web analytics

Anyone else make a connection?

Written By: - Date published: 12:34 pm, April 16th, 2010 - 34 comments
Categories: privatisation, telecommunications, Unions, wages, workers' rights - Tags: ,

Last year, Telecom screws over its engineers. Decides to make them dependent contractors. EPMU wins real jobs for most of them. Better contract conditions for others. But a sh*tload of experienced engineers say screw Telecom and leave the industry.

Then the faults start. XT becomes a laughingstock. Customers leave in droves.

Next, profit warning. Telecom reduces its outlook for the next three years. Revenue’s in the toilet. The solution to the problem created by treating workers like crap and looking for cheap solutions? Fire 200 workers. And asset-strip some more with fire-sale of AAPT.

Telecom: model of failed privatisation.

34 comments on “Anyone else make a connection? ”

  1. the sprout 1

    If they want to save money but not damage productivity, why not shave a few million off Reynold’s $7M salary rather that making 200+ staff redundant? He could take a 50% cut, try scraping-by on a meagre 3.5M and you’d still have money to spare after you’ve kept paying the salaries of the 200 for the next three years.

    Does anyone, Reynolds included, really think he’s worth $7M p/a? Why should 200 go and Reynolds stay?

    • hmmmmmmmm 1.1

      200 middle to senior managers on 100k (probably more) is 20 million savings per annum.

      Oh and Reynolds is clearly a cock !

  2. ianmac 2

    Perhaps Reynolds gets a bonus for shedding staff. He is known as the Smiling Assassin. Oh no sorry. That was that other fellow.

  3. Name 3

    Funny. Therese Gattung left the Telecom CEO’s post with a $5.125 million payout in 2007 and immediately spat the dummy over the fact that the new bloke was getting much more than her $3 million salary just because he was a bloke.

    Now we learn that the wheels are falling off Telecom because of wrong and bad commercial decisions made over the last 10 years.

    Any chance Gattung, Reynolds et al will pay back any of the millions they were paid purportedly for their commercial skills and decision-making?

    • the sprout 3.1

      that would assume there was such a thing as corporate responsibility to stakeholders 😆

  4. prism 4

    Is there some testosterone-lifting aspect to paying big salaries to chief executives? There is one job and 5 billion people in the world only 0.5% of whom would know enough to do the Telecom CEO job but still quite a number would apply/be suitable wouldn’t they?

    Does the board decide the salary and want to have a bigger one than the other companies to show how vibrant and thrusting the company is? Or do they go poaching and have to bid up to detach the rock oyster from its perch, so they can get its particular, delicate flavour.

    Alan Gibbs suggested tendering jobs as being an excellent way of establishing the market price for any job. I don’t think he was referring to Chief Executives but it would be interesting to cut to the chase and advertise for applicants who “must state their required salary”. Good proven people prepared to work for only $2 million a year might turn up (plus bonuses). Or the firm could groom capable people within the company and promote them so they could be ready for the top job.

  5. Peter Johns 5

    A sunk cost so just move on. Also budgeted for. No engineers jobs at all.
    Joke of the day: I want to open an XT account.
    I blame Labour for selling off Telecom in the first place in 1990.

    • Bright Red 5.1

      yep. damn neo-libs.

      I take it, then, that you oppose privatisation of other public assets and government services.

      • Peter Johns 5.1.1

        I was winding you up BR. You always blame National here for similar things, thought I would see the response to that since Labour sold Telecom off.

        • Bright Red

          You’re not going to wind me up by attacking the 4th Labour government. Their economic policy was a complete hash – it was rightwing and riven by your mates Douglas, Brash, Caygill, and Prebble after all.

  6. Name 6

    Ten years into the 21st Century while the Government tries to bribe Telecom into providing broadband coverage and speeds many parts of the developing world already have, there are still people in the Marlborough Sounds sharing party-lines.

  7. tc 7

    Deane and his board drove the joint into the dust by ignoring the reality that re-focus/investment was required in favour of dividends and bonuses….then had a cry when Cunliffe levelled the playing field…..pathetic as they were warned.

