FLYING TOO LOW - United Airlines Had It Coming

New York Post ^ | December 6, 2002 | Beth Piskora

[Timesink]

United Airlines had it coming.

UAL Corp., parent of United, has no one to blame but itself for its financial woes and impending bankruptcy, according to competitors, Wall Street and government sources.

The company, which is 55 percent owned by its employees, has long had a bloated payroll and other high-cost inefficiencies that made it one of the lowest-profit airlines for years.

[Timesink]

Couldn't have happened to a nicer bunch of people.

[leadpenny]

On the debt side, UAL was downgraded from junk, "CCC-," to crap, "D."

It's a rough business. How'd ya like to be downgraded to "crap?"

[spetznaz]

I really feel sorry for the honest hardworking folk who are gonna get laid off due to the messes done by asinine top management! UA had it coming to it sadly, and sadly it is those who had nothing to do with this fiasco that are going to suffer (the people who drive Hondas and have mortgages will suffer while those who have huge compensations, golden parachutes, and time share chateaus in the south of France will be fine and dandy).

UA would still have gone down flaming even without 9-11 ....all that that terror attack did was accelerate the process.

[Lightnin]

American unions clearly have a death wish!

[Arthur Wildfire! March]

United also has the highest cost structure in the industry, paying a total of $11 for every mile flown. A whopping $4.60 is for labor costs alone.

Well there's the key. The people better start using their brains and take a hit on wages. They own 55% of the stocks for goodness sake. The union bosses might not like it, but if they don't take a hit on wages, they might kill the golden goose.

[Lightnin]

"and sadly it is those who had nothing to do with this fiasco that are going to suffer (the people who drive Hondas and have mortgages will suffer..."

You've got to be sniffing something illegal! It was those very same dumb $hits that voted down a plan that would save the company from chapter 11!

[OBone]

Unfortunately, it seems a lot of people out there think that business' sole function is to provide jobs. The fact that business has to make a profit in order to do so doesn't seem to enter the equation!

[Leisler]

Sorry, if one is smart enough to rip down a jet engin, they can read the newpaper. Watch all these heros' of labor turn on themselves to see who is going to take the reduction in hourly pay. Lord of The Flies comes to United.

[RWG]

but Southwest does grant options as a way to keep payroll costs down...isn't this a big part of the problem with corporate corruption and the bubble that was supposed to have been the new economy?

[tcostell]

If you mean the rank and file union members who allowed their union leadership to run this airline into the ground because they didn't know any better, I can understand your sympathy. But this airline wasn't killed by "greedy top managers who exploited the working class to their own benefit". This airline was run into the ground by putting the union in charge. They have the weakest management team in the airline industry, and for years did nothing other than rubber stamp the union's view on how an airline should be run. They were even responsible for increasing the costs of other airlines through weak labor negotiation.

If the rank and file is upset, they really have only themselves to blame.

[TonyS6]

You got that right. United is an example of how silly those "employee empowerment" models of business are. Organized labor has one purpose - to make the most money for its employees for doing the least amount of work. Putting labor unions in charge is a blueprint for disaster. And they think that this is the correct model for running a company?

[TheJollyRoger]

I flew to China a few years ago on United. The UAL employees on the ground were profoundly rude. The president of my company flew to China the week following my trip, also on UAL. Upon his return he declared that our company would NEVER fly UAL again, regardless of cost.

I have hoped for years that this collection of misfits would fail.

You are right. It couldn't happen to a nicer bunch.

[hopespringseternal]

However, reacting to pressure from unions, United actually added capacity last month even as demand dropped.

That is what you call "Eating the seed corn."

[FreedomFlyer]

I have been reading the local news accounts and the union workers just don't get it. They are worried about which group of workers bore a larger share of cuts and whether they got as many raises as other groups within the company. Also, they talk as if they can just go work for American Airlines. If the job you have pays $75,000 a year (as the mechanics get paid) and the next best job you can get is $40,000 a year, you are an IDIOT not to make deep concessions to keep your company afloat.

Plus, the union members of the board fired any CEO who said that bankruptcy was inevitable and replaced him with a Pollyanna. Also, there is a huge amount of union featherbedding at United.

The United failure is another disaster brought to us by the National Labor Relations Act. People should be free to join unions, but employers should be free to hire whomever they want and to refuse to hire union workers if they wish and refuse to bargain with the union if they wish.

On the financial side, the management paid $60 a share to aquire US Airways when it was worth less than half that amount.

With people losing their jobs, it's hard to be too worried about the 120,000 frequent flyer miles I might lose. A very sad state of affairs.

[leadpenny]

To see the anger and chaos among UAL employees, investors and others, go here.

It's the Yahoo! UAL Stock Message Board. Caution it's X rated.

My question is this: Why would anyone get on an Un-tied Airplane at this time?

[twntaipan]

Between my wife and young daughter we've got about 360,000. Ouch!

[riversarewet]

Your link to the Yahoo forum, wow! I forget how good we have it here at FreeRepublic.

The barely coherent vulgar commentaries sound more like a rukus in a Junior High School locker room.

There may have been some insight found on the forum, but I am not going to wallow in the filth to find it.

I do thank you leadpenny for providing the link as I said, I often forget how good we have it here.

[leadpenny]

I often forget how good we have it here.

My thought exactly. BTW, welcome to FR.

[verity]

And the weak SHALL NOT inherit the earth!

[not-an-ostrich]

Sounds like those honest hardworking folk are 55% owners in a company with a payroll out of line with reality.