Quoting mozart (Reply 48): Of all the DAX30 companies in Germany Lufthansa is the only one where there often is a split board between employees and "capital" and the Chairman needs to use his double vote.

That's interesting, would you be able to provide some background information?

Quoting RyanairGuru (Reply 20): BUT the economic maelstrom was caused - almost exclusively - by their poorly leveraged banks. It had nothing to do with an "entitlement culture".

Lets not put the cart in front of the ox here. The banks became poorly leveraged because they were used to finance the "entitlement cuture". Sorry for drifting.

Quoting PanHAM (Reply 44): Right now LH offers zero and 1 hour addtional work. The union same work hours and a lunatic 5,2% If they meet at 3% and 3 hours additonal work per week it is a good compromise.

5,2% lunatic? That is a very low demand. In Europe so much money has been thrown down the throats of banks and capitalists, It is time that workers see more money.

Quoting Gonzalo (Thread starter):

Quoting seahawk (Reply 52): 5,2% lunatic? That is a very low demand. In Europe so much money has been thrown down the throats of banks and capitalists, It is time that workers see more money.

it is about LH, not banks. The -what you call "capitalists"- get nothing, I said that before. The conditions under which LH is working has been mentioned as well. The employees (I prefer that term over "workers") should be interested to work for a company that has a sustainable business plan and a firm grip on its costs.

[Edited 2013-03-27 06:09:03]

[Edited 2013-03-27 06:40:29]

Quoting PHXFlyer16 (Reply 3): I feel for them. Unions are strangling these airlines and Europe in general with their entitlement attitudes and it continues to catch on in the US. And people wonder why the Middle East carriers are crushing everyone else.

I guess you have no clue what the low cost carriers are doing to the employees then and they are pulling the entire industry in that direction. Pilot salary of 1000 EUR a month during line training, and 90 hours flying time every month. You do get 1 month of self sponsored annual leave though.

The unions are fighting to give the employees some dignity and fighting for a pilot salary that is higher than that of a bus driver. I wish all airline employees would organize themselves in unions but people are afraid to lose their jobs.

[Edited 2013-03-27 06:19:06]

Quoting seahawk (Reply 52): 5,2% lunatic? That is a very low demand.

In this economy, I think it sadly is lunatic...

Quoting AirPacific747 (Reply 54): The unions are fighting to give the employees some dignity and fighting for a pilot salary that is higher than that of a bus driver. I wish all airline employees would organize themselves in unions but people are afraid to lose their jobs.

That's fine, but then don't join an industry with realities like these if you are interested in making a lot of money. If those are market rates, then you can't fight them, if you do, you will eventually find your airline out of business and ALL of your employees out of a job.

I respect airline employees, however, like teachers they just do earn a lot. They do what they do because they love it. If it's not enough money then people need to re-educate themselves and find a new career. It's pretty simple economics that for some reason Europe keeps trying to fight. The problem is they can continue to fight it all they want, but the rest of the world will not follow suit and the airlines will only become less and less competitive vs. their Asian, Middle Eastern and American counterparts.

Quoting PHXFlyer16 (Reply 56): It's pretty simple economics that for some reason Europe keeps trying to fight. The problem is they can continue to fight it all they want, but the rest of the world will not follow suit and the airlines will only become less and less competitive vs.

The disease is called "ideology". No company, no country can be run efficiently by an ideology unless they call themselves "church" and are tax exempt.

A well run business works hard to meet the parameters which are set by industry standards, by the financing needs etc. and most of all, the market. The market is unforgivable for mistakes.

The LH board is simply doing their job and I still hope that they find a solution in negotiations. Which could be more work against a bit more pay and job security.

Quoting aloges (Reply 2):

I can appreciate the perspective of an employee. But surely you understand that LH has to be competitive. It faces huge threats all around. The ME3+TK will eat a lot of LH's long-haul traffic. And Easyjet, Norwegian and Ryanair are doing the same at home. How in this reality is LH supposed to compete?

If LH doesn't get their costs down, in the long run, they are finished.

Quoting AirPacific747 (Reply 54): The unions are fighting to give the employees some dignity and fighting for a pilot salary that is higher than that of a bus driver

Oh for chrissakes--LH pilots are well compensated by any measure. Half of Europe is being bailed out left and right, and LH pilots are easily in the top 5-10% of wage earners in the EU. I'm not saying they don't deserve more, or less for that matter, but LH pilots have dignity in spades compared to everyone else, especially bus drivers.

Quoting seahawk (Reply 52): 5,2% lunatic? That is a very low demand.

Perhaps it's a low demand, but when you're making cents on the dollar in the best of times, a 5% increase in costs is a game changer. Or they could be at AB where a 5% increase in costs would just increase the velocity of money flying out the door.

Quoting CaptainCrackers (Reply 41): But I bet Menne wasn't hired at a much, much lower fixed rate like all those cabin staff were, to take one example.

