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| Mr Biz on DougStephan.com |
Let's say you're anti-union. Always have been, always will be. Well, on
this round, you can still root for the unionized employees of American
Airlines.
AMR, the airline parent, is again on the verge of bankruptcy. Post Sept.
11 woes, deregulation, high pension and labor costs, rises in jet fuel, and
war jitters have all worsened their problems.
But nothing has hurt American as badly as the liars in top management.
Just as the bigshots congratulated themselves on an unheard of third
round of deep pay and benefit cuts and give backs by the three major unions,
press reports leaked that a funny thing would happen on the way to the
bankruptcy judge.
If the airline went belly up, employees would lose many of their fringe
and pension benefits.
If the airline went belly up, the CEO and his cronies would keep their
pensions, and bonuses, and perks, and benefits, which actually had increased
by $45 million while the employees were playing "give back."
A similar scandal at Delta forced the CEO to disgorge his sweetheart
deal three weeks earlier, and Delta is now trying to avoid a similar fate to
American by launching a second cut-rate carrier called "Song."
At American Airlines, once the flagship of U.S. pride for many travelers,
it will take more than a song to shake the impact of a sour melody.
As an anti-union person, who never wanted a 40-hour week, social
security, or child labor laws, you probably figure greedy unions caused the
problem, and should not be allowed a second (or in some cases a third) vote
on the management give back package.
Yet, how would you feel if you voted on a statewide referendum, and
three or four lines of the proposed amendment were accidentally dropped by
the printer and left off your ballot? Better yet, let's say it wasn't an
accident!
At the very least, the American Airline flight attendants, the last
union to (revote to) ratify the yellow dog give back package, needed to know
all the facts about the dire straits facing the airline coffers. While we're
at it, the union was actualoly asked to vote on an emergency package to keep
the company from possible death. Like a different Dire Straits, the
management Sultans of Swing partied on with unpublicized perks which they
knew would have been a deal-killer if revealed to the union.
All of which finally brings is to the misguided American parlor game
pastime of: "The Unions killed (you fill in the blank)."
As a kid, my uncles told of how "The Unions killed the garment
industry." Of course the same industrialists who cried when the textile
plants moved from Manhattan to North Carolina, eventually unionizing against
lousy wages and conditions, were the first to complain when the Carolina
plants moved to Sri Lanka and El Salvador.
As a teenager it was "The Unions who killed the newspapers," with
no
regard to technology, TV, radio, Internet, or a growing functionally
illiterate portion of the populace.
It's easy to say that Eastern Air Lines was killed by its unions.
On the other hand, I always thought it was pretty neat that a
hard-working black, er, African American, with 30 years as a porter, could
earn $40,000 per year, plus overtime. This same worker could pay his mortgage
and send his kids to college. As a fulltime employee of Eastern, and not a
subcontractor looking only for tips, he actually had a vested interest in
representing his company.
I also remember astronaut hero Col. Frank Borman, who squeezed out of
controversy and possible prosecution by the skin of his space suit after
liquidating a chunk of EAL stock the day before announcing plans for
bankruptcy. "Well, I was in need of money for a nursing home for my mom," he
tried to explain to regulators.
In short: pilots, mechanics, and flight attendants for American
Airlines have already "given at the office" as the hand of charity
once again
knocks on their door. In fact, they've given at their office, their doctors'
offices, their retirement offices, and probably their shrinks' offices.
A vote now to reject the compromise package would be a spite vote for
bankruptcy. A vote for bankruptcy probably voids their contract provisions,
but ironically keeps the management deals (which they now claim they will
refuse) in place. If the company actually went under, some folks would blame
" the unions."
The truth is that I meet a few dozen alumni of Eastern, National,
Ozark,PanAm, TWA etc every year in my travels. They each have a few nostalgic
stories, but at least one "last straw" story. The "last straw" was
the
incident or experience which led them to chuck it all and start a new life
at
age 40, 50, or even 60. For some it meant early retirement. For most it was
a
catalyst to work in an environment healthier to their physical and mental
well-being.
As an American Airlines frequent flyer, I hereby forgive the unionized
employees, if management's secret slush fund is viewed as their last straw.
---
Mark Scheinbaum is chief investment strategist for Kaplan & co. Securities,
Inc. members Boston Stock Exchange, NASD, SIPC; He is a former International
Representative for AFSCME AFL-CIO, national rep for the American Federation
of Teachers AFL-CIO, and representative assemblyman of the Wire Service
Guild/The Newspaper Guild AFL-CIO.