Worst Company In America

DCT JVL

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Oct 7, 2002
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www.usaviation.com
Just got this in my e-mail box from the Motley Fool. It is their Small-Cap investment newsletter (the free version). It is a long read, but worth it. It goes to show you that you have to be nice to everybody. You never know who you are going to piss off.

The Worst Company in America?
By Paul Elliott

Are you familiar with the phrase, "Where do I start?" Finally, I know exactly what that means. Because, honestly, where do I start?

Maybe I should just blurt it out: American Airlines (NYSE: AMR).

No... wait!
I guess I really don't know where to start. But I know where I'm going: I'm going to tell you the only condition under which I would buy a single share of that woeful midair disaster. But first you must hear something. (Bear with me; you will see the connection.)

Every 30 days, I pay darn near $100 for cable and Internet. You probably do, too. Now, I'll be the first to admit... I can't be absolutely certain that I am right in my ongoing payment dispute with my provider, Comcast (Nasdaq: CMCSK), but I do know this: Those folks seem awfully reluctant to take $1,200 per year from me for the rest of my life. You probably think that's an exaggeration, but, really, it's not. At least it wouldn't be had the company's disregard for customer service not hastened my...

"Inevitable switchover to satellite"
That last bit is in quotes because that's exactly what I said to Comcast. I also told them how I was documenting my experience so that should the occasion arise -- say, in a column discussing the importance of customer service -- I would tell you all about it.

Do you think this got a rise out of Comcast? Not one bit. And so goes the second-most audacious corporate act of malfeasance I came across this week. The big one occurred at an airport in Miami. We'll get to that shortly, but let me make one last point before I let this go.

It is my conclusion that Comcast does not really care about its customers (otherwise, they wouldn't leave an ominous message on your machine and then not answer their own phones for two days). Worse, Comcast apparently doesn't care what people say about its lack of customer service -- or how many people they say it to.

This article really is about investing
If you've read my previous columns, you know I lean a bit toward Socially Responsible Investing (SRI) -- at least so far as I won't knowingly invest in companies whose business I don't approve of. Others insist that social conscience and investing don't mix. I respect that opinion.

But that doesn't extend to customer service. If you invest in a company that sells junk, or worse, disrespects or ignores its customers, you are headed for heartache. Say what you will about those value gurus who buy beaten-up disasters as "turnarounds." Unless you see draconian changes under way, walk away.

Experience tells us that no business -- not even a monopoly -- can survive if it doesn't put its customers first. Eventually, folks like you and me will find alternatives. (The Department of Motor Vehicles might be the one exception, but I swear to you, my recent experiences with ours in Maryland have been downright pleasant. What's up with that?)

Because you can't be everywhere
All of which brings me to one major benefit of investing in what we call a "community of like-minded investors." After all, my hero Peter Lynch advocates buying companies whose products you swear by, but that pretty much limits you to consumer and service companies. What if you want to branch out?

I own a Dell (Nasdaq: DELL), for example, and I would recommend one to anybody. I can't necessarily recommend the stock to you personally, but I'd sure give it a hard look. Same with Nordstrom (NYSE: JWN) and XM Satellite (Nasdaq: XMSR), for that matter.

But what about Cisco (Nasdaq: CSCO)? I have a wireless router at home that works just fine, but that's small potatoes. I could read about the products in mags and journals, but where do I get firsthand knowledge of its service and culture -- you know, like the kind I got at the airport this weekend?

I'll take your hand if you take my hand
Now imagine, on the other hand, you hook up with a service like Motley Fool Hidden Gems. Once a stock is recommended, you can bet that someone will pipe up with some real-life experience. If you take the time to get in there and really mix it up, there is no end to the scuttlebutt you can dig up.

And this is important because in the final balance, a company's worth isn't determined on Wall Street, but on Main Street. Put another way, a company without customers is a company without assets. And by the time an experience like the one I had at Miami International Airport shows up in an annual report or analyst report, it's usually too late.

Has this ever happened to you?
I won't bore you with the whole story. Let's just say that the camel's back broke about five hours into my ordeal, as our rag-tag fugitive fleet made its way from Gate A-7 to Gate D-46. By my estimate, we had just about passed the halfway point on a mile-long trek when it happened.

We rounded the last corner and she was standing there, leaning against the wall and looking at a piece of paper in her left hand. A fellow traveler -- a smallish, soft-spoken woman, maybe in her mid- to late 60s -- shuffled up to her and exclaimed, "Oh, thank goodness, are you here to help customers?"

The woman -- and I swear by heaven this is the truth -- looked down at her, straight in the eye and said, "No."

Never disgrace the uniform
For some reason, what kills me is that this unhelpful soul was decked out hat to shoes in American Airlines garb. For crying out loud, do what you want on your own time, but as Cliff Claven would say, don't ever be a "disgrace to the uniform."

Let me emphasize this last point with an example. A while back, I was lucky to meet Howard Shultz, chairman of Starbucks. He related a tale about how just before closing one night he stopped in for coffee and found some trivial aspect of his service not to his liking -- how it enraged him and how he handled it himself the next day.

Now I seriously doubt that American Airlines executives fly their own airline (I know they weren't on my flight Sunday). But a dose of Howard Shultz zeal might do the company some good. Heck, I'd settle for a quick lesson from JetBlue (Nasdaq: JBLU), which I would recommend to my own mother. Starbucks, too.

