Maritime Union slowly losing

December 16th, 2013 at 11:00 am by David Farrar

NBR reports that the Maritime Union is slowly losing its death grip on the Ports of Auckland.

In April last year, after eight months of bitter industrial action, the parties applied to the Employment Relations Authority for “facilitation.”

Instead of engaging in banter through the media, they were required to sit down and logically explain their arguments in a structured way and in legal terms.

Away from the previous dramatic and underhanded tactics, the port was able to state its need to lift productivity to compete commercially so it could lift returns to its ultimate owner, Auckland Council, which demanded it lifts returns on its investment.

The union, meanwhile, relied on health and safety concerns over the rosters.

It’s clear Ports of Auckland won that battle.

Although ERA head Alastair Dumbleton’s recommendations to the parties were confidential, the port company said it would immediately accept them.

The union, meanwhile, issued a statement saying they were “a useful basis to enter into what it hopes will be a successful round of negotiations.”

Without saying which way he was leaning, Mr Dumbleton had previously said he found “instructive” a report by the ERA’s fatigue-related risk expert, Associate Professor Sally Ferguson.

Earlier this week, union national president Garry Parsloe said, somewhat bitterly, that facilitation was a “whole wasted year.”

What this means is that experts found their claims to be scare-mongering and without merit.

Since negotiations for a new collective agreement started in August 2011, has the union lost members?

And have some of those jumped ship to PortPro, the rival union at Ports of Auckland?

Alongside his comments about facilitation, Mr Parsloe says the dispute has cost his union more than $1 million – a figure which is yet to be publicly verified because the union is yet to file its 2012 and 2013 accounts.

They should be deregistered for not filing. If you are a company and do not file your annual return by the due date, then after a certain grace period you are automatically deregistered. The same rules should apply for incorporated societies and unions.

Yet, what does the union have to show for this costly battle? And will the union’s new collective agreement be materially different from what was offered in September 2011?

We’ll have to wait and see on that last point, but it looks as if the union’s line about flexible rosters being a health and safety risk is losing steam and the body itself seems weakened and fractured.

Mr Parsloe is retiring and PortPro is taking on his union’s former members.

In May, the union confirmed some of its members are working under the new, 12-hour flexible rosters, despite its apparent concerns over health and safety.

As previously stated, some of its members have been sacked, and those dismissals have been endorsed by the Employment Court as proper.

And those sacked have been union officials – not because they are union officials, but because their behaviour was so bad they were justifiably dismissed.

With the port company abandoning its unpopular stance on contracting out, it is unlikely the flags and banners will be waved again, in huge numbers, any time soon.

The port is taking on more staff, lending credence to arguments that a more efficient port is positive for workers, the port company and, through its council ownership, all of Auckland.

Look at Port of Tauranga, where most of the staff are shareholders. Productivity is high and industrial action very rare.

Holmes on POAL dispute

March 18th, 2012 at 11:04 am by David Farrar

Paul Holmes writes in NZ Herald:

 I formed the view that the ports company have not been ungenerous in their offers to the union. In fact, even Auckland Mayor Len Brown himself agreed that the company’s first offer made early last September should have been accepted.

The offer would have rolled over the collective agreement and given the workers a 2.5 per cent pay increase each year for three years. There were several offers but early on the company decided it could no longer tolerate its workers getting paid for sitting around doing nothing.

I do not believe the union when it says that it’s a lie that the workers earn in excess of $90,000 for an average 26 hours work. Ports of Auckland had Ernst and Young audit the figures. And that’s something you notice about the ports’ conduct throughout the dispute. They’ve done things very thoroughly.

The union’s argument that its people ceasing to be permanent staff would mean that their families couldn’t plan things was obliterated by the company’s offer to roster the men for 160 hours a month, and the roster delivered a month ahead. For the life of me, I can’t see what’s wrong with that.

I think the union was dyed in the wool. I think they didn’t read the signs. Before they knew it, it was all over. Nearly 300 men were made redundant, just like that. End of story. I think there were some hardliners who’ve buggered things up for everyone. Hysteria is never a good thing.

MUNZ turned down a sgnificant pay rise and a guarantee of 160 hours a month, with rosters known a month in advance. By turning it down, their name is now going to stand for More Unemployed New Zealanders.

What you didn’t hear from Radio NZ

March 13th, 2012 at 10:22 am by David Farrar

Whale Oil has the audio of a Cecil Walker on Morning Report yesterday slagging off Ports of Auckland, talking about how he is forced to walk work 16 hours a day and how the 10% offer from POAL is not worth losing his family over, and how he used to work long hours and almost lost his family over it as he was working 80 hours a week. He even said how one of his kids said he never sees him as he is always at work. He concludes his family is more important than money.

