Qantas agitators can safely be ignored
The proudest moment in the career of this reporter was being called a f---wit by the then chief executive of Qantas Geoff Dixon at an investor presentation a few years back.
The proudest moment in the career of this reporter was being called a f---wit by the then chief executive of Qantas Geoff Dixon at an investor presentation a few years back.Sadly, we were not there to enjoy this panegyric firsthand. Being called a f---wit by Dixon is the highest commendation. There is no more worthy a tribute, nor a more ringing endorsement of one's professionalism than to be ennobled as a f---wit by Dixon.Dixon had been responding to questions - responding in, ahem, global and ad hominem terms - about a story that showed some 20 per cent of the Qantas bottom line profit was in fact capitalised expenses on software and the like.Anyway, Dixon is rather fortunate that the leveraged buyout he cooked up for Qantas - in league with Macquarie and Allco - fell at the final hurdle.Strapping on $10 billion in "covenant lite" debt at the cusp of the credit meltdown in 2007 and plonking in the soon-to-croak Allco as cornerstone shareholder would have led the national carrier back into national hands in very short order.Mind you, although Dixon's $11 billion bid with $10 billion in debt might have been a dodgy deal for the government, the airline, employees and taxpayers, it was a ripper for shareholders.Pitched at $5.45 a share - compared with the $1.32 share price now - it would have prevailed if not for one US hedge fund manager who suspected Macquarie was trying to leg him over and so refused to sell into the offer at the 11th hour.Fast-forward five years, Dixon's mate and protege Alan Joyce has succeeded him at the helm of Qantas and this week came the dramatic news of the shattered friendship.Joyce is cross because Dixon has been niggling him. Dixon, you see, is tied up with an agitator's group that reckons it can drum up a takeover for the airline.So Joyce engaged the thermonuclear option. In a bid to flush Dixon out, he pulled Qantas and Jetstar's $40 million in funding for Tourism Australia. Dixon is the chairman of Tourism Australia.Joyce had invoked the thermonuclear option in his brawl with the unions last year. He grounded the airline. And it worked.This time, it looks petulant. It takes Dixon and his mates John Singleton, Mark Carnegie and Peter Gregg too seriously. The lads are pretty good at getting yarns in the press mooting what they might do if they had a lazy $3 billion. That's a far cry from a credible offer for the national carrier.Singo and Carnegie are linked to every second deal in town. Carnegie is particularly ubiquitous, having just turned up as a dissident in the Gold & Copper Resources claims against mining company Newcrest. And only this week, he jagged a bizarre proxy from Perpetual to do its agitating in the Brickworks kerfuffle.Gregg is a former chief financial officer of Qantas and, more recently, the finance man at the tumultuous Leighton Holdings. Between them, they speak for 1.5 per cent of the stock.Joyce has moved to flush them out but really this is an agitator's game, a slow burn. The aim is to build a credible Qantas alternative management and garner the support of the institutions.The moral of the story is that there will be many more agitators' plays such as these. Deal volumes are down, debt and equity finance is scarce and there are a lot of old rich blokes about who can't stand the thought of retirement.Back in the day, they didn't put up with this nonsense. Bring back the good old State Electricity Commission!Those balding becardiganed bureaucrats would never have allowed price rises of 5 per cent, let alone 17 per cent a year.Not when they had to trudge up to Parliament for Senate estimates and explain themselves to the politicians. Not on your nelly.Back in the day, when a KPI was still a Malaysian political party and AEMO a Maoist Colombian guerilla movement, they wouldn't put up with that. Back in the day there was accountability. But what did they do? They blew up that old State Electricity Commission. They blew it to smithereens.Now we've got generators, retailers, regulators, distributors, transmission providers and corporate empires everywhere, teeming with fat cats, each with their own board, their HR, their PR, their lobbyists, their consultants.And they call that progress.If that lot went up to Senate estimates to explain why prices rose 100 per cent in five years, it would be busier than Tahrir Square in Cairo. They'd have to break out the tear gas just to stop them blaming each other.Back in the day, they didn't have lobbyists, they had tea ladies. Back in the day - before they corporatised, incentivised, privatised, capitalised, computerised, demergerised and rationalised - there was commonsense.Back in the day, banks didn't rob people, people robbed banks. Back in the day, before they gave people clean energy payments to spend on the pokies, they didn't have water coolers, they had a sink.Back in the day, they were called merchant bankers, not investment bankers. And nobody had even dreamed of an automated voice message that said "your call is important to us".And now we have smart meters. Say no more.Since Goldman Sachs further impoverished the world and enriched itself by creating and then shorting toxic credit into the financial crisis, it has spread its alumni into the top of the European Central Bank (Mario Draghi), the prime ministership of Italy (Mario Monti), the chairman of the US Commodity Futures Trading Commission (Gary Gensler) and, this week, the governor of the Bank of England (Mark Carney).There will be no quick fix.
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