The qualifications for a CFO are much higher than cabin staff, which at least in the US are a GED and a few weeks of company sponsored training. Of course she is paid more.

Quoting PanHAM (Reply 57): The LH board is simply doing their job and I still hope that they find a solution in negotiations. Which could be more work against a bit more pay and job security.

   and this is not the end, and it's likely to only get much uglier in EU aviation.

Quoting aloges (Reply 9): Bearing in mind that LH management has, over the years, spent (or even wasted) millions upon millions on BMI et al while ignoring several key product trends, I can definitely understand a certain dissatisfaction among the workforce.

LH management is widely regarded as the best management team in Aviation, so I don't know what you're talking about. Certainly everyone makes mistakes occasionally, which BMI could probably be classified as, but overall the Management team has been excellent.

Quoting futureualpilot (Reply 29): I don't know too much about LH and their policies but if a labor group is willing to strike I can only assume what is being asked of them is unfair.

I agree with what I think you're saying here, but with one caveat, I would say "I can only assume THAT THEY THINK what is being asked of them is unfair." Because what is fair is always in the eye of the beholder.

Quoting futureualpilot (Reply 29): Agreed. Nor is their accountability at the upper managerial level.

Broadly speaking there are mechanisms to hold upper management accountable, Shareholder votes. Unions could easily buy up a block of shares and start a proxy war to get rid of certain individuals. Many institutional investors would probably get on board in order to prevent labor unrest. Might not get them a raise per say, but could get them someone more sympathetic to labor at the top.

If LH's board caves, I daresay, there'll be little reason for anybody to invest in LH. As it is, airlines offer such poor returns. And then you have labour woes that eat margins on top of it....

Quoting PHXFlyer16 (Reply 56): That's fine, but then don't join an industry with realities like these if you are interested in making a lot of money. If those are market rates, then you can't fight them, if you do, you will eventually find your airline out of business and ALL of your employees out of a job.

Once one airline starts cutting down costs somewhere, all the others have to follow suit. So don't join this business you say. Next time it will be some other business.

Quoting MaverickM11 (Reply 59): Oh for chrissakes--LH pilots are well compensated by any measure. Half of Europe is being bailed out left and right, and LH pilots are easily in the top 5-10% of wage earners in the EU. I'm not saying they don't deserve more, or less for that matter, but LH pilots have dignity in spades compared to everyone else, especially bus drivers.

Yes they are well compensated, but this cost cutting exercise won't be the last and it'll only get worse over time if this spiral continues.

Quoting AirPacific747 (Reply 62): Yes they are well compensated, but this cost cutting exercise won't be the last and it'll only get worse over time if this spiral continues.

I could be wrong, but I don't see any spiral here. Are this percentages of 5.2 % (or similar) realistic with the current inflation rate and GDP growth in Germany ? I know the economics are not so simple, but if you have a 1,5 % of inflation rate / year, and an economic growth of 0,7 %, you can't ask for wages increasing a 5 %.... or you can, but the answer will be a slap in the face most probably.... Add to this the scenario of countries being bailed out all over your neighborhood, and the things will look even worse.

Rgds.
G.

Quoting AirPacific747 (Reply 62): Once one airline starts cutting down costs somewhere, all the others have to follow suit.

Quoting AirPacific747 (Reply 62): Yes they are well compensated, but this cost cutting exercise won't be the last and it'll only get worse over time if this spiral continues.

Welcome to the global economy.

If the best argument that you have against cost-cutting is an argument against globalization, then I fear for LH, Germany and Europe. The rest of the world, isn't going to stop its relentless drive for efficiency and lower cost just because LH's employees don't want to participate.

If LH doesn't cut costs, FR, DY and U2 will eat their market at home and the Gulf 3+Tk will eat their long-haul market. Are you prepared to accept a substantially smaller LH with fewer employees? Because that will be the reality if LH can't cut costs to compete with the rest.

Quoting Gonzalo (Reply 63):

Good point. There may not be a problem in is exact case.

Quoting YTZ (Reply 64): If the best argument that you have against cost-cutting is an argument against globalization, then I fear for LH, Germany and Europe. The rest of the world, isn't going to stop its relentless drive for efficiency and lower cost just because LH's employees don't want to participate.

Efficiency to an extent where you think the above mentioned working conditions are acceptable in the Western world? It may be possible but is it acceptable?

I hope you'll get to experience the effect of globalization on your job when your wage is cut down to next to nothing and see what you think of that. The only reason why this is possible in aviation is because most pilots are not members of a union.

And I'm not saying pilots should be treated as they are in Lufthansa, but generally a higher minimum standard should be implemented.

[Edited 2013-03-27 09:42:25]

Quoting YTZ (Reply 58): I can appreciate the perspective of an employee.

I am not an LH employee, but self-employed (as a side job apart from university) and my kind of business depends on reliabilty and punctuality like few others.

