Australia Post, a 312 million dollar Crisis
By Sebastian Tombs
Australia Post has recently cried poor with the CEO stating recently, "Australia Post is going broke." One wonders where did that came from seeing as Australia Post enjoyed a healthy 312 million dollar profit in 2012/13.
In fact total revenue increased from 5 billion dollars in 2009 to 5.9 billion dollars in 2013. The annual report for 2013/14 is likely to show a smaller profit this year due to a lavish spending spree due mostly to the massive payment for the purchase of the second half of StarTrack for 412 million dollars. There is also the 184 million dollars spent on upgrading the Melbourne and Sydney parcel cross belt sorting technology facilities.
At the same time the CEO is crying poor and wants to sack 900 workers and reduce the grade of service of delivery from five days a week to two.
Mr Fahour has been the CEO of Australia Post for 5 years, coming from the post of CEO of the NAB and prior to that with the Citigroup. When he came to Australia Post it was with the 'business renewal program, called "Future Ready". The program involves the implementation of a more customer-focused business model designed to capitalise on Australia Post's reputation as a trusted services provider.' However, sacking 900 workers and reducing the service quality of letter and parcel deliveries from 5 days to 2 is contrary to being 'customer focused.'
After five years of cost cutting and crying poor in the face of healthy profits, this begs the question; does Mr Fahour understand how a balance sheet works? And just how effective IS Mr Fahour is at his job anyway and does he really earn his 4.745 million dollars a year? (By comparison the US Postmaster General, who runs and administers one of the largest postal systems in the world, was paid just $550,000 in 2013. Under 10 percent of Mr Fahour's salary)
In addition, under his mentorship, 11 million dollars has also been spent in remuneration and redundancies of managers only to be replaced by other managers who were subsequently 'let go'. And apart from the CEO effectively doubling his salary, management and supervisory salaries have also enjoyed a satisfactory hike. Yet the bun fight with the Unions over a couple of dollars a week increase in worker's salaries continues.
Considering that Australia Post is wholly owned by the Federal Government, appearing to be satisfied with this gross disparity in effective management, one is left to speculate if this is simply a job for the boys exercise regardless of the questionable competence level involved. Or perhaps this is simply setting up Australia Post to be sold to the highest bidder. What price customer service then?
Or perhaps Mr Fahour should go back to banking. He might do well with the Commonwealth Bank. They need a good PR man right now.
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