    Gattung was chosen because she’d go along with it and being a marketer/bullshiter and not understanding technology she was unlikely to see the issue that being just a telco is a dinosaur industry (TV/Newspapers know this issue well)…..and she still doesn’t get it.

    Once again the board shows how incompetant it is as they could’ve paid half what reynolds gets but like the expensive european cars they drive think price = value and we pay him alot so he must be good. Reynolds can’t lose and is laughing all the way bringing in a few mates to see what they can do.

    Who can blame him for accepting the dosh, blame the board who recently when given an opportunity to bring some telco experience on brought in an Ad man…….says it all I reckon.

    In terms of privatisation the error was allowing them to own the network, they should have been licenced to it so other players could enter and share it’s upkeep…..we’d have alot less cell towers and a decent backbone created by independant world class advice on technology not the clowns who bought you XT.

    Now they’re playing scarecrow over the second fibre link …..the leopard’s incapable of

    • bobo 7.1

      Good old Kevin Roberts…. seems Telecom has some lovemarks or is that skidmarks going down the corporate toilet , did he have something to do with that hideous new logo as if by just changing a logo a company is reborn as innovative and fresh… Oh well if telecom keeps up its current pace of self cannibalization as the shareholders have sucked it dry from chronic underinvestment since it was privatized it might be a bargain to be re-nationalized down the road, if anything is left of it that is.

      • Jim Nald 7.1.1

        Re-nationalisation! Ahhh … now you’re talking
        Blingish dahling, would you love to be Reynolds’ white knight?

  8. RedLogix 8

    My inside info on the South Is XT Radio Controller fiasco is that one of the root causes was incompatible firmware revisions in various installed hardware modules. This is why the NI was running ok, but the SI unit was behaving unpredictably.

    I’m pretty familiar with this kind of scenario. In my field it’s 101-level stuff; and if what I’m hearing is true (from a person I judge as a solid insider)… then it fully backs up Zet’s story here. Experienced engineers would simply not have made this kind of mistake.

    Paul Reynolds is getting exactly what he has paid for.

    • the sprout 8.1

      But Reynolds clearly isn’t delivering what he’s being (over)paid for.

    • Lanthanide 8.2

      I heard that same thing Red, and posted this a few weeks ago. We could be getting the information from the same sources, but it looks like there’s some corroboration here.

  9. tc 9

    Reynolds is delivering what the board pays him to deliver…….you’d need to ask them exactly what that is and of course they’ll be honest and tell you……yeah right !

    He would’ve known eaxctly the mess he’s inheriting as the industry insiders would’ve told him…..I reckon that’s why he’s screwed them as they needed him…he didn’t need them but och aye laddie I’ll take yur wedge.

  10. If 200 middle managers are surplus to requirement then what the hell did their jobs entail ?…passing memos between each other and writing reports for the sake of it ?

    I would hope most of them, if they knew they were just shuffling paper and killing time, could see the writing on the wall and lined up something else.

    And if not then I can imagine a whole lot of brown nosing going on in telecom at the mo.

  11. tc 11

    Pollywog’s onto it……plenty of large companies have a fat middle layer simply waiting to be shed if profits are required and the actual workforce can’t be screwed anymore…here it comes bend over.

    Global software/hardware/clothing operations outside the actual manufacture/head office domain springs to mind.

    Most of these people are 100k+ and have zero skills aside from /meetings/agendas/politics/strategies/powerpoint slides and general bs…..good luck people.

  12. HT 12

    I heard that Telecom [Telescum.] tried to do the XT Network on the cheap and used low grade equipment. Thought they might save costs but didnt think about long term reliability.
    And got Alcatel Lucent involved who dont have as much experience building Networks as say Ericson or Simular.
    I also understand there is very little backup system in place if part of it goes down.

    • Lanthanide 12.1

      Alcatel Lucent do have experience building networks, the problem is that their gear is cheap crap.

