This primer focuses on one set of tools the labor movement can utilize to build power, expand wealth, and deepen member engagement in the years ahead: worker ownership. It explores: How Unions and Worker Ownership Work Together How Worker Ownership Can Build Power for Workers The Good, The Bad & The Ugly: Overcoming Challenges Looking … Read More
Why is Southwest so uniquely able to succeed where others can’t? The thing that makes Southwest employees a powerful force for success is that they are autonomous workers working toward a common goal…
The Southwest Airlines Way examines how the company uses high-performance relationships to create enormous competitive advantage in motivation, teamwork, and coordination among employees.
UAL suffered from particular design flaws in its stock ownership plan and, more seriously, the absence of complementary institutions focused on the distinctive problems of employee-owned firms.
Employee stock ownership programs (ESOP) may become a source of competitive advantage but a threat to a firm’s survival as well. Strategic stakeholder negotiation, on the other hand, is a process through which an organization negotiates with multiple stakeholders in order to achieve a strategic goal. Such perspective helps to illustrate the importance of understanding, balancing, and managing stakeholder demands in ESOP-related negotiations. The airline industry provides an interesting arena in which to study this process.
It would be easy to look at what’s happening at United Airlines, now on the brink of bankruptcy, and conclude that the concept of employee ownership in America has fallen into a tailspin.
Southwest Airlines, consistently ranked as one of the top performing airlines in the business, began a profit-sharing plan in 1974.
In May 1995, about 19 months after emerging from the Chapter 11 bankruptcy it filed in 1993, Trans World Airlines issued a proxy statement to seek the consent of its shareholders and certain creditors for another debt restructuring plan.
In 1994 United Airlines became the largest employee majority-owned enterprise in the United States, with various groups of employees – most represented by unions – having purchased 55% of its stock in exchange for various concessions. The employees accepted pay cuts and made other concessions, but were also granted representation on the company’s board of directors…[newline]
The U.S. airline industry has, in recent years, offered some conspicuous examples of a phenomenon that has now become familiar, both in the U.S. and abroad, among firms that face economic difficulties: the granting to employees of a substantial ownership stake in return for wage and work rule concessions necessary to maintain the firm’s viability.
Southwest Airlines has created a culture where employees are treated as the company’s number one asset.
In the largest attempted employee-buyout in history, a large U.S. commercial airline seeks substantial wage concessions from its employees in return for 53% stake in the airline’s common stock and guaranteed seats on the board of directors.
This case describes the innovative approach to organizing and managing employees by People Express and describes the company’s eventual demise.