US Airways cutting 52 employees at IND

[SparrowHawk]

Who turned the employer-employee relationship into one of enmity and a battle against a despised adversary first, the unions or the company? Why don't non-union employees claim that the Comapny is their enemy when they work for the same place as their union represented co-workers? The adversarial relationship starts with and is fueled by labor cartels who gain power and wealth by convincing uninformed followers that Managment wants to steal their lollipops because they just hate employees because they can actually read and understand how a profit and loss statement works. More often than not the effect of unionization is lost jobs and bankrupted companies. WN has avoided this so far based on twenty years of winning the fuel hedging battle but take those away and WN would have likely been under bankruptcy protection at some point in the last two decades and have been asking for wage concessions just like everybody else. AA is certainly headed that way after trying to get the unions to cooperate with needed steep wage concessions in order to survive but they just don't understand how a business works so they will likely get far worse once a bankruptcy court gets involved. Management and bankruptcy judges understand math and finance well enough to make decisions that give the best chance for am,Inc a profit; unions clearly don't understand or don't care because it's all aout them.

Do you really want the answer to your first question?

The WN fuel hedge argument has more hot air in it than a Balloon Festival.

As to AA, I recall the words spoken to me by one of the most strident union leaders I know. 700UW knows her as well. This is a direct quote to me over dinner.

"Bob, If a company is well run and treats their employees fairly, you don't need a union" Now politically this person and myself were light years apart, however she is dead bang correct. Look no farther than DL as a prime example. With notable exceptions, DL is non union and you have to ask yourself why? Another question would be this. If US is such a great place to work why did their employees recoil in horror at the prospect of merging with US and working for DUI Doug? How does that square against your argument? Or doesn't it? They kept Delta their Delta and the Leader of the Tempe Clown Posse demonstrated his character (or lack thereof) by becoming an overnight guest at one of Sheriff Joe's fine facilities.

 

[700UW]

And she was the ONLY labor leader who Glass feared, she was a dynamic labor leader in her day, not just for the AFA but for all workers!

 

[bagchucker]

How is that any different then you mindless, senseless, slogan regurgitating unionista's bashing everything the company does, even when they do something obviously well or correct?

Give it a rest, already. You are an antagonist. Calling out people you have never met as mindless?! You are one insensitive person, now it makes sense why you own a position in the Tempe Castle. Get Lost! If you had to go meet each one of those "52" in person and spew your rhetoric, would you be able to defend yourself adequately?

 

[Harry Callahan]

I don't think he could. He just needs to go back to Doug's office & do whatever he does.

 

[CallawayGolf]

Do you really want the answer to your first question?

The WN fuel hedge argument has more hot air in it than a Balloon Festival.

As to AA, I recall the words spoken to me by one of the most strident union leaders I know. 700UW knows her as well. This is a direct quote to me over dinner.

"Bob, If a company is well run and treats their employees fairly, you don't need a union" Now politically this person and myself were light years apart, however she is dead bang correct. Look no farther than DL as a prime example. With notable exceptions, DL is non union and you have to ask yourself why? Another question would be this. If US is such a great place to work why did their employees recoil in horror at the prospect of merging with US and working for DUI Doug? How does that square against your argument? Or doesn't it? They kept Delta their Delta and the Leader of the Tempe Clown Posse demonstrated his character (or lack thereof) by becoming an overnight guest at one of Sheriff Joe's fine facilities.

The answer to the first question is simple and entirely objective. Any enmity between employer and employee over wages can be isolated to whichever group first tried to get the other side to abandon free-market forces which set labor rates beyond the control of either employee or employer. Now which side do your think did that? Was it companies trying to pay less than what employees (current or potential) were willing to accept for a day's work or was it employees requesting/demanding more than what the free-market forces of supply and demand would support? If it was they companies fault they would have lost employees to other employers who were paying market rates and they would have had no potential employees coming to the door to get a job. On the other hand, if it was labor that stuck first, then you would have employees demanding more in wages than what the independent free-market forces would support. This would be evidenced by the fact that willing and able potential employees would readily accept the job at the same or lower wage rate than what the current employees were being paid. The forces of supply and demand would objectively prove that it was labor who first tried to violate the free-market forces which resulted in enmity between the to parties over how much pay and under which working conditions people in need of a job would be willing to accept.

