Punish the Management, but save the airline, MAS first CEO tells Putrajaya


Pouring scorn on calls to declare Malaysia Airlines (MAS) bankrupt, former chief executive officer Tan Sri Abdul Aziz Abdul Rahman said the loss-making flag carrier should not be punished for mismanagement by government-appointed teams, but instead, Putrajaya should bail it out once again.

Abdul Aziz said MAS was in a deplorable state now as those who manage it are “not doing their jobs very well” and have not been able to adapt to the competitive airline industry.

“The problem started in 1994 when the government decided to give up its shares and sold it to a private group. It all went downhill from there,” he told The Malaysian Insider.

“By 1998, the government had to step in and redo the whole thing to salvage it. Since then, the government has bailed out and changed its management teams many times but until today, the problem has not been fixed.”

In 1994, Tan Sri Tajudin Ramli bought a 32% equity in MAS and was the airline’s chief executive officer from then until 2001, after which he sold back the shares to the government at RM8 a unit, when the market price was only half of that.

Since then, Tajudin has been entangled in a complicated series of expensive suits, counter-suits and appeals with various parties due to failure to service a billion ringgit loan he took to purchase the major stake in the national airline.

He has claimed that his purchase was forced “national service”, disguised as an arm’s length commercial deal, because the government wanted to appease the investment community and the public.

Abdul Aziz said until the late 1990s, MAS operated in a closed domestic market but then found that it could not compete with other emerging airlines, including budget ones which had rapidly taken over its market share.

“I can appreciate the people’s feelings. Because after helping so much, nothing has changed. If I were in their position, I would do the same. But, we have to think this way… that this is the national carrier. It can still be revived.” – Tan Sri Abdul Aziz Abdul Rahman, former CEO of MAS.

“There was rapid economic development in the world and people got very ambitious. They began to have more airlines in all parts of the world and here also, we have AirAsia, AirAsia X and others. These provided competition internally and externally.”

“It became very competitive but MAS management could not adapt themselves to the sudden competitive environment because those who are managing it are not doing their jobs very well,” he added.

Abdul Aziz, who chaired MAS from 1982 until his retirement 10 years later, stressed that he was against any suggestion for MAS to file for bankruptcy following its continuous dismal showing in profits, adding that it was not too late to save it.

“MAS is not an ordinary company that is selling rice, or sundry goods. It is an established organisation catering for the whole world.”

“This (filing for bankruptcy) is the easy way out for people who don’t like to apply their minds but I will always stress this point. It was so difficult to establish it in the first place, back in the early 70s, when we were lacking in so many things and we had no money,” he said.

Despite the challenges and limited resources in the early days, he said MAS built itself up, made profits and became the pride and joy of the nation.

“Why? Because of the pride of Malaysia. Because it carries our flag. I will say that a national carrier is the representative of the people of the country globally in the skies and on the ground. The logo has been there for more than 48 years and it must not disappear just like that.”

In a recent interview with the The Wall Street Journal, Prime Minister Datuk Seri Najib Razak said that bankruptcy could be among several options as a way to restructure MAS, after years of losses and bitter conflicts with its labour unions.

This followed MAS recording a net loss of RM443.4 million in the first quarter of this year, up from a net loss of RM278.8 million in the same period last year.

MAS had earlier said the tragic MH370 incident had a “dramatic impact” on the traditionally weak first quarter performance, adding that the airliner experienced high numbers of cancellations and a decline in long-haul travel after flight MH370 went missing on March 8.

MAS had lost money for the last three years, beset by high costs and stiff competition, and this was the carrier’s worst quarterly loss since October-December 2011.

However, Abdul Aziz acknowledged that MAS has not seen a turnaround despite the multiple government bailouts, which has caused taxpayers to be against yet another one.

“I can appreciate the people’s feelings. Because after helping so much, nothing has changed. If I were in their position, I would do the same,” he said.

“But, we have to think this way… that this is the national carrier. It can still be revived. Put the right people there.”

“And maybe, you catch hold of those who made these blunders and hang them. Maybe the people would like to see that. It will give confidence to the people that you are serious about solving the problem.”

Calling MAS his “baby”, Abdul Aziz said said he was “deeply engraved” in MAS, having helped with its start up after splitting from the Malaysia-Singapore Airlines in the early 70s.

He was also among those who had been roped in to draft both the Civil Aviation Act 1974 and the Civil Aviation Regulation 1996

“That is why I feel strongly about certain things pertaining to MAS,” the practising lawyer said.

“In the early days, when we started the airline, we did it from scratch. So everybody who joined the airline worked very hard to make sure it was successful. Because it was a challenge to us and for the sake of the nation.”

“And everyone was united on this. I think that is the reason why we were so proud of it. We put all our effort into it.

“Although there were some employee-employer problems, we ironed it all out amicably. Why? Because we were proud of the establishment. Everyone worked hard. We were inspired to make it work.”

Now, said Abdul Aziz, in order to save itself, MAS needs to “quickly adjust” to the competition and make sure they are still “vicious” in the fray.

“MAS does not seem to have the right formula to challenge the competition. The economic environment and the aviation industry have changed. It is now a more liberal market, open skies policy. They have to adjust themselves. If you are slow in adjusting, you will be in trouble.”

“Others are running and you are walking. How do you challenge them? If they are running, you should also run. In fact, you must run faster,” he added.

MAS should also take its employees into consideration as they are prepared to “work hard to make sure it survives,” he added.

“So MAS has the right foundation. It has the employees – the main asset – who are prepared to work hard to make sure we survive. We have the facilities now too, the expertise and the image.”

“If you as a leader or employer don’t pay attention to the union and your staff, then they, likewise, will also forget about you,” he said. – May 31, 2014.

Malaysiaairlinesfamilies salute Tan Sri Abdul Aziz for his patriotism and loyalty toward MAS.

To save MAS, the thick-skinned monkeys who keep clinging to the wreckage of MAS airplanes should leave MAS in urgency.

For MAS and its loss making trend under Ahmad Jauhari, Azahari Dahlan and Zahrah Zaid still staying put thinking they were the heros (?).  It is true they are heroes but the heroes with monkey faces and tails who carelessly caused huge losses to the national airline.

They should be arrested and investigated for the crime they organized against the national airline.  While they are not aware their asses are on the hot plate burning to the 1st degree; they should prepare to parachute out of MAS taking with them the stockholm Syndrome disease they employ on the middle management.

The Khazanah ladies in red too must be eradicated for the conspiracy they offer to Tony Fernandez to save AirAsia and destroy MAS tarnished the GLC status.

In a brief encounter, whenever the public read our posting against Tony Fernandez; the public will also be enjoying a hammering post from Tony’s baby – The NUFAM crooked gang on MAS. That is because Tony Pariah pays NUFAM to disrupt MAS from the outside simultaneously paying the TRIO bastards to destroy MAS from the inside.

Then the tax payers get MAS going down the drain and AirAsia going up the hill.

Not only that with MAS down and AirAsia up; here comes the hidden heroes who have been organizing to take over Putrajaya but failed; the Daredevil And Party of the desperado instigated by foreign forces to destroy the unity of its own country. Bearing the name of treason-ship Daredevil And Party are now taking MAS too with their magic hands swinging behind Putrajaya waiting in line to contract out MAS into pieces. The short story is You take One AJ&Gang take Two Tony Takes All.

