Welcome to Flightinfo.com

  • Register now and join the discussion
  • Friendliest aviation Ccmmunity on the web
  • Modern site for PC's, Phones, Tablets - no 3rd party apps required
  • Ask questions, help others, promote aviation
  • Share the passion for aviation
  • Invite everyone to Flightinfo.com and let's have fun

Who's to blame?(mgt vs labor)

  • Thread starter Thread starter enigma
  • Start date Start date
  • Watchers Watchers 6

Welcome to Flightinfo.com

  • Register now and join the discussion
  • Modern secure site, no 3rd party apps required
  • Invite your friends
  • Share the passion of aviation
  • Friendliest aviation community on the web

enigma

good ol boy
Joined
Nov 26, 2001
Posts
2,279
I'm just standing on a soapbox at the streetcorner here. Stop and listen, or keep on walking.

As I read the ongoing strings about the UAL situation, and some of the arguments being made pertaining to blame, I just have to add a couple of thoughts.

If we take the situation and look upon it like we were dealing with a courtroom trial, we would be attempting to choose which side was right. To do so, we would look at arguments presented by both sides, determine who had the "best evidence" and then make our decision based upon that evidence.

If we take the situation and look upon it like we were dealing with a mediation, we would attempt to get both sides to accept some of the blame as a part of a compromise.

Now let us look at some facts.
*. The airline industry has never made a profit (according to the book "Hard Landings").
*. The major airlines (excepting SWA) have never been able to get off of a boom/bust business cycle.
*. Labor unions have made concessions in bad times and taken gains in good times.
*. Management has built up record losses in bad times and made record profits in good times.
*. The major airline business structure is based upon being able to charge top dollar for non-discretionary travelers and using yield management to fill the remainder of the seats.
*. Those non-discretionary traverers have accessed other ways of doing business, and are no longer a sure thing.
*. Low Service Carriers have gained a significant percentage of market share over the last decade and continue to make gains.
*. Most Importantly, the marketplace no longer supports UAL's business model.

So how can we resolve this conflict? Can we use the trial method and pick the "right" side, or should we use mediation?

If we take the trial method and attempt to choose the correct side in the UAL management vs labor fight, we then have to decide who is at fault. The positions are these: Labor says that management has completely mismanaged the company, but labor is still willing to make concessions in order to keep their jobs.
Management says that labor costs are too high and everything would be fine if the unions would go away.

If we go to mediation, we must attempt to get labor to reduce its rates and get management to change its propensity to make bad decisions (AAA merge, Avolar, golden parachutes for failed CEO's, etc)

It seems to me that method one is suitable for assessing blame, and method two is suitable for developing a plan for the future.

If I was the judge in our imaginary courtroom, I would issue this ruling: Labor rates at UAL were set by a legally recognized and acceptable bargaining process. Labor has show a historical willingness to make concessions at times when the companies financial condition warranted such concessions, and labor is currently willing to make additional concessions in addition to the large defacto concessions accomplished by furlough. UAL management has: squandered the gains made under previous concessionary labor agreements, failed to foresee a changing marketplace, and continues stagnation in the area of adapting to the market place. I place blame entirely at the feet of management. (remember, we weren't trying to resolve the issue, just place blame)

If I was the mediator in charge, I would give the same statement that I gave as judge. Then I would tell both sides that any further discussion of blame would be conterproductive, because blame for previous problems does nothing to solve the matter at hand. I would tell them that the marketplace no longer supports either their business model (for the managers) or their current labor rates. In recognition that labor is currently offering dramatic concessions in wage rates, I would demand that management offer a significant plan to adapt to the changed marketplace. I would offer AMR AAA and DAL for examples. Those carriers have (respectively) announced plans to: change the hub and spoke structure to "de-peak" the hubs, made dramatic changes to their fleet, and announced a LCC affiliate. I am unaware of any such plan on UAL's part.

OK, now I'm off of the bench. I find it very sad for my friends at UAL that their management had nothing to offer the ATSB except an overly optimistic view that revenue would return in the very near future. It is obvious to me that labor (at least the pilots) was very willing to make dramatic changes in each persons income in order to save their employer. That is so much more than the company deserves.

regards,
8N
 
Enigma

You made your point, now my counter.

You are labor at one of the largest carriers in the world. You feel you should have an industry setting contract. To prove your point, you slow down and take actions that drive away the best customer base you had, business travelers who frankly could not care less about your problems.

You gain record pay when the company caves in order to try and preserve what market share is left. You own 55% of the carrier. You have board seats.

You have brought the company to your way of thinking at the expense of the business customer who flees in droves for other carriers.

