British Airways has asked its 40,000 staff to work without pay for up to a month as the ailing airline seeks to cut costs.
The group, which made a record £401 million loss in 2008 amid surging fuel prices and a collapse in premium-fare passengers, is seeking to reduce costs dramatically and has already offered staff unpaid leave or a reduction in hours.
Willie Walsh, BA’s chief executive, has now gone a step further by asking staff to volunteer for between one and four weeks of unpaid work in what he says is a “fight for survival.” Mr Walsh, who said last week that he would work for free in July, has set a deadline of June 24 for employees to volunteer for unpaid work. He said that the salary deductions would be spread over three to six months wherever possible. BA denied that those staff who volunteered for unpaid work would be given preference if the airline imposes a further round of redundancies.
The airline is currently negotiating pay deals and job reductions with its ground handling staff, pilots and cabin crew, who have been told that the airline needs to settle discussions by the end of the month. In total, BA is thought to be seeking as many as 4,000 job cuts, including 2,000 voluntary redundancies among the 14,000 cabin crew. Mr Walsh wrote: “I am looking for every single part of the company to take part in some way. It really counts. We face a fight for survival. These are the toughest trading conditions we have ever seen and there simply are no green shoots.
“Our survival depends on everyone contributing to changes that permanently remove costs from every part of the business,” he added.
It’s one thing for the CEO to work for free, he can well afford it. But the “grunts” among us who have been asked to take substantial pay reductions… can sympathize.
Thanks to Ian Warner
isnt that slavery?? wouldn’t that be against the law here? not trying to start a huge arugument over it but this wouldnt sound right here. i guess you could work for free if you want but why? i wonder if goldman sachs, aig, citi, etc. employees would have done this??
And this will help… how?
If people can’t make money, how can they buy stuff?
If you worked at a large company with 10,000 employees, and you had a choice:
10% pay-cut (for all employees)
or
lay-off 10% of all employees.
Would you take a 10% pay-cut if you knew it would help your fellow employees keep their jobs? If you knew that you wouldn’t be one those fired, would you still do it?
#3. yes, I have taken a 20% pay cut to keep my fellow employees in work. And that company was soon sold to an Australian who asset stripped it and ran it’s business into the mud in six months. Moral is, in business it’s every man for himself.
See now, this is the neoliberal economic model in action.
Convince workers that management is struggling while management takes perks galore.
Even the workers themselves think they’re disposable half the time.
More:
http://home.comcast.net/~plutarch/Neoliberal.html
If they really wanted to save money and keep happy employees, they would cut executive pay and maybe sell off some assets?
Oh, bloody marvellous. This will no doubt lead to “industrial action” this summer, and I’m flying BA to and from the USA. Grrr …
#5, Typical, at least one exec, the CEO said he was donating July for free, so it’s not all neoliberalism. I wonder how many other exec staff is willing to give up their salary as well.
Also, according to the article, it’s voluntary (yeah, right).
Under the heading of:
#4’s “..Moral is, in business it’s every man for himself..”
It’s not unusual for top executives to take a $1 salary and the balance in some form of non-standard compensation (stock options, parachute, etc).
So if the boss is REALLY smart, he’ll advertise that he’s taking a 50% or even a 75% cut in his ‘payroll’.
…gotta watch those sneaky businessmen, they’ll get ya coming AND going 🙂
“Our survival depends on everyone contributing to changes that permanently remove costs from every part of the business,” he added.
Notice the words “permanently remove” labor costs. Yeah, that would be, um, slavery. But hey, you’ll still have a job. 😀
I guess if employees don’t like working there they can quit and work for the government…
My company cut 6% across the board, laid off 15%, and with all their savings, hired three more vice presidents bringing our hireling to VP ratio at something like 10:1 (yes, for every VP, we have 10 employees).
My company is considering the same thing albeit a different take. They suggest that workers take a week of unpaid work and instead of staying home, you’re told to report to work. Not sure on legality but this is an “at will” employer.
BA really wants to cut everyone’s annual pay by 8% (1 month’s pay). Wonder why they didn’t just do that? Better than asking people to work free for a month. Now employees are more likely to just stay home, causing manpower shortages.
