American banking on unity approach
'Marriage counselor' to help airline, employees learn to work together
09:31 PM CDT on Thursday, October 9, 2003
By ERIC TORBENSON / The Dallas Morning News
American Airlines and its unions – with the help of what chief executive Gerard Arpey calls a "marriage counselor" – are setting aside three decades of acrimony and trying to run the airline as partners.
It's unlike anything ever attempted at American, and unheard of among major airlines.
"The company is taking a heck of a risk by inviting us to their party," said Capt. Steve Blankenship, the pilots union's communications chairman.
Mr. Arpey took the initiative this month by inviting union leaders to key management review and strategy meetings for the first time.
But that's just the beginning. In the next few weeks, union leaders and American's management will chart out other ways that the company's 98,000 employees can influence its direction.
The effort isn't restricted to top union officials and Mr. Arpey and his lieutenants.
Committees will be organized on two other levels as well to improve American's operations. One set of committees will team department vice presidents with union representatives; the other pairs front-line workers such as mechanics and bag handlers and their bosses.
"We're committed to it," said Jeff Brundage, vice president for employee policy and relations.
Mr. Arpey, who's been on the job six months, is staking his success on the collaborative approach, one labor expert said. "Arpey may see it as the only future they have," said Brad Bartholomew, a consultant with the Newfoundland Group in Southlake who has followed American closely.
It's a sharp departure from the approach of his predecessors, Donald Carty, who resigned under fire in April, and Robert Crandall, who retired in 1998, Mr. Bartholomew said.
"He doesn't want to choose the confrontational path that Bob Crandall was comfortable with, and he doesn't want to have the negotiating snafus that Carty struggled with," he said.
Time is on the plan's side because American faces no contract talks for four years.
The Allied Pilots Association has been most enthusiastic about the effort, and the Transport Workers Union also is on board. The Association of Professional Flight Attendants isn't sure.
"We've not made any decisions yet about it," said George Price, a spokesman for the flight attendants union.
Airline executives and pilots union leaders agree that the plan will take months to take hold. To work, it will require union leaders to abandon their long-held belief that working against the company helps them reach their goals.
On the other side, American executives will have to stop thinking of unions as adversaries and employees as an expense line on the company's ledger.
"What we're really talking about here is oversight for us," Mr. Blankenship said. "The company all of a sudden becomes transparent, and we understand things about the company that we've never had access to before."
From restructuring
The unprecedented effort emerged from the painful restructuring that saved American from bankruptcy this spring. It required American to squeeze $1.8 billion in annual concessions from the pilots, the Transport Workers Union's eight labor groups, the flight attendants and the airline's non-union employees.
"I don't think anybody has ever renegotiated 10 agreements in five weeks with a couple of hundred people in one building," Mr. Brundage said. "What we're doing here is an extension of that."
This week, Mr. Arpey drilled 400 of his top managers in the new way of working with labor.
Managers at American's annual leadership conference analyzed their dealings with employees and mapped out ideas on how to improve those relationships.
The managers wrote what didn't work on cards – concepts such as "distrust" – that they left in Fairmont Hotel conference rooms. "We're physically asking them to leave behind some of those old traits," Mr. Brundage said.
Cards with ideas about improved collaboration and respect were brought back and hung up at American's Fort Worth headquarters.
"We're going to measure ourselves, and we're not going to accept anything other than that type of behavior down the road," Mr. Brundage said.
Unprecedented move
No other major airline – not even Dallas' Southwest Airlines, revered for its tranquil labor relations – has tried to tie together unions and managers in quite the same way.
United Airlines tried something similar when its employees bought the airline in 1994. But it fell apart after a few years, and the Chicago-based carrier is now in bankruptcy.
There's no guarantee the plan will work at American, said Robert Hughes, founder of the Overland Resource Group in suburban Kansas City, Mo.
Mr. Hughes is the marriage counselor who is helping American's management and unions work out the details.
Either side can fire the small firm, which has worked with dozens of companies and their unions, including Ford Motor Co. and the United Auto Workers.
"We've dealt with companies where labor relations have been as strained as they are at American," Mr. Hughes said.
