Read more. Gregor Gall at the Graun says nothing of the sort. If you get six short paragraphs in, you’ll find the explanation for the introduction, which posits the question that “It seems like the ultimate kamikaze action: mutually assured destruction.” He also uses the phrases “do-or-die” and “macho-management tactics”.

He talks about previous success in using strikes to pressure management into caving in, and pressuring government to intervene and how this could play out.

He’s certainly not saying that they’ll end up on the dole queue. He’s talking about a situation where Unite is trying to call Walsh’s bluff.

And they are.

Let us hope BA doesn’t go the same way as British Leyland.

Sorry, Dave, but the attempt to portray this as a case of dastardly employer exploiting their workers by breaking the union just doesn’t stack up.

As you may have noticed if you have flown much over the last ten years the aviation business has changed dramatically. The reason that BA, and most other state airlines, are going bust is that they are trying to compete with the low cost airlines whilst retaining a high cost business model.

That doesn’t work.

So, to survive, they have to change their business model and cut their costs- and that means that they cannot continue to pay their cabin staff more than twice the market rate for the job they are doing. Of course it’s tough on the individuals concerned, but the alternative is collapse and unemployment.

It’s that clear cut and that simple. Anything else is just ideology.

I quite agree Dave, the extent to which corporate or white-collar crime operates means that to cover it all in the press would be sleepless, thankless task, self-perpetuating, never-ending. However, when, as you call it “the kamikaze stuff”, is used by staff, it is treated, and thus observed, as isolated and a storm-about-nothing.

I know you are familiar with Zizek’s book Violence, and do we not see the crux of Zizek’s thesis here; the real crime is obfuscated by a constant – that of corporate crime – whereas the reaction to this constant level of violence (not violence in its traditional sense, but rather violence as a kind of mental disturbance as well) is the action that is benchmarked – vilified thus.

2 evident tactics by the press, not mentioned here, must be curbed as well; 1) a news article that strikes a debate between a trade unionist and someone who has booked a dream holiday aborad and might not go is not a debate, its stupidity to think otherwise, 2) BA staff may well be high-earners, relatively, but that is not the point (though you’d think it was by listening to the managers on why they feel staff shouldn’t strike), the point is what good is a wage if your contract has been made unreasonable. If this is the only way to stop corporates doing as they wish with pay, with contracts, then so be it. Let’s not vilify the workers, let’s not forget the underlying level of violence at play, at white-collar level.

So, Carl, cutting through you jargon, how should a company losing hundreds of millions respond?

Presumably there is some sum of money which BA cabin crew would be happy to accept in return for having their employment contracts re-written and some redundancies made … say £20,000 per worker plus £20,000 extra to each worker made redundant.

Presumably there is some sum of money BA would be willing to pay to avoid this strike, which must be costing them tens of millions.

How far apart are these sums of money?

hah! I wish I could delete the above comment – which might make sense if BA had about 500 cabin crew workers, otherwise not

Presumably staff wages are not the only area in which a large organisation like BA could save money.

The Civil Aviation Authority (CAA) has revealed that while the average Virgin cabin crew salary was £14,400 per annum and £20,200 at EasyJet, BA paid its staff £29,900.

BA is where General Motors was. A company left totally uncompetitive and unprofitable through a legacy of unsustainable final-salary pension schemes and employee contracts (with a heritage from state ownership) that are completely out of line with the modern industry.

The answer for BA is a pre-pack bankruptcy where employees are put on competitive contracts (or choose to walk), the pension deficit is plugged through ownership of a stake in the new entity and BA creditors get themselves a solvent borrower capable of repaying their debt (important if BA ever expects them to lend to it again).

It is that or a slow, lingering death that leaches taxpayer money for year after year, damages our national reputation as a flag carrier and continues to dissapoint and disrupt travellers.

What a disingenuous way to present an article that actually seems fairly balanced and thoughtful. What pi$$es me off is that this will almost certainly be picked up by a right-wing blog as evidence of ‘lefty tactics of misinformation’ or similar. Nice work, David.

£3.7bn pension fund deficit in a company only worth £2.2bn. As they say, British Airways has become a pension fund with an airline attached.