The UK has a minimum wage, so how can this be legal?
“It’s one thing for the CEO to work for free, he can well afford it.”
Yeah! Plus they get huge bonuses, that the workers aren’t getting. And sometime later, said executives will probably get a pay hike, to offset their sacrifice. I’m willing to bet that in most every case, such a “solution” is just a con job. Preying on workers’ sense of loyalty. But the company just wants to reduce man hour costs, without filing layoffs (officially). Then some time later, they’ll simple layoff X% of employees, anyway. Or sell off the company. But this tactic give the majority stockholders, time to liquidate while the stock price remains high. That’s what it’s really all about.
#3 My dad went to work for General Electric transformer division in 1972. About two years later in bad economic times GE asked the workers what it should do: lay off 25% of work force at that plant or reduce everyone’s hours to 30-32 hrs a week. The old timers wouldn’t give up that 40 hr paycheck and my dad bounced in and out of work there for several years before finally gathering enough seniority.
He never held it against the union (I think it was either IUE or IBEW) but I would read their propaganda newspaper about how the workers had to hang together as one, speak with one voice, etc. To this day it still makes me angry and taught me never to trust unions.
Cap’n: For GE it would be IBEW. My father worked for them for years. He also pushed for COLA increases rather than a straight ‘raise’, noting ‘when has the Cost of Living ever gone DOWN?’
J/P=?
Typical BA stuff, they have pretty terrible employee relations.
The exec in question gets a basic salary of £743,000.
Some cabin crew work for a basic salary of £11,000.
So BA- when you are back in profit and making lots of money, will you start offering employees extra money in return ?
I’m thinking about my safety. I wouldn’t fly on any plane were the staff aren’t getting paid.
Ask British Airways shareholders to go without a dividend check for one month.
It never ceases to amaze me the number of people that only read the headline. Read the effen article people!!! You might learn something.
Even still, the resident trolls, such as Cow-Patty and ‘dro will continue with their trolling, BUT, there is no excuse for the rest of the people.
HINT, BA currently pays as much as twice the salaries that competing airlines pay. The shareholders aren’t being paid. etc.
As far as legalities, these are voluntary moves. If you are salaried employee hours don’t count, it’s getting the job done, which may take 80 hours a week. For some this may be doable, but those living on the edge would be in deep crap. I guess you could ask the mortgage lenders and other creditors to skip a payment. I seriously doubt that could be arranged. What’s the choice, picking up your card and going on the the dole?
http://uk.finance.yahoo.com/q?s=BAY.L
British Airways shareholders are doing VERY well, currently at 132.50 down a mere -4.10 with a dividend and yield of 3.66% which is better than most banks these day.
They can sacrifice a bit too to save their own greedy arses.
Also, it appears that the 132.50 is in UK POUNDS STERLING at the Yahoo stock quote site.
In US DOLLARS that would be $215.91/share. Yeah, I’d say shareholders are doing VERY WELL. Let them sacrifice too if they’re really interested in saving the company. But they won’t, they’ll milk the company until it’s dead and then blame the workers. Same pattern over and over.
Hmmmmm, take a 8.33% pay-cut to help others at BA and you will never get it back, but management CERTAINLY will from your generosity.
8.33% pay cut? Okay, then 20 non-paid days off through the year, in addition to paid vacation days. “Oh, you want us to WORK for the 8.33% less? Uh, no.”
#27, Miss X2B,
So what is your point? Over the past month the shares have fallen from 168 P to 133 currently, in a steady decline.
There was nothing at your link saying the shareholders were getting dividends. My understanding is they are not.
#30, Mr. Fusion. Look again, it’s there. The steady decline could be caused by anything, and no doubt asking employees to work for free is not going to stop that decline in fact, it might accelerate it.
#5, lol, what a piece you’ve got there.
Wealth is invented? No, wealth is created through production. This wealth can then be used to consume and support further production.
The market is fair? Who says that? The market attempts to achieve allocative efficiency. Fairness in the allocation result has nothing to do with it.