Today’s controversial decision of the Qantas non-executive directors to roll management and reject Macquarie Bank’s $5.50 a share cash offer will come as a huge relief to the Howard Government.
The last thing Peter Costello and John Howard needed was for an iconic Australian brand to be privatised and carved up in an election year.
The private equity owners would almost certainly have gone the knuckle on the unions by taking maintenance offshore and this would have played right into Labor’s hands given the WorkChoices battles.
Similarly, a hugely geared Qantas would have effectively carried a government guarantee if things turned bad. Remember how the New Zealand government bailed out Air New Zealand in 2001? No first world government can let a national carrier go under.
Qantas is infamous for it government connections and lobbying abilities. Indeed, chairman Margaret Jackson knocked back the job of Governor General a few years back and has just been appointed to the PM’s emission trading systems review.
Did Jacko just happen to take a call from the PM or Cossie suggesting Macquarie Bank was taking private equity a bridge too far? All those anti-private equity noises coming out of the Reserve Bank would suggest the government is distinctly uncomfortable with the current raiding.
It’s worth naming exactly who these Qantas non-executive directors are:
Margaret Jackson, chair: very close to Howard and Costello
James Packer: very close to Howard and Costello
James Strong: appointed to review symphonies and chair Australia Council
Garry Hounsell: old Arthur Andersen colleague of Margaret Jackson’s
Mike Codd: last surviving Keating era director
Paul Anderson: former BHP CEO whose Billiton merger was backed by Howard
General Peter Cosgrove: the PM’s favourite soldier
Patricia Cross: former AMP director and close to Margaret Jackson
John Schubert: Commonwealth Bank chair and former Business Council president
Margaret Jackson is Australia’s best networked director. She wouldn’t role her management team without very strong grounds. But if John Howard and Jacko did reach the same conclusion – there was no way this bid was going to get off the ground.
At least, not at $5.50!