Quoting RDH3E (Reply 60): LH management is widely regarded as the best management team in Aviation, so I don't know what you're talking about.

They like to save in wrong places, or too many places. There's a difference between smart economy and stinginess; if I may paraphrase the words of a gate agent at an unnamed German airport: "Ladies and gentlemen, if you have not already done so, please get a gate check tag for your large carry-on item!" And then off the tannoy: "Get as many as you like, they're the only things that Lufthansa give away freely!" Some examples:

labour relations: They have become increasingly confrontational towards their own workforce. The employees have already made considerable concessions, yet the hammerings continue - and as hard as they work to hide it, their disappointment does show every now and then. This latest utterance from the CFO won't help that one bit; on the contrary, it furthers a dreadful "us versus them" mentality that seldom fails at damaging the companies where it prevails.

product quality: They routinely take ages to modernise their on-board products, the most recent embarrassing example being the snail-paced introduction of the new business class. Their old seat is widely regarded as more of a torture instrument than a comfortable place to be, which my personal experience supports.

alienation of frequent fliers: I know that most, if not all airlines, have devalued the FF accounts of their most loyal customers. But I know of no other airline that has actually been sued and lost over the way it has done so; only to appeal, win the case after all and then still make the T&C change required by the plaintiff. What sort of message is that supposed to send, "we'll fight you every step of the way and then do a 180 once we've exhausted you"?

loss of political goodwill: They rely on protectionism to keep the ME3 at bay, but then antagonise politicians through campaigns like "LuftverkehrsTEUER: für alle zu teuer" (silly pun aimed at the German aviation tax - it does need fighting, but not through populism) and through gestures like the recently announced closure of the corporate headquarters in Cologne. The latter might not seem like much, but Cologne is the biggest city in the most populous state of Germany - you just don't poke a city and a state in the eye like that if you need their support.

Quoting RDH3E (Reply 60): Certainly everyone makes mistakes occasionally, which BMI could probably be classified as, but overall the Management team has been excellent.

Then why are the employees dissatisfied enough to start going on strike even before talks have started? Management that doesn't realise its responsibility towards the workforce cannot be excellent.

As for BMI, you might find the name of (one of) their last CFO(s) interesting: Simone Menne.

Quoting mozart (Reply 48): And who tells you that what they are asking for is "fair treatment and just compensation for their time and effort"? Is Lufthansa's level of compensation and organization of work "fair and just"? Or easyjet's?

I already admitted I don't know the entirety of the LH situation, however if the LH labor feels what is being asked is unjust there is validity to their argument.

Quoting mozart (Reply 48): Whilst I am all for unions and against simplistic statements of the "unions are working against the company's success" kind I find the kind of simplistic statements where employees are the victims just as "unconvincing".

I never said they are victims but they are being asked to give up something they clearly feel is worth fighting for.

Quoting mozart (Reply 48): Those are the rules of the game. If you don't like them, don't join aviation. It's not even new rules that have come upon them once they started their job. These rules have been around always.

Yes, because those rules are around it is even more important to protect what you do have to ensure your own long term success.

Quoting mozart (Reply 48):

Because what is fair is always in the eye of the beholder.[/quote]

Agreed

Quoting RDH3E (Reply 60): Broadly speaking there are mechanisms to hold upper management accountable, Shareholder votes. Unions could easily buy up a block of shares and start a proxy war to get rid of certain individuals. Many institutional investors would probably get on board in order to prevent labor unrest. Might not get them a raise per say, but could get them someone more sympathetic to labor at the top.

Management is "held accountable" but not held accountable. Golden parachutes, ease of sliding into high profile jobs elsewhere, and lack of true consequences for pillaging labor groups doesn't scream accountability.

Quoting mozart (Reply 48): You are joking, right? Fair enough to have a pro-Union point of view, but accusing Lufthansa or other companies not to abide by the contracts that have been signed is quite a substantial accusation. And completely baseless. You dis-credit all your other arguments.

I never said they weren't did I? I made no such accusation, in fact what I was referring to was another post speaking about employers meeting demands. My comment was an agreement that they don't have to meet demands but they do have to meet the terms of contracts they agree to. Nothing accusing anyone of anything so quit putting words in my mouth that aren't there.

[Edited 2013-03-27 10:33:41]

Quoting YTZ (Reply 64): If LH doesn't cut costs, FR, DY and U2 will eat their market at home and the Gulf 3+Tk will eat their long-haul market. Are you prepared to accept a substantially smaller LH with fewer employees? Because that will be the reality if LH can't cut costs to compete with the rest.

One thing related, at least competition wise, is the fact that the main hub of LH, FRA, is limited by a curfew in the operation hours, a problem that no one of the 3ME and TK have in their home base. LH must adequate to the times ahead or face a gradual deterioration of the financial situation. That being said, I think that the statements of S. Menne are, at least, unfortunate.

Rgds.
G.