This makes POAL look like a heartless employer, with no consideration for families. However an e-mail to Whale (I presume it is accurate) paints a very different story of POAL, of how they gave Walker 21 weeks off on full pay when his wife had cancer, how they had a limo pick them up from their house to take them to and from Christmas in the Park to meet Frankie Stevens, and even how when he had a baby, The company tracked them down to where they was staying and sent a 5 tiered baby gift basket to him.

Jackson calls on union to be more violent and intimidatory

March 12th, 2012 at 6:09 pm by David Farrar

Hayden Donnell at NZ Herald reports:

Radio Live host Willie Jackson has called for striking wharfies to mount violent “militant action” in their ongoing battle with Ports of Auckland bosses.

Mr Jackson, a former trade union organiser and Alliance Party MP, supported the striking port workers’ calls for eight hour shifts and job security on his Radio Liveafternoon slot today.

He called Ports of Auckland bosses “greedy, filthy, right wing fundamentalists” who were led by a “gutless wonder” mayor.

Intimidation or violence was needed to stop non-union workers being called in to do the striking workers’ jobs, he said.

We first saw some violence on the protest, against counter-protesters. Then there was damage done to at least one car this morning. And now a former MP is advocating there needs to be more violence and intimidation.

Will the CTU and/or the Maritime Union condemn Jackson’s remarks, and say they support peaceful protest only? Or will they implicitly condone them, by remaining silent? For they are the ones who have organised the picket line, so they can’t say it is nothing to do with them.

UPDATE: Jackson now says he only wants the union to be more militant and use greater intimidation, but not use violence, after his earlier remarks were highlighted.

All things to all people?

March 12th, 2012 at 2:00 pm by David Farrar

Derek Cheng at NZ Herald reports:

Labour leader David Shearer says he has taken a consistent position on the Ports of Auckland industrial dispute, even though he marched with the workers on Saturday and earlier described the issue as “not about taking sides”.

Perhaps David was marching with the two counter-protesters, if he was not taking sides?

Thuggery in Auckland

March 11th, 2012 at 1:26 pm by David Farrar

Brogan Powlesland blogs:

“Our most valuable asset is the right to protest.” – Matt McCarten

Yesterday, I found out what this actually means in the eyes of some unionist protesters. I have always believed in the right to protest, despite not always agree with what is being protested. Heck, most of the time I strongly disagree with the protest message, but so long as the protesters don’t directly harm anyone, I tend to be fine with it. At the March 10 Save Our Ports protest, organised by the Council of Trade Unions, I found that this feeling is not always mutual. 

I am reminded that there is no virtue in wanting to protect popular speech. The virtue is in defending the rights of free speech for people whose message you totally disagree with. Hence I have supported the right of holocaust denier David Irving to come to NZ, and speak.

So David (former AoC Auckland President) and I decided to take to the streets with placards, joining the march from the opposite side of the road that they were on. My placard read “Union Strikes, Efficiency up 25%” and David’s read “Who still has their jobs? Helen Kelly and Garry Parsloe”. I had made a decision from the start that this would be a silent protest, as I knew we would be shouted at and thought that we would have been just as bad as them if we shouted profanities back. 

As predicted, during the march we were screamed at, being called things such as “Fascist pigs”, “f**ken scumbags”, and “NAZIs”. Although I was expecting people to shout at us, I was not expecting that extreme verbal abuse. Those are names I would never use to describe anyone, simply because they are extremist and are offensive to both the person you’re shouting at, and the people who were victims to the NAZIs. I would think that the people who like to think they fight most for so called freedom would understand that.*Sigh* I guess not.

While distasteful, free speech even extends to the marchers screaming Nazi names at Brogan and David.

Into about fifteen minutes of marching, we were rushed by a bunch of protesters. One of the protesters knocked my arm and stole my placard, one punched David in the back of his head and stole his placard. They both ripped the placards and chucked the pieces onto the road, receiving cheers from many of the marchers. One of the protesters had been filming it, and came up to us, narrating his ‘film’ by continuously calling us “f**king fascists” and “fascist pigs”, telling us that we were going to be famous on Facebook. Within about 30 seconds, one of the police officers that had been on duty came running and that seemed to be the cue for the protesters to run back into the mob.

The irony is that it was the protesters who were being fascists, with their violent suppression of messages they disagreed with.

The police officer, instead of pursuing the people who had offended, came to ask us to leave. He had seen everything, but told us that there were too many protesters for them to protect our right to protest. At the time, I was quite shaken. I was in no mood or state of mind to argue with the officer, and so we left peacefully. Although David and I have protested and counter-protested before, this was the first time things had become physical, which is something we thought New Zealand was above. It seems we were wrong there too.

