MAS workers union threaten strike

Three of MAS unions representing 15,000 employees was reported threatening a strike. If the strike happens, it could affect the nation's transport system as the pressure will be on other mode of transport to pick up the slack.

Their concern is MAS was forced by the disbanded exco to cannibalise the potentially successful Firefly and be replaced by Sapphire.

The issue is more than just that.

The exco, comprising of representative from MAS and Air Asia, was making major decisions before the collaboration agreement and stewardship is in place. The suspicion by the unions is that more MAS interest is being sacrificed for Air Asia interest.

While the unions' concern for its members is genuine, the integrity of the MASEU President is questionable. That relates back to the very issue that previous MAS kept avoiding to address. And that is bleeding the company.

A new suitable CEO is needed and they can't pick a wrong one again and again.

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The Star report on the picket below:

Unions threaten to picket over MAS-Air Asia deal

Thursday September 8, 2011

SUBANG JAYA: Some 15,000 members from three Malaysia Airlines (MAS) workers' unions say they will picket if the MAS-Air Asia deal goes through.

"We do not agree with the collaboration or the move to establish the new airline Sapphire (under the deal)," said MAS Employees' Union (Masue) president Alias Aziz.

Maseu joined forces with the Airline Workers Union of Sarawak and Air Transport Workers Union of Sabah in announcing their ultimatum to the press here Thursday.

Alias said the airline and its union workers would be on the losing end of the collaboration between budget carrier Air Asia and national carrier MAS.

"This is not the way to revitalise MAS. We should straighten out our own affairs starting with the decision makers," Alias said.

The mistake was that the exco or a committee established to temporarily managed until a replacement for the outgoing CEO, Tengku Azmil was found was not just doing day to day management.

They were seriously dividing up MAS's business in favour of Air Asia without the supposed collaboration agreement and stewardship of the company addressed first.

The problem with the exco was it's membership - which include Tan Sri Tony Fernandez and Dato Kamaruddin Meranun of Air Asia and Dato Rashdan "Danny" Yusof, a member of Binafikir that came up with the "half-bake" idea of Wide Asset Unbundling (WAU) and now Executive Director of MAS - were not personalities MAS employees are comfortable. The half-bake comment will eventually be explained.

Only two staff managed to speak their mind in the uncustomary short townhall-style briefing on August 11th. Both expressed frustration and unhappiness with the past Government appointed CEOs that failed to address the problems and turnaround the Company.

In the first place, the employee of MAS do not trust most of those involved in this deal, be it in the Air Asia side and MAS side, and at all level of the collaboration.

The reason being that the employee knew they, including former Prime Minister Tun Abdullah Badawi who is the sleepy Adviser of MAS and supposed to take stewardship of MAS, were the one who wrecked MAS badly after Tan Sri Mohd Nor Yusof executed the WAU restructuring. It is as the Malay proverb say, seperti tikus membaiki labu, which means expecting the gnawing mice to repair the pumpkin.

Even the collaboration was leaked by Kalimullah's news portal, The Malaysian Insiders (MI) on August 6th first before the official announcement on August 8th.

The employees had a series of non-airliner and inappropriate background of airliner leading the company. It only further worsened the company's situation. It doesn't help that part of Air Asia and Air Asia-X success came at a price to MAS for being forced to give-up valuable routes.

Since the fundamental mistake of in-bred Dato Fuad Dahlan, MAS was constantly being downsized by uncreative accountant-styled management in favour of cost cutting instead of revenue generation and capacity utilisation (if not capacity building). The subsequent CEOs had little business acumen and entrepreneurship.

The union only knew of the plan to dump Firefly to put in place Sapphire. That gave the impression that Firefly is being cannibalised in favour of Air Asia.

Khazanah Nasional CEO, Tan Sri Azman Mokhtar had given assurance in his briefing with bloggers that there will be no cannibalisation into the business of the three parties involved; namely Malaysian Airlines (MAS), Air Asia and Air Asix-X.

Most of the staff that attended the August 11th briefing did not know the reason Mohd Nor left early and Executive Director Danny did not utter a single word was that the first exco meeting was scheduled at 11 AM.

It wasn't because Mohd Nor said there is a gun on my head and his nasi lemak turf war analogy. Nor was it because Danny was uncomfortable when veteran pilot, Captain Azmi and Alias demanded that the CEO must be an Airliner and not accountants (or in essence, no more book-keepers and financial man).

In the first exco meeting, the whole company's financial and business details were laid naked for Tony and Kamaruddin, MAS long time competitor to see.

The London route was slashed down from a 747 to 777 and caused headache to the branding. Naturally, Air Asia X will fill-in the vacuum left by the reduced capacity.

Alias could sense they is a long list of chop chop and expressed further concern. Read the News Straits Times on August 13th, below:

Don't sideline capable staff, says MAS union

By Adeline Paul Raj

SUBANG JAYA: Malaysia Airlines (MAS) biggest employees' union says it isn't necessarily against the latest changes taking place at the national airline but wants assurance that the employees will be well looked after.