Quoting AirPacific747 (Reply 65): Efficiency to an extent where you think the above mentioned working conditions are acceptable in the Western world? It may be possible but is it acceptable?

Entirely acceptable. Okay I'm being slightly facetious. I don't agree with some of sexual harassment stuff at the ME3. But that's a function of the chauvinistic mentality of that part of the world than a reflection on the management of the airline.

Indeed, the ME3 seem to have no issues recruiting workers (many of them European too). If they are such bad places to work, why are people flocking to EK/EY/QR to work while workers at LH contemplate strikes?

So I certainly think what LH is asking is acceptable. Ultimately, the question is an existential one. Can LH survive if it doesn't cut costs? You are only looking at what it might cost you. Now imagine LH eventually goes bankrupt. Are you willing to risk that possibility so that you can enjoy your working conditions for a few more years?

Quoting YTZ (Reply 69): So I certainly think what LH is asking is acceptable. Ultimately, the question is an existential one. Can LH survive if it doesn't cut costs? You are only looking at what it might cost you. Now imagine LH eventually goes bankrupt. Are you willing to risk that possibility so that you can enjoy your working conditions for a few more years?

  

Quoting seahawk (Reply 52): 5,2% lunatic? That is a very low demand. In Europe so much money has been thrown down the throats of banks and capitalists, It is time that workers see more money.

5.2% pay rise - but what for? To reward them for more work? No, they don't work more. To compensate for higher cost of living? No, inflation is much much lower then that.

So what grounds are there for a 5.2% pay rise? Or do you believe pay rises should be given without any justification? Do you believe that one should not *earn* one's wage?

Quoting aloges (Reply 66): Then why are the employees dissatisfied enough to start going on strike even before talks have started?

Union tactics. You know their leader. "Smart" guy in a way. Just as the Lufthansa CFO shows her muscles with statements like the one quoted the unions show muscles by warning that they'll go on strike. I believe both are wrong. It is unnecessarily conflictual.

Quoting futureualpilot (Reply 67): I already admitted I don't know the entirety of the LH situation, however if the LH labor feels what is being asked is unjust there is validity to their argument.

You are joking, aren't you? Only because someone feels that something is unjust the argument is valid?

So if they didn't say 5.2% pay rise but 30% pay rise is just - that would be valid and they should get 30%? If my buddy feels that it is unjust that he doesn't have a Rolls Royce whilst other people do - that would be valid and he should get one? If Mr. Assad feels that UN sanctions against his regime are unjust - that would be valid and they should just stop?

Completely absurd. Or a joke.

Quoting futureualpilot (Reply 67): Yes, because those rules are around it is even more important to protect what you do have to ensure your own long term success.

Right. So "long term success" means to ask for more money now and to threaten the long-term sustainability of your employment. Interesting.

Quoting aloges (Reply 50): That's interesting, would you be able to provide some background information?

Told to me by one of the board members who is also on the board of other DAX30 companies.

Quoting PanHAM (Reply 53): it is about LH, not banks. The -what you call "capitalists"- get nothing, I said that before. The conditions under which LH is working has been mentioned as well. The employees (I prefer that term over "workers") should be interested to work for a company that has a sustainable business plan and a firm grip on its costs.

All those cuts are just for the shareholders. It is time the workers get more money - much more money, not just the greedy managers and shareholders. I prefer workers, as this shows the clear class difference between the honest working people and the capitalists and managers.

Europe needs to wake up. If LH reduces the cost of labour, it just increases the pressure on airlines like Alitalie or Iberia. The European governments need to take action and regulate the aviation industrie again.

Quoting seahawk (Reply 72): All those cuts are just for the shareholders. It is time the workers get more money - much more money, not just the greedy managers and shareholders.

Hmm. So when shareholders want to increase their returns that is a terrible thing, unethical and they are greedy. But when employees want more money that is a good thing, ethical and they are not greedy. Care to explain?

Also, care to explain WHY the employees should get more money? I asked the question previously, maybe you have the answer. What is it they should get more money for? Because they work more? No, because they do not work more. Because cost of living increases? No, because the cost of living does not increase by 5.2%.

You could argue that when the whole company does well the employees should benefit as well, not just shareholders and managers. I agree. And so does Lufthansa and its unions, which is why they have put in place a scheme by which employees have a benefit-sharing scheme. So they do benefit from a healthy and successful company.

If your sole argument is that employees should get more because shareholders have more then basically your sole justification for higher wages is "jealousy". I am glad that neither Lufthansa nor Germany's social market economy work that way.

Quoting seahawk (Reply 72): I prefer workers, as this shows the clear class difference between the honest working people and the capitalists and managers.

Please take a look at the calendar. We are in the 21st century. We are no longer in the 19th century where in Europe people were exploited by industrialists who pocketed in all the benefits.

