Crikey’s Sydney shock jock watcher Neal Woolrich has got back to core business and presents this account of the recent Lang Corp AGM.
Stevedoring makes for strange bedfellows (as Waylon Smithers once said on the Simpsons, “women and seamen don’t mix”), but could it be that Patrick Stevedoring and its once adversarial dockside workers have finally kissed and made up?
By Jiminey, I think they have!
After the acrimony of the 1998 docks dispute, I was anticipating that Patrick’s AGM could have been another testy union affair. One could be forgiven for thinking precisely that after walking into the ASX building and seeing a host of placards along the lines of “Lang conned its workers” and “Corrigan is the son of a motherless goat” (or words to that effect) held up by a hardy bunch braving yet another Sydney downpour.
But it turns out that those protesters weren’t old-time dockside workers still angry about being stood down during the 1998 dispute.
No, in fact these blokes were the union-busters who were hired by Patrick Stevedoring at the time to break the unions’ stranglehold on the docks the infamous “Dubai experience”.
These blokes claim they were hired by two companies, Fynwest and PCS Resources, to take part in the union-busting work on the docks back in 1998, but were then sacked without appropriate compensation. They now have a case in the Federal Court against their former employers and Patrick.
In a strange juxtaposition, it seems that the “old unionists” who Patrick tried to shaft in the docks dispute are now in sweet with the company, having just signed a new enterprise bargaining deal. Chris Corrigan said that negotiations were “at times acrimonious” and weren’t easy by any stretch, but they were done in a mature, detailed manner over 6 weeks.
And in another strange twist, in the recent bidding for National Rail and FreightCorp, the unions gave the nod to Patrick as their “preferred bidder” ahead of the competing bidders.
So the once-despised Patrick now seems to be sweet as apples with the unions.
It’s no secret now that the initial pain of the docks dispute has born fruit for Patrick in terms of productivity and profit. But it’s probably also been good for the dockside unions as well, with the sizeable productivity gains enabling them to shake off the “bludger” stigma that might have been pinned on them in the past.
When was the last time any Crikey Sole Subscribers saw “A Current Affair” or “Today Tonight” do a touch-up on the dockside workers? Hopefully never we’d like to think Crikey’s Sole Subscribers are beyond watching that piffle.
Corrigan’s address to shareholders was one of the more illuminating that this correspondent has seen. He explained clearly the various aspects of the group’s business, what their aims were for the past year and how well they had achieved them, and what their aims are for the coming year and how they will go about achieving them.
It is no surprise that the company is performing so well financially and is a stock market darling given its detailed plans and clear focus.
After Corrigan’s address, no shareholder should have left the meeting with any doubts about what the company was about and where they were headed.
Instead of giving the usual waffle you hear at these sorts of events, Corrigan set out four specific areas of focus institutionalising stevedoring reform, integrating land logistics acquisitions, exploiting opportunities in rail, and lowering costs through technological change. He told shareholders how the company had performed in each of these areas and how they could further build on them.
On stevedoring reform, Corrigan displayed graphs which showed the “national average net crane rate” trending upwards and speculated that it could go further north. This is the statistic which measures how many boxes the crane moves per hour. Back in 1998 at the height of the docks dispute, the unions said there was no way in this country that we could get this above about 18 boxes per hour, when worldwide averages were around 25. Now Patrick have it above 25 boxes per hour and rising.
There are arguments that this statistic is unreliable and there are many different ways it can be measured, but so long as Corrigan’s steeply sloping graph compares apples with apples over the years, then there can be no question that Patrick has greatly improved waterfront efficiency.
Another important aspect of stevedoring reform that Corrigan pointed out was that the new enterprise agreement allowed for rostered shifts to be changed at short notice (e.g. when a ship is delayed and cannot turn up as expected). The agreement provides for these altered shifts to be re-scheduled to a time when there was work available on the docks.
Isn’t it incredible that nobody had thought of this before?!
When talking about exploiting their opportunities in rail, Corrigan gave a nice little backhander to National Rail and FreightCorp, saying that they’d talked to the rail companies’ customers and “they might think they’re providing customer service and reliability, but that is not the customer perception”.
On technological change, Corrigan said the company was placing its faith in the automation of container movement through lasers, a concept which Corrigan said should be proven this year.
A shareholder who turned out to be one of the Dubai shaftees asked whether this meant we would see fully automated docks in Australia. Corrigan denied this, but you’d have to think he’d be licking his chops at the prospect, wouldn’t you?
Corrigan was later asked by the shareholder what was the cost of an automated straddle on the docks. Corrigan said it was in fact cheaper than a manned straddle, as the automated version didn’t need the operator’s cabin and other costly equipment.
The accounts were passed unanimously by the meeting without any questions, which reflected shareholders’ satisfaction with the company’s performance, and the re-election of chairman Gilles Kryger and director Peter Scanlon occurred with close to 100% votes in favour.
A couple of shareholders asked questions on the proposed name change to Patrick, suggesting that “Patrick” would bring back negative public perceptions of the company harking back to the docks dispute. The company appreciated this but said the move made business sense as all of their customers dealt with “Patrick” companies so it was confusing for them to occasionally visit “Lang” Corp’s offices or get correspondence from “Lang”.
The chairman also advised that there would be a negligible cost in implementing the name change, so the meeting voted in favour of it with only one dissenting vote.
Interestingly, there was a special resolution to consider a change to the company’s proportional takeover rules in its constitution, but this special resolution was withdrawn as not enough proxy votes were cast prior to the meeting to be able to pass the resolution.
When it came to general business, the shareholder who was part of the Dubai crew asked whether the company’s estimate of a maximum possible liability of $4 million arising from the court case was adequate. The chairman said it was, and there wasn’t a contingent liability raised because the company fancied their chances of winning the case.
I asked about the bid for Ansett, suggesting that the company never seemed to be in the running and saying that Fox-Lew were always the front runners. I was hoping for a bit of niggle and for the company to slam the administrators and unions for freezing out other potential bidders.
But Corrigan didn’t take the bait, explaining that Patrick (and its joint venture partner, Virgin Blue) was only interested in certain assets of Ansett, in particular those which would give Virgin Blue terminal space at Sydney airport, and provided certain circumstances came to pass.
He said that Patrick would still be interested should the Tesna syndicate not go through and if those desired circumstances materialise in the future.
It has been interesting in the past few days to see the media speculation shift to a potential Fox-Lew acquisition of Virgin Blue, rather than focusing on the potential for Patrick and Virgin Blue to acquire terminal space. Patrick has almost dropped off the media radar completely.
I wouldn’t be ruling out Patrick at this stage the Sydney airport space would provide such a crucial element to their existing businesses that they should be expected to put up a bit of a fight for it.
And after taking on the unions in 1998, don’t expect Corrigan to get rolled too easily by a bloke from the rag trade and a truckie with a penchant for fast cars and “one-size-fits-Lindsay” Arnold Ross jumpers
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