Willie swings his axe
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Slasher axes 600 jobs at BA
· 'Slasher' says three-year reductions will not be last
· Airline sets its sights on £50m of annual savings
Terry Macalister
Thursday December 1, 2005
The Guardian
Willie Walsh, the new chief executive of BA, reinforced the cost-cutting reputation which earned him the nickname "Slasher" at Aer Lingus by announcing 600 senior job losses yesterday.
Almost 50% of the airline's top executives and 30% of middle managers are to be made redundant in a move designed to save £50m a year as the airline battles against high fuel costs and competition from no-frills flyers such as Ryanair.
Mr Walsh, who took over at the beginning of October, said the reduction in his management team, to be achieved by 2008, would not be the end of job cuts. He refused to be drawn on future numbers.
Already 3,000 people a year are leaving the business through normal turnover but he said "some" were being replaced as BA tries to reach its target of saving £300m in labour costs by March 2007.
"I said when we reported our second-quarter financial results last month that our costs were up in most areas and that, as a result, we need to re-energise our efforts to deliver a competitive cost base," Mr Walsh said.
He denied there was any change of strategy and insisted it was no indictment of the way his predecessor, Rod Eddington, had run the business. "His track record was exceptional. BA was one of the few companies that really did face up to the challenges after 9/11."
Reporting second-quarter results two weeks ago, Mr Walsh played down the importance of job cuts as a way of reducing costs. Yesterday he insisted he had flagged up the need to tackle costs, and there was "absolutely no panic and to my mind no surprise" in the announcement of 597 senior staff cuts, which will cost the company £50m.
BA hopes most of the reductions can be achieved voluntarily but he accepted there were likely to be some compulsory redundancies. Top managers have salaries of about £86,000 while the middle ranks are on about £45,000. The company believed most managers would understand the need for changes and Mr Walsh foresaw no problem with unions, because the cuts would be done in a controlled and structured way.
The moves would not affect safety and should make the business more effective, BA said, using similar arguments to those voiced by the airport operator BAA when it cut middle management jobs recently.
The senior job cuts will come in three phases, with 94 top executives to leave the airline by March 31 2006 and further reductions over the next two years.
Reuters quoted a source familiar with the situation as saying that Mr Walsh was considering a 15% cut in the total workforce of more than 46,000 over several years as part of its move to a single new terminal at Heathrow. But the move could exacerbate relations with the unions after three summers of industrial strife at Heathrow and ahead of planned changes in work practices there.
Mr Walsh cut a third of the workforce at Aer Lingus, while Mr Eddington shed 14,000 jobs over the last five years at BA, Europe's third-largest airline.
Kevin Egan, a national officer for the Amicus trade union, said: "We are still waiting to see the detail from BA but our priority will be to ensure that alternative options to compulsory redundancies are offered."
Equity analysts said the move was in line with the strategy of making £300m of savings but one pointed out its unfortunate timing in the run-up to Christmas - "the kind of thing investment banks do".
Shares in BA rose 1% to 355p.
· Airline sets its sights on £50m of annual savings
Terry Macalister
Thursday December 1, 2005
The Guardian
Willie Walsh, the new chief executive of BA, reinforced the cost-cutting reputation which earned him the nickname "Slasher" at Aer Lingus by announcing 600 senior job losses yesterday.
Almost 50% of the airline's top executives and 30% of middle managers are to be made redundant in a move designed to save £50m a year as the airline battles against high fuel costs and competition from no-frills flyers such as Ryanair.
Mr Walsh, who took over at the beginning of October, said the reduction in his management team, to be achieved by 2008, would not be the end of job cuts. He refused to be drawn on future numbers.
Already 3,000 people a year are leaving the business through normal turnover but he said "some" were being replaced as BA tries to reach its target of saving £300m in labour costs by March 2007.
"I said when we reported our second-quarter financial results last month that our costs were up in most areas and that, as a result, we need to re-energise our efforts to deliver a competitive cost base," Mr Walsh said.
