canyonblue
Everyone loves Southwest
- Joined
- Nov 26, 2001
- Posts
- 2,314
From Forbes Magazine
Aude Lagorce, 03.29.04, 3:00 PM ET
NEW YORK - Could James Parker, the wizard chief executive of Southwest Airlines, be losing his mojo?
This, at least, is what the results of our March CEO approval ratings poll would suggest. While the Parker we know has traditionally been a high flyer in our poll, consistently raking in more than 65% of positive votes over the last year, his score plummeted to only 33% this month. Add in the fact that an unusual 29,000 site visitors cared to vote on his performance since March 1 and you begin to wonder what kind of turbulence Southwest may be experiencing.
A reading of the discussion associated with the poll yields a few clues. Essentially, the contract negotiations between the "LUV airline", a nickname it derives from its stock ticker, and its flight attendants have been anything but a love fest. Started almost two years ago, they have stalled.
"We're at a stalemate with the company; they're refusing to meet with us," says Thom McDaniel, president of the union that represents Southwest's 7,300 flight attendants. "Baloney," replies the company. "We made them our best offer and they barely looked at it. They wouldn't even let the members see it. The federal mediator has called for a recess, not us."
Because of the prolonged bargaining, frustration is now running high among employees. While posting to the message board associated with our poll is anonymous, that discussion board displays a high degree of familiarity with the airline. And the vast majority of the posts direct harsh criticism at Parker, often unfavorably comparing him to predecessor Herb Kelleher, who remains chairman.
"All Mr. Parker will ever be remembered for is that he was the little man who destroyed Herb's wonderful airline," reads one message. The note is quickly echoed by a flurry of responses voicing similar reproaches: "He is the beginning of the downfall of Southwest Airlines" and "Everything that Herb Kelleher built has just become a house of cards because of Jim Parker."
But wait a second. Shouldn't Parker, under whose management the airline has managed to remain in the black while bigger competitors like US Airways Group , Continental Airlines and Northwest Airlines struggled, be praised rather than immolated in public? After all, as a few postings point out, he has given employees "job security and peace of mind," and led the company with a steady hand in turbulent times.
So, why is Parker now entangled in contract negotiations when it is customary for chief executives to leave this work to others and only step in at the end to land the contract?
The answer: Because it used to be his job. Parker was the airline's lead negotiator before he became chief executive. Under his new title, he has kept that responsibility.
But not everyone thinks he should be the public face of the company as well as the man to confront the unions. "He's a very good negotiator," says Glenn Engel, an analyst with Goldman Sachs. "He's doing it because he's good at it. But now he's in a different role. Maybe he shouldn't take as active a role as he used to at this state of the negotiations."
Parker is indeed paying a high price for his determination. Although in the past two years he has successfully renegotiated five contracts with various groups, the row with the flight attendants union is becoming unusually partisan.
McDaniel denies that it was the union's idea for employees to start voting en masse against Parker in our approval ratings poll, but he admits that lately, seeing the company unwilling to budge, he has begun encouraging members to voice their opinion.
"The way they see it, he's the only man standing in the way of higher pay," McDaniel says. Replies the company: "It's unfortunate that a small group of people is trying to smear mud on a guy who really doesn't deserve it." While our poll is unscientific, and the vote count nearly equals the total number of Southwest employees, it has been structured to prevent automated voting by Web software.
So what do the flight attendants want anyway? A little more than higher pay, it turns out. They want to be remunerated for time spent on the ground dealing with security procedures or cleaning the plane; they want their four-week training period to be paid and special compensation when working holidays. Their main arguments: The company is doing well--it reported net income of $442 million for 2003, its 31st consecutive year of profitability--and all the other groups have gotten raises over the past few years. The company counters that it is paying its flight attendants as well or better than competitors, and is more than willing to give them raises. But a negotiation is a negotiation, and it must keep costs low to remain profitable.
Ironically, the airline's continued profitability, although it has saved many employees' jobs, is not an asset in the negotiation. "Because they've been doing well, they're not getting the concessions from labor that the other airlines got," says Engel. By comparison, the union representing Northwest Airlines' pilots urged its members last week to consider making more concessions.
Faced with demands it doesn't seem to consider reasonable at times when it must compete with a growing number of discount airlines like JetBlue Airways , Delta Air Lines' Song and UAL's discount sibling to United Airlines, Ted, the leadership of the LUV airline could finally be tempted to override the union by trying to let members know directly what their offer is. "It has happened in the past," says Engel.
In the meantime, none of the bad-mouthing, whether it is the pins some flight attendants wear ("Has the LUV airline lost its heart? It's breaking ours") or the campaign to sink Parker's rating on our site, are moving the negotiation forward.
