UA/UA merger?

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No airline, indeed no business, can conduct its affairs with the parochial interests of its own employees as the centerpiece of its business strategy.


I disagree with this statement because:
When Southwest first started and things were not going well, they realized they needed to get rid employees, or an aircraft to stay in business. As we all know the choice was the aircraft, the employees stayed and have made history because of the very fact the employees came first. Yes the UAL problems are a LOT bigger. But there are too many successful companies that have put employees first. Success is based on large part by the employees treatment of the very customers that make it a success, why would anything less then great employee relations make an airline a success? Now in industry where people are not front line employees they can be treated as cave dwellers without hurting the bottom line. I see both sides here and really don't have an answer, but the answer is not going to be one sided either way.

DCAFlyer response:

I dont' see this so much as puting employees first as I do recognizing that employees are a significant asset to the company, not a liability. This is a major problem with the large carriers right now. Southwest has always recognized that happy employees results in a more well-run operation. If you treat people well, they will not only be happier, they will look happier, act happier, and work harder. Once Bethune went to CAL and changed the corporate culture, the airline turned around. Once he gave gate agents the final authority to offer upgrades, comp hotel rooms and meals on delays, and deal with the passergers because they are the front person, attitudes changed. Bethune essentially said 'I can sit in the executive suite and make rules, but I'm not the one who has to face a passenger when there is a delay.' (paraphrased) He held a bonfire in the parking lot at HQ and burned the employee manuals. He replaced them with employee guidelines and told the employees you have a brain, you figure out the solution to XXX problem. He went on to say that he was amazed at the creativity that employees displayed in problem solving.

Changing attitudes toward your employees is one piece of the puzzle, but not the entire answer. What we see now with the major carriers is a mish-mash of different work groups commanding different benefits and varying levels of rights which have been written into the different contract over the years. It is no wonder Dave had the mismanaged mess to clean up. The majors also have instances, I believe, where the people responsible for giving away the farm did so thinking or knowing that they wouldn't be around when the do-do finally hit the fan. Classic example, parity plus one, which never made sense in the most liberal of business schemes. The WolfGang figured they would be long gone when this became a problem.

I don't know that there is a perfect solution... perhaps one union for one airline negotiating for all labor groups at the same time. Not a perfect answer, though. I think the perfect answer would be an airline treating its employees with dignity and respect, across the board, so we don't need unions in the first place. Oh, to dream!
 
Argento, you really showed your true colors on this one, are you really that bitter? The fact that you and your ilk would scab the entire airline industry is troubling, very reminescent of ENRON, Texas Air, Global Crossing and other companies whoe's senior management were morally and ethically bankrupt. The fact is most union workers are hard working, ethical people, unlike the silver spooned entiled dirtbags that inhabit many of todays corporations. You comprise any credability you may have had, you contribute nothing by impeaching hard working people of any industry. Please refrain from this kind of dribble in the future.
 
CAPTRONAGN: Again, don't shoot the messenger. Understand the message and respond, if you like, but stay on the subject.

Perhaps for obvious reasons (these boards are overwhelmingly dominated by airline employees), questions concerning or related to airline employment are treated as something of a third-rail around here. And, unfortunately, views of the sort I've expressed in this string are too frequently treated as iconoclaastic, branded as eccentric and presumably marked ignor. That's unfortunate because too much of what is wrong with domestic civil aviation relates to its rigid and antiquated operational structure and the attitudes toward labor relations that had evolved in response to it (long ago). CAVALIER, I believe, cited the LUV model for what he asserts is its employee-centric business model; and LUV's success may indeed owe a great deal to that single feature of its business model. But LUV is also dramatically more productive than any of the mature network carriers, employing, for example, less than twenty percent the number of mechanics as USAir (to service comparable numbers of aircraft).

The essence of my expressed views in this string is not that employees are worthless or irrelevant to the ultimate success of an airline business model, but rather, that an employee focus cannot become the centerpiece of any successful business model -- neither in commercial aviation nor in any other industry. Frankly, the extent to which human resources considerations can even approach the heart of any enterprises' core concerns must be a function of the central significance of thoes employees to the economic success of that enterprise. Viewed in that light, service businesses (including airlines) are by nature more sensitive to human resources concerns than other businesses. But among service businesses, some are almost by definition hostage to their employee's well being than are others. Banks, for instance, accounting firms and insurance brokerages absolutely live and die on the strength of their employee's books of business while retailers, restaurants and . . . airlines are usually able to market their own identities independent of specific employees (not that their own employees' capabilities to furnish acceptable levels of customer service are irrelevant).