The Police Commissioner should instruct the Auckland Police that the next time this happens, the appropriate response is to call for more police officers to protect the rights of peaceful protest.

After the march on that part of the street was finished, David and I returned to pick up the remains of the placards. Although we knew we were not the cause of the litter, we still thought that we shouldn’t leave it lying around the road and footpath. During this time, thankfully, drivers were actually relatively friendly and respectful of what we were doing. A few protesters coming back from the Vector Arena were not though. We again were verbally abused with the same extremist labels. One protester in particular encouraged cars to run us over, and said if they didn’t, he would do it himself.

What a pity Brogan and David didn’t have a friend along with a video recorder. It would be very interesting to identify those who resort to violence to suppress speech they disagree with.

I recall an anti-EFA march in Wellington. A handful of (mainly) Young Labour activists did a counter-protest. When we got to Parliament we actually offered them a chance to speak to have their view heard. A stark contrast.

Hat Tip: Whale Oil


March 11th, 2012 at 11:02 am by David Farrar

Matt McCarten attacks Len Brown in his HoS column:

Brown’s actions, or lack of them, over the port fiasco are perplexing.

His officials set an impossible 12 per cent return for his port’s directors.

When they ran into trouble I’m told the board offered the mayor their resignations. If true it was a master stroke. Because once he assured them of his support he was their puppet.

No experienced politician who knows what they stand for would have been manoeuvred like this.

With the biggest citizens’ revolt for 60 years about to erupt in his city, he is pathetically reduced to whimpering that he doesn’t have any real power. He looks weak.

The biggest citizens’ revolt for 60 years? Really? 3,000 people turned up to the support rally for the Maritime Union. That’s 0.3% of Auckland’s population.

The Mayor for all of Auckland

March 9th, 2012 at 2:00 pm by David Farrar

I defend Len Brown in my Herald column today:

Len Brown campaigned to be the first Mayor of the Auckland super-city with the slogan, that he would be the Mayor for all of Auckland.

Mayor Brown has come under huge pressure from his party, his donors and his activist supporters to abandon his campaign pledge, and to intervene in the Ports of Auckland dispute. It is to his credit that he has resisted putting the interests of the Labour Party above the interests of Auckland.

I conclude:

Len Brown got elected on a slogan of being the Mayor for all of Auckland. The Labour Party shouldn’t complain that he is taking that slogan seriously and putting the interests of Auckland ahead of the interests of the Labour Party affiliated Maritime Union. He should be congratulated for his stance.

In my full column I articulate why I think this has helped Brown get re-elected.

What a diference

March 8th, 2012 at 9:00 am by David Farrar

Last night on 3 News they interviewed a couple of staff working at the Port of Tauranga. What a stark difference it was to the Ports of Auckland. They talked of a culture of getting the job done, and even pride about increasing efficiency.  An extract:

Throughout the Auckland dispute, the Port Of Tauranga has been held up as an example of how Auckland could operate – profits are at a record high, and the port seems to have a contented workforce which gets the job done quickly and efficiently.

David Hone has worked at the port for 18 years and, like 90 percent of employees, is a shareholder in the company.

He says “working in a place that you’re part owner [of]” means he’s more invested in the success of the business.

It’s one of the key reasons the port is so successful, according to chief executive Mark Cairns.

“If you have a stake in a company your behaviour changes when you’re an employee,” he says.

I’m a huge fan of employees being shareholders, and POT seem to be a great example of how well this can work. It is such a shame that Mike Lee a few years back deprived POAL employees of this opportunity.

Profits and efficiency do not need to be the enemy of having a happy workforce. It is just when dinosaur unions get in the way, that it does not happen. Look what has happened at POAL since the unionised staff went off the job:

Ports of Auckland chairman Richard Pearson says flexible rosters increase productivity and the 50 non-union workers have proved that.

“We’re operating at a 25 percent production improvement on what we were achieving 3 or 4 weeks ago before the strike,” he says.

“They don’t want to go slow so they can get another shift, they just want to work.”

Imagine the incentive at the moment. If you can delay a ship for another 90 minutes, then you get an extra eight hours pay.

There’s a lot of focus at the moment on the possible expansion of the Port into the harbour more. POAL makes the point that if they can lift labour productivity by a conservative 20% it would give them the equivalent of two new berths, allowing the Port to accommodate five extra ship calls each week.

Maritime Union succeeds in getting their workers sacked

March 7th, 2012 at 12:56 pm by David Farrar

After weeks and months of strikes, and a growing loss of business to other ports, it was inevitable that Ports of Auckland would go down the only viable path left to them, which is contracting out.

