United CEO Scott Kirby has reached out to employees with a broad vision to avoid furloughs and job cuts in October. But the devil remains in the details…
In the first of a new video series to employees called “Straight from Scott”, Kirby talks about his trip out in to “the system” as CEO. The video was shared with Live and Let’s Fly by a United employee.
With video of him greeting employees at Dallas-Fort Worth (DFW), Kirby says, “I’m here with, not only co-workers, but a lot of friends.”
While I understand the desire to build camaraderie, I’ve learned over the years that it is not smart to become friends with employees. I appreciate Kirby’s optimism, but he should focus on leadership, not friendship. Employees will look to him for guidance and direction, not fellowship.
Most importably, he asks what will happen on October 1st? That’s the day federal assistance under the CARES Act expires and the day many fear will be marked by broad furloughs and other job reductions. But Kirby hints at a “better” approach:
“And while I wish I could give you an exact answer today, while all of our competitors are planning to do large-scale furloughs, we are hoping that we can come up with a better approach.”
What is that approach? “Shared sacrifice.”
Kirby hopes that working with unions, all workers will agree to work fewer hours “in one form or another”. He hopes that by doing so it will avoid short-term job loss and “means we can bounce back quickly.”
In order to ensure job safety for the longterm, Kirby hopes to “variablize” cost structure, a fancy way of saying that he wants to keep as many on the payroll as possible with greatly reduced hours so that if/when demand rebounds, their hours can be quickly scaled up.
In a brief note which accompanied the video, Kirby again pledges transparency and honesty:
“Whether I’m making announcements, sharing our strategy or talking directly to you from my iPhone, I am fully committed to telling you what’s going on and to be candid and forthcoming in good times and bad— particularly as we’re going through the COVID-19 crisis.”
He adds that “you can expect to be hearing from me a lot more in the future.”
Will Unions Agree To Scott Kirby Job Plan?
The devil, of course, is in the details. Will unions choose to protect their most senior members at the expense of junior employees or band together to avoid job cuts? Or will unions decry this move as a false choice, arguing that United must find a way to preserve employees?
Throughout the video, Kirby stresses that he is already working closely with unions to address the issue now, not later. Whatever ends up happening, Kirby cannot be faulted for dodging the problem.
CONCLUSION
It appears that Kirby will take a much more hands-on approach to communicating with employees than did his predecessors. He hopes that by being blunt, he can earn their trust, even if the news is bad. Already, Kirby is laying the groundwork for a broad compromise with unions that would save more jobs at the expense of salaries. Whether the idea is plausible remains to be seen.
United’s Union Employees are the toughest to negotiate in the business (AA’s machinist nearly match). I wish him good luck and much sucess. I think the union leadership will be hard-pressed to accept anything that shows weakness on their part. They get elected by vowing to crush management, not enrich shareholders and officers.
If he can navigate those treacherous waters he will be up in the Crandall class of labor whisperers.
Wish him well.
I was more interested in your comment that a CEO can’t develop a sense of “friendship” with employees. While I agree to a certain point there are exceptions to this and it’s not a formula.
Herb Kelleher did it quite successfully. He never forgot an employees name (he would even remember the names of members of your family), he had an uncanny ability to unite as everyone if a family, and would get down in the trenches with any worker to show solidarity that was not a photo op but genuine care. Employees looked to him like a father figure, with all his faults and brashness, a still wonderful father who never let you down. It’s why I think a lot today about Herb, if he was here now, wondering, “What would Herb do?” Man, I miss that guy.
But Kirby is no Kelleher. Few are. People see through the attempts and know right away what is genuine and what is nothing more than posturing. To that, your point is a good one, Kirby should rely on his strengths and try to avoid being something he is not.
What you write about Kelleher is fascinating. He was before my time and thus I don’t have any alternate frame of reference before Tilton at United or Kellner at Continental. Do you think Kelleher’s secret was his charm and good memory or did he actually run the airline differently?
It came down to what I would define as a genuine personality, trust – in that he stood by his promises, faith in that employees and customers knew he always had their back, and a bigger than life charisma that could have you belly laughing at some of his gems. You could feel at home just as much with Herb at a backyard bbq as you would a boardroom. He was always the same person.
One of his quotes hangs on my office wall. “We have a strategic plan – It’s called doing things.”
He embodied the very spirit of his employees. That is that a person’s spirit and love of their work is all that’s needed. Skills can be trained or learned on the fly as long as you show passion for your job.
He was a crappy arm wrestler but a bigger than life figure. By far the most influential business leader in my life – and I have worked to try to ‘Do like Herb” as much as I can.
Spend some time to read more about him, his book, watch interviews and bios. He is so much of what we need today.
Gordon Bethune too at Continental in the 90s, from all I’ve heard. Only met him once personally. Similar to Herb in a lot of ways.
Lay-off so the employees have decent pay to come back to since it’ll be temporary . Union should not give on and demoniac the CBA’s by any means. The executives takes years of dragging their feet in negotiations , but when it hits the fans they want fast concessions! WRONG ANSWER’nn
According to this video, kirby hasnt had any discussions with our union.