Stay united MAS if you want to save the airline. Continue hammering the red devil if you want to survive. God Bless MAS and Malaysia!

What MAS first CEO says?


TSAA

When Yg Bhg TAN SRI ABDUL AZIZ ABDUL RAHMAN retired as the CEO/Managing Director of MAS, he left MAS with RM5 billion cash reserve. During his tenure as CEO, MAS employees have been paid yearly bonuses.  He served MAS from its inception in 1971 as its company secretary and director of legal affairs.  He served as CEO/Managing Director from 1981 until his retirement in 1991.

Yg Bhg Tan Sri (Dato’) Dr Abdul Aziz is a Fellow of Chartered Institute of Transport, United Kingdom, Fellow of Institute of Management Malaysia, Fellow of Institute of Directors Malaysia, Fellow of Institute of Public Relations Malaysia and Fellow of Asian Institute of Management Science. At present he is an active advocate and solicitor. He has more than 35 years experience in managing public and private corporations. He started by serving the government for 15 years, the first 7 years as an administrative officer and for 8 years he was in the judicial and legal service of the Federal Government.

He served as Magistrate, President Sessions Court, Federal Counsel and Assistant Parliamentary Draftsman. His last government appointment was as Federal Counsel and Legal Officer of the National Operation Council (NOC) during the Emergency of 1969.  Of course, he is an “Anak Kelantan”.

Yg Bhg Tan Sri Abdul Aziz Abdul Rahman is synonymous with MAS. That is why his heart strings are tugged whenever the word MAS is mentioned, MAS which was once the pride of the nation is gradually sliding into the deep end and will fade into oblivion if no efforts are made now to save it, wrote AINUL ASNIERA AHSAN, the reporter from malaysiagazette.com.

During this interview with a Malaysia Gazette reporter, Abdul Aziz who is known to be vocal and outspoken just couldn’t hide his  emotions anymore. As a Malaysian citizen who was responsible in building the national carrier from scratch to the pride of the nation, Abdul Aziz bristles whenever the option of MAS filing for bankruptcy is mentioned.

For Abdul Aziz, his heart is pierced deeply seeing MAS assets being disposed one after the other as well as its overseas assets which was the toil of his blood, sweat and tears, has now changed hands. He does not want MAS to be bankrupt but wants the national carrier to soar high again, workers morale reinvigorated and MAS image revived once again.

I’d be honoured to help but not work for MAS. I just want to do national service and two years is enough to turn MAS around. With deep honestly, I really feel sorry for MAS,” he told AINUL ASNIERA AHSAN at his house recently.

MALAYSIAGAZETTE: In your view Tan Sri, should MAS file for bankruptcy?

TAN SRI ABDUL AZIZ ABDUL RAHMAN: There is no need for MAS to file for bankruptcy. What is going on in MAS right now is that they are adopting the wrong business model for the past 15 years.

Management changes has taken place numerous times but the crux of the problems plaguing MAS has never been dealt with. Although MAS managed to make some profit at times, the problems were never solved. Will MAS really recover if all of its assets are sold to get cash?

What can MAS do to deal with its problems?

TAN SRI ABDUL AZIZ ABDUL RAHMAN: Generally, MAS poor performance is due to its wrong business plan and the loss of flight MH370 demoralized the staff and MAS has to handle this. How to do it? MAS must change its business plan. What’s wrong with the plan? The thing that is wrong with the plan is the choice of its routes which it has been plying for the past 15 years.

Those routes are now overcrowded with all the low cost carriers. The market now wants to fly domestic and regional and 80 per cent of air travelers want to fly budget. Only the rich and the businessmen fly full service. So MAS has to do something to capture that 80 per cent market. It has to reshuffle and realign its aircraft fleet. Utilizing Firefly as the main carrier for domestic and regional. The rest, let MAS handle.

And take a second look on the use of the A380. Does MAS really need six of the super-huge aircraft. No need to file for bankruptcy. Don’t be ridiculous.

MAS – from premium to low cost?

TAN SRI ABDUL AZIZ ABDUL RAHMAN: No. MAS has to branch out into two business divisions. First for domestic and regional it has to be budget while international and long haul it has to be full service. However, MAS also has to be wary of its competitors. What’s important is that it has to control cost effectively in both low cost and full service.

I am saying this because I read in the papers that the ASK cost is 22.05 cent  and revenue is 17.02 cent. So every ASK is already registering losses.  We have to analyze this because other wise it will be a perennial loss. Today MAS is bleeding RM4 million a day,  RM2 million pay the interests, total debts has already reached RM11 billion, operational cost RM2 million a day. If it were another business, they would have closed shop already.

The government and the private sector must help MAS, trim liability and devise a new business plan. If these two plans are implemented, insyaAllah (God willing) MAS will turn around.

So the government must not shirk away from its responsibility?

TAN SRI ABDUL AZIZ ABDUL RAHMAN: No it cannot because MAS is the National Carrier. What does the National Carrier mean? National Carrier is the global representative of the country and the people both in the skies and on the ground. The government I believe is not letting go. Just fed up maybe. It has done so much but it has come to this.

If that is the case, then how can we overcome MAS problems?

TAN SRI ABDUL AZIZ ABDUL RAHMAN: The Prime Minister has to take a look at this problem. Khazanah Nasional Berhad (Khazanah) is just the strategic equity holder. It is the government which is the policymaker. I am the one who started MAS under the directive of the government to ensure MAS is the flag carrier.

If the government wants to maintain as the national carrier, the government has to continue to invest in MAS. But if the government has no money or is fed up, the government can work with a local company on condition that the company preserve MAS with the national carrier status. The firm must work together with the government.

Are there any companies out there willing to develop the business model?

TAN SRI ABDUL AZIZ ABDUL RAHMAN: There are companies but while it controls MAS it must also obey the government at the same time. Lets say the company wants to  revamp the sterwards and the stewardess attire, the government can intervene if it finds the attire not suitable as MAS represents Malaysia.

It is not easy to solve MAS problems but it can be done. MAS image must be defended and we have done it before. MAS biggest problem is its huge debt and it has to be restructured as no company would want to take over a company which registers losses of RM4 million a day. If MAS is restructured, even though it still has a lot of liabilities, it can still register profit.

What if MAS is declared bankrupt like Japan Airline?

TAN SRI ABDUL AZIZ ABDUL RAHMAN: Japan carries a different set of laws and they carry it out drastically such as laying off thousands of workers. In MAS we have to be  careful as it is said that MAS is overstaffed. Is this so? I’m saying this because there are many who complaint that MAS has few cabin staffs, engineers to the extent it has to cancel flights.

Maybe in some departments there are a surplus of workers but we have to look at it in totality. We can’t lay off 5,000 workers out of the 20,000 employees which MAS has. It does not have to lay a single worker if it is restructured properly. But we have to take a look  at the salaries of some of the management team of which I was told touch more than RM100,000 a month.

Why must they be paid such a huge amount at a time when MAS is in the red and why do you axe workers with low salaries? I question how the board of directors can approve such a huge salary. How did it come to this?