He denied there was any change of strategy and insisted it was no indictment of the way his predecessor, Rod Eddington, had run the business. "His track record was exceptional. BA was one of the few companies that really did face up to the challenges after 9/11."
Reporting second-quarter results two weeks ago, Mr Walsh played down the importance of job cuts as a way of reducing costs. Yesterday he insisted he had flagged up the need to tackle costs, and there was "absolutely no panic and to my mind no surprise" in the announcement of 597 senior staff cuts, which will cost the company £50m.
BA hopes most of the reductions can be achieved voluntarily but he accepted there were likely to be some compulsory redundancies. Top managers have salaries of about £86,000 while the middle ranks are on about £45,000. The company believed most managers would understand the need for changes and Mr Walsh foresaw no problem with unions, because the cuts would be done in a controlled and structured way.
The moves would not affect safety and should make the business more effective, BA said, using similar arguments to those voiced by the airport operator BAA when it cut middle management jobs recently.
The senior job cuts will come in three phases, with 94 top executives to leave the airline by March 31 2006 and further reductions over the next two years.
Reuters quoted a source familiar with the situation as saying that Mr Walsh was considering a 15% cut in the total workforce of more than 46,000 over several years as part of its move to a single new terminal at Heathrow. But the move could exacerbate relations with the unions after three summers of industrial strife at Heathrow and ahead of planned changes in work practices there.
Mr Walsh cut a third of the workforce at Aer Lingus, while Mr Eddington shed 14,000 jobs over the last five years at BA, Europe's third-largest airline.
Kevin Egan, a national officer for the Amicus trade union, said: "We are still waiting to see the detail from BA but our priority will be to ensure that alternative options to compulsory redundancies are offered."
Equity analysts said the move was in line with the strategy of making £300m of savings but one pointed out its unfortunate timing in the run-up to Christmas - "the kind of thing investment banks do".
Shares in BA rose 1% to 355p.
Talk about chiefs and indians....
BA's got how many employees? 40,000?
And 1715 middle/senior manager to run the outfit?
The LH Group (not the most efficient outfit on the planet - yet) runs close to 100,000 and does all that with 800.
You do the math.
BA's got how many employees? 40,000?
And 1715 middle/senior manager to run the outfit?
The LH Group (not the most efficient outfit on the planet - yet) runs close to 100,000 and does all that with 800.
You do the math.
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My point about hotels I think has been misunderstood.
I was not talking about going from say the SAS Radisson in central AMS to the Sheraton at Schipol Airport.
I meant going from the SAS Radisson/Sheraton whatever to an Ibis, Days Inn or a Holiday Inn Express etc.
I was not talking about going from say the SAS Radisson in central AMS to the Sheraton at Schipol Airport.
I meant going from the SAS Radisson/Sheraton whatever to an Ibis, Days Inn or a Holiday Inn Express etc.
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Generally speaking, small hotels/motels of the type you have named, Scottie, are unable to provide:
* reliable 24 hour contactability to allow airlines to advise crew of schedule disruptions, crew changes, or for crew to contact the local station manager to advise of crew unavailability;
* security that will ensure the crews' safety (thus ensuring their next assigned flight gets away);
* check-in/check-out around the clock;
* guaranteed minimum noise levels to rooms allocated to crew (nighttime and daytime);
* checkout times that suit the motels' room servicing time guidelines.
Motels and small hotels of the sort mentioned by Scottie usually charge a cancellation fee for no-shows. The larger hotel chains which secure airline contracts don't.
The contracted rate, paid by the airlines for their crew accommodation is usually considerably LESS than that charged by motels and the smaller hotels.
Finally, crew accommodation costs are a tax deductable employee expense for the employer.
Edit
Scotty had a post - now deleted - indicating that "his loco might like to put him up in nicer places"
So are you saying those places you suggested are not nice, Scotty?