The Herald reports:

Ports of Auckland said the decision to introduce “competitive stevedoring ” was partly the result of the impact of long running industrial action on its business.

Redundancies would begin later next week, with striking staff encouraged to apply for new positions, he said.

“This decision has not been made lightly, but we believe it is vital to ensuring a successful and sustainable future for the Port, including protecting jobs over the long term,” he said.

Ports of Auckland Chairman Richard Pearson said the company’s priority was to win back lost business.

“This decision will reassure the wider market and customers that we plan to achieve a sustainable lift in the port’s competitiveness as soon as possible.

One can’t continue with a situation where you get paid for 43 hours and only actually work 28.

Maritime Union wants total control

March 6th, 2012 at 10:00 am by David Farrar

Stuff reports:

A fully loaded 14,000-tonne cargo ship remains in limbo at Wellington’s wharf as industrial action at the Port of Auckland spreads across the country.

Unionised cargo workers at the capital’s port declined to handle the Maersk Aberdeen when it came into port on Friday because it had been worked on by non-unionised workers in Auckland.

The ship has been “blacked” by Wellington wharfies, with Maritime Union members picketing the port during the weekend.

Yesterday, CentrePort announced it would seek a court injunction to force the workers to handle the ship. The hearing will take place today.

It is important that people realise that the Maritime Union wants to control all Ports in New Zealand. Their resorting to clearly illegal strikes reflects this. If employees choose not to join a union, they should be able to do so without intimidation. However the Maritime Union tries to use its power to blacklist any port which has non union labour. They do not believe employees should have a choice. They want de facto compulsory membership.


Twyford attacks Brown over POAL

February 29th, 2012 at 4:30 pm by David Farrar

Phil Twyford blogs:

Len Brown was elected the people’s mayor on a wave of support across west and south Auckland. People opted decisively for his plan for public transport, and a modern inclusive vision for the city that embraced the young, the brown and working people.

Which makes it puzzling that he is choosing to stand by and watch while his port subsidiary tries to contract out 300 jobs. …

It is all the more puzzling given the Mayor’s commitment to reducing social inequality, reflected in the excellent Auckland Plan. It is hard to see how we are going to build a more prosperous and inclusive city by stripping the city’s employees of their work rights and job security. …

It is time for Len Brown and his Council to rethink their demand for a 12% return, and replace it with something reasonable and not excessive. He should tell the port company casualisation is not an acceptable approach to employment relations in a port owned by the people of Auckland.

This is the same Phil Twyford who spent years saying that Wellington should not dictate to Auckland, yet is now trying to bully Len Brown into putting the interests of the Labour Party (for the Maritime Union is part of the Labour Party) ahead of the interests of Auckland.

Len knows he would be toast if he kneecapped a Council subsidiary, just to please the Labour caucus in Wellington.

Labour not taking sides

February 27th, 2012 at 4:00 pm by David Farrar

David Shearer says Labour is not taking sides the in Ports of Auckland dispute, but here are two of his MPs on the picket line.

I guess they have no choice as the Maritime Union is actually an affiliate member of the Labour Party, and one of their donors. Not even the documented examples of union hostility to female and non European workers is enough to shake their support of the union.

The Maritime Union at work

February 26th, 2012 at 4:00 pm by David Farrar

Watch this video from a non union employee at Ports of Auckland, about how the union employees treat him. Also recall that the Maritime Union is affiliated to the NZ Labour Party, which advocates on their behalf.

Hat Tip: Whale Oil

Audited pay facts from Ports of Auckland

January 24th, 2012 at 3:02 pm by David Farrar

Ports of Auckland have twice released information on average remuneration levels for wharfies or stevedores employed by them. Many on the left have claimed these figures are wrong on the basis of a column by Matt McCarten which used third hand information from the union.

It has been interesting seeing so many try to deny factual figures, on the basis of just wishing they were different, as they are unhelpful to their cause.

Anyway Ernst & Young have audited the Ports of Auckland figures, and confirmed them. Hopefully this means the deniers will now be quiet. I’ve embedded below the Scribd by Whale.

Ports of Auckland Fact Sheet – Ernst and Young

A summary is:

  • Ernst & Young found Ports of Auckland was correct in stating that the average remuneration for full time stevedores was $91,000.
  • Not a single full-time stevedore earned as little as the $56,700 described by theMaritime Union as the basic wage at Ports of Auckland.
  • Ernst & Young found that even part time stevedores made more than this, earning on average $65,000.
  • 43 individuals earned over $100,000 with the highest earner making $122,000.
  • Union claims that a stevedore would have to work around 32 weeks of overtime a year to receive the average remuneration of $91,000 are untrue.
  • The $91,000 includes a range of allowances, benefits and shift payments with the average number of hours paid per week averaging 43.9.
  • However, the real issue is the lack of flexibility which results in an excessive amount of paid downtime at the port. This means that for every 40 hours paid, Ports of Auckland’s stevedores are only working 26.