You have nothing but criticism for mangement when it attempts to get into businesses that have a margin and a sufficient return on shareholder equity. While you talk of record profits, you fail to recognize the pitiful % to sales they represent.

You go to the board room to raise hell. All you find is a mirror. It is you who took that $100 bill per share and made it worthless.
 
Re: Enigma

Publishers said:
You are labor at one of the largest carriers in the world. You feel you should have an industry setting contract. To prove your point, you slow down and take actions that drive away the best customer base you had, business travelers who frankly could not care less about your problems.

Again, I have to ask you the same question I've asked you several times before: what else are we supposed to do to make contract advances? Strikes and work slow-downs are the only things we have to make a point to mgmt. We don't want to do these things. We don't want to hassle the business traveler. What we want is for mgmt to negotiate in good faith. They have proven time and time again that they will not. Therefore we have to threaten strikes and slow-downs. I'm sorry, but it's all we have to fight back. Would you rather us sit by and watch mgmt rip out page after page of our contract because we don't want to drive away customers with slow-downs? If you don't like our past actions such as slow-downs, give us more ideas about how to fight back when mgmt won't negotiate.

By the way, an excellent post Enigma.
 
Publishers...

While you and enigma have had interesting debates on this board in the past.....

In this case your overly simplistic, myopic view of this situation is laughable....at best.
 
Re: Enigma

Publishers said:
You made your point, now my counter.

You have brought the company to your way of thinking at the expense of the business customer who flees in droves for other carriers.


You can't be the Publisher. He wouldn't have posted such an easily debunked argument.

IF those business passengers still existed I might agree with you. I have seen no statistics that show that the UAL business flyer is now a AA customer. If so, one would think that UAL would be the only major having problems and that is so obviously no so. I'd bet that Don Carty et al, would be happy if your scenario were true.
In your (if you really are the Publisher) continued attempt to blame unions for everything wrong under the sun, you lose credibility.
Well, I've got to go. My union job that pays $76 an hour for a 72 hour guarantee to Captain 156 seats and six crew is calling. Since unions are so bad, how do you explain my pay scale?

regards,
8N

BTW, Does anyone know of any statistics that show a major gain for any major at UAL's expense?
 
Oh, boy, another union v. management discussion!

I agree - excellent post, Enigma. I believe that "Publishers" really is our friend "Pub." He had said that he re-registered because something happened to his original account. I respect Pub because he provides good input. That doesn't mean that I always agree with him. I tend to side with labor.

Employee-ownership of United aside, another way to view the situation is that employees have a proprietary interest in their company. Their fate depends in very large measure to the decisions made by management. In other words, you, as an employee, must be willing to follow Frank, or Bob Crandall, or Dick Ferris into battle. Hoping, of course, that they are making sound business decisions because your job may hang in the balance. Thus, employees should be allowed a say in management's business proposals, such as, in United's case, Avolar and the failed acquisition of U. The latter, I know, was costly.

Such decisions might include asking labor to take wage cuts. However, when management is always whining that wages are too high, you have to question management's credibility. With few exceptions, I don't believe that you'll find any manager who won't say that labor costs are too high (Conversely, you will find few managers who say they're not paying their employees enough!). Give management its druthers and it'll find a way to employ the most qualified, and fewest number of, people available for the cheapest pay possible. For both of these reasons - watchdogging management's decisions and protecting pay - unions are needed. In other words, as PCL_128 put it, someone must ensure that employees are treated fairly and management does not rip up each page of the contract.

Accordingly, and I don't know the answer to this, what would now stop United's management from abrogating its agreements with its unions, just as Frank and Phil Bakes did following bankruptcy at Continental nineteen years ago, and install a new, lower wage structure. I've been thinking about that. Anyone know? I heard on news today that if United emerges from bankruptcy, it will be smaller and employ fewer people. Meaning, of course, that people, including pilots, I'm sure, will lose their jobs.

I'd bet a lot of fault for the United debacle will be placed at the feet of the mechanics. They first said "no" to givebacks but reconsidered. Maybe they shouldn't have said "no" so fast.

I always enjoy these discussions. Great food for thought.

By the way, Hard Landing is an excellent book. I'm reading it a second time.
 
Last edited:
UAL

To the UAL 727 Captain who gave me such a stink one day when I was trying to jumpseat home from Alaska; hahahaha
UAL management should have taken a 75% pay cut, pilots 50%, Mechanics 40%, Flight attendants 30%, and rampers 15%. Hope your'e all enjoying you industry leading contracts now!
Do you all remember when you used to fly for the enjoyment of it; I doubt it.
 
