article on profit sharing

[dfw gen]

http://www.dallasnews.com/business/columnists/mitchell-schnurman/20140802-schnurman-come-on-aa-share-the-wealth.ece
 
 
 i usually do not like this writer in fact when he was at the star telegram i cancelled my subscription because of an article he wrote.  but this is why moral is so bad at aa (no capitals by choice they don't deserve them)

 

[WorldTraveler]

of course he is right.. .and so are the other airlines that figured out that making profit sharing a key part of the compensation package was necessary in order to motivate employees.



"Rivals are posting strong profits, too. But unlike American, they’ll be cutting big profit-sharing checks for their employees — probably two to three times the size of American’s raises."


Parker knew what he was doing and, no, there will be no do-over.

I feel sorry for those AA employees who missed out on the hundreds of millions of dollars in profit sharing that nearly everyone except the unions knew was coming.

 

[MetalMover]

of course he is right.. .and so are the other airlines that figured out that making profit sharing a key part of the compensation package was necessary in order to motivate employees.



"Rivals are posting strong profits, too. But unlike American, they’ll be cutting big profit-sharing checks for their employees — probably two to three times the size of American’s raises."


Parker knew what he was doing and, no, there will be no do-over.

I feel sorry for those AA employees who missed out on the hundreds of millions of dollars in profit sharing that nearly everyone except the unions knew was coming.

The profit sharing for the lowly employee wasn't all that generous. We were getting a much larger PS in the 90's with profits much less than they are now.
Management gets the generous checks, not the workers.. That's the way it is.

 

[WeAAsles]

Parker said he’s agnostic on the issue; if American employees prefer profit sharing over raises, they’ll work it out, he said. But he doesn’t sound like a fan.
Most large profit-sharing programs were adopted by industries in decline, including airlines and autos, he said. When they restructured and cut pay and benefits, companies often pitched in profit sharing.
“It’s a bankruptcy-era compensation structure,” Parker said. “We’re not in that era anymore. We just think it’s an inefficient way to pay team members. For the same expense, I believe we can do better.”


Absolutely. Only a complete moron would think that Profit sharing over absolute guaranteed direct wages would be a good gamble. People's bills are not up to Vegas odds and I very much doubt any creditor would accept the comment "Well I didn't get enough Profit Sharing this year to pay you"

Profit sharing is always just one Global Economic issue away from being completely wiped out. Especially in our industry.

 

[MetalMover]

Parker said he’s agnostic on the issue; if American employees prefer profit sharing over raises, they’ll work it out, he said. But he doesn’t sound like a fan.
Most large profit-sharing programs were adopted by industries in decline, including airlines and autos, he said. When they restructured and cut pay and benefits, companies often pitched in profit sharing.
“It’s a bankruptcy-era compensation structure,” Parker said. “We’re not in that era anymore. We just think it’s an inefficient way to pay team members. For the same expense, I believe we can do better.”


Absolutely. Only a complete moron would think that Profit sharing over absolute guaranteed direct wages would be a good gamble. People's bills are not up to Vegas odds and I very much doubt any creditor would accept the comment "Well I didn't get enough Profit Sharing this year to pay you"

Profit sharing is always just one Global Economic issue away from being completely wiped out. Especially in our industry.

I rather have the wages. I am not an executive and therefore do not want stock and profit sharing as part of my compensation. What the workers get is a pittance compared to what the big boys and big girls get.

 

[WorldTraveler]

except that is not entirely true because WN has had it from the beginning.

Of course he is not a fan because he doesn't want to increase labor costs now that AA is profitable which everyone knew they would be coming out of BK and ending US' pricing structure that specifically targeted AA's top markets.

the whole airline industry has been one global economic issue away from being wiped out.

Airlines didn't enter BK and toss out labor contracts right after a few years of strong economic growth.

and metal,
you can have the base wage rates but you won't get them at the same level as you would get with profit sharing.

the whole idea of risk based compensation - of which profit sharing is one - is that you gain more in the upside but you might know grow as much when times are bad.

WN is proof that you can have profit sharing on a consistent basis because the company itself is able to adapt and remain profitable.

 

[MetalMover]

except that is not entirely true because WN has had it from the beginning.

Of course he is not a fan because he doesn't want to increase labor costs now that AA is profitable which everyone knew they would be coming out of BK and ending US' pricing structure that specifically targeted AA's top markets.

the whole airline industry has been one global economic issue away from being wiped out.

Airlines didn't enter BK and toss out labor contracts right after a few years of strong economic growth.

and metal,
you can have the base wage rates but you won't get them at the same level as you would get with profit sharing.

the whole idea of risk based compensation - of which profit sharing is one - is that you gain more in the upside but you might know grow as much when times are bad.

WN is proof that you can have profit sharing on a consistent basis because the company itself is able to adapt and remain profitable.