So Ernst & Young have confirmed that the average remuneration for a wharfie at POAL is $91,000 and the average umber of hours actually worked a week to gain that is 28 (26 x 44/40). That is an average hourly remuneration of $62.50 for actual hours worked.

Is it really about casualisation?

January 19th, 2012 at 3:00 pm by David Farrar

The Maritime Union have said their strikes and industrial action is because they are against casualisation at Ports of Auckland. Labour have also said this is what they are concerned about.

However Cactus Kate blogs:

The problem with MUNZ’s, Fenton’s and the left’s argument about casualisation is that right now MUNZ is pursuing a case against POAL in the Employment Court to prevent the Port offering permanent jobs to “lashers”.
This is not a joke. They are AGAINST casuals getting permanent jobs.
It would be hilarious, if not so serious.
So what is it about?
You may think so, but not when the Union bullies (mainly old, white crusty’s like the charming couple we met yesterday on this blog) have the top jobs and like to take the overtime at their much higher rates rather than allow the lower paid workers to get permanent jobs.
It is indeed simply about patch protection. They don’t want outsiders working on the Ports. By outsiders, they mean Pacific Islanders and women. A MUNZ senior official was sacked for his racism against Tuvalu workers, and they have resisted workplace changes that would make it easier for women to work there – the result being 2/300 are women. We hear lots of people complaining that only 28% of Parliament is female – well how about a workplace which is so hostile to women they make up 1% of the workforce only?
If you think I am being harsh, read the extracts from the court documents Cactus has, and especially the letter from “Billy T James”


January 18th, 2012 at 11:00 am by David Farrar

The Herald reports:

Despite the considerable union influence within his party and calls for him to offer support to Maritime Union members, new Labour leader David Shearer has kept quiet on the matter.

Yesterday Labour industrial relations spokeswoman Darien Fenton, who has been spotted on the picket line at the port, said her party was not taking sides in the dispute.

“We’ve been hoping that the parties will settle this, that they’ll find a way through this.”

You’ve been on the picket line, and now you’re saying you’re not taking sides? I think someone has squashed Darien.

Ms Fenton said Mr Shearer had been in regular touch with both sides, “and he’s in contact with me and we’re all discussing it regularly”.

“Our strong view at this point is it’s not helpful for politicians to get involved.”

Apart from being on the picket line?

I suspect that strong view is Mr Shearer’s.

Chris Trotter did an open letter to Shearer yesterday urging him to wade in:

Ultimately, isn’t it about answering the question: “Who is strong enough to stop the stone-throwers?” The men and women who formed the Labour Party in 1916 decided that the answer to that question was the State. If the State could be made to stop working for those who already exercised power, and began instead to work for those who were powerless, then a political party seeking to put an end to poverty, war and injustice would have a fighting chance.
Labour was formed to create a State that wasn’t neutral; a state that never stood on the side-lines when working people were being threatened and abused. Labour was about intervention: constant, massive, intelligent and creative intervention on behalf of the weak and against the strong.
It’s time to bid farewell to the white sands and the Pohutukawa blossoms, Mr Shearer, and come on down to the Auckland wharves. It’s time to cast aside the gathered cloaks of a spurious and culpable “neutrality” and place yourself and your party between the stone-throwers and their victims. It’s time to end the silence.
Chris writes beautifully, and his wonderfully penned missive almost had me wanting to rush down to the picket line. But the reality is that this is not a romantic battle between the forces of oppression and victims of oppression.
Shearer has made the right call staying out of it. If he rushed in, he would look like a puppet, not a principled politician.
And I’m not sure defending the right of people to be paid for 43 hours but only work 28 hours, is quite the same as being against the stoning of Christian martyrs, or seeing starving kids in the Sudan scrabbling over scraps of food.

Local Labour backs Maritime Union

January 17th, 2012 at 10:31 am by David Farrar

28 Auckland Council Local Board Members have called on Ports of Auckland to surrender to the demands of the Maritime Union, and rule out any contracting out as that will have few work-life balance protections.

I guess having to work more than 28 hours a week to have remuneration of $91,000 would upset the work-life balance.

The majority of the 28 board members are well known Labour activists. Useful of them to provide a hadny list of whom not to vote for.

Worth  noting that the total number of local board members is 148, so 120 have not signed the Labour Party missive.

Hosking on POAL

January 16th, 2012 at 9:27 am by David Farrar

Mike Hosking’s editorial:

In a way, you can’t blame the wharfies for putting up the fight they are at the Ports of Auckland. I mean if you were being paid to do nothing, you would be looking to hang on to the deal, wouldn’t you?