  13. The Baron 14

    A couple of thoughts:

    – nice theory Zet, but it doesn’t actually line up. The techs that were contracted out last year worked on fixed line installations – not on the mobile network. In fact, Telecom claims to have some of the best (and therefore best paid) techs in the country and world working on the XT network to build it, and to restore it now.

    – a failure like this could well have happened to any network, anywhere. It is the nature of the technology – pretty damn robust, but not perfectly so. I am sure Lynn can attest to that, as it is the nature of any tech system. Would public ownership would have prevented that? Well, I can’t see how really. And when you reflect on the state of and pricing available in NZ telco prior to 1989, and how awful it was in comparison to most of the OECD, you’ve gotta question that policy prescription.

    – and finally, I am a bit shocked at the callous comments towards the 200 people who have just lost their jobs. I’m pretty sure they didnt “have zero skills aside from /meetings/agendas/politics/strategies/powerpoint slides and general bs” – instead, they were probably highly capable and educated NZers, who are likely to be highly employable offshore. We may lose alot of these people due to this. And regardless, these are still people who likely have mortgages, powerbills and families to feed. Surely you can find a bit of compassion for them, even if they aren’t your working class heroes, and instead are “rich pricks”.

    • RedLogix 14.1

      a failure like this could well have happened to any network, anywhere. It is the nature of the technology pretty damn robust, but not perfectly so. I am sure Lynn can attest to that, as it is the nature of any tech system.

      Maybe. It’s sort of hard to tell without hard information, but the indications are:

      1. Telecom went with a low-balled bid from a vendor it had an overly close relationship with.

      2. They chose a system configuration with only two Radio Controllers, that although each theoretically enough capacity to handle normal loads, did not have enough redundancy in the event one of them fell over.

      3. Telecom also shortened the vendors support period, effectively dumping the job of managing a new, complex system onto staff with minimal training .. and more importantly… the history of experience and confidence that only comes with time.

      4. And we can only speculate, but any fool can tell that Telecom under Reynold’s regime isn’t the greatest place to work anymore. I’d guess that their most experienced, capable people have long moved on, upping the ante on those remaining.

      . And when you reflect on the state of and pricing available in NZ telco prior to 1989

      The implication that improved services were the result of privatisation is almost completely wrong. The vast majority of the improvements came about because of the new technologies that came on stream worldwide at the time.

      New technologies that at the time Telecom successfully installed by their still strong legacy of well-trained technical people from decades of state ownership.

      • Bored 14.1.1

        Red, on your last statement on welll trained techos, in my experience the techos I have worked with who were trained as Post Office techs are a breed apart, very superior in basic skills such as binary diagnosis etc, nothing like them has been trained in 20 years.

      • IrishBill 14.1.2

        I’ve heard that during the second long XT outage Telecom spent the best part of a day arguing over price with Alcatel before there was even a start on the work.

    • Bored 14.2

      Bit of baronial bollocks methinks. First up Zet does not link directly the XT failure with the line techs.

      On your big points, knowing telco network technology well I can say the failures were not typical of well deployed technology, they were more likely symptomatic of systemic failures within the telco and suppliers. Can you remember major outages across the old fashioned POTs network? That was too well engineered and capitalised.

      On callousness to the 200, they might be skilled, highly paid and “rich pricks”, they have my sympathy. They probably have families and ties here and dont want to follow the inexorable “progress” of neo liberal capitalism that sends jobs off shore to lower paid places. I hope they stay here and able to contribute rather than being dustbinned by this callous system.

    • Draco T Bastard 14.3

      In fact, Telecom claims to have some of the best (and therefore best paid) techs in the country and world working on the XT network to build it, and to restore it now.

      And it’s still falling over. As Bored says, the problem is systemic from the top.

      And when you reflect on the state of and pricing available in NZ telco prior to 1989, and how awful it was in comparison to most of the OECD, you\’ve gotta question that policy prescription.

