to do with the vicious street fighting and gang brawling that is emerging as the new form of entertainment ?
That is a question future historians will ponder !
Border cities like Albury/Wodonga experienced convoys of buses bringing Victiorians for a " flutter " on the machines. In Sydney, St Georges Leagues club was the place locals took visitors to be amazed at the splendour.
The club era at it's height provided luxury that was beyond imagination for those from other states. Meals were heavily subsidized and the level of entertainment rivalled the great cities of the world - and all for a few dollars and often for no charge at all.
This was funded by the profits from poker machines. The churches and the anti-gambling establishnment railed and protested, but squandering a few dollars in the hope of a big win made people happy, and the clubs returned that money by sponsoring sporting teams - and importantly - bank rolling much of the social infrastructure that was the glue holding society together.
Then government greed began to destroy that source of profit. Poker machine taxes became confiscatory under the Bob Carr regime, followed by anti-smoking legislation that further reduced patronage.
Now the results are evident. The plethora of " little clubs " that used to be part of the suburban landscape - bowling clubs and social clubs - is withering and fast dieing. Some are making desperate efforts to keep their heads above water by merging, but the numbers are dwindling - and few can report even a break-even balance sheet.
The days of the big clubs are shortening. The mighty St Geoges Leagues club in Sydney is a mere shadow of it's former glory - and here in Wollongong Fraternity club looks to be close to closing it's doors.
The latest bad news is that Corrimal Leagues club is now in administration.
A few may survive, but because of government greed - and the recession fast changing the landscape - the days of a great meal at a very cheap price - followed by world class entertainment - is over !
Many will remember this past era as " the good old days ". Could it's passing have something to do with the vicious street fighting and gang brawling that is emerging as the new form of entertainment ?
That is a question future historians will ponder !
Monday, 23 February 2009
Nuclear hysterics !
" The sky is falling ! "
Chicken Little is running around in ever decreasing hysterical circles. We humans are doomed ! The end is upon us !
Relax ! It's just the usual politics !
A few fuel rods at the Lucas Heights nuclear reactor have served their purpose and will be sent overseas for reprocessing. To get from the plant to be loaded on a ship they will have to be transported to a port - and in this case the port will most likely be Port Kembla.
Just 159 used fuel rods will be packed into four stainless steel casks - and these will be transported in four shipping containers on semi-trailer trucks escorted by police during a low traffic time of the day or night.
It is normal procedure. It has been done before on several occasions without incident, although at those times the ships were docked at Port Botany. This unremarkable procedure has never been carried out without hysteria from the Greens and the " gloom and doom " people !
Greens leader Lee Rhiannon leads a political party that is stridently anti-nuclear. Despite nuclear power generation being used by France, Britain, the US and other major countries and releasing no global warming carbon - the Greens oppose nuclear power in Australia.
They maintain a ceaseless tirade, warning of danger. There is more chance of a petrol tanker crashing and exploding than an accident happening to a nuclear convoy carrying specially designed protective containers, with an armed escort - and travelling at low speed.
Sleep well, citizens of the Illawarra. This fuel rod transfer will pass unnoticed as has happened on previous occasions.
But - while it takes place - our power generators will continue to pollute the atmosphere with Co2 - and if the scientists are right - the polar ice caps will continue to melt and the sea levels will rise.
Half a century from now - when we watch seaside suburbs reclaimed by the ocean - maybe we will reflect on the folly of taking notice of Chicken Little's hysterical outbursts !
Chicken Little is running around in ever decreasing hysterical circles. We humans are doomed ! The end is upon us !
Relax ! It's just the usual politics !
A few fuel rods at the Lucas Heights nuclear reactor have served their purpose and will be sent overseas for reprocessing. To get from the plant to be loaded on a ship they will have to be transported to a port - and in this case the port will most likely be Port Kembla.
Just 159 used fuel rods will be packed into four stainless steel casks - and these will be transported in four shipping containers on semi-trailer trucks escorted by police during a low traffic time of the day or night.
It is normal procedure. It has been done before on several occasions without incident, although at those times the ships were docked at Port Botany. This unremarkable procedure has never been carried out without hysteria from the Greens and the " gloom and doom " people !
Greens leader Lee Rhiannon leads a political party that is stridently anti-nuclear. Despite nuclear power generation being used by France, Britain, the US and other major countries and releasing no global warming carbon - the Greens oppose nuclear power in Australia.
They maintain a ceaseless tirade, warning of danger. There is more chance of a petrol tanker crashing and exploding than an accident happening to a nuclear convoy carrying specially designed protective containers, with an armed escort - and travelling at low speed.
Sleep well, citizens of the Illawarra. This fuel rod transfer will pass unnoticed as has happened on previous occasions.
But - while it takes place - our power generators will continue to pollute the atmosphere with Co2 - and if the scientists are right - the polar ice caps will continue to melt and the sea levels will rise.
Half a century from now - when we watch seaside suburbs reclaimed by the ocean - maybe we will reflect on the folly of taking notice of Chicken Little's hysterical outbursts !
Sunday, 22 February 2009
A clear way on the air way !
It's not often that governments do something intelligent - but it seems that the air space between Australia and New Zealand may soon be termed a " domestic border ".
Instead of the usual long delays once a traveller enters either country there will be no need to front customs, have your bag searched or go through those interminable checks that officialdom seem to delight in applying.
The details have yet to be verified, but it may well first apply to tourist flights where all the passengers are exclusively Australian or New Zealand citizens.
In such cases customs clearance will happen at the point of departure, rather than at the point of arrival.
The idea is not new. It is in place for travellers between the United States and Canada and it has obvious benefits in time saved when arrival means simply getting off the plane - and walking away !
It may be extended to travellers of other nationalities and there seems no good reason why the formalities necessary on arrival could not be carried out prior to departure from either country.
In difficult economic times anything that improves travel and makes a holiday across the Tasman more attractive has to be a plus. Lets hope the bureaucracy can streamline procedures and make air travel a hassle free experience !
Instead of the usual long delays once a traveller enters either country there will be no need to front customs, have your bag searched or go through those interminable checks that officialdom seem to delight in applying.
The details have yet to be verified, but it may well first apply to tourist flights where all the passengers are exclusively Australian or New Zealand citizens.
In such cases customs clearance will happen at the point of departure, rather than at the point of arrival.
The idea is not new. It is in place for travellers between the United States and Canada and it has obvious benefits in time saved when arrival means simply getting off the plane - and walking away !
It may be extended to travellers of other nationalities and there seems no good reason why the formalities necessary on arrival could not be carried out prior to departure from either country.
In difficult economic times anything that improves travel and makes a holiday across the Tasman more attractive has to be a plus. Lets hope the bureaucracy can streamline procedures and make air travel a hassle free experience !
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