In trying to assert herself, the besieged PM has added to her problems.

One thing can be said for Julia Gillard: she will not die wondering. Early in her life she chose a path and devoted herself  to seeing it through, pursuing her political ambition with a fierce, clinical, almost bloodless determination. Now that she is Prime Minister, she is doing whatever she can to try to hold on to the job.

Gillard's prime ministership is in deep trouble. The public has made a harsh, overwhelmingly negative judgment of her and she must restore her fortunes, soon. Hence her ministerial reshuffle - an audacious attempt to remake her government as she prepares for her second full calendar year as Prime Minister.

Every reshuffle requires painstaking care and precision, not just in the reorganisation of ministers but in the messages that precede and follow the changes. It is the political equivalent of making a souffle: everything must be just so.

Gillard's souffle is not a success. It is as though she approached the kitchen bench, assembled the ingredients, and then donned wicketkeeper's gloves and welding goggles before trying to separate the eggs.

It is internally inconsistent, and driven by an affection for superficialities and her rising paranoia about Kevin Rudd.

The corollary is that the Prime Minister will face a showdown with Rudd next year. The Foreign Minister foreshadowed that with his public intervention on behalf of Kim Carr yesterday, praising Carr as an outstanding innovation and industry minister who had saved the Australian car industry.

This was a pointed reference to what appears to be the issue that created distance between Gillard and Carr, who until this year had worked together closely. Rudd, as prime minister at the height of the global financial crisis, had demanded written undertakings about future investment from the major car makers in return for the government's establishment of the green car fund.

Early this year, Gillard tore up the agreements and junked the fund in order to rustle up money to pay for the rebuilding of Queensland after the floods, and told Carr about it later. As a result, the future of the three domestic car makers in Australia is uncertain and the government now has to try to persuade them to stay.

Carr is now gone from the cabinet, busted down to the outer ministry. Gillard demonstrated her talent as a negotiator by combining a newly created Manufacturing portfolio with the traditional area of Defence Materiel in her offer to Carr. Astutely, she reasoned that it would be harder for Carr to say no and storm off to the backbench, given his years of work formulating and implementing Labor's manufacturing policy.

Gillard guessed right, but consider the result. A few months ago, when there was a contraction in the domestic steel industry, the future of manufacturing became a massive issue, one more mini-crisis for Labor requiring Gillard's intervention at a hastily convened summit. Now, it is not a matter worthy of direct cabinet representation.

The PM had not intended for Carr to be the only minister ditched from cabinet. She also had Robert McClelland, the attorney-general, in the gun. The mild-mannered McClelland fought back, calling in his favours from his New South Wales Right grouping, and managed to stay, fouling up Gillard's original intention of replacing him in the cabinet with Mark Arbib.

But McClelland had to be moved out of the attorney-general's portfolio because the PM had earmarked that for Nicola Roxon, whom she decided to demote from Health. Gillard has made much of Roxon's status as the first female attorney-general but that cannot mask Roxon's demotion from a big-spending ministry at the heart of Labor's political mission. Roxon had to be moved because the PM judged her not to have generated enough favourable publicity for Labor after the government had spent so much money on health.

Thus Tanya Plibersek, a telegenic favourite of the ABC's Q&A audience, got Health. Many of the decisions in this reshuffle appear to have been driven by similar considerations. Ministers who scrub up well on panel shows or are willing to talk under water on Lateline or charm the interlocutors on 7.30 have done well.

The general take on the reshuffle is that Gillard has rewarded right-wing powerbrokers who helped her topple Rudd last year. That is definitely an element of it, but the reality is more complex.

Bill Shorten deserves his elevation to cabinet as Workplace Relations Minister. He was devastated when Rudd chose not to make him a minister after the 2007 election, but he swallowed his medicine and got to work as a parliamentary secretary and more recently as assistant treasurer. Shorten is a potential future leader of the ALP and Gillard was right to promote him, regardless of whether he organised numbers for her last year.

The promotion of Arbib to take over as Assistant Treasurer is more nakedly political. The abilities Gillard sees in him appear to have eluded the notice of many of his colleagues. As for keeping him on as Sport Minister because 2012 is an Olympic year … well, only in Australia.