Note:  In MAS 2011 Annual report, two executive directors salaries and benefits cost MAS RM3,775,000.00 a year.  This note is from yours truly Sir Wee Choo Keong.

Have you ever written to the Prime Minister to discuss over MAS?

TAN SRI ABDUL AZIZ ABDUL RAHMAN: I did write to the PM when MAS wanted to merge with AirAsia of which I was against. Other than that, I’ve never written to the PM on other issues. I don’t like to be a busybody but I’m telling you because you ask. I read in the papers that an individual suggested that MAS be shut down and start anew. To me that person knows nothing and is talking nonsense. I question why MAS use the A380 which is hardly utilised but cost millions to operate.

Why do we need the six air-crafts? That is one out of a thousand and one issues plaguing MAS. MAS also wants to sell the MRO and the person who proposed it does not know anything about the aviation industry. Engineering plays a huge part in the MAS makeup and plays a vital role in safety, efficiency, integrity and operations.

MAS has to fully control that business and if properly anaged can become an income earner. During my time, MAS maintains and services aircrafts from the US, Australia and Canada. MAS made money out of this division. So why do you want to hive off this division to another company and then buy back the service from the very same firm? MAS will bleed even more just like the catering business.  Although MAS has a 30 percent stake, it has to pay a high price for the food. MAS can sell a small stake but make sure it still controls MRO. Don’t sell the entire stake.

Ibrahim

Note: When Tan Seri Md Nor Yusuf was the CEO of MAS, MAS sold 70% of its equity in MAS Catering Sdn Bhd to the company controlled by Datuk Hj Ibrahim Ahmad Badawi. On the same day, MAS sign a back to back catering agreement with MAS Catering Sdn Bhd for 25 years worth RM6.25 billion.  It was a lope sided agreement.  Subsequently, the name of MAS Catering Sdn Bhd was changed to LSG Skychef Brahim’s Sdn Bhd.  MAS catering bill comes to about RM250 million yearly.  

The sale of the equity MAS Catering Sdn Bhd was done during the famous “Widespread Assets Un-Bundling” a.k.a WAU, the brainchild of BinaFikir Sdn Bhd, whose founders were Tan Sri Azman Mokhtar, the Managing Director of Khaznah and En Mohamed Rashdan Yusuf aka Danny. By the way, En Mohamed Rashdan Yusuf was the Deputy Group CEO of MAS and one of the architects of the infamous MAS-AirAsia share swap, which was a case of “Bina” first and “Fikir” later.  This is from yours truly Sir Wee Choo Keong.

During your time, MAS had a lot of assets but after 15 years all of it has been disposed. What is your comment?

MAS

TAN SRI ABDUL AZIZ ABDUL RAHMAN: I am saddened when all of the assets were sold off jsut like that. Extremely sad. MAS assets were sold as it does not have enough  capital, weak cashflow to sustain operations. Why? Because MAS is registering losses. The sale of MAS building was the saddest moment of them all ex-employees were all saddened by it and I was against it. The MAS training building in Subang was also sold and then rented back to MAS.

Its buildings in Jakarta, Singapore, New York, London, were all sold. All these assets are not easy to get back. When we bought MAS, it was not rich but prudent. MAS was not big at the time and the government was not rich. Selling all the assets is not good for MAS image.

What are your comments on MAS turnaround plan which has entered its third year?

TAN SRI ABDUL AZIZ ABDUL RAHMAN: I really don’t know and I really don’t understand. I don’t see what MAS is doing. They made losses last year because they changed the business plan. MAS didnt reshuffle the routes but competed head on with  the low to even lower cost carriers. MAS forgets about its cost. MAS managed  to achieve 85 percent load factor but they made huge losses and didn’t get the yield.

During my time, 85 percent means huge profit. Previously, MAS still get profits at 70-75 percent load factor but now it still make losses at 85 percent load factor. The business model is wrong.

Even this business model is hard for MAS to implement?

TAN SRI ABDUL AZIZ ABDUL RAHMAN: Maybe they were in a rush trying to prove something. Maybe they believed that that was the best approach and got a shock when they see the results. Maybe now they are devising a new business model. MAS has been in trial and error mode for so long. It has been in trouble since 1995 and the government started to intervene in 1998. Since then, management lineup changed six or seven times but still there is not turnaround but instead it is headed for destruction.

The MAS Employees Union wants MAS to be led by an insider and not an outsider. Do you agree Tan Sri?

TAN SRI ABDUL AZIZ ABDUL RAHMAN: I agree but the person has to have leadership skills. MAS has a lot of talent who have served tens of years and there must be a capable leader. If there is none, you can take outsider but he must be loyal and understand MAS. MAS is a business which is laden with legal issues and you have to understand the international environment and the routes inside out.

The aviation industry business is so complex and its not just about competition. As an example, MAS right to fly to London, you must have a prior agreement. Must understand fully negotiations with Britain and know what we want. At present, MAS A380 cannot fly to Australia but AirAsiaX can fly there. Is the government involved in negotiations? MAS should give advice to the government.

Note:  The government has reserved an additional KL/Sydney route for MAS to fly with its A380 but En Ahmad Jauhari Yahya, the Group CEO of MAS,  gave it to AirAsia X.  This note is from yours truly.

Is the government being fed with the wrong information on MAS routes?

TAN SRI ABDUL AZIZ ABDUL RAHMAN: I believe there is nobody at MAS giving advice to the government. Maybe when other airliners ask for the routes, the government gives the go ahead. Things have changed nowadays. Previously, the government would always refer to MAS for advice whenever they want to do anything in the aviation industry. When the government inquires, MAS has to back it up with facts if it does not agree.

If the government still wants to do it, there has to be discussions. For the past 10 years, MAS was never included in negotiations. When Malindo Airways was launched, MAS was in the dark until Malindo Airways started operations. MAS would have prepared itself if it was notified earlier. Its like in a war, MAS cannot just sit and watch. It has to get ready. MAS is a national carrier and uses the rakyat’s money so the government has to give MAS priority by informing the company.

Previously, MAS had tagged along and advised the government on traffic right negotiations and what inputs are needed in the agreement.

Why is MAS being sidelined now?

TAN SRI ABDUL AZIZ ABDUL RAHMAN: Maybe the government has no confidence with MAS or its board of directors and the management do not dare to raise these sort of issues with the government. MAS was left own its own and the carrier in turn also kept quiet. When other people punch you, MAS just remained silent when it should have informed the government. I don’t discount the fact that the MAS management 15 years ago don’t understand the aviation industry. That is why it has come to this.

So how can MAS rise again?

TAN SRI ABDUL AZIZ ABDUL RAHMAN: MAS has to find the right candidate to steer it ahead, focus on the liability and change the business model. That’s all.

Has the MAS management come to see you to discuss over MAS?

TAN SRI ABDUL AZIZ ABDUL RAHMANNo never. Maybe they know that I’m outspoken and I’m honest when it comes to MAS. If they come and see me I will tell them that they are useless. So why  would they come to see me and get scolded. I want to see MAS fly again and I’m angry with people who wants to declare MAS bankrupt.

They don’t know that MAS in the 1980s flew to San Francisco and Hawaii because the Americans thought that Malaysia is part of Congo. They don’t know that Malaysians can pilot planes and that was why I negotiated for the American traffic right which was not easy to get as we had to compete with Taiwan and Tokyo.

