WHy don't the unions ask the judge to suspend management payroll?

[Midnight Mike]

When a company has financial problems it is usually the fault of all employee groups, pilots, management, mechanics, Flight Attendants, etc. Just a friendly reminder, we saw how well
the employees ran an airline, when United had an employee buyouyt, that was certainly a success
story.

 

[pilotyip]

perfectly elastic in a range

In the mid range where airline tickets are now, it is close to a classic price/demand elastic curve. Price goes up, demand goes down, and price goes down demand goes up. No airline can raise it prices on a route where competition has a lower price and expect to maintain its load factor. The marketplace dictates how much money and profit an airline can generate, management has very few options is this environment.

 

[atrdriver]

Well, if the CEO has very little control then why is he/she the higheat paid person in the company? Upper management should have a bonus system where they get paid a lot if the company makes money, and they leave with nothing if they run it into the ground.

Also, passengers will pay highter fares than the competition IF the airline with teh higher fare offers something unique or important to the passenger. If that were not the case, then Super Wal-Marts would have NO competition. Krogers, Publix, HEB, PriceChopper, and every other grocery store charge more for their products, yet they stay in business, and continue to make money by offering something to people that they feel they don't get at Wal-Mart.

 

[pilotyip]

This is a pilot board so saying anything in defense of management is like peeing into the wind, that it is going to come back to you. CEO's are not intentionally running airlines into the ground. They would very much like to succeed. For lack of other reason it would make their resume look great, they would be doing something no other CEO had ever done. An issue of ATW in the last year had an article about “Airline Management a dying breed”, the article basically said no one wants to do it. The good track record CEO’s are going to other industries. With tremendous, payrolls, overhead burdens, and extremely low margins, there is no tried and true path to success. Most have tried to increase market share, but this has lead to low price and ridiculous load factors in 90% range. AA tried to take seats out of the airplanes, to attract people with more room, did not work. UAL USA have used BK in an attempt to start with a clean slate, it is probably not going to work. ATA tried getting a fleet of new fuel-efficient airplanes, which did not work. What is management supposed to do? Eliminating management will bring the end quicker for the airplane industry, and theri salaries as shown above are insignificant to the airlines operating costs. The Kroger/Wal-Mart comparison does not hold water. Kroger builds its stores in areas where shoppers are not price sensitive, Wal-Mart builds in areas where shoppers are price sensitive. In really lower end price sensitive areas, A & P has opened stores that make Wal-Mart prices look like the Ritz. Airlines do not have the option of picking their customers like Kroger, Wal-Mart and A & P.

 

[blzr]

CEO's are not intentionally running airlines into the ground. They would very much like to succeed. (posted by pilotyip)

They are either incapable or incompetent. But, pilotyip, unlike the pilots thrown out on the street, the CEO's and their cronies always get the Golden Parachute.

 

[Publishers]

Ownership

The biggest problem that management faces today is that stockholders and the markets in general live off short term thinking. If you are a CEO, your immediate job is to get the stock price moving upwards. You are not given years to accomplish this, more like one quarter.

You then, of course, put pressure on your management staff to produce exactly the results you must have.

The points made above are valid but the single biggest thing is time. Airlines use aircraft that are purchased or leased for the long term, union contracts are for a term of a number of years, leases for gates are long term ( American has committed for a huge sum of money for the new MIA terminal) fuel deals and everything else cover vastly different time periods.

When the market goes south or we have some economic problem impact things, the ability to change things quickly is non existant. These things are too big and going too fast to stop and change directions. Between government regulation, insurance induistry concerns, political events, oil and gas pricing, and union contracts, you do not control much that can be changed in short order to respond to things that come up./

Guys with talent, well, they can go elsewhere so the plan would leave an industry that is sucking wind, even less.

 

[surplus1]

While all of these theories are "interesting" none of them answers the question posed by the title of the thread, i.e.,

WHy don't the unions ask the judge to suspend management payroll?

The answer is in fact quite simple. Unions don't ask judges to do much of anything that affects "management" (and when they do the answer is invariably "NO") because judges themselves are managers, with fool proof pension plans and total job security, who are themselves appointed by other "managers". Don't expect them to penalize their own kind.

For instance as "labor", I would make it a crime for the executives of a corporation to allow their pension plans to become "underfunded" by billions because they made bad investments or spent the "contributions" on other things. What are the chances of that ever happening? Zero.

The capatilist always finds a way to exploit the peasantry for his own benefit. Government will never balance the equation because the "govenors" are themselves capitalists who gained their own positions by duping the electorate.

Whenever he or she is given the opportunity, a judge will always rule against labor and in favor of his/her own kind. "Birds of a feather flock together".

 

[GuppyPuppy]

CEO's are not intentionally running airlines into the ground. They would very much like to succeed.

I would argue that a tomato could have run UAL better than Jim Goodwin did back in the late '90's and early '00's.

GP

 

[Publishers]

Surplus1 should move to a non capitalist country seeing he is so versed inthier lingo.

 

[pilotyip]

Guppy UAL late 90's early 00's

Is not that when the UAL pilot group got the industry leading contract that was going to take UAL pilots to nirvana land of the $350K to $400K/yr pay scale. Are you saying that he was wrong to approve the contract?