This business story, which deserves wider circulation in Australia, ought to serve as a reality check for those pushing agendas saying the country’s airlines ought to relocate to China because no one can compete with their costs.
(Replace ‘China’ with the UAE, NZ, Bulgaria or Belize as you see fit.)
The crux of the story is that Philips has found it cheaper to manufacture its products in the Netherlands than China, and is bringing its jobs back on-shore. To a country in the eurozone!
The full Bloomberg story does come across as something more akin to a Netherlands sponsored business promotional campaign, but it should remind us that the argument that Qantas has no option but to offshore needs to consider that it has no option but to cease rubbishing its own country and getting back to work on being a superior Australian enterprise based in Australia.
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Better engaging its people (those that are left) and using better judgement in terms of its strategic responses would mean a much higher share price, and dividends, which is the real responsibility of managements who just spend too much time moaning about how helpless the situation is, while making it worse.
By coincidence, I was in conversation with Dick Smith this morning when I raised this item, and he said he was very pleased to see that evidence of China becoming less competitive in terms of costs while getting richer in terms of its spending power, was appearing several decades sooner than he expected.
Needless to say, there is a parallel argument about the importance of China to the future of any Australian airline, and the last two Qantas CEOs have convincingly endorsed that.
The only problem is that Qantas is all talk, while the likes of China Southern and Cathay Pacific (and its intra China carrier Dragonair) are all about doing things, notably in providing the fast links from Perth, our resources capital, to our major resources markets, in China.
For all of the hot air and fluff coming out of Qantas, it continues to leave Western Australia off the map for non-stop full service flights to Australia’s most important resources customers.
Which brings us back to where we started, a badly run airline with no real long term action plan, whinging and moaning about how unfair the world is, while being walked over by competitors who can’t believe their good fortune.