How do you feel seeing that the MAS you nurtured crumbling today?

TAN SRI ABDUL AZIZ ABDUL RAHMAN: I’m very sad especially for staffs who are still in contact with me. They always talk about MAS including the retirees.

If you were asked to help turnaround MAS, would you want to?

TAN SRI ABDUL AZIZ ABDUL RAHMAN: I’m honored to help but not work with MAS. I just want to do national service and two years is enough to turn it around. Honestly, I feel sad and sorry for MAS.

Why don’t you inform the Prime Minister directly?

TAN SRI ABDUL AZIZ ABDUL RAHMAN: I’m also busy as a practicing lawyer and am always at the courts but I always follow the developments at MAS but will allocate the time if the government wants me.

Given the chance to meet the Prime Minister, what would you tell him?

TAN SRI ABDUL AZIZ ABDUL RAHMAN:  I just want to ask that MAS be given the right in the aviation industry policy. MAS is the national carrier and should not be sidelined in favour of other airliners. When  AirAsia and AirAsiaX were formed, MAS was in the dark and its routes was taken away.

Note:  During the Badawi’s Administration, 96 profitable routes of MAS were taken from MAS and given on a silver platter to AirAsia. Further, at that material time MAS had to abandon its Super Saver Promotion because the Badawi’s Administration prohibited MAS from selling its fares below certain level.  It was a case of MAS was asked to go into the boxing ring to fight with with its hands and legs tied. This note is from yours truly Sir Wee Choo Keong.

Personally, do you think there are invisible hands at work behind the scenes plotting the downfall of MAS?

TAN SRI ABDUL AZIZ ABDUL RAHMAN: I can’t say for sure but there is a possibility. I’m also puzzled because those days, MAS will always know every aviation policy.  Nowadays, nobody wants to hear MAS voice. Please don’t do that.

Malaysiagazette.com

Malaysiaairlinesfamilies added “The morale of the story is DO NOT TAKE BACK IDRIS JALA who sells ROTI JALA best!”  The second morale story is the Prime Minister of Malaysia must walk his talk putting his rakyat first by removing all the moles inside MAS in order to re-shape it or revamp the whole organization to prevent a second phase of sabotage by these trios – Ahmad Jauhari, Azhari Dahlan and Zahrah the fatty boom boom!

Why the rakyat in Selangor state are so angry with the Bee End Party?  It is because Tun Mahathir is the advisor for AirAsia and Rafidah the busuk is the shareholders of AirAsia and in collaboration with Tony the Pariah – the low caste seed; combined to destroy MAS from inside out with the help from Tun Bodowi.

How the Bee End can survive in the next election if these prominent figures keep playing politics manipulating MAS? Bee End members also now converting to End Bee newbies members because they hold grudge against Tun Maha-thir and his gang.

Friendly advice for Tun Mahathir that he should leave MAS alone by keeping his mouth restricted to his own personal favorite views.  Stop interfering in the business if you are not asked for.

Mr. Prime Minister must listen to Tan Sri Abdul Aziz’s statement if the Prime Minister of Malaysia has the heart to walk his talking prioritizing the people of Malaysia.  The Prime Minister must also let Tan Sri Abdul Aziz to lead MAS to a greater height and prohibit all the politicians from poking their noses into MAS’s pockets.  However, the Prime Minister could appoint Tan Sri Abdul Aziz as advisor to MAS and mandated only a couple of his ministers in the Prime Minister’s department to oversee the necessary arrangement assisting Tan Sri Abdul Aziz.

Whilst the government is contemplating the next move; we have resources confirming that Mr. Lipas man has initiated his attempt to meet with Tan Sri Abdul Aziz to garner his huge support for NUFAM to make ways into getting contracts with MAS under the pretext of representing MAS crew.

Well…well…well..Mr. Lipas man is such a desperado.  We’ll see if Mr. Lipas man could survive his next election in NUFAM.

The Con Jobs by AirAsia’s Tony Fernandez to steal MAS MRO!


AirAsia is not going to stop cheating its new customers because it has been the Low Cost Carrier’s policy aiming at cheating for surviving from the pugnacious competitions.  As times goes by; the policy became the concept for its natural survivability.

To survive in this challenging yet pugnacious transport industry; Tony Fernandez has resorted to stealing companies for expanding into his collapsing empires before his life ends after he contracted incurable diseases. For the public’s record; Tony’s life has been dependable on Ketamine pills and other supporting drugs to prolonging his livelihood.

Now that Everyone Knows Tony is dying with his empires being left without a caliber person managing it; who do we think the best suited candidate that will take over him? Ahhhh…perhaps Lim Guan Eng would do the honor!

Among all the politicians in Malaysia; only one stood up for Tony of AirAsia pushing the Government to sell MAS to AirAsia and here is the link of the clue – Seek help from AirAsia on saving MAS Dap tells Putrajaya.

Now we all know how did the share swap between MAS and AirAsia take place exactly on time in 2011 which was prepping for the lost of Bee End Party in PRU13. Unfortunately, the people of Malaysia ain’t that dumber than Lim Wants End.

So exactly how did Tony steal the company that is strengthening MAS in the past decades? For a start; he pays off the clueless CEO a lump sum of cash to recruit the CEO and his gang. The job function of that paid clueless CEO by AirAsia is to find way to get MAS MRO landed into AirAsia’s listing property before MAS CEO contract ends.

In the morning of 28th May 2012 as is in scheduled; the paid clueless CEO of MAS will propose to MAS board of directors to sell off its main core Engineering division to increase the profit for restructuring MAS from its recent first quarter losses. The CEO will make the recommendation and propose to the board to sell MAS MRO and the current CEO of MRO Azhari Dahlan as in package to a company that Tony Fernandez has 35% shares in it.

Before the board of directors make any further decisions; they should know that despite contract between MAS and AirAsia ended in February 2014; Azhari Dahlan has secretly allocated a hangar for discreetly repairing AirAsia’s aircrafts without billing AirAsia a cent.

During the secret repair of AirAsia’s aircrafts at MAS MRO area; these events were highlighted by the famous blogger “Sir” Wee Choo Keong which he wrote Mysterious Fire in MAS MRO workshop BMH192 turned back caused by Carbon Brakes and Firefly turned back.

For the public record; Carbon brakes offer a significant weight savings compared to steel brakes. This translates into a lighter airplane, which directly contributes to decreased fuel consumption and associated reductions in engine emissions.

These cost considerations often resulted in the use of steel brakes on smaller, short-haul commercial airplanes (B737-800) and carbon brakes on larger, long-haul (B777-200) commercial airplanes. In the past, the higher cost of carbon brakes could more easily be justified for larger airplanes because of the cost savings associated with reduced weight and longer service life.

So who asked Azhari Dahlan to change the steel brakes with carbon brakes suitable for a smaller short-haul aircraft that had caused the air turned back of MH192?

Is this not crystal clear of the surfacing evidence that sabotaging act carried out by Azhari Dahlan or AirAsia have become eminent?

