I am very happy to be able to present the latest in a series of guest posts on Blawgconomics. Today, my good friend Florian Seelig has written about the announcement of a pilot strike against German airline Lufthansa. Unlike many postings which see me pontificating about topics which I have little to no practical experience with, Mr. Seelig has unique insight into the situation as both a German citizen and student of the law. As always, comments and feedback are appreciated.
A few days ago, the labor union of Lufthansa announced that, starting Monday, its membership of over 4,000 German pilots will strike for pay and job security. Though the pilots, like every other member of a labor union, have the right to regular salary increases to adjust for higher costs of living, two factors are disturbing in this particular action.
First is its length. With the strike lasting four consecutive days (from Monday until Thursday), it will be the longest announced strike in the history of Lufthansa and possibly the European Community. This could set a precedent and lead to a new dimension of refusal to work. Because there have rarely been such strong positions on each side from the beginning of a strike, the union will try to gain more influence for its members concerning business decisions and operations; essentially the pilots want to take part in the management of the corporation and won’t be satisfied with a mere increase in salary. However, this already difficult task in these shaky economic times becomes even more difficult as Lufthansa will now have to determine how to deal with certain losses from such a long lay-off next week. Therefore, the length of the strike could not only hurt the airline, but could work against the union and the demands it is trying to make.
Second is its basis. Lufthansa pilots are among the best earning workers in the field. Their starting salaries are roughly the equivalent of starting salaries for associates in corporate law firms, and they can quickly earn amounts in excess of €100,000 within their first ten years. This amount could be more than doubled by the end of their careers as long as no significant mistakes occur during their time at Lufthansa. Not to mention that they live the life of a pilot and actually only fly between 70 and 80 hours a month.
The question is therefore, is the behavior of the union reasonable, especially in these unique times of economic uncertainty, or if it is just sending a wrong signal. I think the latter.
The following sources were used for this posting:
http://www.spiegel.de/wirtschaft/unternehmen/0,1518,678462,00.html
http://www.zeit.de/wirtschaft/unternehmen/2010-02/lufthansa-streik-piloten
http://online.wsj.com/article/SB10001424052748703444804575070933980477898.html?KEYWORDS=lufthansa#printMode
http://www.handelsblatt.com/unternehmen/handel-dienstleister/lufthansa-worum-es-beim-lufthansa-streik-geht;2531319
This is organized Labor run amok and is akin to the how the UAW destroyed the US auto industry and prevented it from competing with the likes of Toyota. Where exactly does this Union think the money they're requesting is going to come from? I hope they'll enjoy retirement with no pension/healthcare. I'm sure that there is no shortage of unemployed pilots in Europe who would jump a the opportunity to work for a world class airline like Lufthansa for 3/4 the pay of their current ungreatful sky-layabouts. The problem with unions is that in order for them to win, someone will have to lose. They may well get their demands met but what they fail to realize is that they are direct stakeholders in the success of Lufthansa and the damage they will do to the company over a prolonged strike will likely cause an irreversable sequence of events. This will result in pain for Lufthansa at a time it can ill afford any. The global economy is on shaky ground and in a virtual no-mans land at this juncture, if the worst should occur, and the global economy slips into further recession, these pilots will surely pay for a payhike today with their jobs tomorrow. If Lufthansa does have to deal with this strike, they should put the cost savings programs they've been employing to use, shut down all operations, fire their current union in total and start accepting resumes from non union pilots whom will be worthy of a pilot's lifestyle and high level of pay. This is an opportunity for an European company to buck the trend and turn the table on Labor, what Lufthansa does may well set a new president for European enterprise: that no longer will a company be held hostage by labor, because the fact of the matter is, a company owes an employee nothing just as the employee owes the company nothing. Hopefully, Lufthansa will issue a statement citing thier being held hostage by a greed union and will prempt the strike with a lock out while simultaneously hiring new pilots. Hopefully they'll take some resumes from the USA, I'm sure there are some unemployed hardworking american pilots who'd jump at the opportunity to work abroad.
ReplyDeleteWe'll see what Lufthansa is doing. I just think that the pilots should think about if they haven't reached enough by now (at least for another year) or if there's no other way than announcing the biggest strike in history. This is a pathetic way of handling things at the moment.
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