      Technology changed. All of the improvements that we’ve seen in telecommunications had nothing to do with privatisation and everything to do with changing technology that was being installed when Telecom was still government owned. In fact, Labour refused to sell it until most of it had been installed. You would have seen the improvements anyway and you would have seen them faster if Telecom hadn’t been sold. Why? Because if Telecom hadn’t been sold the dead weight loss of profit wouldn’t have slowed things down. 1985 = $272m in profit, 100% of which was spent on maintaining and expanding the network. 1987 = $300m in profit, 100% of which was spent on maintaining and expanding the network. 1988 = $310m in profit, 100% of which was spent on maintaining and expanding the network. Early 2000s $1b in profit, ~15% of which was spent on maintaining the network, ~85% of which went to the dead weight loss of profit.

Links to post

Recent Comments

Recent Posts

  • Tokelau Language Week reminds us to stay united and strong
    Staying strong in the face of challenges and being true to our heritage and languages are key to preserving our cultural identity and wellbeing, is the focus of the 2020 Tokelau Language Week. Minister for Pacific Peoples, Aupito William Sio, says this year’s theme, ‘Apoapo tau foe, i nā tāfea ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • NZ announces a third P-3 deployment in support of UN sanctions
    The Government has deployed a Royal New Zealand Air Force P-3K2 Orion (P-3) maritime patrol aircraft to support the implementation of United Nations Security Council (UNSC) resolutions imposing sanctions against North Korea, announced Minister of Foreign Affairs Winston Peters and Minister of Defence Ron Mark. “New Zealand has long supported ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Pacific trade and development agreement a reality
    Pacific regional trade and development agreement PACER Plus will enter into force in 60 days now that the required eight countries have ratified it. Trade and Export Growth Minister David Parker welcomed the announcement that the Cook Islands is the eighth nation to ratify this landmark agreement. “The agreement represents ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Securing a pipeline of teachers
    The Government is changing its approach to teacher recruitment as COVID-19 travel restrictions continue, by boosting a range of initiatives to get more Kiwis into teaching. “When we came into Government, we were faced with a teacher supply crisis,” Education Minister Chris Hipkins said. “Over the past three years, we ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Border exceptions for a small number of international students with visas
    The Government has established a new category that will allow 250 international PhD and postgraduate students to enter New Zealand and continue their studies, in the latest set of border exceptions. “The health, safety and wellbeing of people in New Zealand remains the Government’s top priority. Tight border restrictions remain ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • First COVID-19 vaccine purchase agreement signed
    The Government has signed an agreement to purchase 1.5 million COVID-19 vaccines – enough for 750,000 people – from Pfizer and BioNTech, subject to the vaccine successfully completing all clinical trials and passing regulatory approvals in New Zealand, say Research, Science and Innovation Minister Megan Woods and Health Minister Chris Hipkins. ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • International statement – End-to-end encryption and public safety
    We, the undersigned, support strong encryption, which plays a crucial role in protecting personal data, privacy, intellectual property, trade secrets and cyber security.  It also serves a vital purpose in repressive states to protect journalists, human rights defenders and other vulnerable people, as stated in the 2017 resolution of the ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Ministry of Defence Biodefence Assessment released
    The Ministry of Defence has today released a Defence Assessment examining Defence’s role across the spectrum of biological hazards and threats facing New Zealand. Biodefence: Preparing for a New Era of Biological Hazards and Threats looks at how the NZDF supports other agencies’ biodefence activities, and considers the context of ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • New Approaches to Economic Challenges: Confronting Planetary Emergencies: OECD 9 October 2020
    New Approaches to Economic Challenges: Confronting Planetary Emergencies: OECD 9 October 2020 Hon David Parker’s response following Thomas Piketty and Esther Duflo. Good morning, good afternoon, and good evening, wherever in the world you might be. I first acknowledge the excellent thought provoking speeches of Thomas Piketty and Esther ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Kaipara Moana restoration takes next step