The unions' contracts with American outline employees' pay, benefits and work rules. But nothing governs how much management should share with labor on strategy and other issues.
In the past, American, like most airlines, decided key issues behind closed doors and announced them to employees and the public at the same time.
Overland's proposal is to let American share as much information with employees as possible. Union leaders and representatives from non-union groups such as reservation agents would, in turn, share the news with rank-and-file employees.
At the same time, the union-management steering committees will be meeting to discuss ways of working smarter. Overland consultants will be a neutral third party guiding the committees, which could begin work as early as next year.
The chief executive needs to back the effort 100 percent for the Overland model to succeed, Mr. Hughes said.
Recovery plan
In American's case, it was Mr. Arpey himself who hatched the idea as part of his four-step recovery plan after the near-bankruptcy, Mr. Brundage said.
The plan's "Pull Together, Win Together" tenet is crucial to accomplishing the other three – lowering costs, protecting American's financial future and "flying smart," Mr. Brundage said.
Those efforts already are showing results. American's parent company, AMR Corp., is expected to beat Wall Street analysts' estimates when it reports its third quarter earnings Oct. 22 – and may even show a small profit.
And AMR shares – which were trading at $4.04 when Mr. Arpey took the reins April 24 – are now above $14.
As American adopts the Overland system, Mr. Arpey may have to fire managers who can't adapt, Mr. Brundage and Mr. Hughes said. The program will "smoke out" individuals who resist on both the management and union sides, Mr. Hughes said.
"We invariably lay this plan out for managers, who seem to like it but pull us aside and say to us, 'This will work, but you'll have to take these three people out back and shoot them,' " Mr. Hughes said.
Mr. Blankenship recognizes that not all his members will embrace the new thinking.
"Listen, Gerard Arpey is not the enemy," he said. "The issue here is trust, but this process permits us the ability to hear what management says, but more importantly, verify what they say by bringing words into action."
American also thinks its new labor strategy will give it a competitive advantage.
"People commit to things they help create," he said. "This is the way to solve a lot of problems."
E-mail [email protected]
'Marriage counselor' to help airline, employees learn to work together
09:31 PM CDT on Thursday, October 9, 2003
By ERIC TORBENSON / The Dallas Morning News
American Airlines and its unions – with the help of what chief executive Gerard Arpey calls a "marriage counselor" – are setting aside three decades of acrimony and trying to run the airline as partners.
It's unlike anything ever attempted at American, and unheard of among major airlines.
"The company is taking a heck of a risk by inviting us to their party," said Capt. Steve Blankenship, the pilots union's communications chairman.
Mr. Arpey took the initiative this month by inviting union leaders to key management review and strategy meetings for the first time.
But that's just the beginning. In the next few weeks, union leaders and American's management will chart out other ways that the company's 98,000 employees can influence its direction.
The effort isn't restricted to top union officials and Mr. Arpey and his lieutenants.
Committees will be organized on two other levels as well to improve American's operations. One set of committees will team department vice presidents with union representatives; the other pairs front-line workers such as mechanics and bag handlers and their bosses.
"We're committed to it," said Jeff Brundage, vice president for employee policy and relations.
Mr. Arpey, who's been on the job six months, is staking his success on the collaborative approach, one labor expert said. "Arpey may see it as the only future they have," said Brad Bartholomew, a consultant with the Newfoundland Group in Southlake who has followed American closely.
It's a sharp departure from the approach of his predecessors, Donald Carty, who resigned under fire in April, and Robert Crandall, who retired in 1998, Mr. Bartholomew said.
"He doesn't want to choose the confrontational path that Bob Crandall was comfortable with, and he doesn't want to have the negotiating snafus that Carty struggled with," he said.
Time is on the plan's side because American faces no contract talks for four years.
The Allied Pilots Association has been most enthusiastic about the effort, and the Transport Workers Union also is on board. The Association of Professional Flight Attendants isn't sure.
"We've not made any decisions yet about it," said George Price, a spokesman for the flight attendants union.
Airline executives and pilots union leaders agree that the plan will take months to take hold. To work, it will require union leaders to abandon their long-held belief that working against the company helps them reach their goals.
