Interim Profit

[Iago]

When James Hughes-Hallett announced the CX interim profit of $2.18 billion dolars, I wonder if anyone in management posed the question, "how much could we have earned, had our team been on side?" Somehow I feel that question was never asked, so lets go through the exercise now. Hughes-Hallett said the pilot sick-out cost the company $500 million to achieve the pilot pay cuts. So, how much was saved, $100 million? thats probably optimistic, but even if it was, without it the interim profit would have been $2.58 billion rather than $2.18 billion. But these salary cut savings are going to be achieved over the long term I hear you say. Thats true provided the aircrew body work on at a similar level of efficiency as before the cuts. A 95% vote for contract compliance would tend to indicate that the previous levels of efficiency are not being achieved and that a severe moral problem exists. In the current environment, no long term benefit will ever be realized.
At a time of rapid expansion, with our competitors nipping at our heels, management needs its team on side and well motivated, this is clearly not the current situation. So what is the answer, I believe it is Man Management [non gender specific], unfortunately no one in managment knows what it means let alone how it should be implemented. Basically it means striking a balance between, team, task, and individual needs. Frank Lorenzo has already walked the path we are on and proves it does not work. Even Watson Wyatt said on CNN a few weeks ago "70% of a companys stockmarket value can be due to how well that company treats its employees". The message is clear, invest in your employees, not the slime bags that would destroy them.

[chat sei chat]

Well spoke... Let's not only look at the income statement, but also at the balance sheet. The current thinking is that there exists enough monitoring capacity to place a value on the "intangible" elements that make up a company's assets. While the obvious ones are already accounted for (the brand name of Coke, for example), there are the ones that a bit harder to measure, but still a part of the overall "value" of the company.

To extend the thinking from the previous post, what if we were to put an arbitrary asset value on the per-pilot (per-F/A, per Gnd Eng., per Admin staff...) morale factor? (say 10-20,000 US$ per) I would like to think that over the course of a year each one of us influences the cost and quality of the portion of the "product" we are responsible for. I would then like to put forth that in the irrational exuberance of the poorly implemented cost cutting over the last 7 years or so, there has actually been a large DECREASE in net shareholder value. And yet again "we" are the accountants enemy...the scourge of the shareholders. That's only because they choose to measure costs. What of all the p***ed off passengers that bear the brunt of the decrease in morale? Forever lost to us, they're not likely to fill in survey forms,but vote with their feet to SQ,UA etc.

So to recap, a 12,000 employee company had (low ball) about a 120,000,000 US$ asset in their employee base. The last few mgmts. have turned that wonderfull, precious and unique team into a liability!

They don't trumpet that in the annual report do they?