The Walmartization of SKYW

[ArcticFlier]

If someone has posted this already, I apologize for the redundancy. I haven't seen it here, though.


NEW YORK, August 16, (Investor's Economic Resources)
http://investorsresources.bravehost.com/dalskyw.htm
DAL-SKYW deal first effect of New Paradigm

The sale of Delta's ASA subsidiary to Skywest for $425
million gives DAL some breathing room and may set the stage for Delta
to broach the subject of much needed further wage concessions from
its employees.

More interesting, is that the sale was probably the first
tangible effect of the new paradigm in labor relations that could
take place if Northwest Airlines is able to replace it unionized
mechanics with much lower paid employees. NWAC will be able to impose
wage cuts of 26% and layoffs on Friday when the federally imposed
cooling-off period expires. This will be the first time a major
airline has essentially de-unionized a major segment of its
workforce. It will be the beginning of a new paradigm for labor
relations in the airline industry and possibly have wider
repercussions.

It is doubtful that the highly union-phobic SKYW would have
bought ASA if it did not think it could ultimately remove the unions
from the ASA property. SKYW probably intends to use the same tactics
that NWAC is using to remove the mechanics union (AMFA) with some
additional wrinkles.

SKYW could use personnel from its non-union operations to
replace the ASA workforce if necessary. In this way SKYW will be able
to "Walmartize" its operations. Walmart is union-proof because it can
take the negotiating stance that it will never agree to a contract
that ever pays unionized workers as much a non-union workers. With
5,000+ stores Walmart can afford to keep any one unit shut
indefinitely, rather than sign a contract paying union members as
much as non-union members (and certainly never more than non-union
members). Once Walmart employees understand this stance, they
understandably will never vote to certify a union.

SKYW will probably adopt the same stance with the ASA unions
and use the NWAC tactic of waiting until the cooling-off period
expires and then imposing cuts with a reserve army of replacement
workers waiting in the wings. This new paradigm will set the tone in
airline labor relations for years to come. If NWAC is able to impose
wage cuts without resorting to bankruptcy it might lead to a
repricing of all securities in the airline industry. The valuation
gap between legacy airlines and low-cost carriers could narrow
appreciably.

http://investorsresources.bravehost.com/dalskyw.htm

AF

 

[SouthTex]

I hate to be here this late but, WTF does NW have do do with ASA being sold to Skywest. This is an irrelevant article considering both pilot groups envolved have nothing to do with the mechs that Nw is going to replace.

And the Gov doesn't give a Sh!t about.

ENJOY

 

[SouthTex]

I apologize, are... before the English Majors show up.

 

[SouthTex]

This is a pretty stupid arguement, does WalMart have "legacy", "national", "regional", and "cargo" competition after them. No they have Target (great company for those who want to invest) and Kmart...lets see, thats 3 companies, not start-ups or the volatile market we are in.

Pray to J be the same ol, ol...

 

[C.Warrior]

SKYW will probably adopt the same stance with the ASA unions
and use the NWAC tactic of waiting until the cooling-off period
expires and then imposing cuts with a reserve army of replacement
workers waiting in the wings. This new paradigm will set the tone in
airline labor relations for years to come.


So SkyWest is going to have 1500+ pilots waiting in the wings? They have a hard enough time hiring people wanting to make $18K to start. Where would they find enough qualified Cpts. They would have to shut down. The comparision to NWA is ridiculous.

I do believe there will be pressure exerted on ASA to keep wages competitive with SkyWest wages.

The article is a joke and so is the moron that wrote it.

 

[Axel]

replacement workers

This is a management euphamism for people who will do the work of union members during a labor dispute. There is a much overused 4-letter word- starts with "S"- to describe such people. In this case I believe its use would be appropriate

If it walks like a duck...

 

[BenderGonzales]

Costco, BJs, Sears/K-Mart, JC-Penny, Kohls, Best-Buy, Circuit-City, Kroger, Giant Eagle...

 

[GuppyPuppy]

SKYW will probably adopt the same stance with the ASA unions
and use the NWAC tactic of waiting until the cooling-off period
expires and then imposing cuts with a reserve army of replacement
workers waiting in the wings. This new paradigm will set the tone in
airline labor relations for years to come.

I didn't realize that SkyWest was subject to a Railway type agreement and the associated "cooling-off period".


So SkyWest is going to have 1500+ pilots waiting in the wings? They have a hard enough time hiring people wanting to make $18K to start. Where would they find enough qualified Cpts. They would have to shut down. The comparision to NWA is ridiculous.

I do believe there will be pressure exerted on ASA to keep wages competitive with SkyWest wages.

The article is a joke and so is the moron that wrote it.

Agreed.

Unbelievable that such a moron could get a media source to print his ill-informed analysis.

GP

 

[P-Dawg_QX]

Keep in mind that this article doesn't say anything about pilots specifically....just unions in general. Sure it would be difficult to apply this theory to ASA's pilot group, but what about its mechanics? Northwest is doing it right now...although their success is yet to be determined. If it does work out for them though, who's to say that other airlines can't follow suit?

 

[Bluto]

This all assumes that SkyWest remains non-union. The whole rationale falls apart in the event of a succesful union drive. I agree, whoever wrote that is way out of touch with the realities of the industry. Maybe Boyd secretly helped this analyst out a little.

 

[BenderGonzales]

Not necessarily. The article did not discount the possibility of a union. It simply said that the airline might not permit a union contract that is MORE lucritive than what the non-union employees currently earn.

That - in its essence - is the argument which prevents unionization at companies like Wal-Mart, Target, Costco, Home Depot, etc.