Perhaps this discussion is occuring in an altogether too insular environment, where too many of our participants lack familiarity with comparable employee-relations considerations or generalized M&A challenges faced within other industries. Referencing the above discussion, it would seem that the culture of American's big commercial or investment banks is even more significant to the successful integration of any of them than is the case in the airline biz. (After all, disenchanted bankers may not solicit their customers with the same zeal as before and might be the reason that those customers migrate to competitors). Yet, when BankAmerica and NationsBank combined into the Bank of America, when Chase Manhattan and JP Morgan formed JP MorganChase, and when Citibank consolidated Solomon Smith Barney into Citigroup, not one moment seems to have been devoted to coddling the sensibilities of the respective employee groups. Not that they were unimportant -- far from it -- it just wasn't a consideration particularly relevant to those business combinations. And none of those were driven by the kind of desparation that may very well be impelling those combos among the airlines.

The unfortunate preoccupation with the attitudes of employees to whatever might be around the bend for UAL and USAir is, to amplify my central message, the very condition that could, perversely, drive these two together. And if they do indeed come up with some kind of unique corporate transaction, you can bet that the economics will be driven by USAir's emerging business model and not whatever happens to be proposed by its unions as the plan-du-jour at UAL.
 
Some folks just refuse to face the reality of their situation. Argento has just pointed out (very accurately I might add) the entire difficulty in getting airlines restructured to function in today's economy. These processes have progressed well in the case of US Airways, as they were able to get employees to understand the true crisis here. I don't believe that UAL, AMR or any other megacarrier will be able to do this as easily. It's obvious to me and probably many others that other carriers are now beginning to feel threatened by U and the potential successful restructuring, and feel the need to deny their plight while bashing U and it's supporters. No employee at U voted for these concession because they wanted to. They did it because they needed to in order to preserve their company. The same reality will present itself soon enough at UAL, AMR and DAL, along with others with similar cost/marketing structures. There's a freight train acomin' boys....
 
Argumento,

You have the audacity to say

“Both you and Ron have fallen over yourselves taking shots at my professional capabilities (about which neither of you can know anything) while you dismissively characterize my views as antiunion and nutty.â€￾

When you had the gall to say this earlier

“Frankly, the best thing that UAL gould do, immediately upon entry into bankruptcy, would be to shut down, lay off all of its employees, reject the non-economic leases and reject the labor contracts and put out the help wanted signs, recruiting only people who wanted to work and were grateful for the opportunity. (Who knows? Maybe a number of ex-Braniff, ex-Eastern and ex-TWA employees might respond). In that way, UAL could overnight implement the LUV model (with LUV productivity) and thereby assure itself a bright future.â€￾


Does ANYBODY NOT see your rant as “anti-union? I think the best thing for the airlines would be strict limitations on litigation by all those ambulance chasers. Our insurance costs and our cost to fight the multitude of frivolous lawsuits is staggering. We should put caps on ALL punitive awards and we should CAP ALL LEGAL FEES! I know lawyers think they deserve a certain income, BUT I DON’T, and that’s what matters. We also need to pass a federal law that prevents “featherbeddingâ€￾ on the part on lawyers. Title companies do just fine in most states handling real estate transactions. We could also let paralegals do much more of the legal work lawyers have demanded for themselves. We could even get the government involved! They could help stop this scourge by demanding that banks only loan money to companies that employ less than a certain number of lawyers, and they could even dictate the amount the companies are allowed to pay the lawyers. After all, we ALL KNOW lawyers make TOO MUCH MONEY for the amount of time they spend at work and the level of education and skill they seem to be at.
 
Busdriver said:

Does ANYBODY NOT see your rant as “anti-union? I think the best thing for the airlines would be strict limitations on litigation by all those ambulance chasers. Our insurance costs and our cost to fight the multitude of frivolous lawsuits is staggering. We should put caps on ALL punitive awards and we should CAP ALL LEGAL FEES! I know lawyers think they deserve a certain income, BUT I DON’T, and that’s what matters. We also need to pass a federal law that prevents “featherbeddingâ€￾ on the part on lawyers. Title companies do just fine in most states handling real estate transactions. We could also let paralegals do much more of the legal work lawyers have demanded for themselves. We could even get the government involved! They could help stop this scourge by demanding that banks only loan money to companies that employ less than a certain number of lawyers, and they could even dictate the amount the companies are allowed to pay the lawyers. After all, we ALL KNOW lawyers make TOO MUCH MONEY for the amount of time they spend at work and the level of education and skill they seem to be at.

