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Home / Business / After 49 long years, Southwest Airlines has just released a prominent announcement

After 49 long years, Southwest Airlines has just released a prominent announcement



Southwest Airlines made a tough and important decision this week, signaling something it has never done in 49 years.

It’s easy to miss out on so many other things going on in the world.

But it puts Southwest Airlines on the path of joining an unfortunate club: airlines have jointly laid off thousands of jobs as a result of the coronavirus pandemic.

If that happens, it would mark the first time Southwest, which has been flying under its current name since 1971, would resort to cuts or layoffs.

This is a difficult story to write. It̵

7;s always hard to see anyone in danger of losing their job.

However, as it unfolds, the experience also contains tremendous learning opportunities for most people running a business of any kind or size.

This is the background image. Last month, Southwest Airlines CEO Gary Kelly recorded a video message for employees, describing the airline’s status and asking unions to agree to a 20% cut in wages by 2021. Help stop the financial outflow.

According to reports, Southwest is expected to lose millions of dollars every day for the remainder of the year, and Kelly says non-union employees have temporarily implemented wage cuts. He also added that he personally won’t receive a salary in 2021 and other senior executives will see their salaries drop 20%.

In return, he promised, non-union employees would not be fired throughout 2021 and their wages would “rise again” by the end of the year at pre-pandemic rates.

For union employees, of course, Southwest can’t unilaterally cut their salaries.

So Kelly said he was asking for wage cuts in exchange for the same promise not to lay off employees in 2021, but warned that if unions disagree, a decline is likely. salary.

At that time, I wrote that I thought this was an intriguing move by Kelly. If the unions agree, he can continue Southwest’s streak of non-layoffs and set a beneficial precedent. If they disagree, he may force them to assume part of the responsibility for losing their job.

Shortly thereafter, the union representing both the pilot and the flight attendant of Southwest Airlines seemed to pour a splash of cold water on the idea of ​​cutting.

The flight attendant federation told me its members “are not interested in giving in to a contract that takes decades to get,” and the pilot union said. The Wall Street Journal that despite having agreed to a discussion with Southwest, it’s “very different from agreeing to give in.”

But even though I don’t have any inside information or access to decision-making processes, that’s what you can expect, since neither side in this negotiation has any incentive to co-opt. right away with anything.

In other words, I can look at this and hope that if any deal is reached on a cut, it will happen at the last minute possible – maybe a few months away.

All of that makes Southwest’s latest move a little more appealing.

Because Southwest issued its first major warnings this week that were legally required before this type of action could be taken, those notices were not sent to the airport. public or flight attendant.

Instead, they came in with a much smaller group: 42 materials experts represented by the International Brotherhood of Teammates, which Southwest said had announced it would not negotiate.

I don’t know if this is by design or by chance, but in any negotiation like this, it seems smart to climb as slowly as possible – take small steps one at a time and allow the other party to have plenty of space. blank can navigate closer to your location.

If I were a Southwest labor executive whose job was to try to get the unions to agree to a cut, I’d rather send the first WARNING notices to a small group of workers rather than being forced to do so. does a bigger step before I want to.

And it made me think of other questions I would ask myself, if I’m running a business that needs to cut back to survive – and especially if I don’t think I have leadership (or legal authority). ) to make unilateral statements.

How can you proceed slowly, carefully, methodically – always in control of negotiations to the fullest extent possible – while still giving others face savings and getting a lot of things Do they need it as much as possible?

Of course, I don’t know all of these places are in the Southwest. I certainly hope we’ll see a quicker return than we could have predicted and the need for job cuts will be minimal. I’d love to be able to write in a few months that Southwest has managed to keep its 49-year trackless.

But I will watch. And if you’re running a business, I think you should.

The opinions expressed herein by the Inc.com section curators are their own, and not those of Inc.com.

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