Think of it this way, if you are an employee with a certain level of experience that commanded $X in annual pay regardless of which who the employer was (airline A, B, C, D, ect.), then why would you blame Management for being evil or hating employees if every other company that required the same skill set paid the same amount? Clearly it's not Management choosing the level of pay, it's the free and independent supply and demand forces at work. On the other hand, if you are an employer and you know that there are many willing and skilled workers available to perform at a wage of $X and your current organized workforce demands that you pay $X + $Y or they are going to shut the business down and go on strike, then who would you say caused the rift between Management and labor? The answer is simple, logical and unavoidable unless you have a bias that prevents the truth from penetrating your cognitive reasoning abilities.

WN making roughly 90% of income from fuel hedges over twenty years is not hot air. There was an article that detailed this a while back and they backed it up with facts. Therefore, we can conclude nothing about how successful WN is at generating an operating profit with overpriced labor in a highly unionized environment absent the non-operating but still brilliant management decision that let them soar in net income from an activity that had nothing to do with moving passengers from point A to point B with labor costs higher than their peers. Take those hedging gains away over the same period and labor relations at WN would have been much more strained as WN would have only had razor thin profits at best.

 

[SparrowHawk]

Here's a news flash. NO ONE cares HOW you make profit, only that you do make a profit. You lso fail to mention that while WN was busy making 90% of its profit via hedging it was also paying it's workforce 30% MORE than US Airways. Yet another inconvenient truth regarding the scary talent of the Tempe Clown Posse.

While I'm on a roll here further consider that WN even if we delete the fuel hedge profit has been profitable for what 38 consecutive years now? Refresh my memory regarding the long term sustained profitability of the current US Airways and its 2 predecessor companies over the same period of time?

All of the above is interesting but the core difference between WM & US is this single Q & A from a lengthy interview with Herb Kelleher. If Doug Parker, Scoot Kirby and the balance of the Tempe Clown Posse live to be 10,00 years old they will never "get" what Mr Kelleher is saying. Simply because it can't be imported into Excel.

S+B: Let’s start with some words from your award. You made an “audacious commitment” to putting employees first, customers second, and shareholders third. How did you get away with that for 20 years?

KELLEHER: When I started out, business school professors liked to pose a conundrum: Which do you put first, your employees, your customers, or your shareholders? As if that were an unanswerable question. My answer was very easy: You put your employees first. If you truly treat your employees that way, they will treat your customers well, your customers will come back, and that’s what makes your shareholders happy. So there is no constituency at war with any other constituency. Ultimately, it’s shareholder value that you’re producing.

Employees have NEVER been first at any of the incarnations of US Airways and to somewhat defend Mr Parker to a certain degree he inherited two work groups that had been brutalized by the likes of Bill Franke, Stephen Wolf, Dave Siegel, throw in three bankruptcies and you create an atmosphere that is at best filled with mistrust and at worst as toxic as Love Canal. However what you can lay at Doug Parker's feet is what I'll call a failure to lead. The morale at old US was no secret in 1995 or 2005 when the merger took place. It was to be polite poor. Doug knew this going in yet he did NOTHING to effect a culture change. He did NOTHING in the way of leadership in resolving the pilot situation before it turned into a pissing match of epic proportions. One that could under certain conditions cause US Airways cease to exist. he had an opportunity with the McCutchen case to set the tone for the future. A future where people were valued and part of a profit making team. Want another example? Take the pilot seniority list integration between Air Tran and Southwest. How long did it take? 6 months or 6 years? Once again leadership vs managing.

Doug Parker has had ample and significant opportunities to alter the culture and make the airline more productive. To date, he has made the choice not to do so and his work speaks for itself in this regard.

 

[CallawayGolf]

The company as far back as 1992 attacked the employees, why dont you educate yourself on the history of anti-labor relations of US Airways, including the airline after the merger.

You have no idea of what you speak about.