The same is true of our public sector pension scheme – a monumental liability that isnt included in any calculation of our deficit or national debt. And the same result will happen there over the next ten years as the baby-boomers hit peak retirement……

H;

There isn’t anything disingenuous that I can see in Dave’s article. It’s a piece with a political stance, one with which I happen to agree. However if he’d written it with a slant towards BA management then that wouldn’t be any more “disingenuous” to me, it would just be that I disagreed with it.

@Alan, pretty much no: BA’s costs are fuel, planes and staff. only way to save on first 2 is not fly, which doesn’t much help with staffing.

Agreed with Dave that managemen haven’t played this well either – but I can’t understand the union doesn’t get that *the strike will make the airline go bust*, at which point getting paid double the average for their jobs will be impossible to re-create.

Actually agree with Andy Jarm’s first piece here (although the second is usual ‘pretending country’s economy behaves like one firm’ nonsense – clearly he’s better on the micro than on the political-economic). BA unions have a valid claim on the firm’s assets by pension rights and staff rights; so do other creditors.

as long as the pre-pack can be done in a way that solely screws BA shareholders and allows the Iberia deal to go through, the airline should be able to continue. if unite aren’t willing to follow the us uaw’s lead and go for something like that, *then* they’re properly suicidal.

The reason that BA, and most other state airlines, are going bust is that they are trying to compete with the low cost airlines whilst retaining a high cost business model.

But other airlines seem to have survived and flourished. Perhaps BA is just badly managed?

sorry cjcjc I didn’t see your patronising comment there. Right: how should a company losing hundreds of millions respond? By turning on the top end of wages that obviously aren’t pulling their weight in this “competitive market”. How should it not respond: by cutting contracts, simple that.

But other airlines seem to have survived and flourished. Perhaps BA is just badly managed?

Which ones, out of interest? I’m no expert on the aviation sector, but this year, for example, for comparable airlines, BA, Lufthansa, and Air France/KLM have all posted substantial losses. Virgin have made a profit, but mostly thanks to clever financial hedging on oil prices (plus paying their staff half of what BA do).

I have no idea what “turning on the top end of wages” means…but if you mean cut the salaries of the senior managers, fair enough.
But you’ll find that there aren’t too many of them to squeeze.
So everyone has to give something up.
That’s hardly surprising if BA is competing with airlines which have much lower salary costs, is it??

Hmm. I posted something half an hour ago but it seems to have got lost in the aether. As Tim J says, all the airlines with civil service pay scales are losing money. The long-haul airlines that are staying afloat are Virgin (affordable salaries, very lucky hedging), plus the likes of Emirates and Singapore (very affordable salaries, more focus on still-growing intra-Asian routes).

As a long-haul premium-end carrier, with slightly more and better-paid staff than the Asian carriers (people are willing to pay extra for the reassurance, stiff-upper-lippery and suchlike of the British image, and BA is especially good at transporting Asians to America and vice versa without scaring the Asians as much as a US carrier would or the Americans as much as an Asian carrier would), merged with Qantas and Iberia, BA has a future.

But everyone involved needs to stop being such an idiot. Rod Eddington was one of the worst idiots ever let anywhere near running an airline – Willie Walsh has done a much better job, but still hasn’t done enough to change the disastrous “yeah, the staff hate us, fuck ‘em, bribe them some cash” HR ethos from that time. Meanwhile, Unite need to accept that if they do what they’re planning to do, then they won’t have jobs *at all*. And the government needs to bang some heads together – Obama’s actions at GM aren’t a bad model at all.

I have no idea what “turning on the top end of wages” means…but if you mean cut the salaries of the senior managers, fair enough.

It means fuck all. The senior managers on the ground have already taken massive paycuts and have been working for free; the middle management level at head office has been cut.

Also note that the current strike isn’t even about a pay cut – it’s about reducing staffing levels on long-haul flights by one (through natural wastage not lay-offs) by expecting senior cabin crew managers to do more hands-on work.

@johnb So what?

The union have offered serious concessions amounting to £140 million. In June, there were negotiations where the unions conceded plenty. This is not an issue of union bone-headedness, this is management in a bullish mood about the potential for effectively breaking workers’ representation (and thereafter being able to do what they like).