Unlike your loco (I suggest), airlines are able to offer a large volume of supply on a daily basis, year in and year out - bread and butter that the hotels which have the crew contracts can count on as REGULAR income.
Is there some petty envy of working conditions of flight crew flavouring your posts, Scotty?
* reliable 24 hour contactability to allow airlines to advise crew of schedule disruptions, crew changes, or for crew to contact the local station manager to advise of crew unavailability;
* security that will ensure the crews' safety (thus ensuring their next assigned flight gets away);
* check-in/check-out around the clock;
* guaranteed minimum noise levels to rooms allocated to crew (nighttime and daytime);
* checkout times that suit the motels' room servicing time guidelines.
Motels and small hotels of the sort mentioned by Scottie usually charge a cancellation fee for no-shows. The larger hotel chains which secure airline contracts don't.
The contracted rate, paid by the airlines for their crew accommodation is usually considerably LESS than that charged by motels and the smaller hotels.
Finally, crew accommodation costs are a tax deductable employee expense for the employer.
Edit
Scotty had a post - now deleted - indicating that "his loco might like to put him up in nicer places"
So are you saying those places you suggested are not nice, Scotty?
Unlike your loco (I suggest), airlines are able to offer a large volume of supply on a daily basis, year in and year out - bread and butter that the hotels which have the crew contracts can count on as REGULAR income.
Is there some petty envy of working conditions of flight crew flavouring your posts, Scotty?
Last edited by Team Player; 1st Dec 2005 at 10:06.
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reliable 24 hour contactability to allow airlines to advise crew of schedule disruptions, crew changes, or for crew to contact the local station manager to advise of crew unavailability;
check-in/check-out around the clock;
guaranteed minimum noise levels to rooms allocated to crew (nighttime and daytime);
checkout times that suit the motels' room servicing time guidelines.
Motels and small hotels of the sort mentioned by Scottie usually charge a cancellation fee for no-shows.
The contracted rate, paid by the airlines for their crew accommodation is usually considerably LESS than that charged by motels and the smaller hotels.
Stand firm and keep that BALPA membership up
As a regular user of this grade of hotels it really make me aware how little my company values me. Normally stuck in the middle of no where.
Edit
Scotty had a post - now deleted - indicating that "his loco might like to put him up in nicer places"
So are you saying those places you suggested are not nice, Scotty?
Unlike your loco (I suggest), airlines are able to offer a large volume of supply on a daily basis, year in and year out - bread and butter that the hotels which have the crew contracts can count on as REGULAR income.
Is there some petty envy of working conditions of flight crew flavouring your posts, Scotty?
[Last edited by Team Player on 1st December 2005 at 11:06]
*** I deleted the post as I wanted to say more but needed to delete it in order to see the rest of the thread (if you follow).
Teamplayer you're damn right the places easyJet puts us up are not nice. They're bare minimum, just on level of acceptance.
However we can supply the volume of business and do to a hotel call the Ramada Jarvis near Luton. This hotel is a pit. Affectionately known as the Rwanda Jarvis or Ramharder Jarvis. We probably have 40-60 rooms there a night used, maybe more. However there are nicer hotels around but we end up there.
Is there petty envy? Well I don't know about petty but there is certainly envy. However I in no way want BA to be put up in such hotels which is why I said stand firm and don't let WW pick you off.
Better conditions in BA mean better conditions for the rest of us.
However for a Teamplayer you sound off like a pointscorer.
Last edited by Scottie; 1st Dec 2005 at 10:25.
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Holiday Inn Express, Ibis etc are all open 24 hours.
And that "24 hour reception/switchboard" means the answering machine intercepts all calls during those zzzzzzzzzzzz hours of the sole caretaker.
check-in/check-out around the clock...........Again having stayed in them this is not a problem.
Check-out early = leave the key in the drop-off box, and we'll post your company the bill for the extra telephone calls, mini bar, and room service.
guaranteed minimum noise levels to rooms allocated to crew (nighttime and daytime).............Having stayed around Europe in hotels in a previous life this a joke right?! Nobody can guarantee minimum noise. Depends on your neighbour and who is walking down your hall, the area of the city etc etc....