Eight hours pay, three hours work – good on them for getting the deal. God only knows who was thick enough to sign it off, but the game’s up. The port is lacklustre. it’s losing business and money to other ports. Its reputation isn’t flash and at long last they’re looking to get things tidied up.

What a good summary.

The wharfies have lost. They don’t have the support of the company, of the council which owns them, they certainly don’t have the support of the Auckland ratepayers who are watching a company they own get destroyed, and they don’t have the support of the wider public. Through all the bluster and hot air and jibes at management pulled directly out of Arthur Scargill’s handbook on how to run a class ridden industrial dispute, they have been seen for what they are – a fiefdom on a deal from another age refusing to be realistic.

Even Len Brown doesn’t back them. The man who took their money to get elelcted sees it for what it is. He should have been playing a far greater role before it ever got to the state it’s in. Ports of Auckland is a major company with a major contribution to the economy of the biggest city in the country and it’s operating in a time warp. Business is leaving – Maersk has walked, Fonterra’s gone.

This even goes beyond Auckland. Reducing freight costs through more efficient ports and the like has benefits for all of New Zealand, especially exporters.

Where’s the council? The owners? The representatives of all the rate payers who have a stake in the business? The dividends are a joke compared to Tauranga. Do they think the port is a welfare scheme? A jobs programme? Why aren’t they demanding better performance and better returns? The answer is there – lay them off. Too many strikes, too many lock outs, too much disruption. Get rid of them and find some people that actually want to do the job.

We must thank Mike Lee for buying out the minority private sector answers, so ratepayers would be the only ones having to tolerate a return of just 2% on capital.

Gaynor on the ports

January 14th, 2012 at 1:00 pm by David Farrar

Brian Gaynor provides some excellent analysis:

One of POA’s biggest issues is its wage bill of $54.9 million compared with POT’s total employee expenses of $25.3 million, even though the latter is now the larger port.

Port of Tauranga was miniscule when it listed 20 years ago, but today has higher revenue, earnings and dividends than POA.

POT is an excellent model for the proposed partial sale of the Crown-owned electricity generators and Solid Energy.

The port company had a 10 per cent ownership restriction, a strong board and management and has performed exceptionally well as a listed company under the public/private ownership model.

In 2002, the company had a capital return of $7 per cancelled share on the basis of one share for every eight shares held, and the following year it had a two-for-one share split. Thus an investor who bought 1000 shares for $1050 in the IPO has had $875 of capital returned, and the remaining 1750 shares are now worth $17,850 at $10.20 a share. These figures do not take into account total dividends of more than $370 million over the two decades.

In other words, POT’s sharemarket value has surged from $80 million to $1368 million over this 20-year period and the Bay of Plenty Regional Council, which still owns 55 per cent, has been a major beneficiary of this.

Stunning results. And the key thing to note is a mixed ownership model can result in the public’s stake being worth more at (say) 55% than if they had retained 100% ownership.

As the accompanying figures show, POA has been hammered by POT in recent years: POA’s ebitda has fallen from $92.6 million in 2003 to $74.4 million, whereas POT’s has increased from $69.5 million to $95.0 million; POA’s ebitda margin has fallen from 55.3 per cent to 40.5 per cent while POT’s has increased from 47.6 per cent to 51.2 per cent; most importantly, POA’s dividend has declined from $34.5 million to $17.6 million while POT’s has increased from $22.8 million to $40.2 million.

This is a huge concern to Auckland ratepayers as the $17.8 million POA dividend represents a return of only 2.1 per cent on POA’s $848 million 2005 takeover value.

Mike Lee should be held accountable for this.

In 2010, POA had total employee expenses of $51.9 million compared with only $18.5 million at POT and last year employee benefits plus pension costs were $54.9 million at POA compared with POT’s $25.3 million.

This is what happens when people get paid for 43 hours, despite only working 28 hours. I am presuming the POT costs included contracted labour.

Lee made the ridiculous statement that POA and POT should act in an anti-competitive way by working together to get better rates from shipping companies. He went on to say that the shipping cartel Maersk and Fonterra “have kept prices right down by playing Tauranga off with Auckland” – yet Lee was primarily responsible for stopping merger talks between POA and POT.

We want competition between ports. That drives efficiency and productivity gains.

The great port stand-off

January 13th, 2012 at 1:02 pm by David Farrar

In my column at the NZ Herald. I start by saying:

The industrial action at the Ports of Auckland has reached the point, when a compromise solution is about as likely as there being a compromise solution over the Falkland Islands.

Instead, like the Falkland Islands, there will be a war, and there will be a winner and a loser. There will also be the significant possibility of casualties from other parties.