I imagine soon after that happens, unless BA workers win the strike, whatever concessions management have made will be shortly restored.

Think Sunny might be onto something here. Piss poor management may well have landed BA in this spot.

What were the losses over the Terminal 5 fuckup, I wonder? Have just been googling around on that one, but am already coming up with words like ‘millions in compensation’, ‘refunds,’ ‘£5000 per passenger for misleading travellers,’ etc. God knows what BA lost in cancelled flights and lost fares over that time as well. And didn’t Unite and the GMB warn BA that staff and systems weren’t adequately prepared for the Terminal 5 launch? God knows I’ve been in a similar situation as a TU rep – telling management that they ought to think twice before chucking out the only staff who can use a system, etc.

All very well to be saying now that BA cabin crew ought to be reduced to subsistence wages because Walsh was/is too much a williewaver to heed the calls of staff representatives.

Going to look around for more numbers.

Good post, Dave. Keep ‘em coming. People keep swallowing the management line, when really, they should spit.

This is pretty good:

http://www.spiked-online.com/index.php/site/article/7834/

cjcjc
if you stood by your call that all should take a share of the squeeze – fairand equal – then unreasonable contracts and thus job losses should not be an option. who honestly bought into the call that workers should not be striking but trying to bring down commercial prices together, a lot of people are trying to make a hero of this MIS-manager walsh!

As far as I can see the problem here is not the particular demands but the way the management is trying to impose measures on the union with no negotiation. Since the union agreed to measures at Gatwick I can see no strong reason to believe the management could not have reached a negotiated settlement with the union at Heathrow.

It looks to me as if Walsh gambled that the union would not strike at Christmas and thought he would use the opportunity to get his own way and take a swipe at the principle of negotiating with the union at all. Unfortunately for him they have called his bluff. Fair play to them.

@frolix – actually I heard that Walsh wanted to avoid inconveniencing business customers, but inflict maximum damage to holiday-makers and people travelling home, for a propaganda victory.

#3

But the changes BA are attempting to force on staff do not constitute a fundamental change to their business model. To do that they would have to orient themselves away from a focus on business class passengers, with the additional costs and uncertainty that approach entails (more bookings through agencies; less space; more vulnerable to shocks in the economy). What they are doing here is squeezing employees permanently to make up for temporary losses due to the recession. What’s more, they have attempted to do that without any negotiation with employees (and as Dave says, what amounts to virtual derecognition of UNITE). If this was just about temporary pay restraint to compensate for short-term losses and was matched by pay restraint from senior executives, I have no doubt that workers would be willing to negotiate.

Anyone in any doubt about whose fault this strike is and whose responsibility should take note of the enormous turnout (80%) and enormous yes-vote (90%). In the real world, you just don’t get extraordinary results like that without genuine grievances and shoddy management.

@22 very very limited. The changeover to T5 actually worked very well, far better than most comparable wholesale airline moves, it’s just the nightmare British press that talked it down. Anyone who claims it lost them serious money simply hasn’t followed the situation.

@27 you don’t get it without shoddy management, that much is true. The point is, BA *can’t * orient itself away from a focus on premium passengers, because it can’t afford to, because of its higher cost-base than other airlines, which stems solely [*] from staffing arrangements and staff pay. During the crazyboomtimes, that worked well, as the money from bankers and consultants paying gbp3000 for a two-way seven-hour flight could be doled out to the satisfaction of shareholders and staff alike. Even when there’s an economic recovery, transatlantic business class won’t recover to where it was in 2007. Which means that these measures *do* need to be permanent if BA is going to survive post-recession.

Genuine grievance? Not about the cuts; they’re necessary, and anyone who can read should be able to understand that. The current staffing arrangements only survived the boom because of the masses of money going into the system.

Means of consultation disastrously flawed, hence genuine grievance on that score? Quite possibly. And Dave’s point @26 is also interesting. But the thing that BA’s management and Unite need to do, or should know they need to do, is to let BA’s cost base fall to levels where pay’s higher and conditions are a bit better than rival airlines in the way that screws current staff the least.

