Airlines have always operated right on the cusp of being in the red as far as financials.
United is depending on the government bail-out in addition to the employee pay cuts to stay in business. Now the mechanics have shot that down.
What a shame - the union was even backing the pay cuts. This would show a working relationship between employers and unions that should be followed - where the union works with the company to keep the company profitable.
please union stop being so stubborn,give back some $$$$,because if they go bankrupt,there will not be any money,,,its not rocket science,,your co. is asking you for help,,help them,then when you need help they will help you,,"lets just all get along please?
I couldnt agree with you more,but....when your managing a Union you must manage the mentality. To say nothing is owed to them might be right to you but if the work force doesnt think that way then you end up where they are today. The job of managment is to get the best results with what you have to work with.Even anybody who knows nothing about the conflict would have to raise an eyebrow when they hear that no raises were given during the high profit 90's. UAL hasnt rewarded the union like the UNION believes they should have been rewarded. You mean to tell me if UPS said you were doing a good job but hasnt given you a raise for 8 years you would be perfectly fine with that??? No you wouldnt and anybody wouldnt blame you for having bad feelings toward the company especially when the company was making Billions of dollars for a good part of those years. The error made was back then and UAL is feeling the results of their mistake now.A Union is like a little child. Dont try to pasify them and they will throw a tantrum. The results of UAL actions were as certain as the sun coming up in the morning. Manage your people or in this case your child.
Sadly a company going through financial difficulties often ends up playing the the blame game. Playing that game is a sure ticket to eventually bankruptcy. United has to find a way to rally the troops around its plan to return to finanacial health. Thats not easy to do. Whats missing in this article is why the union rejected the concessions asked for.
I believe that if the same thing were to
happen at UPS the Teamsters would take a
small cut. UPS has been good to me, the
first year I was there I got a $1.50 in
raises. The second year I was there I only
got 50, but that was still a five percent
raise, which is better than inflation. This
year I am scheduled to make a 13% raise.
Although UPS is trying to take away some of that,
saying I only get 15 cents instead of a normal,
Anyway, those are pretty good numbers and UPS
profits look pretty dagone good.
I took a look at the financial statements from several airlines. It appears to me that they (most of them) have been operating about 9 months to a year in the red. This was typical of most except Southwest and a few others. How those airlines got themselves into that position is a matter of opinion, and those opinions vary greatly.
The tragedy of Sept.11 did not help the airlines that were already at the edge, it did, in fact, push them over that edge. Now we approach the situation and wonder what to do. The airlines cry that they need money from the government and concessions from their employees. The government cries that it will not give money to a losing cause. The employees (some, not all) cry that they have been dealt with in bad faith and therefore will not help. Management says it will go bankrupt.
Sounds like this are no win situations. Should it be considered that bankruptcy is the only option? Should the inevitable not be postponed any longer? If the company somehow survives this mess how will the employees of the different unions (that voted for and against concessions) feel towards one another? Can an airline claim bankruptcy and then successfully rebuild itself as a different company?
It seems that there are to many unfortunate circumstances for (and I am speaking of United right now) an airline to try to overcome and remain a competitive and solvent company. My vote would have to go to starting over. I believe that United had a CEO that was shown the door for saying that they were bleeding to death and something was going to have to change or they would be bankrupt. Funny how things work isnt it?
"I believe that United had a CEO that was shown the door for saying that they were bleeding to death and something was going to have to change or they would be bankrupt. Funny how things work isnt it?"
Sure is. And then the union-dominated board gave everybody nice raises anyway. They deserve to go under. I was glad to hear the govt will not guarantee loans. If it happens to UPS I would say the same thing. You play the free enterprise game, some win, some lose. The losers don't deserve a new stake just because people will be out of work. Less than 10% of all companies come out of chapter 11 successfully.
Finally, a good decision by the government.
It really won't matter for very long for the employees. They all better be looking for jobs, and not in the airline business.
I believe the crux of the problem was with the way the employee stock ownership plan was set up. The structure of the plan itself created conflict and financial difficulties for the airline. Nobody wins here and I think why the mechanics voted "no" is because the employees are stuck with stock they can't sell. The only way they can sell their ESOP shares is to either quit or retire. If UAL files Chapter 11, these shares will be worthless. My last check on UAL stock is at 93 cents per share.
Conversely, management couldn't have open discussions on cost reductions because of the union board seats. In a restructuring, these union-controlled seats are expected to be lost, according to the news reports I have been reading. This whole ordeal appears to be an experimental industrial democracy model, which flopped. There is nothing wrong with ESOPs, but if one wishes to participate, the moral of the story is "buyer beware."
Additionally, its good to see that the federal government is staying out of this mess. Taxpayers should not have to clean up poor labor relations. Airlines such as Southwest and Jet Blue should be in a position to gain market share with their lower cost structure, competitive fares and better customer relations.
Correct me if I am wrong but once a corporation is in Chapter 11 the court officials will be calling ALL the shots. Unless I am mistaken, they (the court officials) can wield a very sharp axe. That includes wages, and expenses.
What that means is the same people that voted against wage concessions of some proportion may end up with wage concessions of a far greater magnitude.
I am not saying that this was the single cause of the downfall of United I think we would all agree that there were many things that contributed to it. My only point here is that ALL employees will be in far worse shape if the company files for protection under chapter 11 bankruptcy. A sad mess to say the least.