The British Airways cabin crew strike is becoming a referendum on the management style of BA CEO Willie Walsh. If you read the fawning business press, Walsh is a dick-swinging capitalist crusader. British union Unite alleges that Walsh’s macho attitude is interfering with his business judgement by picking an unnecessary and expensive strike.
This week, Portfolio Magazine characterized Walsh as a man at war with Unite, which has stood up to Walsh when other unions acceded to his demands Walsh sees Unite as an obstacle to his power at BA. As head of Aer Lingus, Walsh earned the nickname “Slasher” for cutting costs by 30% and eliminating 2,500 jobs. British Airways hired him away in 2005 in part because of his reptuation for getting tough with unions.
The current strike began after Walsh withdrew a last-minute offer to Unite before the strike began. Unite was prepared to accept and the strike could have been averted. The business community hailed Walsh as a “tough manager” for yanking back the offer.
Despite pleading poverty when it comes to wages and staffing levels, BA is sitting on what one financial website characterized as a “£2bn cash mountain”—and Walsh seems only too happy to spend hundreds of millions of dollars of investors’ money to break Unite. British Airways stock prices have risen steadily over the last three months, which the conservative Economist magazine takes as a sign that investors expect Walsh to break the union.
If investors are getting excited about breaking Unite, they’re being short-sighted. First, Walsh is spending tens of millions of pounds of their money to keep planes in the air – even going to far as to charter planes from arch competitors. All this on a strike that could have been avoided.
The business press seems to think that spending millions of dollars to break Unite today is an investment in future profitability. Contrary to popular belief, a weakened union doesn’t necessarily mean a more profitable company. Checks and balances are important in any organization. Unchecked tyrants are seldom the best leaders. Unite is a brake on Walsh’s fanatical zeal for cost-cutting. What looks good on a spreadsheet won’t necessarily fly at 30,000 feet. It’s a radical idea, but maybe the people who run the airline have some idea how to run an airline.
BA’s attempts to keep planes in the air with many fewer cabin crews haven’t exactly been confidence-inspiring. BA put out a schedule of flights for next week that the union says has “more holes than Swiss cheese.”
“Passengers are paying for management machismo,” Tony Woodley, joint general secretary of Unite, said in a statement issued yesterday. “BA management should spend more time on addressing their employees’ concerns and less on fantasy schedules sending empty planes to unknown destinations.”
Conservatives take it for granted that managers can act in their long-term self-interest. Yet they are unwilling to make the same assumptions about labor. BA crews are career flight attendants who arguably have a much higher stake in the brand that sustains their company and defines the scope of their day-to-day work than some manager who could bail with a golden parachute next quarter.
The union fears that slashing staff will compromise the service that sets British Airways apart from other carriers. Relative to other airlines, BA is unusually dependent upon its first- and business-class clientele. Those customers are notoriously tempermental and there’s every reason to believe that they will vote with their feet if BA stops offering the level of pampering they’ve come to expect.
Ninety-five academic experts in industrial relations sent an open letter to the Guardian newspaper accusing Walsh of trying to break the union. The signatories, including professors at the London School of Economics and other prestigious institutions, say that Walsh’s radical anti-union agenda could have far-reaching consequences for workers’ rights.
The strongly-worded letter opens with an indictment of Walsh and Gordon Brown’s government:
As academics in the field of employment relations our expertise includes the analysis of the causes, process and outcomes of industrial disputes and particularly the dynamics of strike action. Given the near certainty of further strikes (Follow-up strike will go ahead says union, March 22nd), it is clear to us that the actions of the chief executive of British Airways, notwithstanding his protestations to the contrary, are explicable only by the desire to break the union which represents the cabin crew. What other possible interpretation can there be for Willie Walsh rejecting Unite’s acceptance of BA’s previous offer or indeed of his marshalling of resources, including those of bitter industry rival Ryanair, to undermine the action of his staff? Walsh and now Prime Minister Brown have made the error of underestimating the deep seated and justifiable anger of a loyal and dedicated workforce, whose continued trust and goodwill is a vital ingredient of customer care.
If Walsh breaks Unite, it will be easier for him to debase the British Airways brand while pursuing profits. If that happens, his greed and hunger for power will ultimately kill the goose that lays the golden eggs.
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