Pseudo-Private Corporation: the Twisted Phenomenon of China Airlines

 Pseudo-Private Corporation: the Twisted Phenomenon of China Airlines

United Daily News Editorial (Taipei, Taiwan)

February 14, 2019

 Translation of an Excerpt

The China Airlines (CAL) pilot strike has entered the 6^th day, with the accumulated number of affected flights reaching 174, inconvenienced passengers exceeding 23,000, and operating losses over NT$470 million.

The cause and assigning of responsibilities of this strike have been explored by various circles, but up to now, the exploration has stayed at the surface or the ignition fuse, and has not touched on two deeper and more deplorable factors, namely, the “pseudo-privatization” of state-run enterprises, leading to leadership problems brought about by external intervention in personnel and operation policies. In the first root cause, China Airlines claims to be a “private enterprise” with a majority of shares held by private sector stockholders; however, the government up to now has owned nearly half of CAL shares (49%), respectively held by the Air Travel Development Council, the Development Fund under the Cabinet, and Chunghwa Telecom. Thus, all 12 members of the board of directors (including the chairman) of China Airlines are all appointed by the government. These "pseudo-private" enterprises controlled by the government are usually led by politically-correct laymen, leading to frequent tilting to politics and forsaking professionalism on important issues by corporate high-echelons, affecting normal corporate operations.

Secondly, it is about employees and management cadres; working in so-called private corporations, they are fully aware the corporations are in fact "state-run" enterprises, thus it has spawned a mentality of "eating the same meal"— professionally called the "tragedy of the commons" or vernacularly referred to as "what belongs to the public belongs to nobody.” All strata of the corporation, on the surface, speak beautifully-worded niceties, but privately, however, use all efforts to "dip into the corporate coffers," creating a situation in which employees of China Airlines, working in the same domestic airline industry, enjoy far more benefits than those in EVA Air, with profits far below those of EVA. This, in reality, has made the true stockholders of public shares, and the general public who indirectly own the government-held shares, become the victims.

This twisted mentality of indistinguishing state-owned and private-owned corporations was demonstrated very obviously in this strike incident. Facing the same crisis in which the umbrella organization, the Taoyuan City Pilots Union, adopted a decision to launch a strike last August, China Airlines and EVA Air were similarly confronted with threatens to their operations; without quick handling, it would cause the corporation enormous losses; therefore, EVA cautiously and modestly secured cooperation with its employees, dissolving the threat of a strike in a timely manner. However, the high-echelons of China Airlines didn’t care so much; they resolutely rejected the union’s demands, but did not fully prepare themselves to reduce to a minimum the possible impact on passengers; the chairman of the board was even traveling abroad during the Chinese New Year’s holidays when the chances of a strike were at the highest, appearing only after his Transportation Ministry bosses asked him to return home to handle the matter. This is unimaginable to the public. This is also precisely the phenomenon of dereliction of duty produced by cavalier mindlessness spawned by the mentality of "holding government jobs."

Attachment : none