The two combatants are the Ports of Auckland (POAL) management team led by Field Marshall Toby Gibson and the Maritime Union of New Zealand (MUNZ) led by Generalissimus Garry Parsloe.

The stakes are high for both sides. The losing side will be humiliated and powerless.

I also look at who else faces being dragged onto this war.

Labour and MUNZ

January 13th, 2012 at 10:01 am by David Farrar

Whale has this photo sent in by a reader. MUNZ receives $285,000 rent for space in their building.It is unknown how much comes from the electorate office rental.

MUNZ only has 2,580 members today. Doing pretty well to own their own building. Of course it helps if you have Labour MPs having the taxpayer pay rent on their behalf.

I’m generally against electorate offices being rented from political parties, or people or groups affiliated to a political party. A total ban is difficult as some MPs have purchased an electorate office so that they can secure the location, and in fact rent them back at well below market rentals.

However despite their good intentions, I think it is time to put in place a ban, so that unions and parties do not get this backdoor funding. The latest review of parliamentary spending recommended:

That MPs entering Parliament from the next general election not be able to receive public funding for out-of-Parliament offices owned by an MP or an interested party. The funding for premises owned directly or indirectly by current MPs should be grand-parented while the MP continues in Parliament.

MUNZ is affiliated to the Labour Party and should be seen as an interested party.

Another alternative to a ban, is my suggestion to have the rent set at say 66% or 75% of the market rate, so that the party or union or MP is not seen to be benefiting from the arrangement.

Don’t do it David

January 12th, 2012 at 10:29 am by David Farrar

Denis Welch blogs:

The Labour Party’s silence on the Ports of Auckland dispute is getting louder. Robert Winter has drawn attention to this in an excellent post: he says the dispute has become, potentially, the first defining moment for Labour under the new leadership of David Shearer, and they have to ‘step up and come out swinging on this issue.’

We wish. What is already remarkable about the dispute is how depoliticized it is, with not just Labour but all political parties keeping well clear of it. It’s a far cry from the days when ministers personally intervened in industrial action and Labour politicians sided with striking workers, even joining them on the picket line.

Oh I would love to see Labour MPs out on the wharfie picket line. That would be the best Xmas present ever.

But unless David Shearer is a moron, he will not be getting involved in this industrial dispute – especially as public support for the wharfies is confined to the UNITE union and the hard left.

When Denis Welch and Robert Winter urge David Shearer to get involved as a test of his leadership, they are not advocating in the best interests of the Labour Party – they are advocating for their views (nothing wrong with that) which are far to the left of Labour.

I don’t know if anyone has approached Shearer for comment or asked, um, wait a minute, who is Labour’s spokesperson on labour issues? I just looked it up: it’s Darien Fenton. Who knew? She may well be intensely credible on industrial relations but I don’t believe we’ve heard from her yet on the ports dispute.

I presume they have sedated Darien to stop her joining the picket line 🙂

The only Labourish public figure to even put a fingertip over the trenches so far is Auckland mayor Len Brown, and he has come down on the woolly side of woofterish by declaring resoundingly that he supports both sides.

There is an unhappy echo there of Walter Nash’s infamous response to the 1951 waterfront dispute when he was Labour’s leader: asked whether he supported the watersiders he said he was neither for nor against them. I have a horrible feeling that Shearer, if he ever does comment, will say much the same thing.

Shearer should choose his words more carefully than Brown, but he absolutely should not come out swinging for the Maritime Union. It would just pigeon hole him as captive to the unions which fund the Labour Party (MUNZ is one of them). Only 25% of NZers voted for Labour. I suspect not even a majority of those 25% have sympathy for militant industrial action from a union representing what must be the most highly paid unskilled jobs in New Zealand.

At the most you might get Shearer saying that he is against contracting out (as this is existing Labour policy), and wants both sides to reach a settlement. But he should resist all efforts to get him involved. He is the leader of the parliamentary labour party and of the opposition – he is not a union spokesman. Clark would have never got involved, and Shearer shouldn’t either.

Talking of MPs with a view though, a good column from Botany MP Jami-Lee Ross. He notes:

Every Aucklander has a stake in the Ports of Auckland. It is not a privately owned company. Nor is it listed on any stock exchange. Each and every share in the company is owned by the Auckland Council on behalf of 1.4 million Auckland residents and ratepayers. The destruction in value in one of our city’s largest public assets is alarming and has to be of concern to us all. …

But numbers aside, it is obvious that losing the trade of New Zealand’s largest company, only a month after losing the business of one of the worlds largest shipping lines, has to be a wakeup call. Yet sadly for the Maritime Union, it isn’t. Sadly for port workers and Aucklanders alike, the Maritime Union continues to be unphased.