Surely we are all glad that the times of reckless exploitation of people are over. People deserve to be paid for their efforts, they deserve to be protected at their place of work, they deserve to have decent working hours and rest times and paid vacation, they have a right to education and training, and some mechanism must exist to prevent people from being pushed around as if they were screws or pens. All of this happens. And companies in Germany do recognize the value of good employees and they spend lots of money finding the best people and training them (do you know how much it costs Lufthansa to train a pilot? Hundreds of thousands of Euros, and that is before he does his first revenue flight). But all of that doesn't mean that compensation shouldn't be linked to the economics and rules of the sector people are working in. Aviation was lucky in the past because it was a small and regulated industry. Because of regulation - which basically meant exploiting passengers by making them pay very high fares whilst offering less service, less flights, less safety than today - that industry could generate levels of profitability that allowed them to pay their employees wages that were generous. Plus the workings of the industry were such that timetables and long haul technical stops resulted in longer layover times. Today the market is unregulated, competitive and technical progress has made it possible for planes not to require any stopovers with crew layovers any more. Those are the realities of the sector today. If people don't like them they should find work in another sector, but not come in and then make unrealistic and unfounded claims and drool some 19th century gibberish about "honest workers.

It actually would be worthwhile to look into a high school level economics book. It would tell you that there are several production factors at work that each need to be renumerated. Land, capital and labour. Labour is being renumerated for its efforts and expertise, capital for providing capital and for its risk taking. Once that is established a lot of the hollow "the shareholders and managers get more" becomes meaningless.

Quoting mozart (Reply 73): Please take a look at the calendar. We are in the 21st century. We are no longer in the 19th century where in Europe people were exploited by industrialists who pocketed in all the benefits. Surely we are all glad that the times of reckless exploitation of people are over. People deserve to be paid for their efforts, they deserve to be protected at their place of work, they deserve to have decent working hours and rest times and paid vacation, they have a right to education and training, and some mechanism must exist to prevent people from being pushed around as if they were screws or pens. All of this happens. And companies in Germany do recognize the value of good employees and they spend lots of money finding the best people and training them (do you know how much it costs Lufthansa to train a pilot? Hundreds of thousands of Euros, and that is before he does his first revenue flight). But all of that doesn't mean that compensation shouldn't be linked to the economics and rules of the sector people are working in. Aviation was lucky in the past because it was a small and regulated industry. Because of regulation - which basically meant exploiting passengers by making them pay very high fares whilst offering less service, less flights, less safety than today - that industry could generate levels of profitability that allowed them to pay their employees wages that were generous. Plus the workings of the industry were such that timetables and long haul technical stops resulted in longer layover times. Today the market is unregulated, competitive and technical progress has made it possible for planes not to require any stopovers with crew layovers any more. Those are the realities of the sector today. If people don't like them they should find work in another sector, but not come in and then make unrealistic and unfounded claims and drool some 19th century gibberish about "honest workers. It actually would be worthwhile to look into a high school level economics book. It would tell you that there are several production factors at work that each need to be renumerated. Land, capital and labour. Labour is being renumerated for its efforts and expertise, capital for providing capital and for its risk taking. Once that is established a lot of the hollow "the shareholders and managers get more" becomes meaningless.

Couldn't agree more !!!      

LH is not a cooperative. It is a private company. And it does have a system to share profits with the honest workers.

The ideologies that sounds so good in some books are usually crushed by reality.

Rgds.
G.

Quoting seahawk (Reply 72): All those cuts are just for the shareholders. It is time the workers get more money - much more money, not just the greedy managers and shareholders.

Quoting seahawk (Reply 72): All those cuts are just for the shareholders. It is time the workers get more money - much more money, not just the greedy managers and shareholders. I prefer workers, as this shows the clear class difference between the honest working people and the capitalists and managers.

Thanks for the compliments, I am a "greedy" shareholder and I have more than once, in the 20 or so years I am holding LH shares, got nothing, while all employees always still got paid and reduced the earnings that way. How much could i have earned wihtout those greedy employees wanting to get paid,  

mozart has given you already the right answers on your antiquated opinions, there's little to add. except may be that LH is still amongts the most desirable employers in Germany, which means 2 things, no one is forced to work for that company and the company has little problems to fill vacant jobs, should some of the exploited masses find greener pastures elsewhere, may be in some desert area?

Quoting seahawk (Reply 72): All those cuts are just for the shareholders. It is time the workers get more money - much more money, not just the greedy managers and shareholders. I prefer workers, as this shows the clear class difference between the honest working people and the capitalists and managers.

Unless I am mistaken, LH is a publicly traded company. As such, the employees are welcome to purchase stock (likely at a discount or with additional benefits) and share in the company's success that way as well. Which can be much more lucrative than a 5% pay raise.

Your argument doesn't hold water and is all about more government regulation. Where has that gotten Europe? .... so now you want event more? How is it the government's role? Unbelievable.