Management's job is to make money for the shareholders by putting a product/service in the marketplace that consumers will part with their own money to acquire. It is not their responsibility to make sure everyone has a three bedroom house, two cars in the garage, three TVs hooked up to cable/satellite, and ample spending cash left over to buy drinks for everybody at the bar. It is also not their job to pay employees at rates above fair market value except as necessary to ensure adequate labor is available to staff the business operations. If there is any strife between labor and management it is because labor has asked for more than what the free market forces would otherwise allow employees to acquire outside of a organized cartel. If more workers are needed and no one is willing to accept the wages and work rules Managment is offering, they will adjust rates and other perques until people agree to take those positions. That's the free maket at work and it works great because it it simple, logical and needs no government oversight to ensure jobs are filled at a competitive rate that qualified workers are willing to accept. Unions attempt to keep potential workers who are willing to work at lower rate from taking the job of someone who want to be paid a premium rate for no additional financial value to the Comapny. That's where strife comes in.

Based on our previous exchanges I'm sure you will not accept this as you prefer to ignore fact and sound reasoning. It's understandable, you have seemingly spent an entire working life being unjustly enriched by the power of unions to purchase wages hire than what your skillet and value could purchase on the open free market. So having been unjustly enriched and enjoying the benefits of earning more than what you could earn outside of the union cartel, you have nothing but good to say about the power of unions to destroy private business and bankrupt the public sector. I don't agree with you but I understand why you would have such a limited and closed view of the world outside of union cartels . That's why when you can't refute an argument you change the topic with a diversion and then tell people to educate themselves thus proving you have lost the argument. It happens in almost every one of your posts and it's very predictable. Too bad because ever once in a while you do make a good point, but you discredit yourself when you attack another poster for have no knowledge when you have no idea what they know or don't know.

 

[SparrowHawk]

Management's job is to make money for the shareholders by putting a product/service in the marketplace that consumers will part with their own money to acquire. It is not their responsibility to make sure everyone has a three bedroom house, two cars in the garage, three TVs hooked up to cable/satellite, and ample spending cash left over to buy drinks for everybody at the bar. It is also not their job to pay employees at rates above fair market value except as necessary to ensure adequate labor is available to staff the business operations. If there is any strife between labor and management it is because labor has asked for more than what the free market forces would otherwise allow employees to acquire outside of a organized cartel. If more workers are needed and no one is willing to accept the wages and work rules Managment is offering, they will adjust rates and other perques until people agree to take those positions. That's the free maket at work and it works great because it it simple, logical and needs no government oversight to ensure jobs are filled at a competitive rate that qualified workers are willing to accept. Unions attempt to keep potential workers who are willing to work at lower rate from taking the job of someone who want to be paid a premium rate for no additional financial value to the Comapny. That's where strife comes in.

Based on our previous exchanges I'm sure you will not accept this as you prefer to ignore fact and sound reasoning. It's understandable, you have seemingly spent an entire working life being unjustly enriched by the power of unions to purchase wages hire than what your skillet and value could purchase on the open free market. So having been unjustly enriched and enjoying the benefits of earning more than what you could earn outside of the union cartel, you have nothing but good to say about the power of unions to destroy private business and bankrupt the public sector. I don't agree with you but I understand why you would have such a limited and closed view of the world outside of union cartels . That's why when you can't refute an argument you change the topic with a diversion and then tell people to educate themselves thus proving you have lost the argument. It happens in almost every one of your posts and it's very predictable. Too bad because ever once in a while you do make a good point, but you discredit yourself when you attack another poster for have no knowledge when you have no idea what they know or don't know.

I guess I have to re-post this for you as clearly you're not paying attention to founder an long time CEO of the most consistently profitable airline in aviation history.

S+B: Let’s start with some words from your award. You made an “audacious commitment” to putting employees first, customers second, and shareholders third. How did you get away with that for 20 years?

KELLEHER: When I started out, business school professors liked to pose a conundrum: Which do you put first, your employees, your customers, or your shareholders? As if that were an unanswerable question. My answer was very easy: You put your employees first. If you truly treat your employees that way, they will treat your customers well, your customers will come back, and that’s what makes your shareholders happy. So there is no constituency at war with any other constituency. Ultimately, it’s shareholder value that you’re producing.

I made it bigger so you'll be sure to see it. Enjoy! When eating your words it's helpful to wash them down so as not to choke upon them.

 

[CallawayGolf]

I guess I have to re-post this for you as clearly you're not paying attention to founder an long time CEO of the most consistently profitable airline in aviation history.


I made it bigger so you'll be sure to see it. Enjoy! When eating your words it's helpful to wash them down so as not to choke upon them.