This isn’t a story of a greedy corporate hammering the little guy. This isn’t a story of a David versus Goliath battle where workers are being ripped off or paid a pittance. Few could call poverty on an average annual wage for a wharfie understood to be north of $90,000, with a proposed 10 percent hourly rate increase and performance bonuses of up to 20 percent, sitting on the table. To the average person on the street, the latest Ports of Auckland offer to the Union would almost seem generous.

It would be most interesting if the Herald (or someone) did a poll to ascertain the public’s views on the stand off.

The trade union movement evolved through a desire for workers to band together to protect their common interests. This is not a dishonourable goal. But when a union loses sight of its members long term interests and cavalier negotiating tactics start to backfire, the union itself begins putting its own member’s livelihoods at risk.

Unions still occupy a privileged position in New Zealand’s employment law; a relic of the last Labour administration which has not seen significant overhaul for some years. Few non-government organisations can boast clauses in legislation specifically designed for their benefit. Despite only 18 percent of the nation’s workforce being unionised, trade unions can look to whole sections of the Employment Relations Act written exclusively to aid union survival through legislative advantage.

Unions do get many major legislative advantages. These should be reviewed. Take just one – why should employers act as unpaid fee collection agents for unions?

I say unions should be like any other incorporated society – let them invoice their members directly for their membership fees.

UPDATE: It seems Labour Whip Darien Fenton has been spotted on the picket line. No surprise, but will we see other Labour MPs join her?

POAL pay facts

January 11th, 2012 at 5:02 pm by David Farrar

Inventory2 has blogged at Keeping Stock the comment left on another blog by Ports of Auckland Ltd relating to the earnings for stevedores or wharfies. The key points are:

  • average remuneration for a full-time stevedore $91,480
  • average remuneration for a part-time (guaranteed 24 hrs a week) stevedore $65,518
  • 53% of FT stevedores earned over $80,000 and 28% over $100,000
  • The highest annual remuneration was $122,000
  • Stevedores also get 15 days sick leave per annum (triple the minimum) accumulating to 45 days (two months if continuous) and five weeks annual leave
  • All training for stevedore tasks is done in-house, paid for by the company
  • Stevedores who earned the average $91,000 worked an average of 43 hours a week, or 49 hours a week if you factor in leave.
  • 35% of hours paid are for when there is no work to be done, so those 43 paid hours, on average only 28 hours are actually worked.
  • This means the effective pay per hour worked is an average of $62.50 per hour ($91,000/52/28).
  • At Port of Tauranga which has an 80% labour utilisation rate, stevedores get paid from when the ship arrives to when it leaves. At Auckland they get paid in eight hour blocks, even if the ship is only there for two hours.
  • These figures are not inflated by redundancy payments

Incidentially POAL, in response to a question about how Cactus Kate had these figures, revealed that she simply e-mailed and asked for them.

This highlights for me the value of blogging. Because Kate took the time to send a simple e-mail, now most New Zealanders know about the average pay of wharfies in Auckland, as the figure has been widely reported since she blogged it.

I have to say $62.50 an hour is a pretty good pay rate for a job where all training is done on the job – no qualifications or skills needed. One can see why the union is fighting so hard to keep a system where you get paid for 43 hours a week, despite there being only 28 hours of work. It forces POAL to hire more people than they really need, and ironically penalise POAL for being efficient. If they turn a ship around more quickly (say by investing in better cranes), they still have to pay staff for eight hours work.

What I would do if I was a clever stevedore is offer POAL a contract where if they finish a ship early, they get paid a bonus, or a higher hourly rate. That way they both win.

The national interest in making the ports more efficient

January 11th, 2012 at 11:49 am by David Farrar

Fran O’Sullivan writes in the NZ Herald:

It seems pretty obvious that the ports company has been determined to ensure productivity at its downtown Waitemata Harbour operations is markedly increased. Particularly in the vital area of crane productivity, where rival Port of Tauranga sub-contracts its container stevedoring work and boasts a superior performance to its Auckland competitor.

If the Maritime Union didn’t see this one coming, then they haven’t been paying much attention to the Ministry of Transport report on container productivity at New Zealand ports. Nor has the union been paying attention to the Productivity Commission which estimates exporters and importers spend upwards of $5 billion a year on freight and has forecasted annual trade could be boosted by $1.25 billion if transport costs were shaved by 10 per cent. There is a national interest issue at stake here.

$1.25b if costs are down 10%. The Ports of Auckland are definitely working in the national interest if they can make themselves more efficient.

I note the Port of Tauranga sub-contracts its stevedoring work out. Maybe that sub-contractor could apply to do the work for Ports of Auckland also?