By Brad Bartholomew, President, The Newfoundland Group
United and US Airways union employees face horrific choices. They can
shed a third of their fellow workers; a third of their wages,
benefits, work rules, and a portion of their pensions — or their
airlines will perish. These employees are now frantically trying to
shove golden eggs back up their respective geese. It was just a few
summers ago that their unions — in an act of solidarity— were urging
these same workers to strangle their golden geese. As an airline
captain, when I see a thunderstorm on the horizon, I immediately tune
my radar to determine what lies ahead. It does not matter whether the
thunderstorm was forecast; it is just another event I must deal with
while airborne. If I become concerned by the thunderstorm, I may
make a small course correction 100 miles prior, so I can pass well
clear of a dangerous ride. Unions routinely seem to do the exact
opposite. Two years ago, when airline revenues started falling
rapidly, it was obvious the airlines were in for a rough ride. When
the Sept. 11 tragedy occurred, the revenue drop-off became
precipitous. Months later, United CEO Jim Goodwin told employees the
airline could perish if its cash-burn rate did not recover quickly.
Swagger And Clout
United's unions collectively used their swagger and boardroom clout
to send Goodwin packing. One year later, United's cash-burn rates
remain unabated. It is as if the unions ignored the rough weather
ahead and chose to fly directly into the storm. Defensive and
embattled, unions need a renaissance, becoming marketplace-
enlightened and offensive. Two to three years' organizing and
mobilizing maximum leverage to capture a leading-edge contract,
followed by three to
five years of "defending the contract," is a broken model. Airline
unions live in perpetual denial, claiming all matters of corporate
prosperity are under management's control. Pilots cannot control the
weather, and managements cannot control market demand. Unions'
push "for
what employees deserve" is a noble cause, but pushing costs above
what the airline can afford — revenues — can only bring short-term
success, followed by agonizingly slow disaster.
Airlines operate in a capital- and labor-intensive service industry.
No matter how well run, they cannot exist and buy $100 million flying
factories without attracting capital. Unions spend millions each year
lobbying politicians but make no attempts to understand or court
investors. Adam Smith said capital naturally flows to the most
efficient and profitable service providers. Some-how unions have
taken this simple axiom and twisted it into a paranoid victim
mentality. Whether unions like it or not, their members are always
competing for capital.
On the vital issue of job security, unions are often misguided
because they are singularly focused on the wrong side of the demand
equation. Ten years ago, mainline pilot unions failed to notice a
nascent opportunity on the horizon — RJ flying. Instead of embracing
this opportunity, they choose to fight for contract language limiting
their participation. If mainline pilot unions had wisely viewed RJs
as an opportunity, rather than a threat, many of their furloughed
pilots might have jobs. Airline managements also fuel union
mistrust. On a good day, most managements address labor with a
frustrated "father knows best" attitude, making only perfunctory
efforts to understand employees. Managements also see their airlines
as private piggy banks, and elevated CEO compensation packages stoke
employee ire.
Whatever It Takes
I am a union member and support the union concept. Still, ignorant,
rhetoric-spewing unions are as worthless as ignorant, rhetoric-
spewing managements. I do not want to be paid less and work more.
However, since I hope to work at one carrier for 30 years, I see no
value in publicly beating up my airline and driving away customers
and investors. Unions need to do whatever it takes not to fly into
thunder-storms. Pilots can do this; why can't their unions?
Brad Bartholomew is a captain for a major airline.He is also
the president of The Newfoundland Group,which specializes
in labor issues.
United and US Airways union employees face horrific choices. They can
shed a third of their fellow workers; a third of their wages,
benefits, work rules, and a portion of their pensions — or their
airlines will perish. These employees are now frantically trying to
shove golden eggs back up their respective geese. It was just a few
summers ago that their unions — in an act of solidarity— were urging
these same workers to strangle their golden geese. As an airline
captain, when I see a thunderstorm on the horizon, I immediately tune
my radar to determine what lies ahead. It does not matter whether the
thunderstorm was forecast; it is just another event I must deal with
while airborne. If I become concerned by the thunderstorm, I may
make a small course correction 100 miles prior, so I can pass well
clear of a dangerous ride. Unions routinely seem to do the exact
opposite. Two years ago, when airline revenues started falling
rapidly, it was obvious the airlines were in for a rough ride. When
the Sept. 11 tragedy occurred, the revenue drop-off became
precipitous. Months later, United CEO Jim Goodwin told employees the
airline could perish if its cash-burn rate did not recover quickly.
Swagger And Clout
United's unions collectively used their swagger and boardroom clout
to send Goodwin packing. One year later, United's cash-burn rates
remain unabated. It is as if the unions ignored the rough weather
ahead and chose to fly directly into the storm. Defensive and
embattled, unions need a renaissance, becoming marketplace-
enlightened and offensive. Two to three years' organizing and
mobilizing maximum leverage to capture a leading-edge contract,
followed by three to
five years of "defending the contract," is a broken model. Airline
unions live in perpetual denial, claiming all matters of corporate
prosperity are under management's control. Pilots cannot control the
weather, and managements cannot control market demand. Unions'
push "for
what employees deserve" is a noble cause, but pushing costs above
what the airline can afford — revenues — can only bring short-term
success, followed by agonizingly slow disaster.
Airlines operate in a capital- and labor-intensive service industry.
No matter how well run, they cannot exist and buy $100 million flying
factories without attracting capital. Unions spend millions each year
lobbying politicians but make no attempts to understand or court
investors. Adam Smith said capital naturally flows to the most
efficient and profitable service providers. Some-how unions have
taken this simple axiom and twisted it into a paranoid victim
mentality. Whether unions like it or not, their members are always
competing for capital.
On the vital issue of job security, unions are often misguided
because they are singularly focused on the wrong side of the demand
equation. Ten years ago, mainline pilot unions failed to notice a
nascent opportunity on the horizon — RJ flying. Instead of embracing
this opportunity, they choose to fight for contract language limiting
their participation. If mainline pilot unions had wisely viewed RJs
as an opportunity, rather than a threat, many of their furloughed
pilots might have jobs. Airline managements also fuel union
mistrust. On a good day, most managements address labor with a
frustrated "father knows best" attitude, making only perfunctory
efforts to understand employees. Managements also see their airlines
as private piggy banks, and elevated CEO compensation packages stoke
employee ire.
Whatever It Takes
I am a union member and support the union concept. Still, ignorant,
rhetoric-spewing unions are as worthless as ignorant, rhetoric-
spewing managements. I do not want to be paid less and work more.
However, since I hope to work at one carrier for 30 years, I see no
value in publicly beating up my airline and driving away customers
and investors. Unions need to do whatever it takes not to fly into
thunder-storms. Pilots can do this; why can't their unions?
Brad Bartholomew is a captain for a major airline.He is also
the president of The Newfoundland Group,which specializes
in labor issues.