On the other side, American executives will have to stop thinking of unions as adversaries and employees as an expense line on the company's ledger.
"What we're really talking about here is oversight for us," Mr. Blankenship said. "The company all of a sudden becomes transparent, and we understand things about the company that we've never had access to before."
From restructuring
The unprecedented effort emerged from the painful restructuring that saved American from bankruptcy this spring. It required American to squeeze $1.8 billion in annual concessions from the pilots, the Transport Workers Union's eight labor groups, the flight attendants and the airline's non-union employees.
"I don't think anybody has ever renegotiated 10 agreements in five weeks with a couple of hundred people in one building," Mr. Brundage said. "What we're doing here is an extension of that."
This week, Mr. Arpey drilled 400 of his top managers in the new way of working with labor.
Managers at American's annual leadership conference analyzed their dealings with employees and mapped out ideas on how to improve those relationships.
The managers wrote what didn't work on cards – concepts such as "distrust" – that they left in Fairmont Hotel conference rooms. "We're physically asking them to leave behind some of those old traits," Mr. Brundage said.
Cards with ideas about improved collaboration and respect were brought back and hung up at American's Fort Worth headquarters.
"We're going to measure ourselves, and we're not going to accept anything other than that type of behavior down the road," Mr. Brundage said.
Unprecedented move
No other major airline – not even Dallas' Southwest Airlines, revered for its tranquil labor relations – has tried to tie together unions and managers in quite the same way.
United Airlines tried something similar when its employees bought the airline in 1994. But it fell apart after a few years, and the Chicago-based carrier is now in bankruptcy.
There's no guarantee the plan will work at American, said Robert Hughes, founder of the Overland Resource Group in suburban Kansas City, Mo.
Mr. Hughes is the marriage counselor who is helping American's management and unions work out the details.
Either side can fire the small firm, which has worked with dozens of companies and their unions, including Ford Motor Co. and the United Auto Workers.
"We've dealt with companies where labor relations have been as strained as they are at American," Mr. Hughes said.
The unions' contracts with American outline employees' pay, benefits and work rules. But nothing governs how much management should share with labor on strategy and other issues.
In the past, American, like most airlines, decided key issues behind closed doors and announced them to employees and the public at the same time.
Overland's proposal is to let American share as much information with employees as possible. Union leaders and representatives from non-union groups such as reservation agents would, in turn, share the news with rank-and-file employees.
At the same time, the union-management steering committees will be meeting to discuss ways of working smarter. Overland consultants will be a neutral third party guiding the committees, which could begin work as early as next year.
The chief executive needs to back the effort 100 percent for the Overland model to succeed, Mr. Hughes said.
Recovery plan
In American's case, it was Mr. Arpey himself who hatched the idea as part of his four-step recovery plan after the near-bankruptcy, Mr. Brundage said.
The plan's "Pull Together, Win Together" tenet is crucial to accomplishing the other three – lowering costs, protecting American's financial future and "flying smart," Mr. Brundage said.
Those efforts already are showing results. American's parent company, AMR Corp., is expected to beat Wall Street analysts' estimates when it reports its third quarter earnings Oct. 22 – and may even show a small profit.
And AMR shares – which were trading at $4.04 when Mr. Arpey took the reins April 24 – are now above $14.
As American adopts the Overland system, Mr. Arpey may have to fire managers who can't adapt, Mr. Brundage and Mr. Hughes said. The program will "smoke out" individuals who resist on both the management and union sides, Mr. Hughes said.
"We invariably lay this plan out for managers, who seem to like it but pull us aside and say to us, 'This will work, but you'll have to take these three people out back and shoot them,' " Mr. Hughes said.
Mr. Blankenship recognizes that not all his members will embrace the new thinking.
"Listen, Gerard Arpey is not the enemy," he said. "The issue here is trust, but this process permits us the ability to hear what management says, but more importantly, verify what they say by bringing words into action."
American also thinks its new labor strategy will give it a competitive advantage.
"People commit to things they help create," he said. "This is the way to solve a lot of problems."
E-mail [email protected]
