“We’re all in this together,” American Airlines CEO Doug Parker told employees more than two years ago, the day he merged his former US Airways with Fort Worth-based American to form the world’s largest airline.
Two weeks ago, speaking about those same employees in a presentation to investors and Wall Street analysts, he was clearly discouraged: “They still don’t trust us.”
No surprise he should say that. American’s pilot union had just accused managers of fomenting a “toxic culture” and ignoring key provisions of the union’s contract.
Parker has said from the beginning that building a team culture at American, replacing the painfully evident pre-merger worker/management animosity, was paramount.
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On Wednesday, he put a significant amount of money into what he’s been saying.
He announced that American will unilaterally — without asking union groups for anything in return — re-institute a profit-sharing plan employees voluntarily gave up in favor of larger pay raises in their current contracts.
The free money, 5 percent of American’s pretax earnings this year, is expected to be distributed early next year to about 110,000 employees.
That’s assuming American makes a profit this year, but it’s a pretty safe bet. The airline generated more than $7.6 billion in profit last year.
Parker vowed the company will still offer pay rates higher that its competitors in future contract negotiations.
“Although we continue to believe the most effective way to increase compensation is through higher base pay, we recognize there is a team-building component to profit sharing,” Parker said in a letter to employees.
“By eliminating profit sharing in exchange for higher base pay rates, we inadvertently have eliminated some of our shared sense of teamwork — and that was never our intent.”
American operates a major hub at Dallas/Fort Worth Airport. Its corporate offices just south of the airport house more than 4,300 employees.
The reception from pilots was underwhelming. Union leaders said they’ve pointed out all along the importance of profit sharing.
Meanwhile, at the Association of Professional Flight Attendants, President-elect Bob Ross said he is “pleased to see management is assigning value to employee morale.”
Some retirees complained that Parker didn’t also rescind recent reductions in their free flight benefits.
Parker is to be commended. Employees are to be congratulated. But at American, it is yet to be seen whether money can buy you love.