But even as she has sought to assert herself, Gillard has created more problems. The humiliation of Carr has only served to energise Rudd. Promotion of Shorten gives the NSW and Queensland right-wingers who are now her main sponsors one more non-Rudd leadership option, in addition to Stephen Smith, should they decide next year that her position is terminal. As a ruthless, unemotional operator herself, she would understand the thinking.

http://www.smh.com.au/opinion/politics/gillard-shuffling-into-a-showdown-with-rudd-20111213-1ot1r.html

meanwhile ……

Supporters of Kevin Rudd are preparing to capitalise on the fallout from Julia Gillard's cabinet reshuffle after the demotion of Victorian Left factional warhorse Kim Carr sparked uproar in the Prime Minister's home branch.

Factional leaders were yesterday assessing the impact of the decision to demote Senator Carr, who is a longstanding numbers man and policy architect in the Socialist Left.

But the damage to the Prime Minister over the move is not restricted to the Left, with key Right faction members also angry at what one described as the "complete betrayal" of Senator Carr. The former Gillard supporter now seen as sympathetic to Mr Rudd, was demoted from cabinet from the Innovation, Industry, Science and Research portfolios to the outer ministries of Manufacturing and Defence Materiel.

"Gillard's unpopped the cork," a senior Labor insider said of the dumping of Senator Carr.

As Mr Rudd yesterday declared Senator Carr had been "a very good minister", the Australian Industry Group put itself at odds with unions by criticising the fact that manufacturing was no longer represented by a cabinet-level minister. The developments came as Ms Gillard declared she had appointed "the best team" to meet current national circumstances and denied claims that Peter Garrett and Robert McClelland had told her they would resign from parliament and spark byelections if she demoted them from cabinet.

On Monday, Ms Gillard ended days of speculation by announcing a ministerial reshuffle in which she promoted factional players Bill Shorten and Mark Arbib and former union leader Greg Combet to more senior positions and expanded her cabinet from 20 members to 22.

Yesterday, key Rudd supporters said Ms Gillard had angered the Labor caucus because she had appeared weak by promoting supporters without having the courage to demote poor performers.

They said the reshuffle could drive MPs to support Mr Rudd if there was a leadership contest next year. "In every reshuffle you have winners and losers, but the test is whether the reason changes have been made is easily identifiable, even to those who are unhappy," said one MP, who asked not to be named.

A key Carr supporter said: "She has created distinct divisions in her own caucus. She now has drawn a line and said who is on my side and who isn't."

The fallout over the Carr demotion is complicated in Victoria because of his leadership in the so-called "Stability Alliance" deal between the Socialist Left and part of the Right.

Senator Carr is in talks with Mr Shorten and Stephen Conroy to extend the deal, which shuts out a significant slice of the Right faction but delivers preselection "certainty" for Ms Gillard and state Labor leader Daniel Andrews.

"She f . . ks everything," a senior Socialist Left source said.

Sources suggested Ms Gillard might be strategically shifting her allegiances to NSW, following in the footsteps of Bob Hawke, in the belief that she needs to broaden her support base in the face of a potential challenge by Mr Rudd.

Ms Gillard's office denied consideration was given to dumping Senator Carr from the ministry altogether or that former Speaker Harry Jenkins was considered for elevation to the front bench.

Sources said a push to promote Mr Jenkins was scuttled amid concerns Tony Abbott would campaign on the issue.

They said Senator Conroy, the Communications Minister, had lobbied heavily against demoting Senator Carr, who yesterday released a pointed statement.

"Whilst this change of portfolio was not of my choosing, it is a job I am honoured to do," he said.

"The recent reshuffle is not a reflection of our efforts or our achievements."

Australian Industry Group chief executive Heather Ridout said she was concerned that manufacturing was not a cabinet-level portfolio.

Australian Workers Union national secretary Paul Howes and his Australian Manufacturing Workers Union counterpart Dave Oliver defended the changes, noting that Mr Combet, the new Industry and Innovation Minister, was in cabinet.

http://www.theaustralian.com.au/national-affairs/kevin-rudd-backers-mobilise-over-kim-carr-demotion/story-fn59niix-1226221336401

whilst back at the coalface …..

A stevedoring company chaired by Chris Corrigan has locked out hundreds of wharfies and helicoptered in non-union labour over union pickets to unload ships, in an escalating dispute that presents Bill Shorten with his first challenge as Julia Gillard's new Workplace Relations Minister.

