Did I hear Doug right?

[ALCARLOS]

The open question IMO is how much will they move off of cost neutral and how long will it take?

Since management has contracts in place with both the East and West, what would be the incentive for them to offer anything more than cost neutral?

 

[SpinDoc]

I hope every union employee is ready to strike, or honor the strikes of those of us who do! Maybe when the stockholders see the stock go to single digits with the threat of a shutdown they will be apt to think less of themselves.

Cost neutral = STMFD

And strikes would accomplish WHAT? An unplanned permanent vacation for you and your buds? That's not very smart.

 

[qwerty]

At what point do you think the salary gap between CEO and front line employee will get to your liking? There is a reason why boards pay their executives 6 figures - it's because they do a good job, and they just won't get the requisite experience by paying less. You can whine all you want about how much the 5 most senior executives make, but here is a clue - take all their salaries combined and it still doesn't lease one more plane, which means none of your brothers are coming back.

Let's talk about sharing he wealth since it's obvious there is some move afoot to tie executive pay and profit to current negotiations. This management team has created tremendous value over the last year, and promised to share that with every employee. If your paycheck + your profit sharing isn't enough for you because some in management make more, I suggest you put your feet where your mouths are. Collectively or individually you can decide not to work, but as long as you draw an agreed upon paycheck every week or two, hold up your end of the bargain and work. Remember, you work here, you choose to work here. ALl this talk about shut it down is nice and quaint (and I am beginning to think a bit contrived, some PR hack in motion), but that's not a realistic solution and you know it.

 

[whodoiworkfor]

Since management has contracts in place with both the East and West, what would be the incentive for them to offer anything more than cost neutral?

No, no, no. There is no contract with West FA's. Our contract expired two years ago. We were in the middle of neg. when the merger was announced and company quit neg's so we could get a combined contract. The west FA's have EVERY leg to stand on when it comes to work action.

 

[Nebucanezzar]

How about Customer Satisfaction? Happy, Motivated front line employees delivering great service is good for business and further enhances shareholder value. Some of Herb Kelleher's musings on this topic make an interesting read.

Shareholder value, Employee and customer satisfaction are not mutually exclusive but intertwined. The greater employee and customer satisfaction are the greater the potential is for enhanced shareholder value. Good business is not always quantifiable on a spread sheet.

Piney Bob speaks the truth.

 

[qwerty]

He sure does. Wouldn't it be nice if all airline employees were still making middle class or higher salaries with great benefits? Problem is it just isn't sustainable, didn't two trips through bankruptcy teach us anything?

Great customer service employees are invaluable, but with a union how do you reward them for what they are worth? Everyone is equal save the date of hire.

The other problem I have with this argument is this: how does the company realize their ROI when they increase salaries? If pay doubles, are employees twice as productive and twice as friendly? It's obvious the entry payrates need to come up (the PHL ramp as an example), but why increase the top tier when there is no return on the investment?

The pilots grandstanding not withstanding, employees that tie their future to a seniority based system are basically stuck. You can accept what your union negotiates or strike (or quit and start over.) Striking only works when you know you'll win, and its a gamble with a little to gain and everything to lose. Burning fuel might ruffle some feathers, you wanna bet who ends up paying that shortfall when negotiations get rolling? I am guessing it comes right out of any wage increase for the pilots.

 

[Dog Wonder]

Burning fuel might ruffle some feathers, you wanna bet who ends up paying that shortfall when negotiations get rolling? I am guessing it comes right out of any wage increase for the pilots.

How can the company take something from nothing?

 

[BoeingBoy]

The pilots grandstanding not withstanding....

There was an interesting statistic in the last About US - a 1% change in fuel burn is worth $25 million a year.

One percent is trifling - it gets lost in the "background noise". A 3% change is child's play. 4 to 5% takes a little thought and planning. So we're potentially talking $100 million or more per year. That can be savings or it can be additional cost. I don't think I'd call it "grandstanding".....

Jim

 

[RowUnderDCA]

He sure does. Wouldn't it be nice if all airline employees were still making middle class or higher salaries with great benefits? Problem is it just isn't sustainable, didn't two trips through bankruptcy teach us anything?

It's not sustainable, because we've decided in our broader political culture to not have a strategy to sustain a fluid, middle class. We have the building blocks to do it, but it appears we've decided to move head long to the teens '11..... 1911.

The labor movement of the 20th century.... the New Deal and WWII created the culture of economic mobility that most of us that are reading this board have lived in and know as the U.S. economy. In the last 30 years or so, it's been artificially maintained with huge budget and trade deficits. This will not last and will come crashing down hard on our kids, (or ourselves in the old-folks home). Right now, we're in the phase where everyone can afford two iPods, but not many can afford to be confident that they can keep their kids healthy and educated.

So, we could have a strategy for dealing with the new world of developing nations, developing consumer economies, increased standards of living of others in the world, increased use of natural resource (possible to depletion) and increased pollution, but instead it seems that the only things we care about are iPods and flat screens.

It's not about the airline industry, it's about your country and the world... it's a bigger system to think about.

 

[LCC_#1]

He sure does. Wouldn't it be nice if all airline employees were still making middle class or higher salaries with great benefits? Problem is it just isn't sustainable, didn't two trips through bankruptcy teach us anything?

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Then please explain SWA. They make MUCH more than US. While your at it, please explain legacy AA, whose f/a's top out at $58 an hour. US top out? $39. You're arguement has no legs.

I don't think anyone is proposing huge increases, but neither side should give a dime back. Parity with contracts is the fairest way. We are talking pennys in the big scheme of things.

