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Guest Post – Industrial Democracy for Air New Zealand?

Written By: - Date published: 2:56 pm, June 9th, 2020 - 16 comments
Categories: capitalism, uncategorized, Unions, workers' rights - Tags: , ,

Guest post from Annie Newman, E tū assistant National Secretary.

COVID 19 has caused us to question many things that we have taken for granted for years. One of these is the value of our public institutions that enable citizens to have a say. The idea of industrial democracy fell by the wayside some 30 years ago as the corporatisation of key public institutions diluted any public voice that might get in the way of economic efficiency. The de-regulation of labour in 1991 dealt a further blow to the role of unions in influencing the future of private sector industry. The result of the withering of the public institution was a colossal waste of workers’ knowledge and talent, a fact never more obvious than in the recent COVID-19 crisis.

Many will remember forms of industrial democracy that have emerged in NZ in recent decades. Public health industrial democracy that emerged in the 1980s became focused on the “management of change” in the 1990s and ceased to have strategic value for the health system. Current private sector models, such as High Performance High Engagement (HPHE) in Air New Zealand, largely focused on management issues, such as collective bargaining, and workplace restructuring and then got dropped when the big crisis of COVID arrived. The notion of co-determination, emerging in Germany out of WW11, is not a familiar concept here. Co-determination goes beyond day-to-day management to the strategic issues of governance, the serious matters we here in NZ leave to boards of “experts,” who represent the interests of capital.

Biedenkopf Commission in 2006 in Germany said co-determination was the recognition of the firm as a “social institution” in which owners, executives and employees collaborate to achieve common goals. Co-determination locates firms in the public sphere of our democracies as opposed to the private sphere.
This is important because currently the firm seemingly exists outside of the democratic institutions that are its very enablers. It is clever of capital to rise like Frankenstein and take control of his creator, Democracy. Now, workers, civil society organisations, and the indigenous owners of the land have become putty in the pursuit of profit by this corporate monster.

This is more important than ever when citizens as taxpayers invest in corporations. Air New Zealand is a case in point where government is part owner, holding 52% of the shares. The government has, in the act of investing taxpayer’s dollars, steered the firm, Air NZ, toward being a social institution, and they have recognised aviation as something of a public good. By investing our money in the national airline, Government have pulled the company back into the democratic frame and yet they require almost nothing of it in return. I expect it is to be the best little corporate it can possibly be on behalf of us, its owners.

The question is then, who should participate in its governance, if it is a social institution? The future of a social institution in a democracy cannot be limited to “private exchanges” (to use of term from Isabelle Ferreras) controlled entirely by corporate capital, in the interests only of corporate capital. It cannot be that governance is controlled by a CEO (and his henchmen, the managers and board members) accountable only to themselves and their shareholders.

Air NZ has indeed chosen a path of no public accountability. It has ignored the much lauded model of worker participation in management, HPHE, during a time of crisis, deciding on the more minimalist, speedier legal requirements of consultation. It is marching to the tune of its CEO who aspires to a low cost domestic airline, contracting engineering to oversees firms and laying off workers in their thousands.

Controversially, Air New Zealand has ignored the call for ticket reimbursement by an incensed public, on the grounds that it can not afford it. The reason the public is incensed, is that this is our airline, we are Air NZ, and so why doesn’t it care about us and what we are going through during the crisis. Sadly, it has our money, but it is not us; Air NZ is a corporate focused on private exchange for shareholders and not its social responsibility to citizens. This is a case of maximising profits over many years for the benefit of shareholders and Executives with their monster pay packets, and then socialising the losses.

It has still not drawn down its $900million loan facility offered by government. This is tied to greater public investment in our national airline. Perhaps more deeply embedding the airline as a public institution, is a repellent concept for this corporate focused solely on capital return for shareholders.

There is a way forward as we emerge from this crisis. It is to actively build the firm into a social institution of democracy, accountable to the citizens of democracy, for both its management and its governance. By regulating industrial democracy at the level of the firm, we recognise the investment of workers’ labour, not just capital, in the wealth of a firm, and we value workers’ experiences in building a better future for everyone. By regulating for the engagement of unions, Iwi, and employers in industry we start to shape a society that is collaborative and transformational and not subject to a takeover by the private interests of capital. We put Frankenstein’s monster to sleep.

16 comments on “Guest Post – Industrial Democracy for Air New Zealand? ”

  1. dv 1

    I wonder if the new CEO? from his role in the great public service walmart brought his do it my way attitudes to NZ

  2. Ad 2

    This government has not negotiated even one fair pay agreement, so there's zero chance of anything more substantial between companies and workers.

    They just prefer to throw almost completely untargeted subsidies out the helicopter window. Then get angry about it.

  3. gsays 3

    Thanks Annie, good read.

    New words, to me, to describe a way of doing things that resonates.

    "co-determination was the recognition of the firm as a “social institution” in which owners, executives and employees collaborate to achieve common goals."

