EAHSOP's CABLES
Newsletter of Ownership Sharing of Alaska/Horizon Airlines by
Employees and Customers
Oct. 19th, 2001 Vol. 4 No. 1 (website
<www.eahsop.org>)
Published by HACECA Inc. for EAHSOP and CSOPAH
The momentous, hard-to-comprehend events of 911 have made us all reevaluate
God, countries and company. (Remember, we’ve got employees and customers in
Canada and Mexico besides the U.S.) It’s a world economy now. We’ve got to find
ways to equitably share the wealth that these two airlines are capable of
producing big time forever. And do it peacefully. Otherwise, we all are guilty
of fostering breeding grounds for criminal and violent acts by frustrated
humans.
Miraculously, it appears that both Horizon/Alaska Airlines will not furlough
employees after the industry’s hard pitch-over following the terrorist attacks.
How could that possibly be when the rest of the industry has shed more than
100,000 employees? In all our failings, could we somehow be closer to
business-and-people reality around here when compared to most of our
competitors?
SEVEN-FIGURE SAVINGS
Both Horizon and Alaska have suggestion boxes posted on their respective
websites. Employee suggestions save $500 there, $1,000 here. How about saving
millions of dollars by solving the conundrum of management and our unions
properly relating? Horizon executives estimate the strike fax that the Teamsters
sent out of the blue to travel agents in the summer of 2000 cost the company $7
million dollars in cancelled booking and changed travel plans by our trusting
customers caught in the squeeze play. The IAM Alaska aircraft mechanic strike in
1985, and the AFA’s infamous CHAOS campaigns of 1993 and 1997 cost Alaska and
Horizon millions of dollars as pilots, mechanics, flight attendants and
management proved they would rather fight each other and vaporize capital than
uncover true and accountable solutions to share the wealth.
Using the almost four year QXTeamster IBT negotiations as an example, what
does that employee group and our company have to show for this new contract? Pay
and benefits were significantly increased, and some work rules were better
defined. Well and good except all of the increased costs are fixed. They have to
be paid regardless if Horizon earns $50 million a year or loses $50 million a
year. When economic downturns like the current one occurs, high fixed costs
equate to employees losing their jobs and airlines going into the smelter.
One would think with the significant increase in salaries and benefits that
Horizon pilots now enjoy there would be some corresponding capacity of the
company to earn higher profits to pay those increased costs. That’s why
investors (which in some fashion is all of us, don‘t forget) buy and hold AAG
stock. We haven’t lost sight, have we, how important it is for employees to be
rewarded on the basis of what they actually produce or contribute, i.e.
delivering value to the customer and being rewarded on the basis of that added
value?
Recently over the phone I talked to Mr. Guy Adams, who advanced the
revolution occurring in corporate governance by winning a contested board
election this year at Lone Star Steakhouses and Saloons Inc. He said that he
owed his successful campaign to unseat the chairman of the board to the
institutional investors who backed his candidacy and voted for him. They wanted
the management to cease their hijacking of the company. Institutional investors
currently own about 70 percent of the AAG. Mr. Adams said that of this 70
percent, typically about 10 percent is AFL-CIO money, employee’s money that
funds retirement plans and futures. Yet we insult all these owners by
continually forcing through contracts that not only bites off the hand that
feeds us but decapitates the head. Do we do life justice by being this
stupid?
THINK YOUR JOB WILL ALWAYS EXIST? SO MUCH FOR THINKING...
Do pilots contribute special skills and expertise commensurate with their
financial compensation? Remember, in the U.S.’s free enterprise system, Milt
Kuolt created Horizon Air in 1981. Five years later he sold his creation to the
AAG. Milt, his investors and the employees who participated in the original QX
stock ownership plan, all reaped financial rewards as
co-owner/employee/risk-takers. Somehow, with the AAG, this risk-reward reality
of business and freedom has fled.
Individual initiative, which this country was built on, seems to no longer
matter. Employees through their powerful unions demand and receive higher and
higher fixed pay and benefits with no sharing in the risk to pay for those
increases. Such as, if the company’s annual revenues or profits reach a certain
negotiated level, only then would certain increases kick in. Or board-approved
dividends on the stock employees own in the 401(k) being considered as a
percentage of any future pay increases. How about profit sharing based on a
percentage of AAG profits? A trustee would be appointed to oversee all capital
entitlements paid to employees and customers.
There was none of that in the pilot contract. Horizon pilots agreed to zero
risk and yet gained all these increases. How did that happen? Simple: They
joined a powerful union, the Teamsters, who put in motion a potent political and
economic agenda that basically was this: If you don’t give us what we want, we
will cripple or destroy your company. There were threats, intimidations, a
quashing of any dissent, which whipped up individual pilots to sabotage the
company until the management cried uncle.
Did it work? Yes, it worked. Are we all better off for it? No. This system
probably cut the heart right out of our great company, and we may never feel it
pumping the same again.
Does this sound like America to you? I thought America stood for truth,
justice and equality for all under God, Life, and the laws we create together?
What has happened to America? We came together to self-govern and unsheathed
private property as our sword to defend freedom against the potential tyranny of
the unaccountable State. Minutemen of the Round Table reconvene. Evil reigned
supreme on the East Coast on that sorrowful 911 day. Isn’t unchecked, unbalanced
power from any source not a blood relation to the grim reaper? If not
confronted, do we think it will not further corrupt us and our children?
On Horizon’s immediate horizon is what other employees, both unionized and
not, perceived from the Teamster negotiations. Our customers, too, observed. If
one employee group unjustly leverages its power over another--this supposedly
doesn’t matter? The other employees saw what the Horizon pilots did. This
process has angered and elevated resentment against them. Can we see how
critical human relationships between each other are destroyed as we slave as
non-owners to pay-by-hourly-wages only? We break these chains by agreeing to
share in money we earn collectively, which instead unites us together as
one.
“ME TOO” CLAUSES COMING HORIZON’S WAY
Currently open union shops that exist at the TWU (mechanics and dispatchers)
and AFA are being evaluated per “me-too” provisions that were triggered when the
QXTeamsters contract was ratified. Closing the shops provides the union
security, which basically boils down to all employees being forced to pay the
union. If one union gets it, they all do.
Bev Moss, the MEC President of Horizon AFA, told me in a Oct. 2 phone call
that currently 18 percent of QX FAs are dues-paying members. 82 percent of that
employee group enjoy the fruits of the contract but don’t pay to maintain or
renegotiate it. Our unions don’t own anything. Like the government, they exist
on taxes in the form of dues paid by workers. Want more power? Power follows
property. Why not agree to provisions based on ownership?
One “meet-in-the-middle” solution HACECA promotes is a capital dues checkoff.
Dues would be paid to our unions based on capital entitlements paid to employees
of which a negotiated percentage would be paid to the union. This could be a
“win-win” instead of a “zero-sum” way to proceed. The union legitimately earns
its keep by moving employees and customers to a broader share of capital
ownership of the AAG.
Can we at least agree to talk about, consider it? Or will we continue to bang
down telephones and delete unread emails while we burrow heads into the desert
sands of stubbornness?--Steve Nieman, President of the Horizon/Alaska
Customer/Employee Co-Ownership Association, AAG shareholder, Horizon employee
and QXTeamster