Southwest Airlines and the unions which represent the bulk of the carrier's employees have never undergone negotiations quite like this.
Southwest Airlines Co. (NYSE: LUV) is asking union employees to take 10-percent pay cuts. The Dallas-based airline says these pay cuts are necessary to prevent furloughs and layoffs through 2021.
However, some of the largest unions which represent Southwest employees are telling members they are not interested in contract concessions, according to multiple communications between union leadership and members viewed by the Dallas Business Journal. One union recently told members WARN Act notices could be forthcoming.
"Your negotiating team believes that the company will continue through the process of issuing notices of potential furloughs as required by the WARN Act, even if those notices are not followed by furloughs," TWU Local 556 told members after an Oct. 27 negotiation session with the company. The union represents about 17,000 Southwest flight attendants.
The Worker Adjustment and Retraining Notification Act is meant to give advance notice of factory closures or mass layoffs. Just because a company issues WARN Act notices doesn't mean furloughs are guaranteed or every employee who receives a notice will be furloughed.
For example, American Airlines issued 25,000 WARN Act notices this summer, and furloughed 19,000 people Oct. 1.
Southwest spokesperson Brian Parrish declined to answer an inquiry about WARN Act notices, saying the company does not comment on communications between union leaders and members.
"Talks with Southwest's union representatives are ongoing," Parrish said. "Southwest thanks union representatives for engaging in these discussions and helping the airline think creatively about potential solutions to save costs."
Negotiations carried on for most of October between the company and union. In particular, one phrase in the company's proposals rankles union leaders.
Southwest's offer of 10 percent pay cuts in exchange for a commitment to no furloughs or layoffs through 2021 "rang hollow when it was immediately qualified with, 'barring unforeseen or uncontrollable circumstances,'" leadership from the Aircraft Mechanics Fraternal Association, which represents about 2,700 Southwest mechanics, told members earlier this month in a memo.
The Southwest Airlines Pilots Association also expressed concern with the force majeure provision.
"That language is wholly unnecessary as SWAPA pilots will work collaboratively on solutions that are favorable to both parties, just as we have always done at Southwest Airlines, should 'unforeseen or uncontrollable circumstances' arise," said SWAPA leadership, which represents about 10,000 Southwest pilots, in an Oct. 21 message to pilots.
Southwest has never conducted an involuntary furlough or layoff in its nearly 50 years of flying. Company leadership often boasts about this fact, and Southwest Chairman and CEO Gary Kelly has called it his "greatest source of pride." Because Southwest received more than $2.3 billion in grants from the federal government this spring as part of the CARES Act and nearly 17,000 employees took buyout packages or long-term leave, the company committed to no furloughs through 2020.
But as the calendar nears 2021, traffic is still not at levels high enough to support enough work for Southwest's roughly 60,000 employees.
"Right now, in just very raw numbers, we're roughly 20 percent overstaffed," Kelly said in the company's third quarter earnings call Oct. 22.
Southwest employs roughly 10,000 people in North Texas.
This article originally appeared on Dallas Business Journal
Comments