THE DISTILLERY: Howes censure

This morning the commentariat is rallying against some of Australia's biggest unions in loud solidarity, after they provided two of the biggest stories of the day. First, the head of the Australian Workers Union suggested the government should intervene against the Reserve Bank to bolster industry – a call that was either disingenuous or self-defeating, depending which commentator you ask – and then BHP Billiton-Mitsubishi Alliance shut down its Norwich Park coalmine in Queensland, seemingly due to a 15-month industrial dispute. However, one jotter explains why the mining giant could never say that publicly. Elsewhere, Gunns' proposed move to Melbourne gets a tick of approval and GWA's decline carries lessons for Woolworths and Wesfarmers.

But first, The Australian Financial Review's Matthew Stevens says it was crucial for BMA to frame the closure of its Norwich Park coalmine as a financial decision, as opposed to a lock-out after a 15-month stand-off with three mining unions. Why?

"Well, because that would certainly trigger union action to bring this matter to a head through formal conciliation or arbitration. And BMA management is simply not ready to concede to the risk of external oversight of issues it believes sit at the heart of management's prerogative. BMA is not looking for a Qantas moment. Indeed, it is working very hard with Freehills to ensure it does not trigger a move to any forced compromise. Which might explain why the likes of key service providers such as QR National would be unlikely to trigger the economic loss option available under the Fair Work Act to bring a dispute hurtful to their bottom line to a close."

In the Fairfax press, Michael Pascoe takes aim at AWU national secretary Paul Howes, who's been blaming the steel industry's problems on the Reserve Bank, which he thinks is keeping interest rates – and the Australian dollar – too high.

"Specifically in the steel sector, blaming the currency is particularly disingenuous for a union leader. The key inputs for steel making (coking coal and iron ore) should cost an Australian steel mill the same as a Korean or Japanese mill – they're globally traded commodities. However, if the more militant sections of the union movement have managed to make coastal shipping uncompetitive, if it's cheaper to send a ship across the world rather than around Australia, don't blame the Australian dollar."

In The Australian, Adam Creighton follows up by arguing that maintaining low and stable inflation in Australia is much more important than adjusting rates to protect industry, as Howes seems to be suggesting.

"Manufacturers should be careful what they wish for. A sharply lower dollar would fan domestic inflation as the price of key consumer imports such as fridges and cars surged, making it even harder for the RBA to cut rates. Australia's relatively high interest rates signal Australia's economic strength. Yet many commentators, like Howes, hanker for local rates to be at levels redolent of economic weakness. In Japan, Europe, the US, interest rates are very low and have been for years, while unemployment remains chronically high. On the face of it, low interest rates are not a particularly good way to spur job creation."

Meanwhile, The Australian Financial Review's Chanticleer columnist, Michael Smith, says Gunns' plan to rebrand and move its Tasmanian headquarters to Melbourne makes a lot of sense – mostly because it's almost impossible to attract high calibre executives in Tassie.

"It is no secret [chief executive Greg L'Estrange] is there for the short haul. His contract has only been extended to July and his house in Launceston is on the market. Gunns has a three-phase management plan. L'Estrange, with a background in turning around businesses, was brought in to get the pulp mill up but he does not have the expertise to build the massive project. If the pulp mill ever gets the go-ahead, Gunns will deploy an executive with experience in a construction company like Leighton Holdings to manage that next three-year phase. Following completion, an executive with manufacturing experience would likely take over for the operational phase."

In other company news, Fairfax's Insider columnist, Ian McIlwraith examines GWA's decline, which he sees as an ominous warning for Wesfarmers' and Woolworths' hardware offerings. And recalling times when regular air services were affected by everything from Icelandic volcanoes to bird flu, The Australian's Tim Boreham sees the logic in major carriers investing in stable services for the fly-in, fly-out mining sector, as Virgin Australia did yesterday with its $8 million investment in Perth regional operator Skywest.

In The Australian, Rowan Callick examines China's sacking of new-left politician Bo Xilai, and the detainment of his wife on murder suspicions, and reckons it will absorb all the nation's leadership energies for some time – which could hit the economy.

And finally, The Australian's Robin Bromby seizes on the International Monetary Fund's latest warning that commodity countries should be saving their resources wealth to push for a local sovereign wealth fund, similar to Norway's.