Virgin Australia: Joe Aston has a piece out of Jane Hrdlicka in the Australian Financial Review

In a piece published yesterday (7 February), Joe Aston doesn’t hold back his criticism of Virgin Australia’s CEO and general manager, Jayne Hrdlicka.

He calls her the ‘Cruella de Vil’ of corporate Australia after casting doubt on her promise to retain 6,000 staff through the use of new owner Bain Capital’s ‘deep pockets,’ as Australian CEO Mike Murphy stated.

Now it is calling for JobSeeker payments, which subsidise businesses for retaining workers, to be extended beyond March this year. Otherwise it Hrdlicka claims, Virgin may have to retrench about a third of that workforce.

As Aston indicates, this is moving the responsibility for their sackings away from Bain Capital, and towards the government. Yes, that old trick of privatising profits, and socialising the downsizing of the workforce. The other term that Aston applies is ‘scapegoating’.

What does Joe Aston know?

He must know something, or at least is just working with how private equity (PE) firms operate. In essence, they buy companies and make them profitable (often by short-term disposal of assets). It’s the ‘mark ’em up, and then sell ’em on’ approach to profit—to quote Patsy from Absolutely Fabulous.

But Aston gives another incentive for Hrdlicka to cut costs, including not taking a salary until June 2021.

Hrdlicka is exceptionally exposed to Bain’s upside in its deal structure and when Bain flips Virgin to its next owner in three to five years she will walk away not with millions, but with tens of millions of dollars. And she wants a gold star for taking a modest base salary? How do PE firms find – indeed produce – people this tone deaf?

Joe Aston, Columnist Australian Financial Review

Aston is acerbic and amusing. Read the full article here.

2PAXfly Takeout

Let me just note that Joe Aston of the AFR’s Rear Window, has just had an adverse decision regarding a defamation suit recently. It doesn’t seem to have chastened his tongue.