Thursday, July 03, 2014

Who is responsible for MAS failings? Directors and management OR workers and UNIONs?

A second politician to blame workers and Unions for the MAS's failings. [See earlier post:- Anti-Union sentiments expressed by Tan Seng Giaw an indication that PR may also pro-employer? ]

In fact, the Union is making a good suggestion - get rid of the top management, the people that caused this 'mess' in the first place. In fact, I would say that we should get rid of the Chairman of the Board and Directors and the Directors of MAS - WHY? Well, they are responsible for MAS - and in this case, the BN government is also to be blamed.

Malaysia has been pumping in money to 'bail out' MAS - normally, when this is done, the amount of money put in is translated in shares ....i.e. the number of government shares increase. But, is this what was happening in the case of MAS - or is the amount used to 'bail-out' - really just a loan (with interest)...or just a no-strings attach 'donation'? 

Now, MAS is also owed by private persons and entities - and I wonder why we, Malaysians, are using our monies to help these private persons/entities...

What is the way forward for MAS? - 1) Maybe the government should completely take over the ownership of MAS, 2) Immediately set up a credible team to 'clean-up' things in MAS - maybe overseen by a Parliamentary Select Committee, and maybe also with members of the 2 Unions in MAS involved...Maybe, Air Asia's Tony Fernandez should be invited in to lead considering that Air Asia is doing well... 

It is said that MAS employees are paid lower wages and allowances than Air Asia and other airlines - and this has resulted many employees of MAS being 'stolen away' by other airlines... 

Warning to MAS union over standoff

KUALA LUMPUR: Former Transport Minister Tan Sri Ong Tee Keat (pix) has warned that a standoff between the ailing Malaysia Airlines (MAS) and its employees' unions will only hasten the airline's downfall. 

Ong said MAS already has enough problems on its plate and any action such as a strike by the unions if their demands were not met would only worsen the unprecedented critical times the airline was going through. 

"But certainly, as a mature labour union, we are hopeful that the unionists should have the larger picture in mind. They should realise that we have indeed come to a crucial moment. "Mere grouses of the unions should be addressed separately and we need to draw a line very clearly here," Ong said in an interview. 

The MAS Employees Union (MASEU), the largest of the national carrier's unions, picketed on Thursday at MAS administration office in Subang near here, a day after the company's annual general meeting (AGM) and demanded the resignation of the airline's top three management, blaming them for losses of RM4 million daily. 

Based on figures made available at the AGM, analysts have raised concern if MAS' balance sheet can endure another year of heavy losses. 

On calls by MASEU for a change in the top management, Ong said: "It all depends on whether or not your business model works and not so much on your credentials or paper qualifications." 

On the options being considered by Khazanah Nasional Bhd, the majority shareholder of MAS, in the impending turnaround plan to save the airline, he said whatever the plan, another bail-put should be ruled out. 

"A mere bail-put without any comprehensive, resolute and prudent measures will ultimately be futile and this reminds me of past experience with bail-outs. 

"Given the fact that Khazanah has been aiding MAS with huge sums such as RM5 billion and the airline is still going down, it is time to take stock of the cost effectiveness and the real problems at hand, such as its high operational costs compared with other airlines' and whether MAS has priced itself out of the market," he added. 

MAS is expected to present its restructuring plan to the government in the next few weeks with chief executive officer Ahmad Jauhari Yahya advocating sweeping changes involving a total review of the fleet, network, costs, employees and work processes. 

Analysts have called for long-term measures such as cost-cutting exercises and for MAS to be privatised with downsizing the 20,000-workforce as one of the key options as the way forward. 

RHB Research noted that while MAS' unit costs (measured by tonnage mile) have improved, it still has a long way to go compared with other full-service carriers, adding that "MAS' low-hanging fruit for cost cutting is staff reduction". 

It said MAS, with a workforce of 19,577 that cost RM2.4 billion for the 2013 financial year, is relatively sizeable compared to other carriers like Singapore Airlines and Cathay Pacific Airlines. 

The government's total exposure to MAS amounts to RM9.6 billion. The Ministry of Finance owns a majority stake in MAS through various entities as a equity shareholder as well as creditors. In turn, several government entities own the airline with Khazanah directly having a 69.4 per cent stake. – Bernama - The Sun Daily, 29/6/2014, Warning to MAS union over standoff

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