Re: Oh, boy, another union v. management

bobbysamd said:
Accordingly, and I don't know the answer to this, what would now stop United's management from abrogating its agreements with its unions, just as Frank and Phil Bakes did following bankruptcy at Continental nineteen years ago, and install a new, lower wage structure. I've been thinking about that. Anyone know?

Because of good old Franky Lorenzo, Congress changed the law in the mid 80's to prevent mgmt from using bankruptcy to break labor. Bankruptcy no longer automatically voids the labor agreements. UAL would have to convince a judge that labor is completely unwilling to negotiate in good faith. If they are able to convice a judge of that, he may decide to void the labor contract. It's up to the judge. We just have to hope for a judge sympathetic to labor.
 
Re: UAL

208pilot said:
To the UAL 727 Captain who gave me such a stink one day when I was trying to jumpseat home from Alaska; hahahaha
UAL management should have taken a 75% pay cut, pilots 50%, Mechanics 40%, Flight attendants 30%, and rampers 15%. Hope your'e all enjoying you industry leading contracts now!
Do you all remember when you used to fly for the enjoyment of it; I doubt it.

Nice to see someone so pleased at the misfortune of others. I don't care how bad the UAL captain treated you, how can you be happy that he is in danger of losing his job? That's just pathetic.

Those are some pretty hefty paycuts. And just where did you come up with those numbers? You just sound like some bitter little man to me.

And no, I don't fly for the enjoyment of it. I fly for a paycheck. This is my job. The fact that I do enjoy flying is besides the point. This is a job, and should be treated as such. I'm not here just for the enjoyment of it. I have a family to take care of just like anyone else.

P.S. Since when can 208 pilots jumpseat anyway? Maybe that UAL captain was justified in giving you a hard time. We don't let just anyone JS nowadays. Just a thought.
 
Re: Re: Oh, boy, another union v. management

PCL_128 said:
Because of good old Franky Lorenzo, Congress changed the law in the mid 80's to prevent mgmt from using bankruptcy to break labor. Bankruptcy no longer automatically voids the labor agreements. UAL would have to convince a judge that labor is completely unwilling to negotiate in good faith. If they are able to convice a judge of that, he may decide to void the labor contract. It's up to the judge. We just have to hope for a judge sympathetic to labor.

Your last sentenance is the most off the wall thing I have read in quite some time. But looking at your profile, I'll bet you believe this.

In any event, the last thing the bankruptcy judge is going to be sympathetic to is labor. In the situation with United, I think the unions are going to come out in tears when he gets through with their contracts. It has been reported the company has been bleeding 20 to 22 million dollars a day. Do you think the judge is going to feel sympathy for the labor groups over there with the creditors screaming about the cash hemmorriging?

You're correct about no automatic voiding, big deal. The courts have historically porked employees every time as the process unfolds. All the laws did was to delay the inevitiable slashing of labor contracts in chapter 11.
 
Re: Re: Re: Oh, boy, another union v. ma

Boeingman said:
Your last sentenance is the most off the wall thing I have read in quite some time. But looking at your profile, I'll bet you believe this.

In any event, the last thing the bankruptcy judge is going to be sympathetic to is labor. In the situation with United, I think the unions are going to come out in tears when he gets through with their contracts. It has been reported the company has been bleeding 20 to 22 million dollars a day. Do you think the judge is going to feel sympathy for the labor groups over there with the creditors screaming about the cash hemmorriging?

You're correct about no automatic voiding, big deal. The courts have historically porked employees every time as the process unfolds. All the laws did was to delay the inevitiable slashing of labor contracts in chapter 11.

I'll admit that a judge favoring labor is a long shot, but it certainly isn't impossible. Anything can happen. Notice I said hope for a sypathetic judge. I didn't say I think it will happen.
 
things have to get better

This whole thing just makes me sick..I try to be an optimist, everyone talks about the cycles the industry goes through..this I'm afraid is going to have everlasting effects on our industry and careers.
 
Now that it's obvious UAL and their pilots are not industry leading, but instead industry laggards, their pay should reflect it. How about America West wages? Topping out around $150/hr... slight adjustment for international ops.
 
Labor agreement voiding

PCL_128 said:
Because of good old Franky Lorenzo, Congress changed the law in the mid 80's to prevent mgmt from using bankruptcy to break labor. Bankruptcy no longer automatically voids the labor agreements. UAL would have to convince a judge that labor is completely unwilling to negotiate in good faith. If they are able to convice a judge of that, he may decide to void the labor contract. It's up to the judge. We just have to hope for a judge sympathetic to labor.
Thanks for the answer. So, maybe, in a back-assward way, Frank accomplished a good change.

