It’s now day 47 since the city was formally closed to non-essential business – and for me – day 59 since I started feeling acutely worried about where the crisis was headed.
Important health metrics including hospital admission totals and critical care capacity in New York City are now solidly trending positive as the city is about to eclipse 20-thousand dead from the virus.
There seems to be a general feeling that some form of reopening is coming but that it will be cautiously incremental and without any kind of crowding or space-sharing. Given the unique human density here – and the first-hand understanding of the human toll when the virus is allowed to spread – it’s impossible to envision much normalcy until a vaccine arrives.
My anxiety has started to level as time passes. The sirens are less frequent. The process of getting food and drink has become more manageable. I’m working much less.
Before tackling any of the other myriad catastrophic impacts on the US economy, Congress and the White House moved swiftly to inject $25 billion into the airline industry. My employer got about $5 billion of that. $3.5 of it was free money with the attached condition it would preserve the existing workforce, some 95-thousand strong through September 30. The other $1.5 billion came in the form of a low-interest loan.
The immediate question from those watching other US businesses shut down and layoff workers was why the quick help for airlines?
Why socialize a specific industry’s losses after a decade in which airlines privatized a ton of gains?
I don’t know much about corporate governance, corporate strategy but how ’bout socking away a chunk of the billion dollar profits that went in the books most quarters for a rainy day? Or for a pandemic?
To be fair, revenue dried to an absolute crisp in just a few weeks.
Once airlines lobbied for and quickly got the bailout money, they were on the hook to maintain pay and benefits of their rank and file through September 30. The government’s return on the bailout was two-fold in theory. One, they keep hundreds of thousands of workers off already-ballooning unemployment rolls. And two, critical transportation infrastructure will remain viable and spring back into action after the health crisis is over.
For me, the concept of a quick taxpayer-funded bailout in the wake of massive privatized profit-taking over many years doesn’t mesh. But as I sit here now, the bailout has kept my paycheck steady even though I’m working 40 hours only every 10 to 13 days. The bailout assured I’d stay in one piece at least through the end of September.
But then last week, my employer made a bold, unexpected move. It announced it was downgrading the full-time status of its 15-thousand or so airport workers to part-time. Base weekly hours would go from 40 to 30. It was effectively a 25-percent cut in pay and it seemed to violate at least the spirit of the bailout terms, if not the actual wording.
Mnuchin’s “Payroll Support Program” agreement posted on Treasury’s website is there for all to see. It says: “The Recipient shall not, between the date of this Agreement and September 30, 2020, reduce without the Employee’s consent the pay rate of any Employee earning Wages.”
The company didn’t explain where it saw wiggle room but perhaps believed that by cutting hours it was not reducing rate of pay.
Even more difficult to understand was how this unilateral move was allowable under the existing agreement collectively bargained by the company and union. The contract spells out plainly that a full time worker is a 40-hour a week worker. It’s a historically important, hard-gained labor value equating a real job with a 40-hour a week guarantee. Erosion of that concept is worth fighting against (even in a pandemic) and so the union representing my work group went ballistic.
It enlisted lawmakers who drafted and supported the bailout legislation to assist in a PR offensive. Union lawyers filed a lawsuit in federal court on Tuesday, May 5.
The company almost immediately pulled back on its plan.
It all comes at a time when our very popular CEO Oscar Munoz is following through on a plan to semi-retire and pass the baton to a widely-respected but more hard-nosed successor named Scott Kirby.
On a live video conference call timed to explain the effort to torpedo the full-time status of his front-line workforce, Kirby made a compelling argument for reducing daily cash burn so the airline is still standing when people start flying again. With tens of thousands of workers tuned in via the employee web site, Kirby said he hadn’t slept in the run-up to the decision. Without using the word bankruptcy, he said he feared what would happen to the airline if demand stayed low and the cash pile shrunk faster than the competition’s. Kirby seems especially worried about Southwest Airlines and their improved relative position to weather the storm and eventually scoop up remnants of airlines that may fail. On the merits of his concern, Kirby is right to seek concessions. As boss, he sees the daily financial numbers and wants to cut payroll so the airline doesn’t run out of money.
He’s constrained by both the bailout terms and the contracts of union-represented workers.
Perhaps had he gone to the entire workforce and asked for an across-the-board concession applied evenly to all, a mutual agreement could have been worked out.
Instead, he tried to jam something through and poked the proverbial bear. Full time job status is not to be messed with in a union environment.
Given the bleakness of air travel demand, Kirby could have sought to invoke the act of God clause and had the contract torn up entirely but only if he didn’t accept the bailout money and the terms that came with it.
As it is, the union won the short term battle but definitely soured the well with lots of hostile rhetoric aimed at management. A firm response in defense of the contract and the aims of the bailout did not need to include a series of immature and inflammatory potshots penned by our union boss and distributed to the membership.
Come September 30th, Kirby will shrink the carrier without the shackles he has now. There will be a process for how that plays out, typically based on a worker’s seniority. Company survival is his top priority and the fierceness with which he advocates for that goal gives me hope he’ll succeed, despite the bitterness that’s been created in the last week on both sides.
More to say soon – on the overnight subway shutdown, bicycles, masks, e-learning, temperature checks and oh yeah – a new Woods record is on the way.
Stay well.