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US Airways' business practices are all too familiar

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The past, British novelist L.P. Hartley once observed, is a foreign country. If so, it may soon be the only international destination Pittsburghers can reach on US Airways.

 

If you've been following the airline's travails, you might feel like you've seen it all before. Twenty years before, to be precise, during the collapse of the steel industry. Then and now, corporate execs mislead local officials about their real intentions. They demand round after round of concessions from employees, concessions that never seem to be enough. Eventually, the employees lash out in response. But a pall hangs over the entire affair, a nagging suspicion that no matter what either side says or does, Pittsburgh employers are doomed by forces larger than both.

 

I got a strong sense of déjà vu a few weeks ago, when looking over an e-mail exchange between US Airways CEO David Siegel and Perry Hayes, the head of its flight attendants union.

 

Sent in mid-November, Siegel's message to employees is an attempt to rally the troops, complete with battlefield imagery: "It is time to stand and fight in Philadelphia," he wrote, citing the plans of discount carrier Southwest to expand operations there. "It's time to get off the defensive" for "if we give ground there, we will give away control of our future and the very heart of our airline."

 

Throughout the missive, Siegel pays homage to his employees: "We can compete with...other carriers on service," he insists. "We have a better product...and most importantly, the best people in the business."

 

Of course, the only time a CEO says he values employees is when he's about to cut their pay. Sure enough, Siegel's letter eventually begins griping about "inefficient operations...outdated work rules and personnel policies, and internal dissension."

 

Apparently, he hasn't worked out a solution to the last of those problems. The day after Siegel's letter was sent, Hayes sent a reply also cc'ed to workers.  He charged that employees "have collectively already given back too much....[They] have been led to slaughter [before] and it is unlikely they are willing to head down that path again."  To Siegel's inspiring charge that "Collectively, we will choose our future," Hayes responded, "Does that mean [we can] demand that the current team of inefficient and apparently inept management be replaced?"

 

Students of local history may hear an echo of the 1980s here, the voice of labor activists like Ron Wiesen damning corporate doublespeak, lashing out at managers who exhort employees while covering up the mistakes of ownership.

 

CEOs justify earning the biggest paychecks by saying they're the ones who take the biggest risks. In reality, though, they take the biggest risks with other people's jobs. The risk to themselves is minimal.

 

We don't know what will happen to US Airways as a business, after all. We don't know what will happen to its employees, or to the Pittsburgh International Airport itself. About all we can be sure of is that Siegel will land on his feet.

 

Just look at his parachute given to his predecessor, Stephen Wolf. As US Airways employees discovered last year -- at the very moment they were being asked to give up their own benefits -- Wolf and a lieutenant pocketed $15 million each in pension money shortly before the airline went into bankruptcy. That's like giving a performance bonus to a pilot just before he crash-lands his jet a half-mile short of the runway.

 

The only difference is that the airline might stiff the pilot. Promises to employees can be broken, as union members are learning. So can promises to retirees, or to investors hoping for dividends. Or to communities that sacrifice tax dollars to keep a company in town. Promises to CEOs appear to be sacred, even if promises by them are malleable.

 

Siegel was supposed to be different when he first came on board in 2002. A Post-Gazette account from June of that year, for example, captured the buzz about him by lauding his "no-nonsense, nothing-to-hide approach."

 

Within the next year, however, Mr. Full Disclosure proved he had something to hide after all. Throughout the airline's bankruptcy proceedings, Siegel pledged it would not turn its back on Pittsburgh, a pledge that inspired state and local officials to lobby Washington for federal help. But minutes before US Airways emerged from bankruptcy last year, it unilaterally voided the airline's leases at Pittsburgh International Airport. Having milked local pols for their support, the airline screwed them anyway.

 

If that, too, sounds like something from the 1980s, there's a reason. It echoes a US Steel ploy to mobilize support among local politicians for federal tax credits...credits it pledged would keep its steel business competitive, but which it used to buy up an oil company instead. And US Airways was just getting started. In November, Siegel pledged, "I did not come here to oversee a going-out-of-business sale." By January, though, he warned employees that he would seek "strategic partnerships that would enhance our financial standing." That's CEO-speak for "buyers," naturally.

 

No one minds self-serving management when times are good; as long as we get a few extra crumbs from the table, we don't care how much of the pie the wealthy scarf down. As Republicans have learned, if we get $100 back on our taxes, we'll shrug when the wealthy receive millions in capital-gains tax cuts.

 

And by the time we do resent such injustices, it's too late. Taking back Stephen Wolf's pension won't bail out the airline now. And Siegel couldn't give up enough of his salary to make a difference either. A fair business plan won't save US Airways; the only thing that could save it is the employees' willingness to live with unfairness, the injustice of having to pay for someone else's decisions.

 

If anything has changed in Pittsburgh over the past 20 years, it's that we've accepted that injustice. If this were the 1980s, someone would have doused Siegel's place of worship with skunk oil by now. But already the unions are back at the table, trying to negotiate, pledging to sacrifice to save the airline. Again.

 

But like that earlier generation of steelworkers, US Airways employees may never be able to give up enough. US Airways might be doomed no matter who gets canned -- even Siegel. Now as in the 1980s, basic overcapacity may mean that the industry has simply passed Pittsburgh employers by. And perhaps the easiest thing for both sides to do is blame the other...when there may be little either can do.

 

What the past had in common with foreign countries, L.P. Hartley wrote, was that "They do things differently there." Here in Pittsburgh, we do them almost exactly the same.

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