While Southwest is no stranger to tough contract negotiations — more of its employees belong to unions than at any other U.S. carrier — what’s new is the degree to which those labor groups are going public with details of the talks on social media.
Southwest Airlines, proud owner of a storied corporate culture that values fun, hard work and a maverick mindset, is contending with an unaccustomed challenge: hostile public disputes with its labor unions.
Employees are showing up for picketing like never before and waving anti-Southwest placards. Unions representing more than two-thirds of the workforce called on CEO Gary Kelly to step down this month, and the carrier’s head of labor relations — Randy Babbitt, a former head of the U.S. Federal Aviation Administration — announced his retirement late Tuesday. Contract talks have dragged on for years even as Southwest posted record profits.
The acrimony is fueling concerns about higher expenses as many employees fight for their first pay raises in years. The airline says it needs productivity gains and new work rules after losing much of its advantage in operating costs over American Airlines, Delta Air Lines and other larger rivals. Southwest is also fending off ultra-discounters like Spirit Airlines.
The unions say Southwest failed to adequately address a series of technical faults that grounded flights and stranded passengers. The disruptions provided the extra impetus for the no-confidence vote against Kelly and operations chief Mike Van de Ven.
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While Southwest is no stranger to tough contract negotiations — more of its employees belong to unions than at any other U.S. carrier — what’s new is the degree to which those labor groups are going public with details of the talks on social media. Workers have been picketing at major airports and the 8,300-member pilots union has spotlighted its message on a three-story electronic billboard in New York’s Times Square. As many as 1,000 pilots, joined by other Southwest workers, protested inside and outside Dallas Love Field terminal Wednesday, their labor group said.
“Employees feel like somewhere along the way, the emphasis at Southwest became no longer about the people,” said Audrey Stone, head of the flight attendants’ labor group. “Our people are what made Southwest Airlines successful. Herb founded our company on that motto — take care of your employees and they are going to take care of the customers, with emphasis on the employees first.”
Herb Kelleher, the colorful and popular co-founder of Southwest, stepped down as chairman in 2008, seven years after giving up the CEO’s title. He still serves as chairman emeritus and is in his office most days. His name is invoked often by employees, who still rush to speak to him at various functions.
The airline has never laid off workers and its profit-sharing program paid out $620 million last year, or the equivalent of eight weeks’ pay for each employee. The voluntary turnover rate has never topped 3 percent, said Jeff Lamb, executive vice president of corporate services. On Aug. 11, Southwest received 6,500 applications for flight-attendant jobs in less than four hours.
“I don’t think what I’d consider to be an isolated group calling for a change or management to leave to be any indictment on our culture,” Lamb said. “The core is still extremely solid.”
Southwest began operations in 1971, flying to three Texas cities with three planes. Now it carries more passengers on domestic routes than any other, operates 719 aircraft and has 53,200 employees. That much change requires an evolving culture, said Susan Divers, a senior adviser at ethics and leadership consultant LRN.
“It’s no longer ‘us against the world’ and the hungry upstart,” she said. “You have to replace that insurgency with other ways of interacting that still really inspire people and keep that dialogue going with employees.”
The airline has been in contract negotiations with pilots and mechanics for more than four years and flight attendants for three years. Pilots and flight attendants both rejected tentative agreements last year, while baggage handlers and other airport ground workers approved a new contract in February by 50.4 percent of the vote.
Billions spent to buy back company stock, poor decisions about upgrading onboard products and missteps tied to the 2010 acquisition of AirTran are among other management shortfalls that have hurt the carrier, said Jon Weaks, president of the Southwest Airlines Pilots Association.
“What we’re trying to do is make everybody, from the institutional people to the Southwest board of directors to the general officers themselves look in the mirror at the way we do things,” said Weaks, whose union has sued the carrier over flying Boeing’s newest 737.
“This place could really, really just kick butt, but we keep getting in our own way.”