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Saturday
Feb122011

Nature Abhors A Vacuum - Proving True At The Allied Pilots Association

Having been critical of some union leadership in the past, I now must acknowledge when some get it right.  And that someone is Captain David Bates, the president of the Allied Pilots Association at American Airlines.

I may not be doing Captain Bates any favors here. In the sometimes irrational world of union politics, leaders too often are applauded for destructive rather than constructive behavior, which is one reason labor relations are such a mess in the airline industry.  But here goes:

There have been few topics covered as extensively at www.swelblog.com as negotiations between American Airlines and its pilots represented by the APA.  My take is that for too long the APA’s behavior and actions were not becoming of a professional pilots union.  I wrote many times about Captain Lloyd Hill (Bate’s predecessor) and his term of empty promises:  All Eyes on Texas; Just Put It On Ice: American’s Ability to Pay ? APA’s Expectations; Maybe the Allied Pilots Association Is Really Onto Something; American Airlines and the Allied Pilots Association: A $3 Billion Question and AA’s Labor Negotiation Scenarios Get Even More Interesting to name a few.  His delusional approach to union leadership often landed Hill a starring role in the ongoing saga of Captain Lloyd and the Lost Planet Airmen.

My last post on the flight attendants union at American, A Flight Attendant Representation Inflection Point? received a lot of attention.  And it is most relevant to what transpired this week when Bates delivered his speech to the APA Board of Directors.  I have wondered many times how APA’s new leader would begin the process of ending the tough and reckless  leadership style of his predecessor and transition to a style he has shown to be tough yet pragmatic.  His words to his Board very clearly follow his actions in his first seven months in office.

As I’ve said before, there is a financial concept lost on union leaders today:  Net Present Value (NPV.)   It means simply that cash flows realized in the short term have more value to the firm (or individual) than cash flows generated years down the road. 

Bates recognizes this in his speech when he states early on: “We're now coming up on the five-year anniversary of when management opened up contract negotiations. Your National Officers know what the pilots want in this contract. We know that our earning power is diminishing each and every day.”  [the concept of NPV loud and clear].

The next five paragraphs of Bates’ speech speak plainly and loudly with a message that should be heeded by labor leaders throughout the industry.  And that is this:  The historic pattern of bargaining, in which a union gives in one round with full expectations that they’ll get it back plus more the next time, is history.  In the past, airline labor agreements addressed only the competitive realities confined within the 48 contiguous U.S. states to the extent they addressed competitive realities at all.  Today, union leaders need to accept that this is no longer the case. Airlines cannot cave to the urge to repeat the patterned sins of the past and give away pay without demanding changes necessary to compete with new and different competition.  At the same time management must listen carefully and think creatively about addressing labor’s concerns about jobs in a different but an increasingly global competitive industry.

Bates’ Five Paragraphs of Truth

I'm going to tell it straight. For the past several years, APA has played the blame game. We've blamed management, we've blamed the National Mediation Board and we've blamed the recession. We've portrayed ourselves as victims of an unfair world.

It's time we look in the mirror and get honest with ourselves. In APA's extensive contract proposal crafted several years ago, we opened on a large number of items in nearly every section of our contract. Instead of concentrating on the most immediate and important items, we created a wish list for a "dream contract," asking for dramatic increases throughout the contract. We loaded up the openers with "throwaways" and put hundreds of items on the table--of which approximately 320 still remain.

We told the whole world that we didn't know or care how much our demands cost. We said we didn't care what was going on with the economy or with the corporation's economics. We didn't consult with professional negotiators. We abandoned working within established industry protocols and severed ties with management.

These are some of the reasons the NMB and the United States government put APA in recess. The NMB told us to clean up our act. They told us that it does matter how much our "demands" cost, to quit bickering over internal governance and that we needed a leader who was empowered to make decisions. They were clear that APA's radical rhetoric had isolated us and that APA did not have many friends in Washington. They were concerned that the APA Negotiating Committee had no authority to bargain and that much of what they brought back was rejected. Lastly, when I was first elected APA President, the NMB was very direct in stating that there appeared to be no one in charge at the union. The NMB considered APA a basket case and no longer wished to waste resources. Fortunately for us, much of this has now been reversed.

Since our openers, we have refused to remove any items from the table and come off any of our more "interesting" demands. To do so--according to some--would be "negotiating against ourselves," or so the mantra goes. But what we've really done is to paint ourselves into a corner, thereby playing right into management's hands. We've given them the tools to slow negotiations down as much as they want. After five years, we still haven't had any serious negotiations on some of the most important items such as scope, pay, retro, stagnation and others. At the rate we are going, we could literally spend the next decade in negotiations.

Bates concludes, “It's time we get serious about clearing out the underbrush. Our pilots want an industry-leading contract now--not years from now.”

The full text of Captain Bates’ speech can be found on Terry Maxon’s Airline Biz Blog at the Dallas Morning News. 

The hard work of fixing labor relations and contracts in the airline industry must begin with clearing the underbrush  -- a  task that must be done before an efficient use of the National Mediation Board (NMB) can commence.  Using the services of the NMB to “work through” issues with the uniform section is grossly inefficient.  Nonetheless, that is how it seems many negotiating teams are using the Board. Reaching impasse on the uniform section [cynical emphasis added] does not constitute having reached the conditions for a release.

As the Dunlop II Commission recommended, both parties had best be working hard toward a resolution of the issues before a release is considered/granted.  Bates understands this clearly.

As I write this, I can hear the hue and cry from his union brethren that, with his speech, Bates is acting like a management lackey.  But that is simply naïve.  Negotiations require a back and forth on issues important to each party.  That’s the way it’s supposed to work. Changing course from the discredited reliance on “pattern bargaining” does not signal defeat.  It merely recognizes that the old way is not working toward reaching a agreement.

Every union has its minority factions that want to “burn the furniture” before they’re ready to sign a deal on the house.  That is a strategy that has proven in this round to not work.  Captain Bates is from a domicile at American, Miami, known to be a home to the union’s Taliban.  That faction will certainly scream.  But the professional airmen at American deserve better than the prior administration and maybe, just maybe, they will accomplish their ultimate goal of getting a leading contract.

This Wednesday, February 16 I will be speaking at the FAA Aviation Forecast Conference in remarks I’m calling: The US Airline Industry and Herbert Stein’s Law.  If you are not familiar with Herbert Stein’s Law, then give it a google.  More to come . . .