Any Info on The Muse/Transtar/SWA Deal in the 80s?

[MILF Hunter]

There have been some interesting posts on another forum about what went wrong with Muse/Transtar. That was way before my time. From tof, it appears their MEC tried to stop the SLI process because they weren't satisfied with the direction. Then SWA pulled the rug out from under them? Can anyone hear shed any light on the subject? Thanks!

 

[vixin]

Here is the info. Not saying it can happen again but this is how it went down.


More complex example
In the real world it is easy to overestimate BATNA and invest too little time to research real options. This can lead to poor or faulty decision making and negotiating outcomes. 1987 saw the conclusion of a complex series of negotiations between Southwest Airlines and two different pilot groups: Southwest pilots and Muse/Transtar pilots. The Muse/Transtar pilots failed to properly analyze their BATNA: their missteps and misfortune offer valuable lessons for anyone exposed to the risks of negotiating in a volatile industry.

TranStar began as Muse Air amid the 1982 traffic controllers’ strike. By the end of 1984 the company was still struggling, and actively looking for a merger to keep it afloat. At the end of the year, Harold Simmons, president of the Amalgamated Sugar Company offered the airline the money to continue, on the condition that Lamar Muse return as CEO. Despite the new influx of cash and new leadership, the company was not able to generate a consistent profit despite its use of non-union labor and competitive fares.

In 1985, Southwest Airlines acquired Muse Air. The Muse pilots were initially unrepresented so negotiations between ensured between Southwest Airlines and the Southwest Airlines Pilots Association (SWAPA). Complicating the always-contentious issue of seniority list integration was the large disparity in pay at the two companies. The difference was so large that the Muse Air operation was unable to support the Southwest Airlines pay scale.

SWAPA pursued a strategy of integrating the Muse pilots to the bottom of the list, with pay parity in five years combined with a card campaign to represent the Muse pilots. This strategy was rejected by the company on the basis of Duty to Fairly Represent and SWAPA agreed to a one time, temporary waiver of their scope clause. This allowed Muse to be run as a separate operation with numerous caveats and protections including a 1:4 growth ratio.

Muse became TranStar and chose independent representation through the TranStar Pilots Association (TPA). Perceiving the dangers inherent in a wholly owned subsidiary the pilot groups attempted to negotiate a combined master seniority list. In November of 1986 an agreement was reached.

This agreement placed a pilot hired in Jun of 1982 by Southwest senior to a TranStar pilot hired in January of 1981 and improved the relative seniority of all Southwest Airlines pilots. The agreement included fences, Captain seat protections and brought the TranStar pilots to pay parity no later than December of 1990.

The TPA Board of Directors rejected the proposed Integrated Seniority List(ISL), apparently believing that such rejection would create more leverage for their Merger Committee to obtain a more favorable ISL.

What followed was a breakdown in negotiations and an angry exchange between union presidents.

"I can only conclude that your inner circle objects to the seniority settlement and engaged in a last minute search for reasons to sabotage the agreement and rationalize the action within your organization. This indicates a lack of good faith, which precludes any further dealings between our two unions." SWAPA President Gerald Bradley to TPA President Captain Golich

"I have waited a few days to respond to your recent letter addressing our unsuccessful negotiations. As you can imagine, it was difficult not to be angered by your groundless accusations, blatant threats and misleading statements." Captain Golich to Captain Bradley.

Negotiations were never resumed and TranStar was operated as a wholly owned subsidiary until the 9th of August 1987 when it closed its’ doors forever. 146 pilots who had seniority numbers at Southwest Airlines, seat protection, and (eventually) substantial raises now had no jobs. Excerpts from a letter Captain Golich wrote to Herb Kelleher on August 2nd:

"As you know, the TranStar pilots are in their darkest hour … I therefore request first right of hire, subject to Southwest’s normal screening, in seniority order, for the TranStar Pilots … … request some form of assistance be provided relative to the requirement for a 737 type rating … … the TranStar pilots will provide their own ground school."

The TPA BOD assessed their BATNA as superior to the agreement their merger committee was able to negotiate. Unfortunately for the pilots they represented this was a gross overestimation, and the actual BATNA turned out to be inferior not only to the negotiated agreement, but even to SWAPA’s opening position of staple.

Unfortunately the mistakes made by the TPA Board of Directors are not unique. The Airline industry is littered with examples of misapplied or overestimated BATNA. BATNA isn’t a walk away position or an assessment of the lowest acceptable offer. It is a tool to assess the certain gains presented in a negotiated agreement against the uncertain risks of the alternative. The uncertainty of those risks can lead to outcomes that are surprising and devastating.

 

[Bill Nelson]

Where is that article from? Do you have a link?

 

[Tweet-a-Lishus]

What I find interesting is that the SWA pilots have already negotiated a side letter with the company on a growth ratio in case this happens. It seems that some Airtran pilots on this board, as well as a few SWA haters, think that Bond Mcaskill will prevent this from happening. We all know that there is a way around BM if the negotiations get ugly. Gary Kelly will protect his own first. What nobody wants to acknowledge is that we (SWA) are buying Airtran - not the other way around, and to say that the SWA pilots have nothing to do with your windfall really is just pissing us off like you can't even imagine. The company just didn't hand us our contract. I say BM doesn't seem to be working out too well for Frontier. It seems the Frontier negotiators overplayed their hand. Only time will tell!
I hope ALPA almighty does go ahead and push Gary Kelly a little too much! What I find ironic is that just about every airline that ALPA has represented has been through bankruptcy! To my future Airtran brothers: nobody over on the SWA side expects a staple so please do yourselves a favor and get real with what you expect out if this SLI!

 

[dicko]

to my future Airtran brothers: nobody over on the SWA side expects a staple so please do yourselves a favor and get real with what you expect out if this SLI!

I think "the problem here is a failure to communicate". The reasons are obvious.

Regarding your quote above; I think you'd be pleasantly surprised by what we think is fair. It's not everything you want and it certainly isn't everything that you think we want.

The carrot is mightier than the stick. All we see is a stick. Carrots aren't made of money. If they were, then after eating the carrot you'd have no money and nothing to eat for the future. If that makes any sense ? :erm:

 

[redflyer65]

From my understanding they didn't want to take any deal from SWAP, but in the end were begging for an interview. Not a job, just an interview.

 

[scoreboardII]

The Muse/Transtar pilots failed to properly analyze their BATNA: their missteps and misfortune offer valuable lessons for anyone exposed to the risks of negotiating in a volatile industry

BATNA

http://en.wikipedia.org/wiki/Best_alternative_to_a_negotiated_agreement

 

[ivauir]

http://en.wikipedia.org/wiki/TranStar_Airlines

 

[Bill Nelson]

Thank you for the link. Very interesting history lesson. I hope the Tranny's have read it.

 

[FlyinGuy]

To my future Airtran brothers: nobody over on the SWA side expects a staple so please do yourselves a favor and get real with what you expect out if this SLI!

Have you hired your own polling group to determine what each and every SWA pilot wants? My suggestion is that you state your own opinions and leave the other 6000 pilots out of your world.