At last, that one condition
I told you earlier that I would buy American Airlines under one condition. No, Warren Buffett, it's not if I got it at a discount. It's this: If they fire every single employee. Of course, I don't want that to happen. I'm sure there are decent people there. But that infection runs deep -- too deep for my investing dollars, anyway.

And of course my experiences with Comcast and American Airlines may be isolated incidents. Maybe you can overlook them. But I tell you, if Tom Gardner were to recommend a stock like either of these, I'd be out in the community giving you and the rest of my fellow subscribers a heads-up. Just as I'd chime in with my good experiences.
 
DCT JVL said:
Hmm, I just got the e-mail today, so I figured it was a new topic. Oh well.

Mods, feel free to delete.
[post="279565"][/post]​


Blah, blah, blah, blah
 
I have non-reved recently and AA does have some real jack-asses at the ticket counters representing the company as a frontline employee.These types should never be allowed to be directly involved with the customer.Maybe put them out on the ramp throwing baggage away from the customers.I cannot believe how I have heard some of them talk to paying passengers,never mind the way they talk to non-revs.
I have hade some gate agents and F/a's treat my wife and myself VERY NICE and be very helpful but they are the exception and not the rule at AA.The nasty attitudes appear to be worse at DFW than ORD as I use them 2 hubs most frequently.
If AA employees themselfs do not get a grip on this type treatment of paying passengers then AA will be the airline of 1 time passengers and no repeat business.
 
goingboeing said:
I have non-reved recently and AA does have some real jack-asses at the ticket counters representing the company as a frontline employee.These types should never be allowed to be directly involved with the customer.Maybe put them out on the ramp throwing baggage away from the customers.I cannot believe how I have heard some of them talk to paying passengers,never mind the way they talk to non-revs.
I have hade some gate agents and F/a's treat my wife and myself VERY NICE and be very helpful but they are the exception and not the rule at AA.The nasty attitudes appear to be worse at DFW than ORD as I use them 2 hubs most frequently.
If AA employees themselfs do not get a grip on this type treatment of paying passengers then AA will be the airline of 1 time passengers and no repeat business.
[post="279614"][/post]​

Perhaps AA could institute a program whereby non-revs would be treated with courtesy and consideration in hope that some of it would spill over to paying passengers.
 
goingboeing said:
I have non-reved recently and AA does have some real jack-asses at the ticket counters representing the company as a frontline employee.These types should never be allowed to be directly involved with the customer.Maybe put them out on the ramp throwing baggage away from the customers.I cannot believe how I have heard some of them talk to paying passengers,never mind the way they talk to non-revs.
I have hade some gate agents and F/a's treat my wife and myself VERY NICE and be very helpful but they are the exception and not the rule at AA.The nasty attitudes appear to be worse at DFW than ORD as I use them 2 hubs most frequently.
If AA employees themselfs do not get a grip on this type treatment of paying passengers then AA will be the airline of 1 time passengers and no repeat business.
[post="279614"][/post]​


In all fairness to the agents they probably have the worst job going. High pressure, dealing with people who are stressed-by the time they make it to the plane they are usually much less stressed -the majority at least. Their low pay and lousy working conditions can only add to the pressure they feel. Your reply will no doubt be -"then quit", but not everyone has the luxury of just walking away from a job, better to get fired and collect unemployment. For some its not the job of woring for an airline that has them there but the fact that the hours enable them to work or have child care available. I would not take that job under any circumstances, and I'm sure you are glad to hear that. With the lousy pay they are offering management can't be as fussy and demanding, as far as congeniality, as they once were. So you should not be suprised that many treat the job the way the job treats them. Years ago when it paid well the good money and perks were compensation for the aggravation.
Despite all that most of the agents I've been in contact with were helpful and pleasent, just like the FAs, but I have expeiences that were not as nice with both agents and FAS. They are all human. As long as the company wants to pay just enough to get people to still show up they are being unrealistic if they think that people are not going to do just enough to not get fired.
 
Bob Owens said:
In all fairness to the agents they probably have the worst job going. High pressure, dealing with people who are stressed-by the time they make it to the plane they are usually much less stressed -the majority at least. Their low pay and lousy working conditions can only add to the pressure they feel. Your reply will no doubt be -"then quit", but not everyone has the luxury of just walking away from a job, better to get fired and collect unemployment. For some its not the job of woring for an airline that has them there but the fact that the hours enable them to work or have child care available. I would not take that job under any circumstances, and I'm sure you are glad to hear that. With the lousy pay they are offering management can't be as fussy and demanding, as far as congeniality, as they once were. So you should not be suprised that many treat the job the way the job treats them. Years ago when it paid well the good money and perks were compensation for the aggravation.
Despite all that most of the agents I've been in contact with were helpful and pleasent, just like the FAs, but I have expeiences that were not as nice with both agents and FAS. They are all human. As long as the company wants to pay just enough to get people to still show up they are being unrealistic if they think that people are not going to do just enough to not get fired.
[post="279647"][/post]​


Although I agree with most of what you said the end result to the customer is the same.The customer does not care the reasons why an AA employee has treated them nasty.The treatment is all they will remember when they leave the airport and share the experience with their family and friends.