DCAflyer says this is more than just a little bit off the topic.
 
Argento

My brother-in-law has a business that I helped him start. I was on the grunt end, not business end. I lasted one year then left. I was only doing it part time too, but he expected me to act like it was MY company. I helped him get it off the ground, showed up when I said I would every single time on time, did a ton of work for him the entire time I was there. Basically I was a great asset to him. He mentioned that to my sister, NOT me, after I left. Why am I telling you this; well reading your posts makes me think of him, the guy who can't keep help, has 100% employee turnover rate just about yearly! He has been in business 20 years and looking to sell now because he can't find good help he says, but trouble is, everyone knows who he is. It just seems to me you have his same attitude. Maybe you don't, but the way I read your posts it seems that way. Yes, my brother-in-law has a ton of money, but also known as a A-hole to everyone with no real friends. I am NOT saying that is you, just my observations from your posts. Guess coming from the grunt end I don’t see the clear picture?
 
CAV: If this discussion is going to descend into a witch hunt designed to feret out those who can be labeled as enemies of organized labor, or alternatively those who require sensitivity training regarding the worth of their fellow human beings, then we can probably close up shop now.

Its as irrelevant what my expressed views bring to mind in any particular reader's personal history as it is quite beside the point whether lawyers (or airplane pilots and mechanics) are appropriate subjsects for demagoguery. Theis string began, more than a hundred messages ago, with the suggestion that some kind of combination between UAL and USAir seemed to again be in the cards. Many reasonable, often contradictory and thought-provoking posts later, any life and value left in it is clearly in danger of hyjack by some UAL-employee types who prefer bombast and would-be charcter assination to rational discourse. However, some of these rants have produced glimmers of light to go with all of their heat. For example, OHCAPTAINRON wrote of a table-turning possiblity involving UAL's acquisition of USAir's PHL and CLT hubs, its shuttle and enough of its assets at BOS to create a hub there. Unfortunately, his heart may not have been in that one and neither he nor anyone else pursued it. More's the pity because the potential for a UAL USAir unique corporate transaction doesn't have to take the shape CHIP and I have suggested. Indeed, with a bidding war about to erupt in bankruptcy court for the right to sponsor USAir's Plan of Reorganization, there is the very real possibility that some truly awful bidder (like Carl Ichan or Marvin Davis) might yet emerge with parallel designs on UAL, once it enters Ch.11.

I will repeat, for maybe the tenth time, the specific business condition that is driving UAL both toward bankruptcy and, likely toward the unique corporate transaction with USAir has been, and continues to be, its own preoccupation with the welfare of its employees. Distilling the views of the various UAL accolytes who have posted here, the ideal UAL management wouldn't lead at all (rather, like most successful Democraat and some Republican politicians, it is urged to poll the employee roster first to discern worker attitudes on specific matters before adopting the majority view as that of the airline). This kind of employee-centric business model not only dooms the enterprise, in this case it will virtually assure that some unpleasantness (for its own employees) will follow the the inevitable crash and burn.
 
Argento

For the record, I was NOT slamming you. Just don't understand your point of view. I do know this; until people start flying again at realistic ticket prices, all this endless talk is absolutely useless, Einstein’s help not required here.
 
I feel this issue (UA/US) forced acquisition is a pipe dream and that it should cease to be discussed by the UA folks on this board. The employees of UAL, with or without a corporate governance change would whole heartedly give more concessions to keep such a transaction from taking place. If this was rumored or filtered to the union leaders working on the Plan then I am sure the unions would much rather seek deeper wage and productivity changes to keep the divesture of UAL to U. If we can get our cost to a reasonable level within industry standards then the whole discussion is mute. We (UA) keep what we have and fly back to profitability.

That is my take and I will not get into the verbal barbs with Chip and his secret hotline to the ATSB,FAA,Whitehouse,Outhouse etc...
 
Well, MAGSAU, maybe you've stumbled onto something very significant here. One way to reconcile CHIP's various intel reports and your firm conviction that UAL's union handlers would never knowingly permit something like the oft-discussed possibility of a fragmentation of domestic UAL into a revitalized USAir, is to accept your thesis that once UAL's unions became aware that it was a real possibility, they would provide UAL with whatever [wage]concessions were necessary to prevent it. To close the circle then, all you need assume is that CHIP's reports of discussions at the highest levels have really been a ruse designed to become known to the UAL unions at the appropriate moment (like now) and thereby scare the beJesus out of them, permiting some sanity. Of course that means that whoever was participating in those conversations (at least from the UAL side) was doing so deceitfully and disingenuously. I guess my problem here is attributing that level of Machievellian scheming to current UAL management -- although maybe I underestimate.
 