A special message for MAS board of director; in the afternoon of 28th May 2014 or early; the clueless CEO will endorse officially and handle over MAS MRO to Tony Fernandez’s proxy as the buyer! If this transfer of ownership is validated; MAS will lose out in billion of revenues and cost for maintaining and repairing MAS aircraft will hike up instantly.

In planning a restructure for the National Carrier; there shall be a change of new Top Management urgently to eradicate the presence of sabotaging acts internally and removing the moles of AirAsia vizly Azahari Dahlan the average qualified CEO whose records showed lacks of aviation knowledge and imminent saboteurs complement AND most importantly that Zahrah Zaid the Tobacco Evil Madam who claims she is untouchable because she is protected by someone from the Ministry of Human Resource as the most certifiable Human Cruelty Director of the century”.

Next episode; we shall cover on the topic on how the clueless CEO crashed MAS into loss-making airline of the year! Stay tuned for eliciting yet-unreported news!

AirAsia not only the big conjob also a big bully to his passengers


Ever since AirAsia is in operation from 1997; Tony boy never stops cheating his passengers from buying the so-called “lowest airfares” which actually is the most expensive airfares if you added up the whole package; to buying fraud travel insurance that does not cover a delay of less than 6 hours’ waiting time.

In Malaysia; only AirAsia can cheats its customers with its creative promotional scheme to trap those who never learn about AirAsia’s scheming packages.

A passenger of AirAsia revealed his traveling experience with AirAsia who thought he could save a few bucks and transited in Bangkok; re-checked out and checked in at Bangkok Airport just to find out his next travel to Kuala Lumpur from Bangkok was suddenly cancelled without further information.  To get the refund from AirAsia for the untraveled ticket would be additional hassle – if you don’t press AirAsia for the refund; they will conveniently be forgetful to refund you those untraveled tickets.

This gentleman who wanted to save a few bucks via traveling with AirAsia ended with purchasing a one-way ticket with Air Thai to Kuala Lumpur that cost him an additional RM1,900 for a two hours flight time.  Months later; he has been informed by AirAsia staff that AirAsia would never pay the refund unless you chased Tony Fernandez (the black babi) like a crow chasing a butterfly and if you ever lost the refund ticket from AirAsia; it means you can never get your refund…GET IT?

Whilst this gentleman made his comparison between his traveling experience with MAS and AirAsia; he never finds any fuss to get his refund from MAS but only with AirAsia.  So the clue is….?  AirAsia is cheating!!!

In refunding any untraveled tickets; it should be included the airport tax and insurance fee that were never utilized but for AirAsia; it’s a no refund for airport tax and insurance fee you purchased once you filled in the refund tickets.  So the second clue is…?  AirAsia is always finding ways to cheat his customers!!!

Now KLIA2 is in progress for an opening on 9 May 2014; why does AirAsia say about their transfer to KLIA2?  In the beginning; Aireen Omar the ugly bitch says AirAsia will not transfer because they are arrogant and a biggest bully ever!  And there was no free tax for transferring to KLIA2.  Perhaps; at KLIA2 it is not possible for AirAsia or Aireen Omar the haggard bitch and Tony the pariah to suck the airport tax from their passengers; or perhaps in KLIA2; there will be too many low cost airliners competing to improving its low cost services and provide the convenient of air ticket refund for travelers!  This is telling AirAsia straight in their face; You Can’t Cheat Anymore You AirAsia Bitch; Babi and Pariah!

On our recent encounter; another AirAsia passenger disclosed of the cheating games behind AirAsia’s check-in counter that is the tempering of weighing scale at every AirAsia’s counter.  If you have bought 15kgs for your luggage; you will get the guaranteed weight in measure of above 15kgs.  For e.g. your luggage should be 15kgs but AirAsia will weigh it at 16.8kg where you will be charged an additional of RM70.  That’s AirAsia’s nature in doing business for survivability!

So the clue is always bring your own weighing scale or call the authority to have all AirAsia check-in counter randomly checked for tempering the scale machine.

Another AirAsia’s passenger revealed his refined experience traveling with AirAsia.  He booked 5 tickets last November 2013 and during the Yolanda typhoon that struck Philippines; they cancelled the flight to Tacloban (Philippines) and filled in the refund tickets.  Guess what was happening?  AirAsia never refunded them at all!  So do you still want to travel with AirAsia the cheating airlines?

Check out this article – https://malaysiaairlinesfamilies.wordpress.com/saving-airasia-with-airasia-becoming-a-scam-airlines-causing-many-stranded-and-no-more-refunds/

Other comments : You will find a load more of such comments from the experience passengers who traveled with AirAsia on this site.

Stay tuned – we are about to expose more of AirAsia scheming packages and promotions.

Nufam’s Stupidity – Episode 3


The journey of the National Union for Flight Attendant Malaysia in typical circumstances is a shortest stint ever recorded in the history of trade unionism as assisted by the Director General of Trade Union – the Cleverest Young Bastard (YB) Mustafa Bin Ali and his collaborators that included AirAsia’s CEO Tony Pariah Fernandez working hand in glove with another born-to-be-bastard “Roslee Sabaruddin” who works discreetly with MAS imported spy – Mohammad Fauzi Mahayahuddin to destroy the National Carrier from the inside.

This is how the department of Trade Union collaborates with Nufam…

buildingtomb20132buildingtomb2013And the hero comes along…

dgtu2014

Let us take a closer look at NUFAM chronologically…it was registered in 2012 by Ismail Nasaruddin the Lipas Man who recently was fired from Malaysia Airlines for public defamation against the National Carrier and six other MAS cabin crew. Nufam was approved by Roslee Sabaruddin (Assistant of DGTU) who then was believed to have received a sum of RM50,000 (under table) from AirAsia for assisting in the formation of Nufam to stir trouble inside MAS.

numb20131Now Every Crew Can Vote!

The slogan Nufam uses are in conjunction with AirAsia’s advertisement clearly revealing such slogan was authorised by AirAsia’s Tony Pariah Fernandez. The mission is to poison MAS cabin crew so to join AirAsiaX with those unfurled lies about how wonderful and fabulous that AirAsiaX is than any other local airlines.

This is how AirAsia get to recruit the experienced cabin crew from another local airlines for its quick expansion avoiding payable inland and airport taxes. The profit AirAsia makes are generated from all taxes specifically the airport taxes and the pre-paid airfares collected in advance from its customers.

Nufam is tasked by AirAsia’s CEO Tony Pariah Fernandez to pressure MAS CEO Ahmad Jauhari to fully committ to his promises that he made with Tony Pariah on signing away MAS quota for Los Angeles route paving way for AirAsia to fly into Los Angeles by the end of 2014.  When a CEO fails delivering it on time…Nufam strikes…nufam2014The fact remains that Nufam was truly formed by Tony Pariah Fernandez working hand in glove with the cougar bitch – Maznah Mazlan whose collaboration included those resentful ex-MAS workers in her attempt to avenge MAS for terminating her nephew who was once also a cabin crew of Malaysia Airlines under 5 years of contract service.

sackedLast year was the most memorable year for Nufam President who then finally joined the resentful clowns.

Here’s the memoir of Nufam 2013…

numb20132numb20137Nufam’s memoir for 2014…

tomb2013Digging a grave…

tomb2014Building a tomb and finally…

tomb20142Done Yet? or Well Done? Looks like the steak is sizzled and well done.