Other considerations are garbage collection, and the usual "disco", or function room, above which the cheapies are placed.
I'm sure ...I'm sure ...I'm sure....I'm sure..
Most of the types of hotels/motels you have mentioned, Scottie, are single owner Ma and Pa franchises, relying upon immediate settlement rather than 6 monthly account billing.
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You won't be surprised to hear I beg to differ 
Holiday Inn Express are 24 hours, aren't ma & pa, have a central HQ for 6 monthly billing etc.
Have stayed in many Hiltons, Radissons etc where there has been a wedding reception or next door bonking until the small hours etc etc. Paper thin walls etc.
I think you're confusing motels with hotels. I never suggested that one should stay in motel.
Anyway I shall bow out at this point as this debate is futile
Holiday Inn Express are 24 hours, aren't ma & pa, have a central HQ for 6 monthly billing etc.
Have stayed in many Hiltons, Radissons etc where there has been a wedding reception or next door bonking until the small hours etc etc. Paper thin walls etc.
I think you're confusing motels with hotels. I never suggested that one should stay in motel.
Anyway I shall bow out at this point as this debate is futile
Oh Shazbat!
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Interesting thread but a couple of comments if I may.
I suspect that BA senior/middle managers affected will have the benefit of serious training schemes paid for by BA and will most likely be able to tick all the right boxes when it comes to applying for new jobs. -
I would also suggest that management help will be required back at BA, but under consultancy terms. For many it will probably be the best thing that could happen, out plus package, then back in as "NewCo Consultants".
As for the hotel debate - don't forget that the large hotels do fabulous block book rates, so staying at an SAS Radisson in central XXX is probably no more expensive for BA on a block rate than the HI Express but with all the benefits of those lovely stars.
All WW is doing is much what is happening in other industries, and that's why the city analysts looks for this.
I suspect that BA senior/middle managers affected will have the benefit of serious training schemes paid for by BA and will most likely be able to tick all the right boxes when it comes to applying for new jobs. -
I would also suggest that management help will be required back at BA, but under consultancy terms. For many it will probably be the best thing that could happen, out plus package, then back in as "NewCo Consultants".
As for the hotel debate - don't forget that the large hotels do fabulous block book rates, so staying at an SAS Radisson in central XXX is probably no more expensive for BA on a block rate than the HI Express but with all the benefits of those lovely stars.
All WW is doing is much what is happening in other industries, and that's why the city analysts looks for this.
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If he is cutting costs the next thing he should go for is the nonsense of crew allowances. Paying crews $50 for lunches that crews spend $15 on is crazy. It does not happen in any other industries.There are still lots of costs to be taken out of BA and this is one of them.
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WOD,
Allowances as you suggest above ended for flight crew a couple of years ago. We're now paid a small hourly allowance for time away from base (£2.50 ish) and incentive flying pay (£10 per flying hour ish). The TAFB is about normal for airline flying although BA insisted on flying pay to make us turn up, rather than just add it to our basic based on 900 hours a year.
For the time being, mainline cabin crew remain on the previous allowance system although I expect that to change to something similar to the pilots sooner rather than later.
Allowances as you suggest above ended for flight crew a couple of years ago. We're now paid a small hourly allowance for time away from base (£2.50 ish) and incentive flying pay (£10 per flying hour ish). The TAFB is about normal for airline flying although BA insisted on flying pay to make us turn up, rather than just add it to our basic based on 900 hours a year.
For the time being, mainline cabin crew remain on the previous allowance system although I expect that to change to something similar to the pilots sooner rather than later.
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Assuming a 3 or 4 star hotel could match prices with a 2 star, logic dictates that you go with the higher quality as there is better value. Its a small token that crews recognize, and goes a long way towards quality of life without costing a cent more.
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All this wittering on and on is sheer stupidity! I, for one, will not gloat over those unfortunates who are having to reapply for their jobs!
