Workers lose money as ownership plan ends
Thread Starter
Joined: May 2001
Posts: 601
Likes: 0
From: New Jersey Shore
Workers lose money as ownership plan ends
http://www.iht.com/cgi-bin/generic.c...rticleId=79876
With collapse of United, a bold experiment dies
Greg Schneider/WP The Washington Post
Wednesday, December 11, 2002
Workers lose money as ownership plan ends
At first, it was just a way to keep the company from breaking up. But over time, the employee ownership plan at United Airlines struck a pilot, Bob Giuda, as something more, something noble.
In 1994, pilots, mechanics and other employees sacrificed as much as 25 percent of their wages and pensions to control just over half of the airline's stock, providing $4.9 billion to save the company from financial strife. In return, they got three seats on the 12-member board of the parent company, UAL, and a powerful stake in their own futures.
The bold experiment was not only supposed to make them wealthy; it was supposed to set an example for the rest of corporate America about the power of the average worker.
It was even touted as a reason to fly United: the company whose employees would take extra care because each had a personal stake in keeping customers happy.
The decision Monday by United to file for bankruptcy-law protection brought the big experiment to an ignoble end. The money that the employees sank into their company - a typical pilot might have given up $200,000 in wages and pension contributions; a mechanic, roughly $80,000 - is lost.
The employee ownership plan was the "greatest experiment in the history of relations between airline labor and management," said Giuda, a former leader in the pilots' union. "But that entire investment is gone with no chance of ever being recovered. It's over. That's capitalism."
Critics say the very idea of employee control doomed the airline, that having union members on the board prevented management from making tough decisions to cut jobs and hold down salaries. Competing airlines have complained that United, because of its size, set a lax standard for cost control that dragged down everyone else.
But insiders say the airline never really embraced employee ownership as a new way of doing business. Like expecting a new paint job to turn a turboprop into a jumbo jet, United never overcame its long history of conflict between labor and management.
Advocates of employee ownership worry that United's spectacular flameout will scare other companies from trying it.
"I'm certain United's experience with this is going to discourage that same model from other large publicly traded companies," said Corey....................................................... .....
With collapse of United, a bold experiment dies
Greg Schneider/WP The Washington Post
Wednesday, December 11, 2002
Workers lose money as ownership plan ends
At first, it was just a way to keep the company from breaking up. But over time, the employee ownership plan at United Airlines struck a pilot, Bob Giuda, as something more, something noble.
In 1994, pilots, mechanics and other employees sacrificed as much as 25 percent of their wages and pensions to control just over half of the airline's stock, providing $4.9 billion to save the company from financial strife. In return, they got three seats on the 12-member board of the parent company, UAL, and a powerful stake in their own futures.
The bold experiment was not only supposed to make them wealthy; it was supposed to set an example for the rest of corporate America about the power of the average worker.
It was even touted as a reason to fly United: the company whose employees would take extra care because each had a personal stake in keeping customers happy.
The decision Monday by United to file for bankruptcy-law protection brought the big experiment to an ignoble end. The money that the employees sank into their company - a typical pilot might have given up $200,000 in wages and pension contributions; a mechanic, roughly $80,000 - is lost.
The employee ownership plan was the "greatest experiment in the history of relations between airline labor and management," said Giuda, a former leader in the pilots' union. "But that entire investment is gone with no chance of ever being recovered. It's over. That's capitalism."
Critics say the very idea of employee control doomed the airline, that having union members on the board prevented management from making tough decisions to cut jobs and hold down salaries. Competing airlines have complained that United, because of its size, set a lax standard for cost control that dragged down everyone else.
But insiders say the airline never really embraced employee ownership as a new way of doing business. Like expecting a new paint job to turn a turboprop into a jumbo jet, United never overcame its long history of conflict between labor and management.
Advocates of employee ownership worry that United's spectacular flameout will scare other companies from trying it.
"I'm certain United's experience with this is going to discourage that same model from other large publicly traded companies," said Corey....................................................... .....
