Save our jobs, say Unions to Government

Senior Government ministers are under intense union pressure to stop Air New Zealand contracting out jobs.

The politicians were told at the Labour Party conference in Rotorua at the weekend that they should buy all remaining shares in the airline, if necessary, so they could exert greater control over it.

Prime Minister Helen Clark met affected unions on Saturday night about the latest Air NZ proposals to contract out jobs - this time the work of 1700 counter staff and baggage handlers.

The flag-carrier has previously proposed having engineering work done in China and contracting out aircraft cleaning and finance work.

The Government owns 80 per cent of the publicly listed airline, after paying $885 million to rescue it from near collapse in 2001.

In 2004, it invested another $150 million as part of a rights issue.

Finance Minister Michael Cullen - who is also the shareholding minister for Air NZ - discussed the issue at a meeting with affiliated unions on Friday.

On Saturday, they again urged him to exercise more control over the airline. Yesterday this developed into calls for the Government to buy 100 per cent.

The issue also spilled on to the conference floor yesterday with the passing of a remit confirming the party's "commitment to the principle of a democratic society's right to choose public ownership, social goals and non-market answers over market-economics answers to economic issues ..."

But it did not go as far as some delegates had wanted the day before in getting conference support for Dr Cullen to get the Air NZ board to withdraw its latest contracting-out proposals.

Engineering, Printing and Manufacturing Union secretary Andrew Little later told the Herald: "There is a good case for the Government to own the entire thing, be a commercial enterprise, and no reason why it can't be modelled on the [state-owned enterprises] model.

"Given its ownership stake, there is less and less reason for it not to own the rest of it."

But he said the Government could set out clear expectations for Air NZ without giving directions.

The airline was a strategic asset, "and the Government does have a stake in its effective management and operation".

Mr Little added: "It ought to be able to tell the board, tell the company, what its expectations are."

The union push for the Government to buy the airline was a result of its management style since the Government's bail-out.

"Every time a new radical idea is launched by management, it undermines the confidence of the workforce, Mr Little said.

Dr Cullen and Associate Finance Minister Trevor Mallard asked the remit forum on Saturday not to progress the remit that passed yesterday.

Mr Mallard told the delegates they were getting into "dangerous territory" and that asking Dr Cullen to involve himself in that way in Air NZ was "unrealistic".

Any call from the conference to direct Dr Cullen in his dealings with the airline would make it harder to carry out similar "strategic intervention" in the future.

But Mr Mallard was unflattering about Air NZ's management style, saying it had "a somewhat bull-at-the-gate approach to contracting out and other management techniques".

Service and Food Workers Union northern secretary Jill Ovens described Air NZ chief executive Rob Fyfe as "Fyfe the Knife".

National secretary John Ryall said the airline was moving towards becoming a "virtual airline" which owned only its name and was run entirely by contracted staff.

Dr Cullen shows no sign of budging on either exerting greater influence or acquiring more of the airline.

He told the Herald yesterday that he could set "broad expectations".

"But that is quite different from detailed matters over employment issues."

What he was being asked to do went "well beyond what would be legitimate".

"And of course there are interests of minority shareholders which have to be borne in mind."

Dr Cullen said that "in the end you appoint a board to do a job. You don't try and micro-manage from that point on in any organisation of this sort."

Asked what sort of expectations he had set in terms of treatment of employees, he said: "Not specifically around those areas".

"Obviously I will have general conversations, particularly with the chair of the board, but I am not going to get into details beyond that."

The Government occasionally exerts direct influence over its state-owned enterprises.

The relationship between the unions and the Labour Government is strong, and is unlikely to be damaged by the Air NZ issue.

Air NZ representatives could not be reached last night.