Quoting seahawk (Reply 72): All those cuts are just for the shareholders. It is time the workers get more money - much more money, not just the greedy managers and shareholders. I prefer workers, as this shows the clear class difference between the honest working people and the capitalists and managers.

I don't know how it works in Germany specifically, but generally here in the US the largest shareholders in major corporations are Pension funds and Insurance companies. Do you know who's money their returns go to benefit? [awkward silence].....Workers.

Also your logic doesn't follow on another point, how do you reconcile a LH "worker" who owns LH stock? Is he a disadvantaged victim or a greedy capitalist? I actually thought about buying some stock right now, but being an ADR here in the US it's a bit expensive, although since this strike talk the stock has dipped a bit   

Quoting YTZ (Reply 69): Indeed, the ME3 seem to have no issues recruiting workers (many of them European too).

Even US and DL have no issues recruiting workers--they've had 50+ applicants for every 1 FA position because guess what--it's a freakin' amazing job and benefits considering the minimum requirements, even in the US, even after multiple bankruptcies and pay cuts.

Quoting seahawk (Reply 72): It is time the workers get more money - much more money, not just the greedy managers and shareholders.

Nobody is making much money off airlines except for pilots

Quoting MaverickM11 (Reply 78): Nobody is making much money off airlines except for pilots

And the upper management. Example: Tom Horton's pretension to get $20m for leading AA into bankruptcy...

Quoting RDH3E (Reply 77): I don't know how it works in Germany specifically, but generally here in the US the largest shareholders in major corporations are Pension funds and Insurance companies. Do you know who's money their returns go to benefit? [awkward silence].....Workers.

Same here and with the company we are discussing. "Institutional investors" as they are called here, are the largest individual shareholders and when you attend an AGM, lots of "small" people who invest part of their savings into the company and other shares are what seahawk calles capitalists in his antiquated, 19th century diction.

The Lufthansa shares are name shares as by law the majority of the owners must be German nationals. A single individual owner would be outstanding. besides, what would be wrong with that anyhow.

Quoting UALWN (Reply 79): And the upper management. Example: Tom Horton's pretension to get $20m for leading AA into bankruptcy...

Yeah, one guy, which is admittedly ludicrous and the bankruptcy judge questioned. Even Arpey turned down the golden parachute.

Interesting to note that all our class warriors seem to have left the discussion.

They are either spending their long easter weekend holidays somewhere in the warmer zones of Europe and the hard core fraction attends thr easter marches.

 

There is nothing much to discuss. LH can not drop costs to a level that would match the middle eastern carriers. Even if they are able to reduce costs this around, it would mainly increase pressure on other European airliners, not on the Gulf carriers.

Quoting seahawk (Reply 84): There is nothing much to discuss. LH can not drop costs to a level that would match the middle eastern carriers. Even if they are able to reduce costs this around, it would mainly increase pressure on other European airliners, not on the Gulf carriers.

That shifts the discussion from class war to a much more sensible discussion of strategy and competition.

Whilst I do believe that the ME3 are indeed here to stay, improving competitiveness in the European context is a good thing. This is where Lufthansa is losing money.

Not sure whether you or someone else argued that it wouldn't be a good thing to lower costs because others would need to then do the same, resulting in other airlines' employees needing to make sacrifices. Let me illustrate the alternative: today Lufthansa and other legacy carriers are losing money on their European network, only easy/Ryan and a couple of niche players are making money. Do you want to suggest that Lufthansa and the legacies should not reduce costs and that they all should just keep on losing money? And then what? You do understand that they will eventually shut down, leaving the market for Ryan and easy. These two will then dictate prices, and they will increase prices. So you'll end up with many jobless people and high air fares. I cannot see any benefit in that.

I am still baffled by how some people refuse to understand that to for customers to benefit from attractive prices and a wide choice of services/products there must be several companies in the industry; having only two will lead to high prices and bad service. For those several players to be able to be around they must earn money, continiously losing money will wipe them out. Or is there something wrong with this line of argument?

Quoting mozart (Reply 82): Interesting to note that all our class warriors seem to have left the discussion.

A comment that in my opinion is uncalled for.
Not knowing the workers' situation at Lufthansa, I don't feel able to discuss union - management négociations / fights ...
What I know, though, is that painting workers with a broad brush of ** ineptitude**, **suicidal**, **out of date** appreciations is at the very least despising and/or condescending... A modicum of respect is urgently needed in this thread.

For any airline, wage control is just a way of improving results ; one way among others : productivity increase is another that's in the LH management agenda.

What amuses me is the common view of most of the posters from across the Atlantic : all is rosy and they can - and do - give lessons to these poor pinko workers of the **old Europe** a certain neo-con had described ten years ago.
As if - to take just one example - robbing UAL and USair workers of their pension fund was an act of courage and a sign of good management...   ( actually, the ceo's 4.5 million $ wasn't touched ).

Please look into your own glass house before casting stones at your neighbour's.