Thread Starter
Joined: May 2001
Posts: 601
Likes: 0
From: New Jersey Shore
I think there are other factors here. UAL, like all the majors, went to the "Hub" concept years ago. It looked good on the drawing board. Management was very happy with the efficiency of it all.
PAX were not. Many hubs became nightmares. DFW, ATL, and STL are a few that come to mind. Endless walking through crowded terminals trying to catch a minimum time connection is no way to attract travellers.
The point-to-point way is the way most PAX prefer to travel. Southwest and Jet Blue use it, as if it was a "new" concept, and they make money.
Then there is the ridiculous security checks. Frustrating to the point that many PAX would rather stay home.
United had a nice station in Stapleton Int'l.. Just minutes from Downtown. Somebody decided it was all wrong, closed it, and opened a nightmare of a hub way out in the Colorado prarie.
TWA did the same thing in Kansas City, only worse.
Of course, we can go way back to that nightmare legislation called "De-Reg."
Put it all together, and you have a dissaster.
PAX were not. Many hubs became nightmares. DFW, ATL, and STL are a few that come to mind. Endless walking through crowded terminals trying to catch a minimum time connection is no way to attract travellers.
The point-to-point way is the way most PAX prefer to travel. Southwest and Jet Blue use it, as if it was a "new" concept, and they make money.
Then there is the ridiculous security checks. Frustrating to the point that many PAX would rather stay home.
United had a nice station in Stapleton Int'l.. Just minutes from Downtown. Somebody decided it was all wrong, closed it, and opened a nightmare of a hub way out in the Colorado prarie.
TWA did the same thing in Kansas City, only worse.
Of course, we can go way back to that nightmare legislation called "De-Reg."
Put it all together, and you have a dissaster.
Joined: May 2002
Posts: 280
Likes: 0
From: Redistributing SLF
I M Esperto--I have to disagree with your assessment that STL is a "nightmare" hub. There are a number of airport terminals in the Third World modeled after STL...
Don't the "locals" working the food stands just give you the warm fuzzies?
TC
Don't the "locals" working the food stands just give you the warm fuzzies?
TC
Joined: Jul 2000
Posts: 1,598
Likes: 11
From: Down south, USA.
Esperto: as for danger, I'll bet that you've never driven much within a city further south on the big river. And that report probably stated MO in error, instead of the really infamous East St. Louis, which is in Illinois.
Doesn't Jet Blue use JFK as a hub, for the overall operation, in contrast to Southwest's linear route systems?
AA717: about nine years ago in the STL Employee Cafeteria (underneath, near present Starbuck's?) , a family member watched as a cook dumped a full plastic bag of fries, still inside the sealed bag, into the frier! The cook said that it was easier and quicker that way. The observer and his partner decided not to eat the fries that day. Watch out for that LDA approach to 12R, which initially lines you up with 12L!! Or it did for a while.
Doesn't Jet Blue use JFK as a hub, for the overall operation, in contrast to Southwest's linear route systems?
AA717: about nine years ago in the STL Employee Cafeteria (underneath, near present Starbuck's?) , a family member watched as a cook dumped a full plastic bag of fries, still inside the sealed bag, into the frier! The cook said that it was easier and quicker that way. The observer and his partner decided not to eat the fries that day. Watch out for that LDA approach to 12R, which initially lines you up with 12L!! Or it did for a while.
Thread Starter
Joined: May 2001
Posts: 601
Likes: 0
From: New Jersey Shore
IO - I lived in the South for many years.
Surprisingly, it is STL MO that is the most dangerous city. I would have expected the IL side myself, but it's not.
As far as JFK being a hub, JFLK is in itself a popular destination for millions.
Surprisingly, it is STL MO that is the most dangerous city. I would have expected the IL side myself, but it's not.
As far as JFK being a hub, JFLK is in itself a popular destination for millions.
Last edited by I. M. Esperto; 16th December 2002 at 13:57.
