Project Early Departure

[SharoninSAT]

09-07-07 | 609 Participate in Project Early Departure

The final participation numbers for Project Early Departure are in, and a total of 609 eligible Employees elected the early-out program. Broken down by department: 166 participated from Ground Ops; 41 from Inflight; seven from Provisioning; and 395 from Reservations.

 

[SharoninSAT]

09-10-07

Associated Press
7 Pct. of Southwest Workers Take Buyout
Associated Press 09.10.07, 6:50 PM ET

DALLAS - Southwest Airlines Co. said Monday that 609 employees accepted buyouts to leave the company - just 7 percent of the 8,500 workers eligible for the offer.

The Dallas-based airline said in July that it would offer early-out packages to about one-fourth of its work force in an effort to cut costs as it heads into a period of slower growth. Chief Executive Gary Kelly said the company hoped to replace longtime workers with lower-paid newcomers. Southwest is dealing with high fuel costs and faces contract negotiations that could result in higher wages.

Southwest spokeswoman Beth Harbin said the company didn't have a target for the number of employees that it expected would accept the offer.

Southwest offered $25,000 in cash plus health and dental benefits to flight attendants, baggage handlers and other employees.

Most of the employees who took the offer worked in reservations or ground operations. The buyouts were not offered to many higher-paid employees, including pilots and mechanics.

Buyouts like the Southwest offer typically cost money upfront but eventually result in lower salary and benefit costs.

Southwest also offered buyouts in 2004 - up to $1,000 per year of service, plus health benefits. More than 1,000 employees accepted the offer then. Southwest has about 33,000 workers.

Harbin said of the 609 employees who took the early-out offer, 395 worked in reservations, 166 came from ground operations, 41 from in-flight services and seven from provisioning. The employees had until Aug. 10 to accept the buyout.

Officials had said it would have been too costly to extend the buyout offer to pilots.

Meanwhile, Southwest is curbing its appetite for growth. In June, Kelly said the company would grow about 6 percent a year, down from 8 percent, and would add fewer new planes because revenue wasn't increasing as quickly as expected.

Shares of Southwest fell 16 cents, or 1.1 percent, to $14.66 on Monday.

 

[jimntx]

Brace yourselves. I went through a similar experience at Texaco years ago. When they didn't have enough volunteers, then some people left INvoluntarily. Maybe SWA will find another way to do it, but once executives get the idea they need to reduce staffing, it's hard to get them to focus on anything else.

 

[skyguy25]

Brace yourselves. I went through a similar experience at Texaco years ago. When they didn't have enough volunteers, then some people left INvoluntarily. Maybe SWA will find another way to do it, but once executives get the idea they need to reduce staffing, it's hard to get them to focus on anything else.

It is not a matter of reduction in force...it was a matter of reducing salaries and benefits... with over 100 planes confirmed with Boeing they will be expanding their workforce....sorry to bust your bubble bud.

Also don't be fooled...if you look at the real numbers-----salary and benefits are less year over year...CASM is down and staffing per A/C is down as wel.. so there are two sets of numbers.. don't worry or be fooled! :unsure:

 

[skyguy25]

FYI if you look at 2004 SWA had a net income of around 320 million then in 2005 it was roughly 490 million and then in 2006 it was over 580 million..... want to know the percent that was salary and benefits?
roughly 39% in 2004, down in 2005 to 35%, and 2006 31%.....HUH? increased profits and an overall decrease in output of $$$ to employees... dont' think SWA employees really need to BRACE themselves...

 

[jimntx]

If things were all that swimmingly wonderful in the labor department, the company would not be offering an early out package. Regardless of what you can "prove" with the financials, the company has decided they need to reduce total payroll. Now, whether they do it by people taking the early out, not replacing them, or then hiring people at lower salaries, or they start finding that they only need 1 gate agent where they used to have 2, and start laying off people, they will do it.

 

[skyguy25]

it's called GOOD BUSINESS.....its just another incredible business move on WN's part. There are to many other ways to reduce cost without "laying off people".
With billions in the bank, being the world's largest airline, the lowest debt of any major carrier, owning the most of its own real estate than any other carrier, and having a market cap of at least 11 billion at any given moment---I don't think they have anything- at present- to worry about.
Also, the company has already hinted that there could be, or don't count out, an announcment in the 4th quarter with regard to WN and its ability to possibly "AQUIRE" not "MERGE" with another carrier.
Am I arrogant enough to think that what you say jimintx can not come to fruition? No not at all...BUT- not likely in the foreseable future.

 

[jimntx]

Then why did they even bother to offer an early out option? That is something that costs today's cash as opposed to a "future obligation" on the books. SWA is too sharp a company, and too savvy financially to do something that was not needed.

I never said, nor implied, that I thought that SWA was in any kind of financial difficulty. I may be crazy, but I'm not stupid. However, there is a reason they offered that early out option. And, I don't believe for a second that it was just a "fishing trip" to see what might happen, or that they were doing it just to be good guys.

 

[KCFlyer]

Then why did they even bother to offer an early out option? That is something that costs today's cash as opposed to a "future obligation" on the books. SWA is too sharp a company, and too savvy financially to do something that was not needed.

I never said, nor implied, that I thought that SWA was in any kind of financial difficulty. I may be crazy, but I'm not stupid. However, there is a reason they offered that early out option. And, I don't believe for a second that it was just a "fishing trip" to see what might happen, or that they were doing it just to be good guys.

Jim...IMHO, early outs means spending a penny today to save a dollar tomorrow. Few other airlines offered an early out, which would have reduced the level of more senior, higher paid employees. Instead, they relied on furloughs, which trimmed the ranks of junior, less paid employees. To get the same level of cuts, those airlines had to cut deep...and impact service. So IMHO, it's better to offer something to that higher paid staff to trim costs than it is to slash the lower branches and ultimately impact service.

 

[swflyer]

Then why did they even bother to offer an early out option? That is something that costs today's cash as opposed to a "future obligation" on the books. SWA is too sharp a company, and too savvy financially to do something that was not needed.

It was because we asked for it.

There was an internal survey, done last year, and one of the things that came up was a request for another early departure program, like the one done previously. What Mgmt. came up with was totally voluntary, not available to pilots and, depending on where you are in life, not that lucrative, IMHO.

Interestingly, one of the requirements was that you worked a certain amount, in the last year. Folks who give away all of their shifts/trips weren't able to take advantage, you had to contribute to the bottom line to enjoy the benefit.

 

[jimntx]

And, that was the whole point of my original post. The employees may have asked for it initially, but if the company had seen no benefit, it would not have been offered. Also, once the company decided there was a benefit to doing it, I can assure you they had a target number of employees they expected/wanted to take the offer.

I have to believe that they wanted a response somewhat higher than 7% of the eligible employees. I don't believe that it will be left there. That's all.