Workers' Liberty

Bryan Sketchley
A consortium of investors (APA) wanted 100% Qantas so they could take it private. If they manage to acquire 90% of shares, they can compulsorily acquire the rest of the shares. If the buy out is successful then the assets directly secure the lenders money and they can do their asset stripping away from public scrutiny.

APA has only been able to raise 70% of the necessary funds and subsequently two large shareholders (with over 10% between them) decided not to sell. APA hope that the two big hold outs will not want to be locked in as minorities, and thus, ironically, lowering the acceptance condition may lead to them getting the lot. Otherwise, APA will try to buy them out later.

The consortium had aimed to buy 90% of Qantas shares but investors became jittery, and now how to raise 70% of the value. As a result Qantas will continue to be a listed company on the stock exchange The investors had intended to buy Qantas with borrowed money.

Qantas senior management told staff that the bid to buy the company would benefit everybody – executives were in line to earn tens of millions of dollars and additional funds would allow new planes and other equipment to be brought. It has become clear though that the private equity consortium have planned to sell much of the plant.

"Where this type of corporate buy-out has happened overseas ... what the (buyers) are interested in is making a quick profit and the only way to do that is to asset-strip and cut corners," Sally McManus, of the Australian Services Union (ASU) said.

The safety reputation of the airline is also a concern as fears of cuts to maintenance in Australia and the possibility of maintenance being moved overseas has also been mooted.

The scene is being prepared for another round of financial disaster for some of these schemes – which are often financed indirectly by workers' superannuation funds.

If Qantas is to be sold to private investors using borrowed money, its major assets sold off, the banks will in effect have a mortgage over the company. Should Qantas fall on tough times, or to collapse as Ansett and other small airlines have, the likelihood of employees receiving their entitlements is significantly compromised. Superannuation benefits of Qantas employees are also considered vulnerable.

So why doesn't the government stop the sale of Qantas? AMWU National Secretary Doug Cameron has noted "The Howard Government's decision to allow a private equity consortium to take over Qantas shows that the federal government never even considered standing up for working Australians."

"The Federal Government has just lined up behind big business on this takeover, against the interests of Qantas workers and the Australian public."

The destruction of a reasonably well-run organsiation, the flogging of assets, the work force that will be made redundant as a result, the out of all proportion executive payments, are but the most recent example of a whimsically destructive way in which capitalism operates. That a handful of stockmarket spivs could, with federal government connivance, cause civil disruption for private profit is beyond contempt.