Malaysian Airline System Employees Union (MASEU) president Alias Aziz said Prime Minister Datuk Seri Najib Razak had assured him on Thursday that would be no job cuts nor voluntary separation schemes (VSS) to follow the latest reshuffle at the airline.

The prime minister's "guarantee" had somewhat helped soothe staff concerns about job security, he said.

But, the union is hoping for more. Key among its wishes is that the airline's new management will not sideline experienced and capable staff when looking to fill top positions.

"We've observed that every time there is a reshuffle at MAS, we are always disappointed as the new managing director (MD) tends to bring in about 30 to 40 of his own people for middle-to-top management posts.

"Some work well, but we notice the bulk of them -- maybe 70 per cent -- are not well-versed in the airline industry and we are the ones who have to teach them.

"Sadly, there are very capable people who have worked here for 20 to 30 years and have not been given the opportunity to take on these roles," Alias said at the MASEU headquarters here yesterday.

Alias, a station head for MAS at the Kota Baru airport, has worked under seven different MDs in his 15 years of helming MASEU.

The union, one of eight for MAS, represents about 75 per cent of the airline's 20,000 graded staff all over the world.

Alias, who hopes the new MD will be from within MAS, said the union had identified at least three individuals who were capable of turning around the ailing airline.

He declined to name them, but said they were currently heads of divisions. The union passed on their recommendations to MAS new chairman Tan Sri Md Nor Yusof at a recent townhall session.

"They've turned around departments, so they should be given the opportunity to turnaround the airline."

Alias said employees were "shocked" to find out last week that there was to be yet another management reshuffle, and that individuals from rival AirAsia Bhd were to become shareholders. Morale has since been low.

A share swap will see AirAsia's Tan Sri Tony Fernandes and Datuk Kamarudin Meranun end up with a 20.5 per cent stake in MAS via Tune Air Sdn Bhd.

In turn, MAS' parent Khazanah Nasional Bhd will have a 10 per cent stake in AirAsia and its sister company AirAsia X.

"When enemies want to become friends, we don't know if the intention is sincere... we can only hope it is," he said.

MAS is currently on the lookout for a new MD following the recent resignation of Tengku Datuk Azmil Zaharudin. The airline lost 2,500 staff via a VSS in 2006 when Datuk Seri Idris Jala came in as MD.

Alias urged politicians not to take advantage of the situation by making "all sorts of comments" about weaknesses within MAS.

"We ask for support to bring staff morale back up so that productivity can be raised. Politicking about the situation doesn't do us any good."

He said there was scepticism about the latest reshuffle as past experience had shown that only a a few top individuals would benefit, while the lot of the staff remained the same.

MAS changed MDs so often that it was difficult for staff to get excited about another change, he said.

"We are still left out. For example, we don't have benefits like attractive houses and vehicle loans that other government-linked companies tend to have."

Alias said, in his short meeting with Najib last Thursday, the prime minister conveyed his hope that employees would work hard and change the culture at the airline.

The exco have disbanded, and there is a long list of things to do before the collaboration commenced. It is cannibalisation before the no cannibalisation collaboration.

One new source of information broke to this blogger that 7,800 empoyees will be retrenched. The numberis a wee bit alarming but that is what was told by source.

During the reign of the Butcher from Shell, Dato Idris Jala was doing his retrenchment masqueraded as MSS instead of VSS. Eventually he went against his first word said in his first briefing with the staff to bring in a lot of new and inexperianced staff and mid management level position from outside, particularly Shell and Ernst and Young.

Alias's words are justified concerns, but he himself is of questionable integrity.

The much talk within MAS is that he is more worried of his web of interest in the company than representing the best interest of the employees and companies.

He remains in leadership of MASEU because he pays for his position. As one reliable source described there was instance of him offered bribery in the tune of RM5 million a year to his potential competitors.

CEO

It is already more than a month and Khazanah has yet to decide on a new CEO for MAS. Thus how do you plan for the turnaround.

In a 3-series to reveal many untold story inside MAS to begin next Monday, the new CEO must not only heed Alias advise to sort out MAS own affair and not resort to another morale depressing move as to retrench the employee.

The new CEO must address the moral hazard attitude at the first and second level management and corrupt "cartels" existing since god knows when in the likes of Alias.

The problem of MAS is complex and require a person familiar with Airline's nature of business. The person is capable to go to the ground to understand the reports, information and numbers fed to him or her and read in a comfortable air-conditioned room.

Equally important, the new CEO must be respectable or earn the respect of the staff in order to get their cooperation and commitment.

The decision to collaborate with Air Asia is seen as another quick fix solution that is not addressing the problems in MAS.

In addition, the deal is shrouded with doubts and mysteries.

As a blogger who fought against the previous administration for their insidious corporate moves like ECM Libra-Avenue Merger, Parkway purchase of Pantai, subsequent green-mailed control of Parkway and many more, it is disheartening that similar style of deals still prevail under the current administration.