Like most large companies, we have managers who deserve their UB40's - and others who are worth their weight in gold. Unfortunately, Willie Walsh's axe will not, I fear, swing the cutting stroke in the right direction to p-prune the dead wood!!!
I fear for my own safety too - we've seen these management cuts before! The only trouble is, two years later, the management numbers remain the same (or greater) and the front-line staff numbers are cut!
If Willie Walsh was serious about saving BA's cash, he could, and should, start by slashing his own £12000 a week pay - until he's achieved something to deserve it!!!
Like most large companies, we have managers who deserve their UB40's - and others who are worth their weight in gold. Unfortunately, Willie Walsh's axe will not, I fear, swing the cutting stroke in the right direction to p-prune the dead wood!!!
I fear for my own safety too - we've seen these management cuts before! The only trouble is, two years later, the management numbers remain the same (or greater) and the front-line staff numbers are cut!
If Willie Walsh was serious about saving BA's cash, he could, and should, start by slashing his own £12000 a week pay - until he's achieved something to deserve it!!!
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There are flying staff in BA who need to be tackled into proper productivity, and they ain't pilots!
As you may know the CAA has minimum requirement for crew on board and BA increase this to tailor to the service, so customers are better cared for by ratio.
Now if you were implying flying hours are less than pilots, thats a whole different story. Infact I'm sure that if a pay deal was offered to the cabin crew too which agreed increase of hours........
Don't forget the cabin crews job is both physically and mentally tiring.
If you mean the days and hours available that crew can work and within the agreements already in place are not used productively, well then yes I agree.
I meant going from the SAS Radisson/Sheraton whatever to an Ibis, Days Inn or a Holiday Inn Express etc.
Also I worked for an airline where there were 2* hotels used. Morale was terrible onboard. Crew didnt want to go away. They couldn\'t sleep as the quality was poor. Food poisoning was often an issue....
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Hi Bealine,
While he was CEO at Aer Lingus, one of the major newspapers did a survey of CEO pay in Ireland. They created a 'league table' based on company profitability relative to CEO salary.
Guess who was the BEST PAID CEO in Ireland on that league table? Yes, you guessed it, oor Wullie!
Given that Aer Lingus was a loss making venture at the time you might say Wullie would have figured high on the list, no matter what he was paid. But he topped the CEO's of succesful Irish globalised companies on multi-million pound packages.
I seem to recall even MOL couldn't touch his position!
And meanwhile he was slashing workers salaries and conditions while still sticking his own snout in the trough to the tune of 400K per year plus bonuses - not bad given that just 3 years before he was a lowly pilot, where top of scale would have been around 100K after 26 years service! In 2001 he had 20 years served.
While he was (famously) selling the paintings off the boardroom walls, couldn't he just have been satisfied with the salary he'd have earned if he'd ever made it to a senior captains scale?
Sadly, no.
Not exactly a 'leader by example' then. Hence the massive strife that accompanied his tenure.
The FAT CAT label fits Wullie snugly. He has a small-man complex to beat the band.
Edited:
If Willie Walsh was serious about saving BA's cash, he could, and should, start by slashing his own £12000 a week pay - until he's achieved something to deserve it!!!
Guess who was the BEST PAID CEO in Ireland on that league table? Yes, you guessed it, oor Wullie!
Given that Aer Lingus was a loss making venture at the time you might say Wullie would have figured high on the list, no matter what he was paid. But he topped the CEO's of succesful Irish globalised companies on multi-million pound packages.
I seem to recall even MOL couldn't touch his position!
And meanwhile he was slashing workers salaries and conditions while still sticking his own snout in the trough to the tune of 400K per year plus bonuses - not bad given that just 3 years before he was a lowly pilot, where top of scale would have been around 100K after 26 years service! In 2001 he had 20 years served.
While he was (famously) selling the paintings off the boardroom walls, couldn't he just have been satisfied with the salary he'd have earned if he'd ever made it to a senior captains scale?
