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Newsletter Publication



EAHSOP's CABLES

Newsletter of Ownership Sharing of Alaska/Horizon Airlines by Employees and Customers

Oct. 19th, 2001 Vol. 4 No. 1 (website <www.eahsop.org>)

Published by HACECA Inc. for EAHSOP and CSOPAH

The momentous, hard-to-comprehend events of 911 have made us all reevaluate God, countries and company. (Remember, we’ve got employees and customers in Canada and Mexico besides the U.S.) It’s a world economy now. We’ve got to find ways to equitably share the wealth that these two airlines are capable of producing big time forever. And do it peacefully. Otherwise, we all are guilty of fostering breeding grounds for criminal and violent acts by frustrated humans.

Miraculously, it appears that both Horizon/Alaska Airlines will not furlough employees after the industry’s hard pitch-over following the terrorist attacks. How could that possibly be when the rest of the industry has shed more than 100,000 employees? In all our failings, could we somehow be closer to business-and-people reality around here when compared to most of our competitors?

SEVEN-FIGURE SAVINGS

Both Horizon and Alaska have suggestion boxes posted on their respective websites. Employee suggestions save $500 there, $1,000 here. How about saving millions of dollars by solving the conundrum of management and our unions properly relating? Horizon executives estimate the strike fax that the Teamsters sent out of the blue to travel agents in the summer of 2000 cost the company $7 million dollars in cancelled booking and changed travel plans by our trusting customers caught in the squeeze play. The IAM Alaska aircraft mechanic strike in 1985, and the AFA’s infamous CHAOS campaigns of 1993 and 1997 cost Alaska and Horizon millions of dollars as pilots, mechanics, flight attendants and management proved they would rather fight each other and vaporize capital than uncover true and accountable solutions to share the wealth.

Using the almost four year QXTeamster IBT negotiations as an example, what does that employee group and our company have to show for this new contract? Pay and benefits were significantly increased, and some work rules were better defined. Well and good except all of the increased costs are fixed. They have to be paid regardless if Horizon earns $50 million a year or loses $50 million a year. When economic downturns like the current one occurs, high fixed costs equate to employees losing their jobs and airlines going into the smelter.

One would think with the significant increase in salaries and benefits that Horizon pilots now enjoy there would be some corresponding capacity of the company to earn higher profits to pay those increased costs. That’s why investors (which in some fashion is all of us, don‘t forget) buy and hold AAG stock. We haven’t lost sight, have we, how important it is for employees to be rewarded on the basis of what they actually produce or contribute, i.e. delivering value to the customer and being rewarded on the basis of that added value?

Recently over the phone I talked to Mr. Guy Adams, who advanced the revolution occurring in corporate governance by winning a contested board election this year at Lone Star Steakhouses and Saloons Inc. He said that he owed his successful campaign to unseat the chairman of the board to the institutional investors who backed his candidacy and voted for him. They wanted the management to cease their hijacking of the company. Institutional investors currently own about 70 percent of the AAG. Mr. Adams said that of this 70 percent, typically about 10 percent is AFL-CIO money, employee’s money that funds retirement plans and futures. Yet we insult all these owners by continually forcing through contracts that not only bites off the hand that feeds us but decapitates the head. Do we do life justice by being this stupid?

THINK YOUR JOB WILL ALWAYS EXIST? SO MUCH FOR THINKING...

Do pilots contribute special skills and expertise commensurate with their financial compensation? Remember, in the U.S.’s free enterprise system, Milt Kuolt created Horizon Air in 1981. Five years later he sold his creation to the AAG. Milt, his investors and the employees who participated in the original QX stock ownership plan, all reaped financial rewards as co-owner/employee/risk-takers. Somehow, with the AAG, this risk-reward reality of business and freedom has fled.

Individual initiative, which this country was built on, seems to no longer matter. Employees through their powerful unions demand and receive higher and higher fixed pay and benefits with no sharing in the risk to pay for those increases. Such as, if the company’s annual revenues or profits reach a certain negotiated level, only then would certain increases kick in. Or board-approved dividends on the stock employees own in the 401(k) being considered as a percentage of any future pay increases. How about profit sharing based on a percentage of AAG profits? A trustee would be appointed to oversee all capital entitlements paid to employees and customers.

There was none of that in the pilot contract. Horizon pilots agreed to zero risk and yet gained all these increases. How did that happen? Simple: They joined a powerful union, the Teamsters, who put in motion a potent political and economic agenda that basically was this: If you don’t give us what we want, we will cripple or destroy your company. There were threats, intimidations, a quashing of any dissent, which whipped up individual pilots to sabotage the company until the management cried uncle.

Did it work? Yes, it worked. Are we all better off for it? No. This system probably cut the heart right out of our great company, and we may never feel it pumping the same again.

Does this sound like America to you? I thought America stood for truth, justice and equality for all under God, Life, and the laws we create together? What has happened to America? We came together to self-govern and unsheathed private property as our sword to defend freedom against the potential tyranny of the unaccountable State. Minutemen of the Round Table reconvene. Evil reigned supreme on the East Coast on that sorrowful 911 day. Isn’t unchecked, unbalanced power from any source not a blood relation to the grim reaper? If not confronted, do we think it will not further corrupt us and our children?

On Horizon’s immediate horizon is what other employees, both unionized and not, perceived from the Teamster negotiations. Our customers, too, observed. If one employee group unjustly leverages its power over another--this supposedly doesn’t matter? The other employees saw what the Horizon pilots did. This process has angered and elevated resentment against them. Can we see how critical human relationships between each other are destroyed as we slave as non-owners to pay-by-hourly-wages only? We break these chains by agreeing to share in money we earn collectively, which instead unites us together as one.

“ME TOO” CLAUSES COMING HORIZON’S WAY

Currently open union shops that exist at the TWU (mechanics and dispatchers) and AFA are being evaluated per “me-too” provisions that were triggered when the QXTeamsters contract was ratified. Closing the shops provides the union security, which basically boils down to all employees being forced to pay the union. If one union gets it, they all do.

Bev Moss, the MEC President of Horizon AFA, told me in a Oct. 2 phone call that currently 18 percent of QX FAs are dues-paying members. 82 percent of that employee group enjoy the fruits of the contract but don’t pay to maintain or renegotiate it. Our unions don’t own anything. Like the government, they exist on taxes in the form of dues paid by workers. Want more power? Power follows property. Why not agree to provisions based on ownership?

One “meet-in-the-middle” solution HACECA promotes is a capital dues checkoff. Dues would be paid to our unions based on capital entitlements paid to employees of which a negotiated percentage would be paid to the union. This could be a “win-win” instead of a “zero-sum” way to proceed. The union legitimately earns its keep by moving employees and customers to a broader share of capital ownership of the AAG.

Can we at least agree to talk about, consider it? Or will we continue to bang down telephones and delete unread emails while we burrow heads into the desert sands of stubbornness?--Steve Nieman, President of the Horizon/Alaska Customer/Employee Co-Ownership Association, AAG shareholder, Horizon employee and QXTeamster

The Horizon/Alaska Customer/Employee Co-Ownership Assn. (HACECA) Inc's website is www.eahsop.org