Quoting Pihero (Reply 86): As if - to take just one example - robbing UAL and USair workers of their pension fund was an act of courage and a sign of good management

No one is saying it's a sign of good management. It is a sign that all other options have left the building, through years of industry, government, union and management missteps. The EU is going through the exact same things the US went through about 1-2 decades ago, and whereas the US rightly or wrongly has CH11, the EU does not. So either costs needs to come down, or capacity needs to come out, either willingly or through a failure. Now are you going to tell us that an outright failure of a carrier (like MA, for example) is better than CH11 bankruptcy?

There is no chapter 11 in Germany which is good for all concerned, but if a company goes bankcrupt, the recently revised (in Germany) bankcruptcy laws focus on continuation rather than liquidation.Only if a reorgansation is without chances to return to profitability a company will cease to exist.

Now I believe that we all agree that LH is not the carrier in Europe that is most likely to cross the Jordan. There are a couple of small and bigger ones having lower numbers in the queue. Your example with MA simply draws the attention to the fact that national carriers of smaller nations are a thing of the past. They flock either under the umbrellas of big parent carriers or quit.

What LH is doing right now is nothing less than accepting the challenges of the market. The management is taking the firm through a fitness progam that will, when successfully concluded, result in a competetive carrier that can take up the challenges of the EU LCC as well as the ME3.

The biggest problem of the LH board is that "competetive" is not a household word in Germany. Our industry in total is highly competetive, otherwise we would not stand where we are. The non industrial (public) sector is not keeping up and what happened at F1 last week still keeps me speechless. Since when does one have to apologise for winning?

[Edited 2013-03-29 07:47:43]

Quoting seahawk (Reply 72):

In the same press release LH announced to buy new, fuel-efficient planes, they said they would not pay a dividend. I can't see shareholders get money while 'workers' don't do.

LH is facing a hard time not only by the ME3 but also by increasing fuel prices, low fares on European connections and so on. What happens if an airline is not able to adjust its operations to the actual demand of the market can be seen in the disappearance of Pan Am, Malev for instance, and the trouble Alitalia, LOT, SAS and others are in. There is no other way to survive as to adopt to the market. That is easy said but pretty hard executed. And that is what economy is all about: Earn more money than you spend to keep your company alive. A company must grow continuously in order to stay healthy as the over-all expenses increase kind of automatically. Once company's profit remains static for a while, then drops - that is the beginning of the end (unless you are in communist county).

I strongly disagree with your view of so-called "true workers" and managers and I believe you've never experienced a managers daily business. Not to mention the difference in working hours, nor the result if one or the other makes a wrong decision. I'm definitely NOT saying that one is more valuable than the other. Both are needed to run a business. That is true for aviation, true for car manufacturing, a hospital...

As for the 5,2%, all of us know, at the end it will be something in between 0 and 5,2. Not need here to argue the value of 5,2 being higher than inflation. Unions are an achievement of the 20th century we should be proud of. They fight for the rights of employees whereas top management fights for the companies health (yes, and for the shareholders value too).
The problem with the fight within aviation is that usually passengers are paying the price: during the strike in having difficulties to travel, after an agreement in eventually higher fares or less service.

I truly hope LH and unions will soon find a solution that is acceptable for both sides and does not lead into long-lasting strikes all-over Germany.

Quoting Pihero (Reply 86): A comment that in my opinion is uncalled for.

But founded by some substance, as objectively any observer, political scientist or economist or other, would put the following choice of language in the category of "class war":

Quoting seahawk (Reply 72): All those cuts are just for the shareholders. It is time the workers get more money - much more money, not just the greedy managers and shareholders. I prefer workers, as this shows the clear class difference between the honest working people and the capitalists and managers.

And since the poster making that statement had not come back to the discussion since some time it was a factual observation that he had left the discussion. Nothing wrong with that I believe.

Quoting Pihero (Reply 86): Not knowing the workers' situation at Lufthansa, I don't feel able to discuss union - management négociations / fights ... What I know, though, is that painting workers with a broad brush of ** ineptitude**, **suicidal**, **out of date** appreciations is at the very least despising and/or condescending... A modicum of respect is urgently needed in this thread. For any airline, wage control is just a way of improving results ; one way among others : productivity increase is another that's in the LH management agenda. What amuses me is the common view of most of the posters from across the Atlantic : all is rosy and they can - and do - give lessons to these poor pinko workers of the **old Europe** a certain neo-con had described ten years ago. As if - to take just one example - robbing UAL and USair workers of their pension fund was an act of courage and a sign of good management...   ( actually, the ceo's 4.5 million $ wasn't touched ). Please look into your own glass house before casting stones at your neighbour's.

Fully agree with all your statements, about not stereotyping workers (nor shareholders for that matter), about simplistic views of Europe from across the Atlantic that *certain* posters seem to have.

Quoting seahawk (Reply 72): It is time the workers get more money - much more money, not just the greedy managers and shareholders. I prefer workers, as this shows the clear class difference between the honest working people and the capitalists and managers.