Congrats Nufam for being so D.U.M.B – Don’t Use Many Brains! Stay tuned to us for our next episode 4 – Against all odds – Ex-executive councils of AEU strikes back against MAS!

AirAsia – The failing Low Cost Airline


The first failing airline of a low-cost concept in Asia-Pacific region is AirAsia – TheConAirliner (TCA). The master planning by Tony Fernandez for AirAsia has failed unexpectedly from his organizational infrastructure that fully support unsuccessful execution in view of now that Tony Fernandez is indeed a creative WMD (Weapon of Mass Destruction). His fine creativity of WMD is a reflection of his gradual slope in his management.

AirAsia never stops cheating its customers and it continues to promote its misleading and fraud deals to the public. But for how long is this going to be? For Tony Fernandez; cheating is a new trend of business ideology which he learned from his late mother who sold tupperware for a living.

Tony Fernandez is the first idiot who adopted the modern psychological warfare in airlines industry; slacken his management via his hunger for suicidal decision. Tony Fernandez is a greedy famish pig who wanted every airlines deal for himself thinking he’s a genius aviation man.

Until he fell from the ladder he was trying to climb through his underground fast-track lane; he still is the same “never learned” pig-asshole fat boy.

Tony Fernandez’s failure in its collaboration with the Malaysian National Airlines – MAS and his most recent failure in securing his board of directorship with Japanese National Airlines predicted his next failure to secure the India’s most popular cities – Mumbai and Delhi.

Mumbai and Delhi do not welcome Tony Fernandez. Tony thought his smart ideas penetrating airlines business into India market will secure him another hub-based in India. His con-job on IPO had the India’s investors fooled. AirAsia’s share prices changed for “before and after” signing of agreement with Indian investors. Before signing – AirAsia’s shares were at RM3.50 but after having closed a deal with the Indian investors – AirAsia’s shares dropped dead to RM2.20.

AAshare

There’s one principle that Tony fails to adopt is the discipline of the Japanese that would never try telling lies to the shareholders. The Japanese counterpart will not follow Tony’s sly way bullshitting for AirAsia Japan by falsely declaring the airline was making profit when it was actually making a huge losses amounted to RM113 million.

Unlike AirAsia Malaysia; it’s still making losses in its balance sheet and it declared profits from AirAsia’s credits combined with the 6 months pre-paid sales of airfares. In reality; Tony uses his credits that he owes to MAS for aircraft’s maintenance as top-up profits for AirAsia’s account. Until todate; AirAsia’s shareholders still received zero dividend for falsifying accounts.

AirAsia parted ways with Japan’s All Nippon Airways (ANA) when it sold its 49% stake in AirAsia Japan to ANA in June this year. Both airlines had clashed over management and operational differences followed by losses amounting to ¥3.5 billion (RM113 million).

Fernandes, 49, has publicly said that he wants AirAsia to re-enter the Japanese market and is on the lookout for Japanese-Indian financial partners.

“We’ve just got to look for the right one this time because we screwed up the last time,” he added.

When Tony said “Japan was a disaster. Our partner didn’t understand what we wanted,” he actually meant that the Japanese counterpart didn’t want to lie for him.

Tony’s next con-job really had the Thailand’s Prime Minister accepted his idea to fly long haul via Bangkok to Los Angeles using  AirAsia X’s new Airbus jet order – A330-300.

25th September 2013 – AirAsia X has revealed it is getting closer to launching its new long-haul division in Thailand after confirming in a filing to the Malaysian stock exchange last week that it had reached agreement with Thai AirAsia chief Tassapon Bijleveld and Julpas Kruesopon, a businessman and advisor to Thai Prime Minister Yingluck Shinawatra, to formally incorporate the business.

The joint venture, called Thai AirAsia X, marks the first overseas foray by AirAsia X, the long-haul arm of Asia’s largest low-cost airline by passengers.  Although not formally part of the AirAsia Group the business has common shareholding with the other airline interests.  In the statement Thai AirAsia X said it submitted an application for an air operator’s license on June 20, 2013 and expects approval to be granted by end of this month when it will then apply for an air operator’s certificate.

As predicted; Tony Fernandez isn’t as smart as he thinks he is as an aviation man. Thai Airways fly from Bangkok to Los Angeles using B777-200/300 long-range aircraft for a flight time of more than 14 hours up to 18 hours. His latest order for 25 A330-300 airbus jet could fly a longer range where he also leases 6 A340 jets from airbus to deliver a one-two punch by 2015 to MAS and Malindo Airways especially after the Malaysian National Airlines rejected Tony’s initiative and collaboration to penetrate Los Angeles whilst Malindo Airways is busy attractting millions of AirAsia’s regular FED-UP flyers.

Whilst Tony Fernandez is planning his next route penetrating Los Angeles; his collaborative double agent CEO of MAS Ahmad Jauhari is tasked to end MAS oldest route KL – TYO – LAX by 2014 before he leaves MAS paving ways for AirAsia X to launch its first long haul route into United States of America via Kuala Lumpur. This will be Tony’s hardest punches for Malaysia Airlines after CEO Ahmad Jauhari contract ends.

Ironically, soon after Tony had the under-tabled discussion with the Thailand Prime Minister to accept his landing rights for Los Angeles to Bangkok; Thailand Prime Minister Yingluck initiated for amnesty bill passed for her cloned brother Thaksin to return home from exile. Consequently Yingluck faces street violent protest and fled from being captured by her protestors. The latter is calling for new election to calm the protestors.

Tony has his right hand wing flown to Los Angeles to discuss the landing rights for both routes i.e. LA – Bangkok and LA – KL (via Taipei). If FAA approved AirAsia X to fly directly from KL; Tony Fernandez will firmly deliver his punches to MAS workers who got his ass kicked out of Malaysia Airlines.

AirAsia has a bad record of its safety performance over the last one decade as compared to Thai Airways;

  • 8 November 2004 – On AirAsia Flight 104, the Boeing 737 plane carrying 111 passengers and five crew skidded while landing. Three passengers – a five-year-old girl and two women – were injured while evacuating from the plane and received outpatient treatment at the Queen Elizabeth Hospital.
  • 14 December 2005 – The Kota Kinabalu International Airport was closed for a few hours after an AirAsia plane burst a tire on landing. There were no injuries in the 10.30pm incident.
  • On 10 January 2011, AirAsia Flight 5218 skidded on the runway whilst landing. The incident occurred around 10:15pm during a heavy downpour. Four passengers were rushed to Sarawak General Hospital, believed to have suffered from health complications.
  • 3 August 2012 – On AirAsia Flight 5187 from Miri to Kuala Lumpur was scheduled to take off at 7.40pm. Furious passengers had their journey delayed for over an hour as a result of a man’s emphatic decision not to remain on the plane until take off. A witness said that as the plane was about to take off, the man suddenly opened the emergency doors and leapt out. On-duty flight attendants reportedly said they were powerless to stop him from opening the emergency exit and jumping out once the plane had started to move on the runway.

For Yingluck to have approved AirAsia X – a subsidiary of AirAsia to take long haul flight away from Thai Airways that basing on AirAsia’s bad safety record; is a bad luck for the Ying-luck. Ying-luck now turns Bad-Luck! Corruption does not choose its gender and Yingluck is a fool to have fallen into her bad-luck at this stage.