I don't disagree with this at all so there is nothing to choke on. One conversation is about free markets and unions and this is about creating value by getting employees to all pull in the same direction. From ten days after Doug became CEO there has never been enough cash in the business to purchase the kind of labor relations that WN has enjoyed by doing things right with a startup Company and then having extremely lucrative fuel hedges to maintain higher than market wages in the face a highly competitive market forces. I think there is little doubt that absent the fuel hedges Herb would have had to ask for wage concessions and who knows what kind of labor relations they would have enjoyed once things started going in reverse.

Unions promote mediocrity and low efficiencies. That is costly to a business over and above the wage premiums gained through the labor cartels. Far better to have one motivate and high paid employee rather than three unmotivated and union-protected jobs at above market rates. WN tends to have a culture of motivation by their employee-first culture and I assume they have mechanisms to get poor performers out of the system or not let them in in the first place. US has employees who have been unmotivated and disgruntled for decades under various management teams and I'm skeptical that very few would change their current level of commitment no matter how big their paycheck may be. Throw out the unions and the underperformers and replace them with people who actually want to see the company succeed and I think you could pay them rates higher than WN and get the return on investment of which you speak. Absent the ability to terminate the hard core haters and underperformers and I don't think there is ever enough money to fix this problem. Just my opinion.

 

[700UW]

A company cannot make a profit out of the employees wages and benefits, they dont know how to run a business if everytime their answer is for concessions.

Like I said, why dont you ask long term employees as far back as 1992 how US treated its employees.

You have no clue.

 

[Dog Wonder]

Left unsaid when management attacks unions for asking 'above marlet rate wages', without unions the market rate is set by management. So they contract work out to the lowest bidder, who can drive down the market rate by hiring an unrepresented and inexperienced workforce.

Management's own inflated rate of self value is only exceeded at US Airways by their disdain for the value of the work done by the rank and file. It has not been a hidden agenda. The rank and file see it every day.

Don't blame the people you are peeing on from your perch for throwing rocks in your direction.

 

[CallawayGolf]

Left unsaid when management attacks unions for asking 'above marlet rate wages', without unions the market rate is set by management. So they contract work out to the lowest bidder, who can drive down the market rate by hiring an unrepresented and inexperienced workforce.

Management's own inflated rate of self value is only exceeded at US Airways by their disdain for the value of the work done by the rank and file. It has not been a hidden agenda. The rank and file see it every day.

Don't blame the people you are peeing on from your perch for throwing rocks in your direction.

You get peed on at work regularly and yet you still come back for more? Whose fault is that? How does that saying go, pee on me once shame on you pee on me twice shame on me?

If we stopped paying people not to work in this country I bet some of the 9 percent unemployed out there might find working at US in whatever job your doing to be a great thing considering the alternatives of having no job or even one that pays way less by comparison. You do make more than minimum wage right?

 

[Dog Wonder]

You get peed on at work

If we stopped paying people not to work in this country.

And you blame unions for morale problems.

If you want to stop paying people not to work, start with the ones who don't board passengers, load planes, fix planes, and get customers safely to their destination. They produce a tangible product every day.

While you get paid to pee on them.

 

[CallawayGolf]

And you blame unions for morale problems.

If you want to stop paying people not to work, start with the ones who don't board passengers, load planes, fix planes, and get customers safely to their destination. They produce a tangible product every day.

While you get paid to pee on them.

I don't get paid to pee on anyone. Not in my job description and if it was I would out the door faster than a FA can grab two beers and jump down the emergency slide.

You must be sensitive tonight. The paying people not to work was a reference to unemployment and welfare, not any employees at currently at US airways. Of course you would know more about front line employees putting in less than a full effort than I would by a long shot. If they are doing that then they are stealing from you by increasing the cost of operations per person in your work area thus leaving less money for Managment to bless you with.

Sounds like you have a great model for a successful airline with front line employees only. When you find enough investment capital to launch your new company with zero managers then I will be looking forward to how that works out for you. As for US, it seems that the owners and investors believe that it is a proper model for this airline to actually pay managers to ensure their investment is well protected and that the company operates within the law. Personally I think they know the best way to protect their investment but you could be just the guy to prove them wrong. Go for it.

 

[Dog Wonder]

"Blessed are the meek."

Cancel your tee time tomorrow morning.