When 1300 people show up for a store-opening where 300 people need to be hired, where is the bargaining power?

The simple act of unionization does not guarantee that the resulting contract will be better than what existed before.

(look at the ALPA contracts at UAL, US Airways, etc...)

Assets can be moved between subsidiaries extremely easily. I sincerely doubt that ASA has fragmentation language in their contract. If the ASA pilots dont want to play ball ... piece of cake. There are 10,000 flight instructors who are jumping at the chance to do the same job for a fraction of the pay/benefits. Simply transfer the fleet slowly to the "Skywest" side over time and hire replacements.

This is very much the same way that narrowbody "assets" have been reallocated to so-called "regionals" over the last 15 years and, as a result, decimated union contracts at the majors.

Its the law of natural selection. The cheapest animal wins.

 

[Splert]

During the ASA acquisition conference Jerry already has said publicly that ASA has a lower CASM than SkyWest Airlines.

Union or not they...we...us...ASA has a lower CASM.

 

[SSDD]

So the mighty ALPA pilots at Northwest are RIGHT NOW crossing the mechanics picket line, and you guys are worried about what non-union Skywest MIGHT do?

Give me a break!

 

[GuppyPuppy]

So the mighty ALPA pilots at Northwest are RIGHT NOW crossing the mechanics picket line, and you guys are worried about what non-union Skywest MIGHT do?

Give me a break!

Correct me if I'm wrong, but NWA ALPA tried to get the mechanics union to go along with them when they were negotiating a concessionary contract. NWA AMFA basically told NWA ALPA to go F themselves. NWA ALPA realized the desperate position their company was in and were proactive in negotiating a new settlement. NWA ALPA also wants to protect as many jobs as possible. I think they realize that if the pilots honored the picket line and the company shut down that it would have a detrimental effect on Northwest, possibly forcing them into either selling some assets or filing Chapter 7.

It suck$ right now for unions. Either take it in the a$$ or take it in the a$$ and lose your job. Your choice.

GP

 

[DoinTime]

Not necessarily. The article did not discount the possibility of a union. It simply said that the airline might not permit a union contract that is MORE lucritive than what the non-union employees currently earn.

Unfortunatley, in order to avoid a strike they may have to to offer such an increase in compensation. The only way a company can have such negotiating leverage is when they have the ability to replace those workers. Pilots are not easily replaceable.

I sincerely doubt that ASA has fragmentation language in their contract. If the ASA pilots dont want to play ball ... piece of cake. There are 10,000 flight instructors who are jumping at the chance to do the same job for a fraction of the pay/benefits. Simply transfer the fleet slowly to the "Skywest" side over time and hire replacements.

E. Merger Protection

1. If the Company acquires a carrier whose pilots are represented by the Association, the pilots of the Company and the pilots of the acquired carrier will each operate pursuant to their collective bargaining agreement or terms and conditions of employment with their respective seniority lists until the first day of the first month following:

a. conclusion of negotiation of only such provision(s), if any, as may be necessary to cover such acquired carriers’ flying under this Agreement, and

b. integration of the seniority lists of the respective pilot groups. Such seniority integration shall be governed by the Association’s Merger Policies. There will be no “system flush” as a result of seniority integration.

2. If the Company acquires a carrier whose pilots are not represented by the Association, the pilots of the Company and the pilots of the acquired carrier will each operate pursuant to their own collective bargaining agreement or terms and conditions of employment, with their respective seniority lists until the first day of the first month following:

a. conclusion of negotiation of only such provision(s), if any, as may be necessary to cover such acquired carrier’s flying under this Agreement, and

b. integration of the seniority lists of the respective pilot groups. Such seniority integration will be accomplished in a fair and equitable manner, including, where applicable, negotiations between the Company and the representatives of the pilot groups affected. There will be no “system flush” as a result of seniority integration. In the event of failure to reach a negotiated resolution, the seniority integration dispute will be resolved as provided in Sections 3 and 13 of the Labor Protective Provisions specified by the Civil Aeronautics Board in the Allegheny-Mohawk Merger.

3. Upon the announcement of any transaction that is intended to result in the consolidation of the Company with another carrier that affects the seniority rights of pilots on the Seniority List, the parties will meet promptly to discuss the appropriate steps to be taken consistent with this Agreement, e.g., to negotiate an appropriate fence agreement and to implement a seniority integration process as provided for in paragraph E.1. or E.2., above.

4. During the period between the announcement of any transaction described in paragraph E. and the conclusion of the process as provided therein, no pilot who was on the Seniority List and who had completed his probationary period as of the effective date of this Agreement will be furloughed as a result of such transaction.

 

[capt. megadeth]

I apologize, are... before the English Majors show up.

HA HA HA HA HA!!!!!!!!!!!!!!!!!!!!!!!


Dointime,
I hate to break it to you, but contracts don't mean crap these days when the crap hits the fan. Management just blackmails everyone and gets what they want.

 

[Andy Neill]

I apologize, are... before the English Majors show up.

OK, the pseudo English Major is here. You were right the first time when you wrote "...that Nw is going to replace." Within this adjective phrase, "Northwest" is the the subject and "is (going to replace)" is the verb. I believe you mistakenly thought that the plural "mechanics" required the use of the third person plural "are", but it does not.

We now return to our regular programming.

 

[PBRstreetgang]

Andy,
Are you doing this from class? If so get back to work...
BAAAHAAA
PBR

 

[SouthTex]

Oops...it appears that my use of the queen's english in the middle of a heated drinking binge is about as well constructed as my $hit the next day.

Touche Andy.