POAGS, a supplier of stevedoring logistics and port management services, has locked out 320 workers at Fremantle and Bunbury in Western Australia and Port Kembla in NSW after claiming bans imposed by the Maritime Union of Australia had rendered parts of its business unviable.

In a key development last night, the union's assistant national secretary, Warren Smith, said the company told him late yesterday the workers at Fremantle and Bunbury would remain locked out even if they lifted their bans.

Mr Smith said the company warned that the employees would not be let back through the gates until a national agreement was reached. "They're doing an Alan Joyce on us," he said, referring to the airline chief executive's grounding of the Qantas fleet and threat to lock out workers in October.

Management staff unloaded at least two vessels at Port Kembla after being flown by helicopter over a picket line set up by MUA members.

Union officials sought to blame the escalating dispute on Mr Corrigan, the POAGS chairman and former Patrick chief who took on the MUA during the bitter 1998 waterfront dispute. "It is like Chris Corrigan is the Grinch, who cannot help himself but ruin Christmas for wharfies," said the union's assistant West Australian secretary Will Tracey.

Mr Shorten refused to comment last night, claiming it was inappropriate for him to talk about the dispute as Chris Evans remained Workplace Relations Minister until a swearing-in ceremony of new ministers today. This is despite Mr Shorten giving interviews yesterday when he spoke about a range of workplace relations issues.

A spokesman for Senator Evans said last night the government was concerned by the "apparent breakdown in negotiations and the tactics that are reportedly being employed".

"Nothing is achieved in our modern workplace relations system by engaging in adversarial behaviour," Senator Evans's spokesman said.

"The government urges both parties to negotiate in good faith and, if necessary, seek the assistance of Fair Work Australia rather than escalating the issue."

POAGS managing director Don Smithwick said earlier yesterday the union had imposed indefinite bans at Fremantle and Bunbury and union members at the two ports would remain locked out until the industrial action was lifted.

The bans at Port Kembla are due to end this morning.

The company was also using management labour at Bunbury and has contracted out work at Fremantle to Patrick stevedores, Mr Corrigan's former company.

Mr Smithwick said the indefinite bans had made the businesses at Fremantle and Bunbury "unviable".

"Given the nature of the bans and limitations the MUA has imposed at our Bunbury and Fremantle sites, POAGS will not be able to effectively and safely operate in those ports until all bans and limitations are lifted," he said. "Employees have been advised . . . we will not be operating in Fremantle or Bunbury and are therefore unable to provide work until either removal of the bans and limitations or the reaching of an agreement on the terms and conditions of a new enterprise agreement."

Mr Smithwick said the union action, which included a recent round of strikes at different ports, was " totally unjustified and have stalled what had been productive negotiations" over a new enterprise agreement.

POAGS, which had offered annual pay rises of 4 per cent over three years, claims the union's bid for better pay and conditions, including higher superannuation, represented an average 29 per cent increase over the life of the proposed deal.

Mr Smith said the "scab workers" helicoptered in to Port Kembla were given a 20-minute induction before starting a 12-hour shift, endangering themselves and other workers. A POAGS spokesman said the workers were adequately inducted and trained.

The union's southern NSW branch secretary, Garry Keane, said: "Rather than bargaining in good faith, POAGS is declaring war on its workforce and, in the process, recklessly endangering safety on the waterfront."

Mr Smith said the union was pursuing average 5 per cent pay rises and additional superannuation at most ports. While parity was being sought at two ports, he said awarding the union claim around a new grading structure would not have the financial impact asserted by the company.

Union officials said the company had unsuccessfully applied to Fair Work Australia to end the bans, which were legal and supported by the workforce.

South Coast Labor Council secretary Arthur Rorris said the company's decision to fly in workers at Port Kembla was a "gutless" attempt to avoid coming face-to-face with hard-working employees who just wanted a safer work place and equal pay.

Mr Tracey said: "We're still hoping for an outcome. . . but that's looking less and less likely."

http://www.theaustralian.com.au/national-affairs/industrial-relations/union-rage-at-lockout-on-wharves-is-first-test-for-bill-shorten/story-fn59noo3-1226221349500