And unfortunately for the union, the LUV airline faces no shortage of applicants for its jobs.
Aude Lagorce, 03.29.04, 3:00 PM ET
NEW YORK - Could James Parker, the wizard chief executive of Southwest Airlines, be losing his mojo?
This, at least, is what the results of our March CEO approval ratings poll would suggest. While the Parker we know has traditionally been a high flyer in our poll, consistently raking in more than 65% of positive votes over the last year, his score plummeted to only 33% this month. Add in the fact that an unusual 29,000 site visitors cared to vote on his performance since March 1 and you begin to wonder what kind of turbulence Southwest may be experiencing.
A reading of the discussion associated with the poll yields a few clues. Essentially, the contract negotiations between the "LUV airline", a nickname it derives from its stock ticker, and its flight attendants have been anything but a love fest. Started almost two years ago, they have stalled.
"We're at a stalemate with the company; they're refusing to meet with us," says Thom McDaniel, president of the union that represents Southwest's 7,300 flight attendants. "Baloney," replies the company. "We made them our best offer and they barely looked at it. They wouldn't even let the members see it. The federal mediator has called for a recess, not us."
Because of the prolonged bargaining, frustration is now running high among employees. While posting to the message board associated with our poll is anonymous, that discussion board displays a high degree of familiarity with the airline. And the vast majority of the posts direct harsh criticism at Parker, often unfavorably comparing him to predecessor Herb Kelleher, who remains chairman.
"All Mr. Parker will ever be remembered for is that he was the little man who destroyed Herb's wonderful airline," reads one message. The note is quickly echoed by a flurry of responses voicing similar reproaches: "He is the beginning of the downfall of Southwest Airlines" and "Everything that Herb Kelleher built has just become a house of cards because of Jim Parker."
But wait a second. Shouldn't Parker, under whose management the airline has managed to remain in the black while bigger competitors like US Airways Group , Continental Airlines and Northwest Airlines struggled, be praised rather than immolated in public? After all, as a few postings point out, he has given employees "job security and peace of mind," and led the company with a steady hand in turbulent times.
So, why is Parker now entangled in contract negotiations when it is customary for chief executives to leave this work to others and only step in at the end to land the contract?
The answer: Because it used to be his job. Parker was the airline's lead negotiator before he became chief executive. Under his new title, he has kept that responsibility.
But not everyone thinks he should be the public face of the company as well as the man to confront the unions. "He's a very good negotiator," says Glenn Engel, an analyst with Goldman Sachs. "He's doing it because he's good at it. But now he's in a different role. Maybe he shouldn't take as active a role as he used to at this state of the negotiations."
Parker is indeed paying a high price for his determination. Although in the past two years he has successfully renegotiated five contracts with various groups, the row with the flight attendants union is becoming unusually partisan.
McDaniel denies that it was the union's idea for employees to start voting en masse against Parker in our approval ratings poll, but he admits that lately, seeing the company unwilling to budge, he has begun encouraging members to voice their opinion.
"The way they see it, he's the only man standing in the way of higher pay," McDaniel says. Replies the company: "It's unfortunate that a small group of people is trying to smear mud on a guy who really doesn't deserve it." While our poll is unscientific, and the vote count nearly equals the total number of Southwest employees, it has been structured to prevent automated voting by Web software.
So what do the flight attendants want anyway? A little more than higher pay, it turns out. They want to be remunerated for time spent on the ground dealing with security procedures or cleaning the plane; they want their four-week training period to be paid and special compensation when working holidays. Their main arguments: The company is doing well--it reported net income of $442 million for 2003, its 31st consecutive year of profitability--and all the other groups have gotten raises over the past few years. The company counters that it is paying its flight attendants as well or better than competitors, and is more than willing to give them raises. But a negotiation is a negotiation, and it must keep costs low to remain profitable.
Ironically, the airline's continued profitability, although it has saved many employees' jobs, is not an asset in the negotiation. "Because they've been doing well, they're not getting the concessions from labor that the other airlines got," says Engel. By comparison, the union representing Northwest Airlines' pilots urged its members last week to consider making more concessions.
Faced with demands it doesn't seem to consider reasonable at times when it must compete with a growing number of discount airlines like JetBlue Airways , Delta Air Lines' Song and UAL's discount sibling to United Airlines, Ted, the leadership of the LUV airline could finally be tempted to override the union by trying to let members know directly what their offer is. "It has happened in the past," says Engel.
In the meantime, none of the bad-mouthing, whether it is the pins some flight attendants wear ("Has the LUV airline lost its heart? It's breaking ours") or the campaign to sink Parker's rating on our site, are moving the negotiation forward.
And unfortunately for the union, the LUV airline faces no shortage of applicants for its jobs.