I was so eager to read this article, but it seems right out of the gate Mr Klimt takes a negative direction with the “leader” vs “friend” assessment. As the wife of a United employee I must vehemently disagree with the notion that Kirby should focus on leadership, not friendship. It’s imperative that Kirby forms bonds with the individuals who make up our great company. One can lead from beautiful Willis Tower and never know whether his policies are coming down as unrealistic commands, or being embraced and enthusiastically promoted throughout the system. Secondhand feedback is second rate. The only way Mr. Kirby will know the true pulse of the organization is by firsthand contact, and by building strong, positive bonds with every employee group. When spending time with employees he gains valuable feedback on whether or not Ivy League textbook business theories actually work when implemented. If something isn’t producing the effect he strives for, he’ll know right away, but only if he is viewed as someone who can listen, assess, adapt and implement. This model works so much better if he is viewed as a trusted ally, aka a workplace friend. I for one, look forward to this new chapter for Scott. Other commenters have mentioned some great past CEO’s. Having been a spouse to a 20 yr employee, the list does include United, in my book. However, United has also seen some horrible “leaders”. Scott Kirby comes very equipped to take the reigns and lead us skyward, He’ll do that best and swiftest by interacting with employees and understanding this operation FROM THE GROUND LEVEL UP, with all employee groups believing that his ideas are practical, financially sound, and attainable. Informed leadership is true leadership.
The AFA has already provided their firm stance objecting:
https://unitedafa.org/news/2020/5/22/mec-officer-letter-we-have-a-contract
What a surprise.
Funny I am reading all these great things about Scott Kirby, but as the wife of one of those employees currently being affected by Mr Kirby’s decisions, the picture that is being painted here is far from the truth. Mr. Kirby does not want to sit down and listen to proposals the union representing front line employees to avoid furlough of these employees. Mr. Kirby is just trying to clean up the image of airline destroyer he brought upon himself after dragging American Airlines to it’s destruction. He does not care about employees, he only cares about his CEO title. He cares about the bonuses that will make him more wealthy while United employees stress about losing their jobs, the income to provide for their families. This article needs to speak the real truth about Scott Kirby. The first
I’m not defending Kirby, I’m just reporting on the video that was shared with me. As a writer who focuses on United Airlines, you can bet that I will be holding Kirby very closely accountable for his platitudes in the days and weeks and to come.
That does not look like Houston to me!
Yep, that’s DFW.
I get what he wants to do but I don’t think he should lump all full-timers into part-time status. Many have 30-40-50 years with the company (full-time) and are close to retirement. Getting thrown down to part-time status will affect some if not all benefits (though hourly wage would stay the same). As well, who would even think of retiring if they leave at a lessor salary and benefits. They won’t, especially those whose pensions went down to half or less with the PBGC, bankruptcy, ESOP, etc. All he is doing is ending up keeping people that United is so eager to lose. You wan’t to make people part-time?, do it only to everyone with less than 20-25 years seniority.
Why should some very high seniority employees be reorganized or reclassified to save the jobs of 1-5 year employees? Just furlough according to date of hire (seniority) and if all those on the bottom lose their jobs (ie., less than 20-25 years), so be it. The very first thing you learn when you join an airline is that your date of hire (seniority) is key to just about everything including shift-bid, salary increments, job choices, vacation, time-off, overtime etc. Let them have recall for 3-5 years and if they are able at the end of that time and want to come back to United, it’s to everyone’s benefit. Keep your longstanding employees, willing and needed while the pace picks back up instead of chopping the whole thing to bits.
I’m a senior employee that will not sacrifice my pay to save the job of a junior employee….back in the day if time were tough for airlines we suffered furloughs, thats how it works. The Union will be held accountable for any reduction in pay to save Junior employees.
Hard for Kirby to cry poor and expect labor to bail them out once again after management blew $9 billion on stock buy backs. Hey Scott, the rainy day is here and it’s a monsoon and you were part of the team that blew all of the money to pump up the stock price for all the fat cats in the executive suite and your wall street friends vs planning for today. Cry me a river and keep your hand out of my wallet.
And I’m a junior girl that would vote for reduction of hours in a second, it seems senior people had a lifetime to save and didn’t, that sounds like poor money skills. Our time in the company doesn’t dictate our worth, we’re all employees and in real terms who they want to sack is who is costing them the most.
You’re criticizing the more senior people for ‘poor money management’ decisions but you’re the one that decided to work for United. You picked the worst major in the US. You should have done better research before applying. You also should have known that the airline industry ebbs and flows with the economy and there’s a certain risk to working for any airline, so expecting senior employees to sacrifice their earnings after everything they’ve given to that shit company just so you can be coddled is just ridiculous. I’d say you need to get off your high horse and learn a little more about how the industry and the world works.
Junior girl, there are senior people who have been through bankruptcy, 911, and other downturns. People senior to you have made much sacrifice and have sweat equity that you do not have. It is not about saving money as an employee, it is about seniority means something! I will NOT give 1 hour to assist a junior employee in keeping their job. This is not socialism, this is a seniority based system.
I’m seven years in with United and I’ll take the furlough when it comes in October. Things will turn around and I knew what I was getting when I started this job. It’ll suck, but I’m not sacrificing my long term earning potential like my more senior co-workers have been forced to previously. Furloughs happen when your industry is as volitile as the airlines. Contract concessions for short term “greater good” in this industry don’t ever come back. Talk to a pre-merge United person and ask them how they feel about their income and retirement accounts always being on the chopping block in past downturns. Remember, while United was posting billion dollar profits Kirby tried to gut our incentive programs and replace them with a lottery. Bonuses for frontline employees that equated to less than $3000 max per year if all criteria were met and they almost never were. We have provisions in the contract specifically for market fluctuations. I’ll keep my contract thanks.