Smisek on Charlie Rose (Friday 10-Aug-2013)
#61
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But that isn't part of Smisek's message of running United like a business rather than like an airline.
#62
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This is an endless debate and like I said, employees in the business are usually the most vocal opponents of any outsourcing, even if it's a perfectly rational decision.
#63
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Then he goes out and outsources more people. What does that say to the staff? "No one's job is safe." So you end up not having that job security which was promised.
That's a whole ball of wax in addition to and on top of service levels, whether insourced or outsourced.
#64
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What I brought up originally, that you're not really addressing is Smisek saying that the airline needs to be run like a business. In his own words, that includes job security.
Then he goes out and outsources more people. What does that say to the staff? "No one's job is safe." So you end up not having that job security which was promised.
That's a whole ball of wax in addition to and on top of service levels, whether insourced or outsourced.
Then he goes out and outsources more people. What does that say to the staff? "No one's job is safe." So you end up not having that job security which was promised.
That's a whole ball of wax in addition to and on top of service levels, whether insourced or outsourced.
The reality, whether it's a pleasant one or not, is that outsourcing certain functions is necessary in that industry, and the job security really only applies to those that are left. But back to the "core" point - from what I've seen, the outsourcing is happening in the margins - small airports, small call centers, etc. - not in the core business. The unions have ensured that to some degree
#65
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Then what we're hung up on is how far into "core" outsourcing will eventually dig.
#66
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The root of the problem right there. Part of "respecting" the workforce should include giving them the tools and training to do their jobs at the level expected of them by their managers, the staff they might manage, and the customers they serve.
But that isn't part of Smisek's message of running United like a business rather than like an airline.
But that isn't part of Smisek's message of running United like a business rather than like an airline.
Airlines have, cumulatively, run at negative profit margins over the entire postwar period. You can't keep running airlines that way, losing money year after year. The investors won't allow it, nor should they. Jeff Bezos can afford to buy the Washington Post and run it at a loss, forever. But no one is stepping forward to buy UAL and run it as a loss, forever. So whoever the investors hire to run the company is going to have to change some things, in order to have a chance to run it at a profit.
What? When did he say that? I'm quite sure that he thinks that running a business means that no one's job should be secure unless they perform it well and provide good value for the wages they receive.
Last edited by iluv2fly; Aug 13, 2013 at 2:33 pm Reason: merge
#67
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Actually, I think running the airline like a business means focusing on generating adequate returns rather than following the old industry mentality of chasing market share and attempting to offset lower margins with higher volume.
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I think it means both. One of the most important aspects of any business (as opposed to, say, a charity) is that its employment and contractual relationships are governed by mutual benefit. Paying people who aren't delivering value equal to what it costs to employ them is incompatible with good business practice. Smisek makes that quite clear in the piece above about the Guam outsourcing.
#69
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I don't agree that the only reason, or even the main reason, that airline employees perform their jobs badly is lack of tools or training. You can't excuse sUA employees badmouthing sCO employees as due to a lack of tools or training. Some things are simply bad behavior. The airlines have quite a lot of it, and their labor relationships make it difficult to do much about.
I've gone through evolutions in two companies in the past decade who were introducing enterprise software for the first time. Both had spent a lot on getting data into the new system, but spent so little on training that one company was having credit holds put on their accounts for crucial supplies simply due to A/P not knowing enough to push payments through the system, it was so badly executed.
I look at my experience and what I see has happened at UA, and say, "lack of tools and training" being a chronic issue.
In the first 10 minutes or so of the interview, I believe it was. Smisek stated that because of how airlines had traditionally been run, employees were usually faced with the fear of losing their jobs to bankruptcy or furlough. He wants to remove that cloud by running UA as a business instead of like an airline.
#70
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I'm really glad Charlie put the words into his mouth that he agreed with re:investment in employee break rooms. Charlie said nice break rooms are good for taking naps, Jeff agreed. Current policy has sleeping, or the appearance if sleeping a termination worthy offense. Now, I got the CEO endorsing it on break. Talk about a change I will like!!
Last edited by fastair; Aug 15, 2013 at 12:01 am Reason: Typo
#71
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In the first 10 minutes or so of the interview, I believe it was. Smisek stated that because of how airlines had traditionally been run, employees were usually faced with the fear of losing their jobs to bankruptcy or furlough. He wants to remove that cloud by running UA as a business instead of like an airline.
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#73
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Hope you were short on UAs stock...
#74
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Whether prices are bundled together or unbundled has nothing to do with the question of whether there is a cartel. The cable TV industry is the most notorious cartel in America and also the most well-known for bundling rather than unbundling prices.
Why do you care if airlines raise their fuel surcharges rather than their base fares? What difference does it make to anyone?
Why do you care if airlines raise their fuel surcharges rather than their base fares? What difference does it make to anyone?
Last edited by iluv2fly; Aug 15, 2013 at 1:04 am Reason: merge
#75
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I think you're taking a general comment about being better positioned to provide job security now than in the past - "We had serial bankruptcies with furloughs. People didn’t know whether they’d have a job between today and tomorrow. We have an opportunity now not only to provide secure jobs..." - and concluding that any further outsourcing directly contradicts that.
The reality, whether it's a pleasant one or not, is that outsourcing certain functions is necessary in that industry, and the job security really only applies to those that are left. But back to the "core" point - from what I've seen, the outsourcing is happening in the margins - small airports, small call centers, etc. - not in the core business. The unions have ensured that to some degree
The reality, whether it's a pleasant one or not, is that outsourcing certain functions is necessary in that industry, and the job security really only applies to those that are left. But back to the "core" point - from what I've seen, the outsourcing is happening in the margins - small airports, small call centers, etc. - not in the core business. The unions have ensured that to some degree
So to say that the unions have ensured protection at these non-small airports (SEA, MSP, CLE...) is far from true. This IMHO is the reason (and what most of my co-workers have said as well) for the rejection of the TA. Well, that and the fact that when you look at the increased cost of medical benefits, it made for many employees take a take home pay cut. (small raise, larger increase in out of pocket medical.)