NYTimes.com Article: Unions Are a Victim of Their Own Success at the Nation's Airlines

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Unions Are a Victim of Their Own Success at the Nation's Airlines

April 26, 2003
By STEVEN GREENHOUSE






Strange as it may seem, the unions representing tens of
thousands of workers at American, United, Northwest and
other airlines have been taking such a pounding partly
because they have been so successful.

The pilots, the machinists and other airline unions have
obtained some of the highest wages in organized labor in
decades past, helping push their airlines' operating costs
so high that the airlines became vulnerable to downturns
and more recently the emergence of low-cost upstarts like
JetBlue.

As a result, many airlines have pressed their unions for
concessions to stay afloat, and that has raised questions
about whether other industries, seeing the airlines'
success in squeezing labor costs, will adopt similar
"accept concessions or else" tactics.

Probably not, said Richard W. Hurd, a professor of
industrial and labor relations at Cornell University.

"The airline industry will only become a model for other
industries that end up in economic trouble," he said. "If
other industries face serious economic problems in the
coming months, the demonstration effect of the airlines
could have some impact."

But other labor experts said the tough stance taken by
airlines could embolden companies in many industries to
throw down the gauntlet to labor, especially when the
economy is weak and a Republican president has shown little
sympathy toward unions.

"A concessionary atmosphere in any industry always
threatens to bleed over elsewhere," said Harley Shaiken, a
specialist on labor issues at the University of California
at Berkeley.

Airline unions, meanwhile, must wonder whether they will
ever be able to recapture their strength of yesteryear.
That will hinge in large part on whether they can succeed
in forming unions at new airlines like JetBlue and ATA. To
have success, organizers will have to the make the case
that unionization does not necessarily mean heavy financial
losses or bankruptcy.

"Unions can say, `Look at Southwest Airlines, they're fully
organized, they have a productive relationship with the
unions and they've been the most profitable airline,' "
Professor Hurd said.

Southwest is Exhibit A for the unions' argument that high
wages and benefits do not necessarily doom airlines.
Indeed, they argue strenuously that labor costs are just
one of the many reasons for the financial woes at United,
American, Northwest and US Airways. Those airlines have
expensive hub-and-spoke structures, and air traffic has
been hurt badly by the Sept. 11 terrorist attacks, the war
in Iraq and the spread of sudden acute respiratory
syndrome. But there is no denying that high labor costs can
push otherwise inefficient airlines over the edge.

In many ways, the airline unions are following the path of
steel and auto workers, who from the 1950 through 1970's
had the most powerful unions, securing wages that were the
envy of most Americans. Companies like U.S. Steel, General
Motors and Ford could easily afford to pay hefty wages
because they dominated their markets.

But the very success of those unions helped push the
operating costs of those companies so high that it opened
the door wide to lower-wage foreign competition, which for
the last two decades has severely pressured steel and auto
companies and their unions. Similarly, the success of
airline unions raised airline operating costs, opening the
door to lower-cost competitors like JetBlue.

"Wages are clearly a factor in the troubles that the steel
and auto industries had, but wages were not necessarily the
defining factor," Professor Shaiken said. "It's easy to
make wages the culprit, but wages did not give you problems
like the Ford Pinto. Wages did not give you the failure of
the steel industry to modernize. But high wages may have
worsened other problems."

The airline unions, like the steel and auto workers, are
far weaker than in their heyday. But like the others, the
airline unions hope to avoid the scrap heap by cooperating
with employers, perhaps by granting concessions, to keep
them competitive. At American and United, the pilots,
machinists and flight attendants approved billions of
dollars in labor savings because they were eager to rescue
their companies and their jobs.

"In times of trouble, American industry comes to unions to
seek their help and almost always when the need is real,
the unions give it," said Julius Getman, a labor law
professor at the University of Texas. "This has happened in
industry after industry. Of course, as industries get
weaker, the unions in those industries get weaker, too."

Some industry experts say the airlines can learn from the
steel and auto industries. Labor relations in those
industries were often rancorous, but when competition from
imports caused a wave of plant closings and layoffs in the
1980's, unions joined with steel and auto companies, as
never before, to work together to increase productivity and
quality.

"Those industries went from having a very adversarial
labor-management relationships to being much more
cooperative," said Paul F. Clark, a professor of labor
studies at Penn State University.

He said that increased labor-management cooperation would
be vital for saving several airlines from oblivion. But he
said the executive bonuses and special pensions that
American Airlines promised its top executives had badly
undercut labor's willingness to cooperate with management.

"It was a critical point in labor relations, and what
American Airlines did was probably the worst thing they can
do at the worst time," he said. "If the airlines can move
to a more cooperative relationship with labor, that can
play a big role in pulling them out of this tailspin."


http://www.nytimes.com/2003/04/26/business/26LABO.html?ex=1052387476&ei=1&en=ab604a488f38c846



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