The reason obviously is because the same people in charge and given free hand to charter the wrecking of the country. The Prime Minister refused to reshuffle the cabinet and corporate personalities.

The Star published a commentary by the CEO of Minority Shareholder Watchdog Group, Rita Benoy Bushon. Although she seemed a tad bias for Air Asia, her issues are quite legitimate. To be fair, she could only comment on publicly available information.

It is likely to be beyond her to know the behind-the-scene insidious dealings of Air Asia in the National Airline Rationalisation plan in 2005, rural air service, demanding and ditching things at his whims and fancies, unpaid airport services, etc.

Are minority shareholders being given the full picture of MAS-AirAsia collaboration?

Comment by Rita Benoy Bushon

THE recent share swap arrangement between the major shareholders of AirAsia and Malaysia Airlines (MAS) comes with the benefit of a period of contemplation.

On Aug 9 a collaboration agreement was announced between Tune Air Sdn Bhd and Khazanah Nasional Bhd, the major shareholders of AirAsia and MAS respectively, to strengthen their collaboration to “further align their respective interests in AirAsia and MAS”.

Our views are from a minority shareholder perspective on both sides of the public listed companies (plcs). Firstly, the collaboration sees two domestic competitors wanting to work together for a common good. It also seemed like a move toward acknowledging the seemingly unsolvable problems that MAS poses, and the Government allowing Tan Sri Tony Fernandes to come in and shake things up. MAS minorities gain the considerable expertise of Fernandes and Datuk Kamarudin Meranun, two of the four pioneers of what is essentially one of the best low-cost airlines in the world.

However, this significant advantage is somewhat cancelled out by a couple of key challenges.

One of them could be a new chief to handle the mindset of MAS' 20,000 employees under the old bureaucreatic way, quite the opposite of AirAsia's entrepreneurial and achievements-based culture of Fernandes' team.

Another issue that further blots MAS' long-term view is an out-of-court settlement involving MAS' former executive chairman, Tan Sri Tajudin Ramli where MAS is among a number of GLCs negotiating for global settlement of all civil suits against Tajudin.

The case management has been set for Sept 29.

Our interest is centred on the following:

That the respective GLC boards, including MAS, assess the merits and demerits of the proposed global settlement, and to be transparent to their shareholders including the timelines, settlement term, the pros and cons, rationale, the ringgit amount involved, and other financial and non-financial impacts.

Interested directors should also declare their interests and abstain from participating in any discussion or voting on the proposed settlement.

The boards are responsible and accountable to all the shareholders, hence full and proper disclosures will go a long way to help to clarify the doubts of the shareholders.

As we know from recent announcements, the problems at MAS kept adding up. It reported a wider-than-expected second quarter loss of RM530mil, bringing its year-to-date losses to a staggering RM745mil.

And what of the perspective from an AirAsia minority shareholder? Slightly negative.

Where MAS benefits from the added expertise of Fernandes and Kamarudin, it in turn could be AirAsia's loss. Shareholders would have bought into AirAsia's attention to costs management, brand-building, fleet and regional expansion. And until recently, both Fernandes and Kamarudin executed brilliantly on all these counts.

This share swap could dilute their attention.

However, this is still an arrangement that can work, since two heads are better than one provided always that execution and absolute accountability is the order of the day. Any less, and any one of a number of externalities, such as volatile fuel costs, uncertainty over global economies and trading activity, makes this partnership of unequals an arrangement that could yet trigger the exit clause under the five-year duration of the collaboration agreement.

It is also a deal made by the parents of both airlines, and thus does not involve the buy-in of the shareholders of either airline. But given the significance from both a national as well as public-private initiative viewpoint, the interested parties must at all times make their key decisions transparent.

To recap, the announced deal saw an agreement to acquire from each other existing shares of both companies, with the result that Tune Air will hold 685,142,000 ordinary shares of MAS representing 20.5%, while Khazanah will hold 277,650,600 ordinary shares in AirAsia representing 10% equity interest in AirAsia.

In addition, a proposed warrants exchange was announced, which involved AirAsia issuing 111,060,240 free AirAsia warrants to MAS shareholders and MAS issuing 274,056,812 free MAS warrants to AirAsia shareholders. Assuming all the warrants are exercised, the total number of AirAsia shares to be issued amounts to 111,060,240 shares, or 4% of the total. And the total number of ordinary shares in MAS be issued assuming full exercise of the MAS warrants is 274,056,812 MAS shares, representing 8.2% of the total.

Some of the stated positives are collaborating in areas where there are “substantial synergies” to be realised, either through joint procurements, increased scale, migration to best practices, lower cost, and the enhanced ability to capture non-captive third party revenues.

And the recognition that there is significant potential in areas like maintenance, repair and overhaul, ground-handling, training, catering and cargo. The plan envisaged an early focus on quickly-achievable synergies such as joint procurements.

Not just shareholders, but are interest of all stakeholders considered?

* Edited 11:30 PM