Rail Union condemns Corrigan outburst

Rail Tram and Bus Union members in Pacific National are disgusted at threats made by Patricks Managing Director Chris Corrigan at an investors meeting in New York yesterday. “These comments run counter to the recently concluded talks for a mini-Enterprise Agreement for former FreightCorp employees, and ramp up the tension for the major negotiations for a Pacific National EBA, due to begin in November,” said RTBU National Secretary Roger Jowett.

"We will not be intimidated by bully-boy tactics. Mr Corrigan's statements were both provocative and inaccurate, playing to a US audience with little real grasp of the Australian rail freight industry," said Mr Jowett.

Pacific National is owned 50 - 50 by Patricks Stevedoring and Toll Holdings, following a firesale privatisation in February this year. The NSW Auditor-General reported in June that the sale of FreightCorp assets to Pacific National caused a loss of $70.1 million for NSW, as well as the transfer of $351.7 million in debt from FreightCorp to the government.

The stockmarket was very clear on what had happened, and boosted Chris Corrigan's personal wealth by $13 million in two days. "The RTBU is focussed on jobs and communities, but Patricks is on gouging what were public assets, revelling in the corporate greed that is at last being questioned by society," said Mr Jowett.

Mr Corrigan complained in New York that the union was blocking job cuts, but the new owners bought Pacific National with a three-year job security guarantee, paid for by the NSW government. "Corrigan is setting out a mid-term agenda with these remarks," said Mr Jowett.

Major broker reports already indicate that Pacific National is making profits above expectations because the separate Patrick and Toll rail operations have been integrated into PN, and it has had higher grain and container volumes.

Corrigan's hint that somehow the former government railways have productivity problems as he alleged against the maritime workers in 1998 clashes with data from the pro-business Productivity Commission. In the five years from 1996 in NSW, rail freight charges for grain to port fell in real terms by 22 per cent, for coal to port fell 52%.

"The RTBU was formed by four unions in 1993, and one of them is the oldest rail union in the world. This year, we celebrate 141 years of railway unionism in Australia. Like the MUA, we are here to stay," said Roger Jowett.

Pacific National Backgrounder

To RTBU Delegates and members

A speech yesterday to an investors meeting in New York by Patricks CEO Chris Corrigan has been a major media story today. Patricks is a joint owner of Pacific National. His comments included a projection of a 50 per cent job cut, "non-enlightened attitudes', and preparing for a new round of industrial disputes.

Railworkers in freight operations have seen massive changes in recent years. The press comments are ill-informed. We need to discuss with our workmates and the community what has really occurred in our industry.

1. JOBS in Pacific National

In 1991, there were 7,000 workers employed in interstate rail freight operations. By the end of 2001, just prior to the privatisation of National Rail Corporation, there were 1,200 workers involved - a reduction of 80%. In 1991, the deficit on interstate rail freight operations was $350 million per year. National Rail Corporation was in profit, and equipped with the most modern locomotives, rolling stock, terminals and communications systems of any rail enterprise in Australia, when it was sold to Pacific National.

In 1997, FreightCorp had 3,525 employees, and this was reduced to 2,100 at the sale in February 2002. This is a cut in jobs of 40% in just three years. FreightCorp was in profit and paying $20 million in dividends to the NSW Treasury as well as a $21 million tax equivalent.

JOBS then ...

ABC TV 7.30 Report, March 2, 2002

Corrigan: "We want to see much more frequency of service and we want to see much more reliability and a customer focus that will draw product away from intrastate movements by road and bring it back onto the rail where it's really the most efficient from an economic point of view

Q: How much room is there for workplace reform in the rail system?

Corrigan: "I think there is some room for refocussing of priorities and that comes obviously with the new owners. I don't think there is a necessity of major restructuring or reduction in numbers. That will depend of course on how quickly we can increase rail's share of the market ... There will clearly be changes in staff functions ... But overall we wouldn't see job reductions as a major element of this acquisition".

JOBS now ...

Sydney Morning Herald, October 2, 2002

Corrigan: "We are finding push-back in any areas that effect employment numbers".

The Age, October 2, 2002

Mr Corrigan said the introduction of new technology at National Rail could enable him to cut the workforce by 50 per cent, which could trigger a dispute.

2. Productivity in Pacific National

Productivity Commission - Trends in Australian Infrastructure Prices 1990-91 to 2000-01 Rail Freight

Between 1996-97 and 2000-01, average rail freight charges for the transport of whet to ports fell in real terms by 22 per cent in NSW and 9 per cent in WA. Over the same period, average rail freight rates for the transport of coal have fallen in real terms in NSW by 52 per cent and in Queensland by 26 per cent.

Rail Freight

• Between 1996-97 and 200-01, average rail freight charges for the transport of wheat from the silo to the port have fallen in real terms in NSW (22 per cent), Victoria (20 per cent), Queensland (17 per cent), SA (6 per cent) and WA (9 per cent).
• Between 1995-96 and 2000-01, average rail freight charges for the transport of coal have fallen in real terms in NSW (52 per cent) and Queensland (26 per cent)
• Between 1990-91 and 2000-01, coal freight rates in the Hunter Valley fell in real terms (61 per cent).

3. How the press saw the sale

Sydney Morning Herald, January 31, 2002

Lang, Toll shares surge as rail deal wins green light Lang and Toll shares open 10% and 17% higher ... the share price may go higher tonight if investors in the UK and US buy the stock overnight, sparking a second round of buying here.

Sydney Morning Herald, March 2, 2002

"According to Lang Corp's 2001 Annual Report, Corrigan's salary package last year was $816,000 and he also owns 4,000,780 shares, in additions to Thursday's rise, the value of his stake in the company has risen $13 million in two days, to $57.4 m".