For public knowledge on Tony The Scumbag’s strategy; he always applies espionage as his gateway to heaven! Tony Fernandez will do anything to survive from the fierce competition including bribing the middle management of  MAS to screw up the operations and paying top-dollars to Ahmad Jauhari; Azhari Dahlan; Zaharah Zaid and remain as the champion eventhough his AirAsia’s debts-growth rose and tripled to maximum.  Tony’s next con-job is to shake those who rejected his proposal and initiatives – Revenge will rise!

Stay tuned to us for more updates on this scumbag – Tony Fernandez the pig asshole fat boy!

The New World Order on Privatization – Part 3


Previously published for Part I and Part II, here is the Part III on The Effect on Employment.

Many observers fear that privatization and the associated efficiency improvements will require large labor force reductions both before privatization as governments cut the workforce and after as privatized firms continue to restructure; also narrated that large-scale job losses have been associated with privatization in most transition countries, and new private sector growth had not been sufficient to absorb labor retrenched by formerly state-owned enterprises.

The following is the examples of some countries that give a flavor of the employment challenge associated with privatization:

  1. Bulgaria:, Industrial employment in Bulgaria fell by 31.3 per cent; employment in privatized firms fell from 4 million to 1 million people, between December 1989 and December 1991.
  2. Czech Republic: A government survey of 572 companies — 101 in food, 159 in engineering, 184 in manufacturing and 128 in construction — revealed a “significant decline in employment”, with engineering (12 per cent) showing the sharpest drop, manufacturing and construction each cutting jobs by 10 per cent, and the food sector by 4 per cent.
  3. Hungary: Employment in engineering dropped by 12 per cent, in manufacturing by 10 per cent, in construction by 10 per cent and in food processing by 4 per cent during 1992 and 1993. Before privatization the lighting company Tungsram employed 35,000 people which were left 9,500 after privatization by 1993. This was done mainly through early retirement and voluntary redundancy, alongside a freeze on recruitment. Many of the jobs were redundant as a result of administrative functions being centralized with the new owner’s offices outside Hungary. As a result, non-manual grades were affected disproportionately by the Tungsram job losses.
  4. East Germany: The numbers in employment fell from 9 million before transition to 6.3 million by the end of 1992; the numbers employed in enterprises under the privatization agency, the Treuhandanstalt, fell from 4.1 million to 1.2 million during that period.
  5. Poland: Government research into 130 companies (24 per cent in manufacturing, 45 per cent in construction and 31 per cent in trade and services), employing 285 each on average, showed that employment fell by 15 per cent in the first year and by 25 per cent over the first two years after privatization, leveling-off in the third year with a drop of a further approximately 2 per cent. A study of ten privatized Polish industrial and trade companies indicated decreases in employment averaging around 12.5 per cent. In the Bialystok Municipal Refuse Collection Enterprises, privatized with a large employee stake, employment halved over the first year, and, as a result of being shareholders, the workers received no severance pay.
  6. Russian Federation: At the Shatura Furniture Company, introduction of an electronic data management system enabled nearly half the 3,700 jobs to be cut while Uralmash, the heavy machinery manufacturer in the Urals, reduced employment from 70,000 people to 20,000.
  7. Viet Nam: Between 1988 and 1992, 1.5 million workers, equivalent to 20 per cent of the urban labor force, were retrenched from state enterprises and the civil service.

Despite the concern about possible job losses, studies undertaken by World Bank showed that “African government have done very little to track the effects of privatization on employment.”

Not only that privatization is causing unemployment in Tanzania, most of workers lost their jobs before Privatization started, because more than 70 enterprises were closed and workers lost their jobs.

It concluded that despite all these successes the government goal to employment rate has not been met since most of workers lost their job at aftermath of privatization. It also concluded that privatization has a significantly negative impact on total and workers’ employment.

In the light of evidences, Pamacheche and Koma (2007) suggested that privatization is in the interest of employees, although there are a few exceptions to this.

Such benefits take three forms:

  1. employment levels tended to increase after privatization;
  2. remuneration packages tended to improve after privatization and;
  3. many employees bought shares at discounted prices in the privatized firms and these benefited when share prices eventually rose.

In cases where employees lost their jobs as a result of privatization, such employees tended to receive generous severance packages. Severance and retirement incentives buy labor support and allow privatization and its benefits to happen and, where unemployment insurance systems are not in place, mitigate the social impact of layoffs.

In some cases, the reduction in the level of employment took place prior to privatization and as such, could be attributed to the need for greater efficiency, and not just privatization. In cases where shut down enterprises were re-opened by private investors, employees benefited directly.

Evidence argued that many enterprises have been privatized with their labor force intact, either because increasing competition led to labor force adjustments under public ownership or because new private investors were willing to take on modest levels of over staffing that could be absorbed by new investments and dynamic expansion.

More important, particularly in sectors with large investment backlogs, privatization and the investments that accompany it have created new jobs at both the enterprise and sector levels. Workers remaining with privatized firms have often benefited by obtaining better-paying jobs, company shares, and improved training and career development prospects.

In general, privatization has had a minimal effect on employment in countries that carried out labor reforms well before privatization.

Chile, for example, began extensive labor market reforms in the early 1970s by rationalizing state enterprise employment and wages and changing labor market regulations regarding the hiring and firing workers. These reforms led to significant employment reductions by the early 1980s in both public and private firms.

As a result the second round of privatization that began in 1985 and involved larger firms in sectors such as telecommunications and electricity resulted in no layoffs.

In fact, employment in these firms increased by 10 percent as a result of overall improvements in the economy but also of the new investments that accompanied privatization.

Privatization has also had a minimal effect on workers in competitive enterprises. Ghana, Mexico, Morocco, and Tunisia are among many countries that have been able to sell such enterprises with their labor force more or less intact. However large employment reductions have often accompanied the privatization of state enterprises that were, in the past, heavily subsidized and protected from competition.

As reported from some studies in 1994 that in Mexico Employment in four steel plants was cut from 35,578 in 1985 to 17,485 in 1994, with the largest declines occurring just before privatization in 1991.

The privatization in the early 1990s of the two heavily overstaffed and highly unionized state airlines also involved major downsizing before privatization. In the case of Aero-Mexico a massive strike led the government to declare the company bankrupt.

The company went into liquidation and its assets were sold; new owner rehired only a fraction of the workforce. In the case of the second airline, Mexicana, the prospective buyers insisted that the lab or force be cut before privatization, and the government reduced it by more than 40 percent.

What’s next?  The Effect on Employees’ Income

In a research about Tanzania, it was reported that salaries and other incentives for workers have been increased and improved, for example before privatization the lowest salary plus other incentives at Tanga Cement Company was 120 USD per month, now after privatization the salary is more than 360 USD.

Tanzania Breweries Limited for lowest salary was 72 USD per month before privatization and after raised to 96 USD per month. Earle (2006) is of the view that the implications of privatization for wages are also ambiguous. New owners may reduce wages as part of a general cost-cutting policy, but if the firm expands, it may have to offer higher wages to attract new workers.

