The Sydney Morning Herald http://www.smh.com.au/news/9904/06/text/features1.html INDUSTRIAL RELATIONS Waterfront deals Date: 06/04/99 When guards locked the wharfies outside the Patrick gates, it was Peter Reith and Chris Corrigan who led the charge for waterfront reform. A year on, they explain their positions to ANNE DAVIES and HELEN TRINCA. ONE of Peter Reith's Christmas presents last year was a balaclava with REITH embroidered across the forehead. The gift came from Dr Peter Shergold, the secretary of the Minister's Department of Employment and Workplace Relations, which was almost as instrumental as his boss in changing the shape of the nation's docks in 1998. The black joke about one of the defining images of the docks lockout last April 7 went down well with Reith. It had been a long year on the docks for the politicians and the public servants at the centre of the Coalition's "activist" strategy to slash jobs at Patrick terminals around the country. Shergold was only one of several bureaucrats who got used to living dangerously in 1998 as the Government pushed the parameters of policy making, policy promotion and policy implementation. Shergold's department was crucial in finessing and implementing the $250 million scheme of soft loans which paid for 826 Patrick workers to leave the industry. Another 450 or more are expected to exit from P&O Ports soon after an agreement there is finalised. Reith's far bigger role in what he once termed the "knock 'em down stoush on the waterfront" left him with a mixed press and public image. It was the same for Chris Corrigan, the Patrick boss. But six months after the settlement and a year after the initiation of the dispute, both men are robustly engaged in defending their positions. The former prime minister Paul Keating once described Reith as one of "those blow-up toys with sand in the bottom: knock them over and they bounce right back". Reith has bounced back with a vengeance. After the Federal election last year, he quietly shed responsibility for the waterfront to his colleague, the Minister for Transport, John Anderson, but has retained his single-mindedness about reform, most recently with his plans to marginalise the nation's workplace arbiter, the Australian Industrial Relations Commission. Not only does he regard the controversial waterfront strategy he adopted as a success in terms of boosting productivity on the waterfront, Reith believes any political fallout, for him and the Coalition, is in the past. It might even be a political plus as he plans more activist approaches in other sectors. "Yes, I make no apology for it and continue to make no apology," he told the Herald. "We are an activist reformist Government ... it is part and parcel of the business of government to ensure people accept our reforms." There are other sectors on his agenda for an activist approach, although none will be quite as hands-on as the waterfront. Industries where the closed shop still operates, such as building and mining, can expect close attention. Reith's office is also putting special effort into encouraging employers to use workplace agreements, or individual contracts, with workers. He has intervened on several occasions in the AIRC during the award simplification process. SO SURE is he that the waterfront dispute will prove a positive, he has revived his leadership ambitions, if and when John Howard chooses to retire. Around the time of the Federal election, most commentators saw Reith as so tarnished by the waterfront saga it seemed that the Treasurer, Peter Costello, would be the only one standing when the time came to pass the baton from Howard. That is now far from certain. Ask Reith about the Government's role in the events of April 7 and he will accuse you of falling for Labor's conspiracy theory. "Understand! Most of what was done was done by the employer," he says. "Whilst it is easy of people to place the Government in the shoes of the employer as directing the matter, Chris Corrigan was the one that took the action." There is, of course, ample evidence of the Government's central role. Aware for months of Patrick's plan to dismiss the entire workforce, Canberra took steps to help implement it. The main assistance was the redundancy fund, announced by Reith late at night within 30 minutes of the sackings. But it was Reith's strong public advocacy of Patrick's actions which so polarised the community. A Herald poll at the time showed the community divided almost evenly over the merits of the dispute, and even more dubious about the appropriateness of the Government's role in it. During the second half of 1997, as Canberra urged the stevedores to reform, the Government was suffering a slump in the polls. Allies as staunch as the Business Council of Australia questioned whether the Howard Administration had the steel in the belly to tackle the hard issues. Reith says the perceptions were turned around by the waterfront reform, tax reform and the tough stance on fiscal policy. "No-one has any doubts that these fairly strong tough positions we took in the first term paid an economic dividend for everyone," he says. "So politically, it was a demonstration that we were in favour of economic reform, we weren't going to budge and we stuck to our guns." Inside the party, the waterfront dispute may have yielded dividends for Reith's ambitions by sharply defining his political style. He demonstrated a resilience and resolve few politicians - including his rivals for the leadership - can boast. Living for eight months with a 24-hour bodyguard, Reith was on the airwaves virtually every day to sell the message. Behind the scenes, he pushed the players for a settlement which would deliver the level of productivity gains he wanted. The gains will be discounted by those inside the parliamentary party who remain unconvinced about Reith's methods, but there can be little doubt what he now stands for. While Reith sees the Government as a winner from the dispute, investors have embraced Corrigan and his holding company Lang Corporation with share prices more than trebling from a low of $1.17 in January last year to $4.97 before the Easter break. The MUA argues Corrigan is still paying the price of the dispute in terms of employee relationships, but the Patrick boss is proud of the changes at his terminals. He has never been anti-union and, unlike Reith and Howard, had little ideological baggage when it came to the MUA. The union exasperated him in the lead-up to the dispute and he loathed the "culture of overtime" on the docks, but