    A Memorandum of Understanding has been signed today at Waihāua Marae between the Crown, local iwi and councils to protect, restore and enhance the mauri of Kaipara Moana in Northland. Environment Minister David Parker signed the document on behalf of the Crown along with representatives from Ngā Maunga Whakahī, Ngāti ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • New Zealand and Uruguay unite on reducing livestock production emissions
    Agriculture Minister Damien O’Connor and Uruguayan Minister of Livestock, Agriculture and Fisheries Carlos María Uriarte have welcomed the launch of a three-year project that will underpin sustainable livestock production in Uruguay, Argentina, and Costa Rica.  The project called ‘Innovation for pasture management’ is led by Uruguay’s National Institute of Agricultural ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • 3100 jobs created through marae upgrades
    Hundreds of marae throughout the country will be upgraded through investments from the Provincial Growth Fund’s refocused post COVID-19 funding to create jobs and put money into the pockets of local tradespeople and businesses, Regional Economic Development Minister Shane Jones and Māori Development Minister Nanaia Mahuta have announced. “A total ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Health volunteers recognised in annual awards
    Health Minister Chris Hipkins has announced 9 teams and 14 individuals are the recipients of this year’s Minister of Health Volunteer Awards.  “The health volunteer awards celebrate and recognise the thousands of dedicated health sector volunteers who give many hours of their time to help other New Zealanders,” Mr Hipkins ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Community COVID-19 Fund supports Pacific recovery
    The Minister for Pacific Peoples, Aupito William Sio says a total of 264 groups and individuals have successfully applied for the Pacific Aotearoa Community COVID-19 Recovery Fund, that will support Pacific communities drive their own COVID-19 recovery strategies, initiatives, and actions. “I am keen to see this Fund support Pacific ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Community benefits from Māori apprenticeships
    Up to 50 Māori apprentices in Wellington will receive paid training to build houses for their local communities, thanks to a $2.75 million investment from the Māori Trades and Training Fund, announced Employment Minister Willie Jackson today. “This funding will enable Ngāti Toa Rangatira Incorporated to provide its Ngā Kaimahi ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Training fund supports Māori jobseekers
    Rapidly growing sectors will benefit from a $990,000 Māori Trades and Training Fund investment which will see Wellington jobseekers supported into work, announced Employment Minister Willie Jackson today. “This funding will enable Sapphire Consultants Ltd. to help up to 45 Māori jobseekers into paid training initiatives over two years through ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Ruakura Inland Port development vital infrastructure for Waikato
    The Government is investing $40 million to develop an inland port at Ruakura which will become a freight super-hub and a future business, research and residential development for the Waikato, Urban Development and Transport Minister Phil Twyford, and Māori Development Minister Nanaia Mahuta announced today. The funding has been has ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • Appointments made to Defence Expert Review Group
    Defence Minister Ron Mark announced today the establishment of an Expert Review Group to review a number of aspects of the New Zealand Defence Force’s (NZDF) structure, information management and record-keeping processes.  The Expert Review Group’s work arises out of the first recommendation from the Report of the Government’s Inquiry ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • No active community cases of COVID-19
    There are no active community cases of COVID-19 remaining in the country after the last people from the recent outbreak have recovered from the virus, Health Minister Chris Hipkins said today. “This is a big milestone. New Zealanders have once again through their collective actions squashed the virus. The systems ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • Clean energy upgrade for more public buildings
    More public buildings will be supported by the Government to upgrade to run on clean energy, the Minister for Climate Change James Shaw announced today. Minister Shaw announced that Lincoln and Auckland universities will receive support through the Clean-Powered Public Service Fund to replace fossil fuel boilers. Southern, Taranaki, and ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • Schools back donations scheme for the second year
    More schools have opted in to the donations scheme for 2021, compared to 2020 when the scheme was introduced. “The families of more than 447,000 students will be better off next year, with 94% of eligible schools and kura opting into the scheme,” Education Minister Chris Hipkins said. “This is ...
    BeehiveBy beehive.govt.nz
    3 weeks ago