Management’s failing now (rather than management’s failing 10 years ago, where this should’ve been obvious and should’ve been bought in as a 15-year plan focused around conditions for new hires) is to antagonise the union onboard. But from the union’s point of view, it’s not even clear whether the union yet understands that falling average wages and reduced staffing per flight can’t not happen if they want there to be an airline they work for.

[*] food already squeezed down, hence the GG fiasco; marketing vital and not really cost-cuttable; infrastructure and maintenance in line with whole-industry average (not least to the *spectacularly* good deal they cut with GE on engine maintenance outourcing); planes and fuel at international market prices.

(delete extraneous “onboard” from second-last paragraph)

> As far as I can see the problem here is not the particular demands but the way the management is trying to impose measures on the union with no negotiation.

Wrong I’m afraid.
Management have agreed terms with several unions, but have been unable to do so with two: cabin crew: and Terminal 5 staff.
And they’ve been over a year trying to agree.
Why are those 2 unions so slow to reach agreement?

It’s hard to face the long-term reality, that cabin-crew costs need to be halved to meet industry averages.

Anyone in any doubt about whose fault this strike is and whose responsibility should take note of the enormous turnout (80%) and enormous yes-vote (90%). In the real world, you just don’t get extraordinary results like that without genuine grievances and shoddy management.

@ 27

If I had an employment contract that my employer was proposing to tear up and my salary was going to reduce and I was faced with working harder for the same remuneration, I would be thoroughly pissed off too

I have no idea how good the BA management is, but I do know change management is extraordinarily difficult. The cabin staff have a responsibility to try to see the bigger picture and respond to the changes in their industry. The only rational reason for not doing so is that they want to gamble on the government not allowing BA to fold.

They may be right but……

Wrong I’m afraid.

Well, you say so. But I don’t see anything particularly persuasive in the rest of your post to substantiate it.

#28

I’m reaching the limits of my knowledge on this, so probably need to go away and read more, but I’m not 100% convinced by your argument that staff wages is the crucial element and all the other costs are fixed. For example, BA didn’t buy new planes when Boeing and Airbus were selling models cheaply after 9/11 in the way that some low-cost airlines did. That seems to be a failure of strategic management and represents extra cost (proportional to other airlines, hence putting BA at a competitive disadvantage) that has absolutely nothing to do with staff wages. I’m also unconvinced that there isn’t a market niche somewhere inbetween no-frills (with all the dicking about, lousy customer service, extra charges for everything that that involves) and an almost-exclusive focus on business customers. A lot of the argument that BA is unsustainable seems to be predicated on the argument that there are only two viable business models.

Seems to me we have quite a few airline crew in Scotland who’d be more than willing to take up the conditions offered by BA.

You mean the Globespan staff?
http://news.bbc.co.uk/1/hi/scotland/8417543.stm

Frolix (22)

Which bits exactly would you disagree with:
* cabin-crew costs need to be halved to meet industry averages.
* other unions have reached agreement with BA
* Cabin crew and T5 unions have not
* they have been trying for ages

Anyone taking the time to read Willie Walsh’s statement, will get his side of the situation – and it covers most of the points above:
http://www.britishairways.com/travel/statement/public/en_gb

My post was a response to
>the way the management is trying to impose measures on the union with no negotiation

which seemed a silly statement – IMHO.
Given the employment law in this country, if the unions really had been offered no negotiation, surely their most sensible course would be to go to court and win easily, and not be going on strike.
A court win would nicely show up the BA management.

In fact, the union went to court and failed to get an injunction against the planned changes… with the main court case coming in Feb.

Anyway, my original interest in the affair, was a friend in the BA offices, who’s not happy that the jobs of _all_ BA staff are potentially at risk long term, through the actions of the few who (in his view) are acting unreasionably.

He’s not an HR person or been involved wth the unions at all: but does see the ripple effect in his area of the stalemate with cabin crew.
Some office staff have been left in a ‘grey zone’ after the reorganisations: having no actual role anymore, not having taken the redudancy packages offered: and awaiting BA HR management and Unions to agree a fair outcome for them.

But the HR are tied up on the Cabin Crew + T5 discussions… so the grey-zone folks have been months in uncertainty.

Not good for the staff stuck in limbo.

And not good for BA which has more inefficiences to bear as a result

All anecdotal of course.