Friday, March 6, 2009

Michael Costa, Pacific Brands, Branding, Protectionism, Misleading Marketing, False Posturing and Oi Aussie Oi Oi

So it turns out that Michael Costa, one time Labor party heavyweight and Treasurer of NSW has the same mindset as Dame Slap, aka Janet Albrechtsen, compassionate conservative of the extreme right.

It helps explain why Costa was so cloth eared while in office, and why now he's a columnist, he's turned into a ranting, railing, fulminating parrot to the right of Alan Jones, chief parrot and king of talk back radio (no cheap jokes about queens here please).

Costa happily picks up the burden of explaining why Pacific Bonds is a great company, unshackled capitalism is great, and unhindered, greedy pay hikes at the top are positively wonderful. And any thoughts to the contrary evoke the evil, vile dangers of protectionism. The full rant is here, under the header Edging closer to the trap of protectionism, if you can bear the shrill Costa tone for a a couple of thousand words.

Costa starts out even handedly by berating both sides for political opportunism - Kevin Rudd, Malcolm Turnbull - and Wayne Swan as a silly dullard for speaking about socks and jocks.

And then we move on to the nub, and I just love this phrasing: While it's regrettable that nearly 2000 workers will lose their jobs, the decision has nothing to do with the efficacy of the fiscal stimulus.

Well that'll be a great relief to the 2,000 workers who've lost their jobs, while Pacific Brands shifts much of its manufacturing offshore to China. It was going to happen all along. Nothing to do with the stimulus. Nothing to do with anything really. So bugger off you hapless worker clowns, sure you've lost your jobs, but we've got important economic principles to debate, and so what if a few pawns bite the dust and head off to become trailer park trash.

Yep, Costa is as compassionate as Janet. 

Whether its brands are nationally recognised is no reason for its management to be judged by a different standard to any other responsible to its shareholders.

But that's the whole point Mr. Costa. Pacific Brands, like many other scoundrels, took refuge in patriotism. Their branding was cluttered with Australiana, they were a national symbol, they wrapped themselves in that colonial flag with its British outpost up in the corner. They were probably what any right thinking lad wore under his daks on the way to the riots in Cronulla.

So what happens when lamingtons get manufactured in China? Or Holden and Ford are found to be outposts of a derelict, wrecked Detroit cabal? Simple minded citizens, of the right and the left wing, who swallowed whole the notion of hard yakka and chesty bonds, get a little mad. (I mean gor blimey guvnor, they used great Australian sporting heroes to spiv and sell their goods! Dinkum!)

It's called trading off, presenting one image while deviously working towards another goal. It's deceptive and disreputable, verging on the dishonest. Perhaps you can't expect anything better of a company, but you can't expect people to say oh bugger it, who cares if we've shifted the manufacture of koalas and kangaroos to China.

Not that it worries me all that much. I don't think I've bought anything belonging to Pacific Brands in decades. Their hokey, and as it turns out specious and false appeal to Australian sentiment and Australian pride and Australian patriotism is nothing but humbug of the worst kind. No I'm a two dollar store person, I don't worry about the labels and the branding, and in any case Pacific Brands were a particularly low rent set of brands. Just give some honest to goodness Chinese crap that will last the lifetime of the warranty, whether 3 months or a year.

So it doesn't worry me that Pacific Brands are trooping off to China, but you'd have to be passably cloth eared not to understand why it's vexatious to some consumers, and why there's been talk of a consumer ban on the assorted brands.

As you'd expect, Costa is profoundly cloth eared, carrying his incapacity as a politician into his incapacity as a columnist of the right wing kind. He's outraged at the moral outrage being feigned by the government. It creates a climate for protectionism.

The public is entitled to ask: if you're so outraged by what appears to be a straightforward commercial decision, why haven't you taken more decisive action to keep these jobs in Australia?

The framing of the attack on Pacific Brands around the symbolic Australian nature of the product feeds into growing protectionist sentiment around the world: the US stimulus package with its, albeit watered-down, "Buy American" provisions and Gordon Brown's misguided plea of for "British jobs for British workers." If more Australian companies move offshore for commercial reasons this issue could come to haunt the Government ...

It could also come to haunt the companies who've traded off on being proudly Australian. It's the lowest kind of marketing, the appeal to others about being so very Australian, rather than selling on quality or price or appeal or utility. It's the kind of humbug product differentiation you find in basic clothing or petrol or other products where there's not much else to pitch - after all the quality of the clothing pitched by Bonds might as well have been made in China in the first place.

But of course for Costa it's not about the company, it's about the way this unfortunate attack on Pacific Brands has revolved around its symbolic Australian nature. Well d'oh, it would, wouldn't it, because they've been shamelessly trading off images of heroic Australians these many decades. If they'd been advertising themselves as internationally sophisticated suppliers of jocks to her Majesty the Queen, nobody would have noticed or given a flying fuck.

Then it's on to a cloth-eared explanation of how the decision to boost the pay packets at the time of the shift to China has nothing to do with anything.

Morphet's salary, while large, is hardly at the top end of the scale for Australian CEOs. Although what the size of her salary has to do with the morality of the decision Pacific Brands needs to be explained. If she was earning half or a third of her current salary, would the decision have been OK?

Let's try this in words of one syllable. She sacked 2000 Australian workers from an Australian company boasting how proud it is to be Australian and sell dinky di Australian products to patriotic Australians, while shipping manufacturing off to China - but presumably still expecting to trade on and market its brands as dinki di Australian.

At best it was poorly anticipated and poorly managed, and the notion that you could just ship all the manufacturing gear supplied by government money off to China to help in the re-adjustment is bizarre to say the least. She should have been paid half or a third of her current salary for mishandling the debacle, creating a mess both for her company and for the government, which truth to tell could have done without the whole mini-saga. Everybody knows the Chinese can do this kind of manufacturing cheaper, but you'd have to be a cloth-eared columnist not to realise what fear this generates in the lucky country, with the thought that we might all be reduced to coolie wages and third world living standards.

Just in terms of timing and method it was singularly inept, and always set to be a tabloid storm in a teacup. It reminds me of the way James Hardie comprehensively mis-read the mood in relation to asbestos victims during that extended compensation saga as the company fought tooth and nail to deny its past.

I'll say it again. I don't mind if Pacific Brands shifts all its manufacturing to China. But they should learn one lesson quickly - if you live by a brand, you can just as quickly die in the marketplace by a brand.

Oh but there's one condition I'd impose on them heading overseas - they're compelled to take Michael Costa with them. Since he's such a good theoretical economist - look at the wonderful state in which he left NSW - he'd make an excellent quality control supervisor. I'm thinking Fujian province is just the right place. 

Oh one other condition. He's not allowed access to email so he can't send any columns to The Australian, at least for the first two years of exile. That should be the fate of all politicians who brand themselves as Labor party people, friends and supporters of the workers, and then reveal themselves to be far right loons, happy to be in the company of Dame Slap. Talk about misleading marketing, unreliable branding and false posturing ...

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