Also, maybe YOU learned something different than me in ch 22, but i learned that when managment can't run an airline successfully and get what they want, they just go ch 11 and let the pro company judges give you everything they want. That may not be YOUR reality of 2 times to bk, but it is NOT mine. Do you think for one moment that NWA and DAL REALLY needed to file? DAL wanted that pension ended and NWA is out to get rid of the unions.

To somehow reward managers for a short lived time of profibility is foolish thinking in an industry that has such a low profit margin. So we reward the uppers for a failed website, cheapen product, and countless other messes, but because we are now at barebones and the WORST contract (East) in the industry, you want to give MANAGEMENT the credit?? US Airways made a profit BECAUSE of having the WORST contract..not because some snot nosed biz major changed the face of the airline industry. Oh it must had been that wonderful IT staff.


Keep on with that thinking and putting your front line people last and guess what? We'll be in Chapter 11 AGAIN!! :down: :down:

 

[RowUnderDCA]

Then please explain SWA. They make MUCH more than US. While your at it, please explain legacy AA, whose f/a's top out at $58 an hour. US top out? $39. You're arguement has no legs.

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1) To a very large degree SWA's ability to pay its employees more is based on its rate of growth, keeping average employee junior, and more importantly, it's style of yield management succeeds BECAUSE of the legacy's style of pricing. It's a ying/yang thing. The system woould not produce more compensation for employees if all airlines acted like SW. Well, maybe a tiny bit.

2) LCC's ability to generate revenue is less than AA's or DL's or UA's or CO's because it's major operations are in smaller markets. CLT is not ATL and PHL is not EWR and PHX is not LAX.

So, it's a broader systemic question. It's not just that your exec's are meaner or dumber. I'm constantly amazed at how persistent this thing is about making stuff personal.

 

[bigman60]

I have a theoretical question, if management came out with a blanket offer, that they were going to match WN payscales witht the caveat that the workforce be required to adopt WN type cooperation policies resulting in the loss of a few thousand employees due to increased efficiency and redundancy. Also, some decrease in the pay scale would be made due to the relatively inefficient nature of the LCC business model, let's say 95% of WN's payscale. Would this be acceptable? No more turf wars, no more 'that's not my job', no more protection of imcompetent employees.

I'm going to ramble here:
There are a few things about organized labor that I have never understood.

First of all, the outright protection of the weak to the detrimation of the majority. It appears to me that every good, dedicated employee suffers because of the inadequacies of a few, resulting in the need for more people to make up for the outliers. As the company has to employ more people to produce the same amount of work, the rate of pay offered will decrease.

Secondly, I don't know if union leaders realize exactly what the public perception of their groups are, but perceptions are generally unfavorable. The public sees every longshoreman on the West Coast taking home more than 100k/year. They see the competition to get entry level postal jobs given the pay/benefits of the position are way out of line with the marketplace. An example of union leadership stupidity I read years ago concerned the mayor of a large Midwestern city (I think). He was walking down the street on a weekend, noticed a storm drain was askew, bent down and adjusted it to fit flush with the road. This was observed by a Municipal Employee union member who reported it to the union. The union immediately filed a grievance because the simple act of adjusting a storm drain on a weekend called per their contract for 4 hours of OT for a Laborer, a Foreman, a Driver and a Dispatcher. 16 hours of OT for 16 seconds of work does not make the public swoon. Then when it's time for negotiations, the general public turns a blind eyes to the true injustices put upon labor by companies because they are most familiar with examples like those I cited above.

I would welcome any debate or observations.

 

[BoeingBoy]

I have a theoretical question, if management came out with a blanket offer, that they were going to match WN payscales witht the caveat that the workforce be required to adopt WN type cooperation policies resulting in the loss of a few thousand employees due to increased efficiency and redundancy. Also, some decrease in the pay scale would be made due to the relatively inefficient nature of the LCC business model, let's say 95% of WN's payscale. Would this be acceptable? No more turf wars, no more 'that's not my job', no more protection of imcompetent employees.

Well, one thing's for sure. Management isn't about to make that offer so it's definitely theoretical.....

There wouldn't be a need for that many fewer employees if US and it's unions adopted WN's contracts completely. The "head count" issue is largely (though not completely) driven by the business model, not by the contracts any longer.

Just looking at pilots, WN theoretically sends each pilot to initial training twice in their career - once when hired and once when they upgrade. There are obvious exceptions - pilots returning from disability, etc - but you get the idea. On the other hand, US is sending about 150 pilots to initial training just from the last bid. A bid that only had 25 new jobs - the E-190's. Little items like that contribute to WN pilot's being more productive. That type of thing happens all across the company.

So US needs the low wages to compete with the likes of WN, since so little effort (none) has gone into operating efficiently. In short, low wages are used to offset management laziness - it's much harder to be efficient than it is to have low wages, especially when BK is used.

Jim

 

[LCC_#1]

2) LCC's ability to generate revenue is less than AA's or DL's or UA's or CO's because it's major operations are in smaller markets. CLT is not ATL and PHL is not EWR and PHX is not LAX.

ummm...about $500 million in profits so far. Yeah, we are providing less revenue then the rest. How much money have the other airlines made so far? AND, I'M NOT THE ONE CONTINUING TO SHRINK THE AIRLINE!! DP could change that overnight. There's growth for SWA, but not for US? I find that HARD to believe.

Wrap it any way you want, no employee at the new US Airways should be taking a CUT at this time and THATS what cost neutral will do. If you want to take a cut, step up and let your employer take the first step to bettering your company's revenue. If you work here, Im SURE DP would love to take your money. Perhaps he could tranfer it to that mess of an IT dept.

 

[ClueByFour]

He sure does. Wouldn't it be nice if all airline employees were still making middle class or higher salaries with great benefits? Problem is it just isn't sustainable, didn't two trips through bankruptcy teach us anything?

LUV. It's sustainable with management that knows what it is doing.