PineyBob said:
Apparently not! There is an orthodoxy on here that to me is very Robotic and Orwellian and shows very little independant thinking.
Anyone who dares question the orthodoxy is immediately shouted down and insulted. God forbid if you are a customer who does not walk in lockstep with this orthodoxy.
One need only look to the Steel Industry to see exactly what happens when all you do is repeat the mistakes of the past.
The USWA is mighty silent on NuCor Steel and it's record profits that almost single handedly bankrupt several integrated Steel Companies like LTV and Bethlehem. A non union shop where the average worker income exceeds USWA wages in some cases by 30-40 THOUSAND annually. NuCor employees laughed the USWA right off the property when they tried to organize. The employees just whipped out there W-2's and asked "What can you do for us" and of course the answer was NOTHING!
There is a lesson in NuCor Steel for every US Airways employee and that lesson is that it is possible to be a low cost, high wage provider. You have to look and think outside the box and this goes for labor and management.
I agree with much of what you've said here.
I kind of like the slick banter between two lawyers in court followed by a shared beer at the sports bar across the street. Perspectives are 360 degrees. 360 people surrounding a problem will give a different description. The guy looking south sees the smile on the face. The guy looking north sees a dagger gripped in the hand behind the back. Together they draw a conclusion what the smile and the dagger combined might represent... The guy to the south sees a hooded figure kneeling in the shadows, over the victim, holding a weapon in his hand. The guy to the north sees a Cleric kneeling, gripping a cross with both hands above the victim in prayer. Listen to perspective... add your own. Argue. Debate. Insults are not productive.
A different perspective on the, “lesson in NuCor Steel for every US Airways employeeâ€. Bear with me...
Here's sections of an article written on the joys of “Low Cost†“Highly Compensated†Employees:
Sun, Jan. 05, 2003
Southwest keeps employees happy
By Mitchell Schnurman
Star-Telegram Staff Writer
â€Low costs are a way of life at Southwest Airlines, but here's a little
secret: Many of its pilots are among the best-paid in the business...
...Southwest pilots earn about 20 percent less each month than their colleagues
at mainline carriers, but many Southwest pilots eventually lap the
competition because of stock options, profit sharing and performance
bonuses.
Those variable elements have made millionaires out of some Southwest pilots
without ratcheting up the company's expenses.
Not surprisingly, stock options have been eagerly adopted by most of the
airline's other workers.
At Southwest, it's a virtuous circle, holding down labor costs, boosting
productivity and rewarding the people responsible for the company's success.
That, in turn, drives more growth, more job opportunities and a stronger
stock price.
Executives at other airlines marvel at the trust between Southwest managers
and employees. But Jim Parker, Southwest's chief executive, says it's just a
matter of everyone realizing that what goes around comes around....â€
... Since then, Southwest's stock has split four times and its price has
soared, even after accounting for the latest downturn in the industry. The
initial stakes for those senior pilots now total 50,625 shares, with a base
price, adjusted for splits, of $3.95 a share.... Last January, when Southwest was trading at more than $23, those stakes were worth just under $1 million....
....The upside potential is great, but the process requires careful tending.â€
...Surely that's one reason that ramp workers recently agreed to a contract
extension, even though it freezes pay for two years. Their deal includes
stock options, which have become a staple with nearly all worker groups at
Southwest.
Darby calls the Southwest approach "self-adjusting." If there are no
profits, there's no profit sharing, and the stock options aren't a hard
cost.
"The problem is that you have to sell employees on doing it," Darby said.
"They start out wanting cash."
Southwest says it pays competitive rates for all its employees. By adding
stock options to the mix, it keeps pay from skyrocketing and motivates
workers to push harder.
That keeps the company growing, which creates more jobs. Southwest pilots
have typically advanced to the captain's seat in less than six years, about
half the time of pilots at many other airlines -- and that promotion adds
the biggest boost to pay.â€
That’s the article. What can you extract from it? Southwest employees are paid well. The total compensation package is worth more than those of some employees at Legacy Airlines. Because of this morale is high. The employees are motivated.
But what is the hard driving facet behind morale, motivation and Management/Employee mutual geniality? --Employee Compensation. Management has found a recipe for success at the negotiating table. But...
Is it nature’s way that everyone live happily ever after? –Rarely. What does this formula rely on? –Growth. This permeates the Article above from the first sentence to the last. For SouthWest and NuCor Steel, the birth or rebirth cycle of a Corporation followed by an enduring Growth Cycle will make the recipe work. But what happens when a Corporation reaches the Mature stage?
When these Corporations reach the Mature phase of its business life cycle, employee advancement declines, cost free, profit based incentive programs such as profit sharing, Bonuses and Stock Options become less valuable because of growth stagnation. ....See where this is going?
The one element which will not change with an aging Employee group as well as new hire Employee entrants – is the compensation and retirement security issue. With growth stagnation at NuCor as well as SouthWest, the employees will seek satisfaction elsewhere at the negotiating table. NuCor will, of course try to retain it’s low cost competitive advantage. Employees will place a greater value on the necessity of Labor Organization and Collective Negotiations. This all leads where... Higher Corporate Operating Costs?
SouthWest must grow to sustain it’s employee compensation operational cost advantages. Lately SouthWest has deviated from it’s formula for growth. With Baltimore and Philadelphia, SouthWest has indicated that it must grow via a path of more frictionally competitive Markets. The Airline is seeing more competitive resistance form evolutionary Legacy Changes as well as an exponentially growing presence of other successful LCCs.
The Industry is nudging toward a new state of Equilibrium. LCC’s costs are rising while Legacy Airlines are remodeling for Low Cost Competition. The external indicators are that the LCCs are meeting greater resistance to incisive incursions. The internal indicators are that employees are beginning to become concerned about the universal truth... Compensation.
Junior Southwest Pilots are just beginning to put pressure on Southwest Executives to convert their compensation plans to match or exceed those of the Major Airlines. Here’s one quote from SWAPA:
“...The Southwest Airlines Pilots Association “remains steadfast in its commitment to negotiate an industry-leading contract.â€
Here’s another quote from the Unisys Corporation:
“Part of the problem stems from the desire of each pilot group to have an industry-leading contract. Even some of Southwest’s pilots have caught the fever. And part of the problem stems from the employees mistaking the cyclical peak of the late 1990s for the beginning of an era of permanent prosperity. Sadly, it was in fact the end of an all-too-brief period of temporary and modest prosperity. Somehow, in the summer of 2002 Southwest managed to avoid (or postpone) the reckoning, negotiating a mid-term two-year extension (to 2006) of its pilot contract with only a 20% wage increase over the next two years.â€
Reckoning... Not my words but the words of an Airline Research and Consulting group which neither slants it’s reports to favor Labor or Management. Employees can’t continue to upgrade forever in a perpetual growth business cycle. An Airline’s overvalued stock in the Mature stage of the business life-cycle, can’t sustain the same post retirement potentials for the youthful as it did for the mature employees.
So my conclusion is that different perspectives by different angles of aspect will reveal why different organizations have competitive advantages and why their employees, who’s needs are mutually satisfying under growth oriented Management, will have no use for more formalized Labor Organizations or more tenuous collective bargaining processes. At least until... the certainty of the Reckoning.
They only have 18 months seniority. Don't let the door hit them in the head.