his motive ultimately was commercial. The lockout of workers on April 7 was a desperate act by a self-described "desperate man" and many Australians will never forgive Corrigan. But he believes he has given his workers an incentive: "We have redesigned the reward structure to enhance productivity as opposed to indolence ... obviously there was a difficult period of adjustment [after the dispute] but by and large, the relationships have settled down." He says he will leave others to judge his mistakes, although he has publicly admitted he did get some things wrong in the dispute. During the dispute, Corrigan touted the idea of automated ports as a way to solve labour hassles and Sydney University is researching the use of robots for the company under a $1 million research and development grant to Patrick from the Federal Government. Corrigan will say only that the company is working continuously on incremental technological change but adds that the move to technology is strong in the stevedoring industry worldwide "perhaps the more so because of its troubled history". Patrick has won an extra 7 per cent or so of market share from P&O but Corrigan is playing it low key. "Whether we can hold that business is a function of service and price, just like any other business," he says. "I see nothing sacrosanct about current market shares. It is a dynamic market." The dynamism has not led to price cuts and there are claims the companies are asking for rises of 15 per cent to 22 per cent for new contracts, despite undertakings they would not try to pass on the costs of the redundancies which they must eventually repay through a levy. Analysts have marked up the stock largely on the basis of the 50 per cent cut Corrigan has made to his wages bill, as well as the more impressive crane rates he has claimed. Patrick's core full-time staff has been cut in half but it is using more casuals and Corrigan has other indirect labour costs through outsourcing of jobs like maintenance, security and cleaning. He is paying substantial bonuses for speedy loading and unloading but says that employment costs have been significantly reduced after taking acount of bonus payments. Barry Henderson, a senior portfolio manager at Colonial First State which manages 15 per cent of the Lang stock, says: "There's been a complete turnaround. For many years the returns went to labour and now they are more equally shared between the shareholders and labour. We went in last July at $2 but in the last month or so the bigger funds are starting to look at it." The only real risk Henderson sees to stock he regards as still undervalued would be an end to the stevedoring duopoly enjoyed by Patrick and P&O. But he says: "We don't think this will occur, we think this is a natural duopoly and there is substantial capacity." Fending off another entrant is nothing new for Corrigan who with P&O fought bitterly to retain the duopoly in Melbourne in 1996 and 1997. Asked about the Melbourne Port Corporation's renewed interest in a third operator, Corrigan says: "So long as it is on a level playing field, we have no objection. However, we do have a right and a responsibility to point out that with our current investment program, we will be able to service the stevedoring requirements in Melbourne until 2015 and with some further cost effective investment, beyond 2020. Hence any investment in the near term with the aim purely of providing needed capacity will be unnecessary and wasted." If new facilities were built with all the required port and land infrastructure, a third operator would have to engage in a desperate pursuit of market share. This would probably lead to a round of price-cutting which would almost certainly lead to the exit of the new player. The outcomes from the dispute are still tentative. Figures from the Bureau of Transport Economics last week for the three months to December show moderate gains in crane rates only in Melbourne, so moderate that Patrick now argues the rates are only part of the story. Reliability and truck turnaround times are just as important. Turnarounds in Melbourne are said to be 30 per cent faster than before the dispute. The shift in rhetoric is sensible if a little cute. Crane rates have always been suspect as a measure of useful work on the wharves. But Corrigan and Reith used them shamelessly during the dispute as an easy way to sell reform to the public. And the BTE figures tell only half the story in another way because they include P&O operations where there has arguably been no improvement because changes to work practices and rosters are still being nutted out. Reith argues success: "Structurally we now have different terms and conditions and work practices between the two major competitors [Patrick and P&O] which has set up a competitive tension between the two which is an important step forward." As for the future, Patrick has made it clear it is prepared to play hard ball with the MUA, recently sacking six workers who refused to load a ship in Newcastle because of a demarcation dispute with the Transport Workers Union. The brawl there is seen by the MUA as the start of a push by the big transport company Toll Holdings - with Patrick's help - to destroy the MUA's coverage on the docks. Corrigan will not comment on the demarcation issue or whether he would prefer to deal with the TWU. Nor will he be drawn on whether Toll is onto Mark II of the waterfront. "It's not for us to define a role for Toll," he says. "That's entirely a matter for them. We act simply as a seaside stevedoring contractor to them. It's strictly a business operation in which they are our client. Just as any other client." Waterfront, by Anne Davies and Helen Trinca will be published by Doubleday. This material is subject to copyright and any unauthorised use, copying or mirroring is prohibited. ************************************************************************* This posting is provided to the individual members of this group without permission from the copyright owner for purposes of criticism, comment, scholarship and research under the "fair use" provisions of the Federal copyright laws and it may not be distributed further without permission of the copyright owner, except for "fair use." -- Leftlink - Australia's Broad Left Mailing List mailto:[EMAIL PROTECTED] http://www.alexia.net.au/~www/mhutton/index.html Sponsored by Melbourne's New International Bookshop Subscribe: mailto:[EMAIL PROTECTED]?Body=subscribe%20leftlink Unsubscribe: mailto:[EMAIL PROTECTED]?Body=unsubscribe%20leftlink