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On 9/21/2002 2:55:07 PM argentomaranello wrote:

Well, MAGSAU, maybe you've stumbled onto something very significant here. One way to reconcile CHIP's various intel reports and your firm conviction that UAL's union handlers would never knowingly permit something like the oft-discussed possibility of a fragmentation of domestic UAL into a revitalized USAir, is to accept your thesis that once UAL's unions became aware that it was a real possibility,

Argumento,

Have you followed Chip's intel in the past? One need only look back a little more than a year ago to see that, although good reading, and may ocassionally have a grain of truth (ala National Enquirer), his more radical theories just don't come to fruition. Chip was a BIG believer that the U BUYOUT would happen, and when it failed, it was because of some vast Wolfie conspiracy to sue UAL for billions and have U execute a hostile takeover. Again, good reading, but never happened.

they would provide UAL with whatever [wage]concessions were necessary to prevent it. To close the circle then, all you need assume is that CHIP's reports of discussions at the highest levels have really been a ruse designed to become known to the UAL unions at the appropriate moment (like now) and thereby scare the beJesus out of them, permiting some sanity.
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That Whatever word is the biggy. UAL management wanted approx 2.5 BILLION a year in concesssions. Talk about a wish list. The unions ARE currently in discussions to provide what the company needs, but not alot more. Our past management has demonstrated that stock buybacks were more important than employee pay raises, profit sharing, or reinvestment in the core business. Rest assured, any deal from the Union Coalition WILL include some sort of sucker clause that prevents it from happening again
 
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On 9/21/2002 1:31:52 PM magsau wrote:

I feel this issue (UA/US) forced acquisition is a pipe dream and that it should cease to be discussed by the UA folks on this board. The employees of UAL, with or without a corporate governance change would whole heartedly give more concessions to keep such a transaction from taking place. If this was rumored or filtered to the union leaders working on "the Plan" then I am sure the unions would much rather seek deeper wage and productivity changes to keep the divesture of UAL to U. If we can get our cost to a reasonable level within industry standards then the whole discussion is mute. We (UA) keep what we have and fly back to profitability.

That is my take and I will not get into the verbal barbs with Chip and his secret hotline to the ATSB,FAA,Whitehouse,Outhouse etc...


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I don't think the issue is whether UAL wants to be a partner with U, but rather that they NEED to be. Some other options include U becoming aligned with other carriers, like NWA. UAL KNOWS that this combination would KILL THEM, and likely in short order. I'm not advocating a merger per se, but I do believe the U and UAL are destined to be some sort of partner, be it code share or a unique corporate transaction of some sort. UAL needs the east coast feed that U provides, and since it now looks like U will be a player in the long term it cannot be ignored. The short sighted employees that are singly focussed on such issues as seniority ARE THE REASON that UAL needs to change their corporate structure.
 
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On 9/21/2002 4:55:31 PM oldiebutgoody wrote:

The short sighted employees that are singly focussed on such issues as seniority ARE THE REASON that UAL needs to change their corporate structure.
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I still don't remember a single UAL pilot over here (or PB) ranting about how he couldn't wait to kick some of those U guys off the F-100 from PIT to Buffalo. UAL's pilot group had sufficient protections, but a lot of anomisity was created by guys asking for 400 and 777 pubs. The AFA was another story, unfortunately, they don't have any real merger protection (DOH). I'm not sure what the IAM's rules are.
 
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On 9/21/2002 6:03:21 PM Busdrvr wrote:

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On 9/21/2002 4:55:31 PM oldiebutgoody wrote:

The short sighted employees that are singly focussed on such issues as seniority ARE THE REASON that UAL needs to change their corporate structure.
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I still don't remember a single UAL pilot over here (or PB) ranting about how he couldn't wait to kick some of those U guys off the F-100 from PIT to Buffalo. UAL's pilot group had sufficient protections, but a lot of anomisity was created by guys asking for 400 and 777 pubs. The AFA was another story, unfortunately, they don't have any real merger protection (DOH). I'm not sure what the IAM's rules are.
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Then what are they afraid of? You know they are afraid of something, or there wouldn't be so much antagonism toward U. U/UAL is an ALMOST perfect match, as far as airlines go. Only the UAL guys who are afraid of losing something are against it. Even the other majors fear the potential impact of such a combination.
 
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