    We are so much more effective when we co-operate.

    This is even more important given CC.

  4. Phil 4

    This post is weird.

    Annie acknowledges that the majority-stake owner of Air New Zealand right now is the Government, but then spends most of the post talking about the company being beholden to corporate shareholders like they're a shadowy cabal of bankers and hedge fund managers.

    It cannot be that governance is controlled by a CEO (and his henchmen, the managers and board members) accountable only to themselves and their shareholders

    I'm bemused by the general point Annie makes here and how it might apply to Air NZ. The Chair of the Board is Dame Therese Walsh. She sure as shit ain't no Bebop or Rocksteady bumbling around at the behest of a CEO.

    • indiana 4.1

      "The government has, in the act of investing taxpayer’s dollars, steered the firm, Air NZ, toward being a social institution, and they have recognised aviation as something of a public good."

      This was where I got lost. In my view the Government has not done anything to "steer" Air NZ – they do not have the legal right to appoint the board. A wise Government will use it's legislative powers to support the Aviation Industry under its control irrespective of the industry players ownership model.

      Facts are planes are not operating and Air NZ is not a cash rich entity that can continue to pay employees for not working. I haven't seen any new of unions waving their membership fees to support workers with their reduced incomes.

      • Phil 4.1.1

        In my view the Government has not done anything to "steer" Air NZ – they do not have the legal right to appoint the board.

        Come again?

        Air NZ is majority-owned by the Crown so the relevant Minister (Finance? Transport?) will most definitely have an active role in appointing directors to the board.

        • indiana 4.1.1.1

          If that is the case, were you happy when John Key was appointed?

          • Phil 4.1.1.1.1

            I don't really give a shit what John Key is, or is not, appointed to. It also has absolutely zero relevance to me questioning your wrong statement that the Government "do not have the legal right to appoint to the board [of Air New Zealand]"

  5. Tiger Mountain 5

    Annie is beating about the bush here, given that the Govt. has stalled on Fair Pay Agreements. The way forward is in stark relief, but, a Labour caucus full of managerialists subject to 30 plus years of institutional neo liberal hegemony will not go there.

    AirNZ in the limited form it might operate in future as a domestic and Pacific carrier should be nationalised. The social dividend in terms of affordable provincial travel, was never forthcoming from AirNZ. More Covid capitalism it seems.

    And…the restoration of power generation and supply to full public ownership would be a good idea too!

  6. Just nationalise the bloody thing and maybe pass some of the aircraft on to the Air Force who are longing to replace those broken down 757s. They're an embarrassment. They could even second some of the staff in the meantime till we get through all this – if we ever do

  7. David Mac 7

    When times are good they're a cash cow but so many bad moons rising. The fall of the World Trade Centre brought them to their knees, now a pandemic. Those threats aside, they live or die on fuel prices.

    The world's most successful Wall St player got stung holding Airlines. It's a rare day that Warren Buffet has egg on his face.

    I agree with him who used to be Tim. It's a crucial bit of infrastructure, down here in our corner of the Sth Pacific, we need it. Stage a friendly majority share-holder take-over and nationalise it. Then, when times are good all NZers will benefit and when the ever present poo hits the fan we'll be in a better position to cope.

    This shareholders rolling in clover when times are good and taxpayers picking up the tab in bad times sucks.

    • "Stage a friendly majority share-holder take-over and nationalise it."

      Yep, that would be the kind way of doing it.

      I haven't worked out yet whether Ron is 'repositioning' or 'pivoting' while Winnie and Shane are trading horses, however it might be a good way of keeping Ron on a LAV's running boards. Ron obviously has concers and a good understanding of Defence capability plus he's a fanatical recycler

  8. David Mac 8

    AirNZ is probably a good buy. Protection Warren Buffet could only dream of. In the good times, milk the growth, in bad times, just hold, the govt will come running in with a billion.

  9. David Mac 9

    Sell TV One while it's still at the worth a few bob altitude in it's death spiral and buy out Air NZ shareholders.

    Remember when the Yellow Pages were worth half a billion in NZ? TV One…tick tick tick….

    • Don't give them ideas @ David Mac. We've been here before (Avalon, Broadcasting House Wellington, NFU etc,)

      The assets and property are worth something especially when RNZ are being starved. As is what preoccupies (some self-appointed) media 'gurus'' minds: The Brand.

      Then there's the growing number (a plurality) of audio/visual content producers who'd be grateful of some better facilities.

  10. David Mac 10

    I'm sliding so far off topic, sorry, last post.

    Interactive advertising could save Free to Air TV as we know it.

    eg: I see a McDonalds ad, I click, my Uber Eats account opens up. A few clicks and that burger and fries is on it's way to me. Bunnings ad for a Ladder sale? I click and the range and pricing appear on my screen. Holiday in Bali ad, a click prompts a 15 minute insight.

    Advertisers would love that.

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