Well, I could argue everyone of your statements on the government side. I have seen no level of incompetence unrewarded by our federal government. Just look at Canada's defence procurement history to get an idea of what we are dealing with here.
As a general rule, private, for-profit motivated entities are more efficient than non or not-for-profit entities. That is an unassailable fact. It's called the profit motive. Can there be exceptions? Of course, but if I had to wager on a government-run shipyard or a privately-run shipyard for maximum efficiency, I'd wager on the private one every time. I realize now, after some education by @Mikeymike, that Osborne is a bit of a hybrid, so that model may well work, but as a general rule, private beats public every time for controlling costs.
Then Air NZ came along and really screwed the dingo.
Not really, due to their lack of good due diligence Air NZ were the ones that got screwed in the purchase of what was already a dog that was so close to death that it stunk to high heaven. Ansett was costing Air NZ about a million a day after the take over and would have destroyed both airlines had not Air NZ not put Ansett into liquidation and then been bought out by the NZ government of the day. Basically the Australian owner ( from memory it was News Corp) had asset stripped Ansett and used them as a debt sinkhole, saw Air NZ come along with blinkers on and stars in their eyes and took full advantage of them .
Mate, yes I do say it’s a good thing, a very good thing. But I don’t think you quite understand why.
As a general rule - but that's not what you said. "When has ownership by government ever been more efficient than private ownership? " strongly suggests that private ownership is always more efficient, & that can easily be demonstrated to be false, especially when private businesses are working on government contracts (as in what's being discussed here), or in highly regulated industries. Productivity on the railways in the UK fell after the state sold them, off, for example.
Ferranti was broken by a deal a bit like that. Bought a US defence company which looked good on paper - until its assets disappeared & cash flow dried up as soon as Ferranti became the owner.
ukdefencejournal.org.uk
A "very good thing." That's a bit hyperbolic isn't it? I don't see it as good or bad. It's at best neutral. I am curious, however, how exactly this arrangement benefits the taxpayer?
Perhaps I'm being overly sensitive, but that is a bit condescending. I'm quite aware that not every private company owns the infrastructure in which they conduct operations. In fact, there are very good reasons to lease rather than own, depending on the business you are in, the expected duration of your business endeavour, and even the jurisdiction. But I'm quite certain that given a 20+ year build contract, BAE would have built a facility in Australia, or purchased and refurbished the facility at Osborne. Irving did that here in Canada, and that was even before getting the CSC. They did it so as to be able to bid for the CSC work, and they did it on their own dime, to the tune of $350 million. And they have already sunk an additional $75 million since to upgrade the computerized plasma cutting technology and introduce other improvements in the shipyard, as a result of lessons learned from the AOPV project. As a direct result from these additional investments, the labour hours for AOPV 3 are said to be substantially less than those for AOPV 1. I have seen estimates as much as 40% less. This represents additional profit to the corporation as they are in a fixed-price contract for the AOPV. That is the point I was trying to make about private versus public. Private will always seek ways to maximize profit. Unless there is some strategic reason for government ownership of Osborne, I don't see any advantage to either the government or the taxpayer of public ownership of this facility.
A private company will own whatever is required to own in order to efficiently conduct its business. And nothing more.
How modern will that shipyard still be in 20 years? Will the government step up to modernize it for the next "tenant". Will the government step up to pay for improvements and modernizations during the Hunter build? A private entity, working under the terms of a fixed-price contract, will be motivated to improve machinery and processes in order to maximize profit. I don't see the same motivation for government. Why would it? Under any fixed-price contract, it would simply be enriching the builder at its expense.
I was not familiar with Ansett, and have a passing familiarity with Ferranti as they had a substantial presence here in Canada. However, the reasons for their bankruptcies seem to me to be more a failing of the parent companies to exercise proper due diligence, and not an indictment of private ownership. From what little I have read of both, the shriveled gray hand of government was hovering in the background in both cases. So if anything, these examples further solidify for me that government involvement at best is inefficient, and at worst an utter disaster.
Just for historical context.... in Britain leading up to WW1 the naval dockyards were significantly faster in producing ships that the private yards in building large warships. This is not to suggest that the same conditions exist now but it is an interesting historical note.
Touched a nerve? Not at all.
I did not suggest that the fate of Ferranti was anything to do with public/private ownership differences, & I'm only answering this to correct this misapprehension. Though, now that you bring it into that discussion, it is a good illustration of the folly of assuming that privately owned businesses are necessarily better run than public enterprises. As I said, that's a naive assumption.
Air NZ was a private company at the time of the Ansett shambles as the government had sold it's shareholding some years previously and only stepped in again when bankruptcy became inevitable, buying a 83 % stake at the time which I think has now been reduced to 51% controlling interest, the airline quickly regained profitability and has been a better than average performer ever since. An other local tale would be Kiwi rail which when past to private ownership was asset stripped and slowly faded away until there was government intervention. Both private and public ownership have their failures and this shows to me that we still have a long way to go before we find the best options to achieve the best outcome as a single style of control is unlikely to cover all contingencies.
A similar story about Australia’s Hunter class suggested a displacement approaching 10,000 tons. Both Canada and Australia are adding different kit to their respective T26 versions due to different requirements and supply chain preferences. Thus displacement differences are to be expected. Until the CSC design changes and kit configuration are finalized along with a cost/benefit analysis of the extra weapons kit, everything is presently is speculation.