I don't believe, then, that United has much of a chance to void its labor contracts. The pilots made concessions. The FAs made concessions. Maybe the mechanics might have, too, finally.

Just the same, the long and short of it is United employees across-the-board will lose jobs. Bad for them, of course, especially after they followed their fearless leaders into battle. Bad for the industry. Bad for pilots trying to find jobs because the always-glutted pilot market will be even more glutted. We're back to 1991. Just change the name(s) from Eastern and Pan Am to United. As Yogi Berra puts it, it's deja vu all over again.

By the way, Kit, don't try to foist a "pilot shortage" on us now.
 
counter

My counter to my friend Enigma was simplistic and one sided on purpose. I thought that his argument was the same.

The thing that hurts UAL is time. Their labor relations being what they are, it has taken them a year to get to this point with nothing accomplished.

If I was a stockholder, the thing that I would be taking the board to task for is letting this thing drag out. They should have gone to the labor groups and said here is what we need to do to protect your stock value. If labor at that point did not want to go along, then file and have saved a ton over the last 12 months.

Another point, you claim that you only have so many things to hold management at bay with. The gains won at the last contract were absurd. If you are going to take these actions that you deem necessary, then you also get the responsibility of being reasonable and not driving away the business.

Obviously SWA must have some formula as they seem to keep everything in balance. Then a bunch of people get on here and become critics of a company that does it right, provides a good living for a large number of people and makes a profit for their shareholders too. Imagine that.
 
The biggest problem is the sour relations that exist and the fact that there is no mutual trust among any of the parties.

You would think that in this day and age of bankruptcies and furloughs both sides would see the proverbial light at the end of the tunnel and make it a point to start up honest negotiotiats. It says something that the past was so bad both sides cant even do that. I dont know if any of these companies can get themselves out of the woods until they start trusting each other.

Just my 2 cents
Dana
 
Originally posted by PCL_128:

"...what else are we supposed to do to make contract advances? Strikes and work slow-downs are the only things we have to make a point to mgmt..."


Who says you have to make "contract advances?"

UAL pilots were well-paid even before they gained last year's 20+ percent increases weren't they? Ever heard of a concept called "contentment?"

D*mn, think how much of this mess could have been alleviated if everyone who already makes a decent wage would just stop looking over their shoulder at what the other guy is getting.

Yeah, that's why I joined the Army all right, for those great "contract advances."
 
Birdstrike said:
Originally posted by PCL_128:

"...what else are we supposed to do to make contract advances? Strikes and work slow-downs are the only things we have to make a point to mgmt..."


Who says you have to make "contract advances?"

UAL pilots were well-paid even before they gained last year's 20+ percent increases weren't they? Ever heard of a concept called "contentment?"

D*mn, think how much of this mess could have been alleviated if everyone who already makes a decent wage would just stop looking over their shoulder at what the other guy is getting.

Yeah, that's why I joined the Army all right, for those great "contract advances."

At the time the contract was being negotiated at UAL, they were making record setting profits. Are the pilots supposed to sit back and not get anything from that? If the company is making more money, then the employees should get a piece of it. I would personally prefer profit sharing. That way the employees could get the extra cash during the good times and not have to worry so much about the bad times. Sort of like an automatic concession. Unfortunately, companies are never willing to negotiate decent profit sharing arrangements, so we're forced to push for pay increases and accept concessions and furloughs during the bad times. Not a great system, but it's all we have to work with. If the company is making record setting profits I'm not just going to sit back and not get anything for it.
 
Posted by PCL_128:

"...If the company is making record setting profits I'm not just going to sit back and not get anything for it...."


But you are getting something for it, PCL. You're getting compensated per the terms of your contract. Who says that management has to share any of their "record setting profits" with you? You're being compensated at the level you agreed to aren't you?

At the risk of oversimplifying, I'm just looking at this from the viewpoint of Joe Sixpack trying to understand the issues. I just don't see your beef.

If you were making dirt for a wage, fine, but that's not the case is it? Taxpayers don't begrudge anyone a decent living but you mainline guys appear to be killing the golden goose. You busted your but* and got to a major, hey, you rang the bell, you're there! Instead of singing "Let The Rejoicing Begin" and being content with your work, its excellent pay, and the chance to be doing something that many would do for much less, you're angling for more.

Where does it ever end? When is enough ever enough? Now we know, don't we. Finally, it ends in bankruptcy. Now you risk losing what little you gained by continually pressing for those greater and greater "contract advances" that just could not continue.

Contentment is a wonderful thing.
 
I think perhaps he works for a "regional" airline, and he doesn't feel that his pay is adequate. So, what should he do to further his cause?
 

Latest resources

Back
Top