New private owners may also be more likely to adopt skill-biased technologies, resulting in a compositional shift toward higher-paid workers. Depending on the relative strength of such factors, wages may either rise or fall as a result of privatization.

The Upjohn Institute, in collaboration with partners from Heriot-Watt University in Edinburgh and the Central European University Labor Project in Budapest, has recently undertaken an empirical analysis of the effects of privatization on the wage bill, employment, and wage rates of firms in Hungary, Romania, Russia, and Ukraine—countries where thousands of businesses were privatized in a relatively short period of time during the 1990s.

These four countries had varied success with privatization reforms.

Hungary was considered one of the most successful, Russia and Ukraine were less successful, and Romania was somewhere in the middle. The new research in this project, however, finds no evidence of large systematic negative consequences of privatization for employment and wages.

Privatization is in the interest of employees and when the industries are given in the private hands their performance is increased manifold; remuneration packages tended to improve because employees are given better wages and salaries in order to improve their productivity and retention in the business. Privatization can be followed immediately by worse terms and conditions, but such an initial impact can be reversed later when a restructured company is able to reward employees for their contribution to its success with improvements in pay and conditions.

However, the converse initial improvement followed by later deterioration has also occurred. The examples of decline of salaries due to privatization of many countries as mentioned in following lines.

In post-reform Viet Nam, the wages of civil servants and state enterprise employees declined by 60 per cent from 1985 to 1991, followed by partial reversal of that trend in 1993. In 1989, a Vietnamese civil servant’s salary could buy 2.3 kg of rice a day and that of a state enterprise worker 3.3 kg, so that, at most, only one person apart from the principal breadwinner could be supported by the wage, compared to four people in 1985. In addition, health and education subsidies declined.

In Poland, average wages and salaries fell by 27 per cent between 1989 and 1992, opening up inequalities in income. A study of ten privatized Polish companies revealed a tendency for wages to increase sharply immediately after privatization but to stop doing so soon afterwards in favor of performance-related pay incentives.

In Estonia, foreign owners have blocked pay increases. A law on collective bargaining, which took effect in 1993, forbids new private owners from unilaterally scrapping collective agreements; it does, however, allow them to be renegotiated.

In Kazakhstan, according to a labor ministry official at an ILO seminar, while the ministry has aimed to ensure that the principles of the ILO on fair wages are followed, external pressures have pushed policy in another direction.

It is believe the consultants of the World Bank and IMF are the people dictating such policies the Governments, including of minimum wages, so that the real wages are falling. So the cheap labor of the Soviet Union, which was criticized for being cheap, remains cheap and gets cheaper. The experts of the IMF calmly ignore these principles and as there are more of these experts in our country, so the politics of ILO in this field has a rather small impact and low profile.

It had been reported that non-payment of wages (after privatization), sometimes for months at a time, has also caused great hardship on employees.

Sometimes this has been caused by government subsidies being cut or simply not paid as failure to restructure has become unsustainable. But there is also anecdotal evidence that, in some cases, managers have deliberately withheld wages due to employees in the hope of financially forcing them to sell (to the managers) their privatization vouchers at knock down prices.

How about the Effects on Working Conditions?

Sri Lanka, analyzing effect of privatization on workers who opted to remain with the privatized firm, expressed that overall the working conditions of workers who remained in the privatized enterprises seem to be at least as favorable as they were when the firms were SOEs.

In several instances there have been wage rises and better working conditions. For example, some firms now offer workers transport (Kabool Lanka Ltd), wage rises (Telecom) and better housing and sanitation facilities. In SOEs, the workers were entitled to take 42 days leave annually, absenteeism was not heavily penalized and public holidays were high. They also enjoyed a high sense of security and treated the public sector job as their entitlement rather than a position that had to be secured by efficient performance. Another reported that in Hungary, while some privatization contracts have committed foreign companies to retaining staff levels for a set period of time, there have been other adverse effects, such as cuts in staff training.

The same country has also had the opposite experience, however. In the General Electric takeover of Tungsram, for example, although jobs and pay were cut, the company quickly put in place a number of environmental and health and safety measures.

These included monitoring factory air and noise pollution levels, fixing the worst problems immediately and adopting plans to make further gradual improvements.

New safety devices were installed and comprehensive worker training programs introduced. As a result, the number of serious work-related injuries has been substantially reduced.

The changes or new privatization structure have big effects on Employees’ Health And Performance.

Experts have expressed results of their study that majority of respondents reported deterioration in conditions of employment and operational participation since privatization. It concluded that once an organization begins changing, its employees might face threats to their jobs, roles, positions, and resources. These threats can lower the employees’ trust in their organization as a whole which can be negatively reflected in employees’ attitudes toward their work. They found that stress is a general and global phenomenon encompassing man’s psychological, physical, familial, and social dimensions.

Researchers have made great efforts studying the effects of this stress on mental and physical health of employees to better understand its nature. When individuals contemplate the stress of organizational change, their perceptions, choice of reactions, and working attitudes all strongly influence whether the change will be successful and if the newly reconstituted organization will function efficiently or not.

Researchers have also concluded that after privatization, the job stress of employees increased significantly. This increase was associated with a decrease in mental health. They illustrated a recent study conducted in Thailand, which concluded that the organizational change has a significant association with more psychological stress, which in turn, resulted in poor job performance.

In Canada after privatization employees of a large healthcare provider surviving from downsizing had a higher degree of delay and also a higher degree of stress due to less control exercised over their jobs.

Consequently, they enjoyed less job satisfaction and living standards and worse general health. In this respect, International Labor Organization in 2001 discussing safety and job health, reported that privatization, organizational restructuring and increasing the number of small business units increase unemployment, stress, alcoholism, job insecurity and prolongation of work hours, all of which lead to psychic trauma at work and private life.

Moreover, it has been shown that stress and its related diseases lead to an increase in the incidence rate of indigestion, heart disease and mental disorders.

Reports shown that in the Russian Federation, conditions of labor have been affected by the “marginal” state of the economy, in transition from a planned economy to a market system. Eighty- eight per cent of equipment in Russian factories is obsolete, 400,000 work in unhealthy conditions, 8,000 every year (more than died in Afghanistan) die because of working conditions, and 14,000 become handicapped we made an inspection in newly privatized companies about how conventions on labor were being respected — these were conditions of real slavery, no human conditions. A slave owner says you must work from morning to evening, no choice, no trade unions.

Privatization also contributes to the Effects on Social Welfare of Workers

Consultants have expressed that in some cases, the true scale of unemployment has been concealed by the practice of state-owned enterprises keeping workers at home on some proportion of their pay.

Workers have also been badly affected as, many of them lost and entitlement and the social impact was worse. It was further argued that even where unemployment levels have remained relatively low, a new phenomenon has emerged — that of long-term unemployment.

In the Czech Republic, for example, despite low levels of unemployment, by the end of 1994 over a third of all job applicants had been without work for more than one year. Only those firms, which have managed to gain access to resources and modern technology, have been surviving. However, the foreign investment that can play the key part in resolving those challenges can also bring other problems.

As privatization enables formerly closed economies to join the globalization trend, employment opportunities can erode, as the Tungsram example in Hungary demonstrates.

Next episode will explain the effects on the share of ownership!