Sadly, no.
Not exactly a 'leader by example' then. Hence the massive strife that accompanied his tenure.
The FAT CAT label fits Wullie snugly. He has a small-man complex to beat the band.
Edited:
Last edited by maxalt; 2nd Dec 2005 at 00:15.
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Don't forget the cabin crews job is both physically and mentally tiring
Mentally - playing sudoku all day
physically - sitting on the ar$e all day getting piles
Now you mention it, our job is pretty tiring, mentally and physically, with the added burden of responsibillity.
70 pax/7 CCM is not a hard days work
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W squared told a recent pilot joinee at BA that "he knew what he was signing when he joined", on being told at a pilot's 'meet the chief exec seminar' that the pension he could expect after 30 years with BA was about £10,000 a year with BA's new pension plan, BARP. (Is that acronym a bad joke or what?).
W squared has news inbound. Those of us who joined BA in NAPS, the previous DB pension scheme knew what we were signing when we joined too.
Whilst BA has long been over-managed whilst underperforming I have sympathy for anybody made redundant at Christmas. Its such a devious, viscious Harvard Business School tactic: 'lets stick it to 'em at the season of Joy when everyone's too preoccupied with their own families to care about other's misfortunes'.
But I'd take heart if I were you. If BA ram the pension cuts down the throats of the workforce that they have in mind it wont exist for long in anything like its current form anyway.
W squared has news inbound. Those of us who joined BA in NAPS, the previous DB pension scheme knew what we were signing when we joined too.
Whilst BA has long been over-managed whilst underperforming I have sympathy for anybody made redundant at Christmas. Its such a devious, viscious Harvard Business School tactic: 'lets stick it to 'em at the season of Joy when everyone's too preoccupied with their own families to care about other's misfortunes'.
But I'd take heart if I were you. If BA ram the pension cuts down the throats of the workforce that they have in mind it wont exist for long in anything like its current form anyway.
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i see slasher walsh is up to his usual tricks, starting his campaign with a bang. instead of in fighting amongst yourselves about who has been targeted this time, you should have a cohesive plan to prevent him using you to make his name as some sort of corporate wizard. despite the media frenzy he generated in ireland as ceo, most of the newspaper reports overstated his achievements. he seems to thrive on sensationalism to achieve his ends. dont forget, just like aer lingus. you are a unionised company and he can only take from you what you allow him to. also, ba is a very profitable company. i will be interested to see what fear factors he will attempt to introduce to achieve his ends. the one thing he did do during his tenure in aer lingus was destroy morale but under our new chief executive pride in the shamrock is once again in evidence.
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"Slasher" will be in charge of a Big Fat Zero soon. Spending our pensions may make sense to him, but those of us who saw B@b 'dont-call-me-Robert' A@ling blow BA's money on a pile of cr@pola are not about to sit here and see the chickens finally come back to the barn with our pension scheme being raided to fund the accumulated losses.
If "Slasher" thinks he's got an easy win here he is woefully mistaken. People will resist till BA is no more - its the only thing that makes working there tolerable, as does bidline. Take them away and the lifeblood, people, will follow.
If "Slasher" thinks he's got an easy win here he is woefully mistaken. People will resist till BA is no more - its the only thing that makes working there tolerable, as does bidline. Take them away and the lifeblood, people, will follow.
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I get a chuckle from reading some of these threads. Sometimes I wonder if Willie might end up being a loose cannon, possibly turning into another Frank Larenzo, going hog wild, busting unions and end up endangering his own existance.
Remember an Irishman isn't happy until he has a good fight on his hands.
An Irishman from the bogs of the wee Emrald Isle running BA!!
Well I guss some of our leaders out here had their roots bogged down there as well.
Remember an Irishman isn't happy until he has a good fight on his hands.
An Irishman from the bogs of the wee Emrald Isle running BA!!
Well I guss some of our leaders out here had their roots bogged down there as well.