Mike Byrne
With great fanfare, the new CEO of Telstra, Sol Trujillo, was announced to an expectant corporate audience on June 9. This would not be news in itself if it wasn't for the staggering $10 million remuneration package that accompanies the position.
Trujillo's remuneration package comprises a fixed salary of $3 million per annum plus a "short-term" $3 million incentive, half of which is payable up front. On top of this, he will get an annual long-term incentive bonus of up to $4 million.
The timing of the announcement, during negotiations for the new enterprise agreement for Telstra staff, clearly spells out the contempt with which Telstra management regards its workers.
Staff are being offered a miserly 2.5% per annum pay rise over the course of a three-year agreement and told that without any further trade-offs of conditions there will be no increase on that pay offer.
Any further decline in conditions for Telstra staff would lead to increased working hours (including Saturday rostering), loss of public holidays and greater amounts of performance-based pay, with a continual threat of outsourcing either to the lowest bidder in Australia or overseas.
Since deregulation of the telecommunications industry and the partial privatisation of Telstra, at least 30,000 full-time jobs have already been lost. Many Telstra jobs have been transferred to private contractors or to labour-hire agencies that now operate in Telstra call centres.
At the National Union Fightback Conference at the Victorian Trades Hall on June 11, Victorian postal union secretary Joan Doyle reported how managers at a Telstra site in Victoria "locked" their workers in a meeting for a whole day in an attempt to force them into signing individual contracts.
The June 9 announcement of Trujillo's appointment marked the end of Telstra chairperson Donald McGauchie's search for the "right man" to oversee Telstra's full privatisation. McGauchie — a former National Farmers Federation president who played a pivotal role for the Howard government in providing scab labour during the 1998 Patrick Stevedores lock-out of the maritime union — was appointed Telstra chairperson last August after having been previously appointed to the Telstra board by the Howard government in 1998.
US-born Trujillo is the former chief executive of Orange, the Britain-based mobile-phone subsidiary of France Telecom. During his 15 months as Orange CEO, he pursued an aggressive stance toward the company's staff. "I am a believer in the American style of governance which is that the shareholders have rights and when you are the CEO you advocate on behalf of your shareholders", Trujillo declared.
The Howard government will prioritise the legislation necessary to enable full privatisation once it has control of the Senate (from July 1). However, it is likely that it would take up to 18 months to finalise the sell off.
The only debate within the government is over what a privatised Telstra will look like. One of the two options being canvassed is maintaining Telstra as a single entity, which would lead to complaints from other telecommunications companies and potentially embarrassing and costly legal claims.
The other option, publicly favoured by out-going National Party leader and deputy PM John Anderson, is to split Telstra into two companies — one handling infrastructure maintenance and construction and the other handling Telstra's current retail services in competition with the other telcos.
Either option will lead to rural customers being left behind in the race for profits in the lucrative metropolitan telecommunications market.
Trujillo alluded to this in accepting his appointment as Telstra CEO. A June 11 Australian Associated Press report quoted him as promising "better services for rural Australians" but also saying that prices could rise if the Telstra's services improved.
From Green Left Weekly, June 29, 2005.
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