Personally, I do NOT want profit sharing. I'd rather have the addition to my wages, even less but consistent. . The theory behind profit sharing is that all we need is a  "feel good" "group hug" "rah rah rah" mentality.
What happens when we give 100% and bad decisions by those at the top wipe out any profits? What good did it do the worker?

 

[jimntx]

I don't know about other positions, but when it comes to WN flight attendants...not only do they participate in a generous profit-sharing program...they are also the highest paid domestic flight attendants in the US on an hourly basis . Now, I know they are paid "by the trip", and a trip equals the air miles between DAL and HOU (their original total route structure). So, for instance one leg from HOU to PHX is 4 trips (I'm guessing). If you divide the total compensation for that leg by the time it takes to fly it, WN f/as top out at over $50/hr. Talk about adding insult to injury.

 

[MetalMover]

I don't know about other positions, but when it comes to WN flight attendants...not only do they participate in a generous profit-sharing program, on an hourly basis, they are also the highest paid domestic flight attendants in the U.S. Now, I know they are paid "by the trip", and a trip equals the air miles between DAL and HOU (their original total route structure). So, for instance one leg from HOU to PHX is 4 trips (I'm guessing). If you divide the total compensation for that leg by the time it takes to fly it, WN f/as top out at over $50/hr. Talk about adding insult to injury.

That has been the WN culture since their birth. To transform  much older and much larger legacy carrier would require way more than just a culture change.

 

[WeAAsles]

I rather have the wages. I am not an executive and therefore do not want stock and profit sharing as part of my compensation. What the workers get is a pittance compared to what the big boys and big girls get.

The company currently has an incentive program that can equal up to $1800.00 for the year if all the metrics are hit. Something like that is fine by me if they want to play "Pat The Pup" on the head for a job well done. 

As for Stock I agree also. Pay me enough money and I'll make my own choices if I want to invest in something. I already invest personally in AAL because I think it's a good play and a good value that shows great potential for upsides.

 

[WeAAsles]

I don't know about other positions, but when it comes to WN flight attendants...not only do they participate in a generous profit-sharing program...they are also the highest paid domestic flight attendants in the US on an hourly basis . Now, I know they are paid "by the trip", and a trip equals the air miles between DAL and HOU (their original total route structure). So, for instance one leg from HOU to PHX is 4 trips (I'm guessing). If you divide the total compensation for that leg by the time it takes to fly it, WN f/as top out at over $50/hr. Talk about adding insult to injury.

Jim don't forget that FA's have a lot of areas in their contracts that skew that $50 per hour a lot lower. Ready reserve, block time, time to and from hotels, etc. They mostly don't do 40 hours per week like us and they certainly don't go home every night.

Did I mention dealing with those passengers? Ugh. They can have it.

 

[MetalMover]

The company currently has an incentive program that can equal up to $1800.00 for the year if all the metrics are hit. Something like that is fine by me if they want to play "Pat The Pup" on the head for a job well done. 

As for Stock I agree also. Pay me enough money and I'll make my own choices if I want to invest in something. I already invest personally in AAL because I think it's a good play and a good value that shows great potential for upsides.

I recall getting more than twice that amount in the 90s when profits were no where what they are now. And my hourly salary was half what it is now. 
As for stock, look at what we received compared to what we gave.....I know, I know, the equity is about going forward,,,,,Not based on the past. 

 

[WeAAsles]

I recall getting more than twice that amount in the 90s when profits were no where what they are now. And my hourly salary was half what it is now. 
As for stock, look at what we received compared to what we gave.....I know, I know, the equity is about going forward,,,,,Not based on the past. 

I worked for two large corporations before AA, UPS and FEDEX and the profit sharing back then was doled out EQUALLY to all employees.

As for who was taking the lions share of profits the few times we got them in the last 15 years that would be the Pilots. Upper Management mostly received extra compensation in shares that needed to hit a strike price to be cashed in.

 

[1AA]

Profit sharing program still exists 20 years later.
Company offered if as a thank you for a job well done.
So what happened to the same profit sharing today that we had back in the 80's?
It became a union negotiated issue. Profit sharing still existed during this change.
Today the TWU just gave it away for a pay raise. Profit sharing program still exists today for the same reason, Thank you for a job well done. TWU did not think so.
 
Pay raises are negotiated in contracts. Profit Sharing should have never been put in the contract in exchange for a pay raise. Profits will continue and the company says Thank You for a job well done. But this time there is no show me the money for a job well done. Maybe the company will direct the next Thank You for a job well done to the TWU for giving it away. And the profits continue to roll on and on with the Thank yous.

 

[Kev3188]

Equal payout would be nice, but apparently it's too, well, equitable. Not sure how it would play out at AA, but doing that here at DL would mean a *massive* boost to Ready Reserve employees, and others at the low end of the scale. Given that they do the same work as we do to generate said revenue, it'd be the right thing to do.