While not sure whether I should simply laugh or shake my head in disbelief over this 19th century rhetoric taken straight from the pages of Communist Manifesto, I am quite sure this mindset is often present among union bosses and their more militant followers.

Quoting seahawk (Reply 72): The European governments need to take action and regulate the aviation industrie again.

...and people like you will be the very first complaining again... this time about flying being a privilege only for the "rich". Even more regulation (as if there was not enough of it coming from Brussels) is not the way to tackle economic reality of the 21st century, just as it is not forcing everyone to have same tax levels all over the EU, which is the tired old mantra of French socialists... regardles of their formal political affiliation.

[Edited 2013-03-29 08:27:01]

[Edited 2013-03-29 08:34:24]

Quoting Pihero (Reply 86): What amuses me is the common view of most of the posters from across the Atlantic : all is rosy and they can - and do - give lessons to these poor pinko workers of the **old Europe** a certain neo-con had described ten years ago.

All is not rosy here. What we are doing with entitlements is unsustainable. What Europe, and especially France is doing is even more unsustainable.

Quoting PHXFlyer16 (Reply 92): All is not rosy here. What we are doing with entitlements is unsustainable. What Europe, and especially France is doing is even more unsustainable.

Care to compare debts / wages / social security / Medicare... ?
I daresay the US is far closer to bankrupcy than France.
... or the EU.

[Edited 2013-03-29 10:36:35]

Quoting L410Turbolet (Reply 91): Even more regulation (as if there was not enough of it coming from Brussels) is not the way to tackle economic reality of the 21st century, just as it is not forcing everyone to have same tax levels all over the EU, which is the tired old mantra of French socialists...

When these *tired old socialists* participate in paying 150€ per year per Czech citizen, the first thing in order is say "Thank you".
Of course, you can elect to leave the EU...
Would you ?

Quoting PHXFlyer16 (Reply 76): Your argument doesn't hold water and is all about more government regulation. Where has that gotten Europe? .... so now you want event more? How is it the government's role? Unbelievable.

You mean kind of like here in the US, where the dysfunction of the financial system nearly destroyed the world economy in ’08-’09? Instead of prosecuting those who treated the world economy like a weekend trip to Vegas, we continue to enable then to make decisions for us…

Quoting seahawk (Reply 84): There is nothing much to discuss. LH can not drop costs to a level that would match the middle eastern carriers. Even if they are able to reduce costs this around, it would mainly increase pressure on other European airliners, not on the Gulf carriers.

Exactly. None of us would like it if our manger bolted in and informed us that we would have to be compensated based on what workers in other less developed regions make.

For a little hypothetical fun, let’s say I was able to start a large airline based in Somalia next month, and use slave labor to fill all positions. Now I understand that this hypothetical is extremely far-fetched – but you should be able to see the point. No airline on earth could compete with my cost advantage. People would flock to my carrier to take advantage of the great fares I could offer....

Quoting Pihero (Reply 86): What I know, though, is that painting workers with a broad brush of ** ineptitude**, **suicidal**, **out of date** appreciations is at the very least despising and/or condescending... A modicum of respect is urgently needed in this thread. For any airline, wage control is just a way of improving results ; one way among others : productivity increase is another that's in the LH management agenda. What amuses me is the common view of most of the posters from across the Atlantic : all is rosy and they can - and do - give lessons to these poor pinko workers of the **old Europe** a certain neo-con had described ten years ago. As if - to take just one example - robbing UAL and USair workers of their pension fund was an act of courage and a sign of good management... ( actually, the ceo's 4.5 million $ wasn't touched ). Please look into your own glass house before casting stones at your neighbour's.

Couldn't agree more.

Quoting Pihero (Reply 93): Care to compare debts / wages / social security / Medicare... ? I daresay the US is far closer to bankrupcy than France. ... or the EU.

Sure. Overall debt to GDP% in France is lower than the US by about 10%. However, France and Germany and also at the mercy of Greece, Italy, Portugal and Belgium. Germany can not continue to bail out the rest of Europe forever... And you just saw that in Cyprus. So now the EU has set the precedent that bank accounts can be raided by the government to cover debts.

When this precedent has been set people will keep less money in the banks. With less money in the banks business and individuals will be able to get less financing for growth, further compounding the debt crisis since tax revenue will decrease... then the EU countries will raise their taxes even higher. It's a viscous death spiral that will not end well.

The US has it's own problems with debt and programs like social security and medicare. Mainly because we adopted European-like welfare programs where there is less incentive for people to work and grow their wealth.

The difference is that the US has some flexibility. Unlike the EU, the US can print money. It's not a great idea as it causes inflation but it is a tool that can be used in moderation to support the financial needs of the country.

Let's also compare unemployment. Countries like Spain with 26% unemployment, Italy and France with 11%. Again, less revenue coming in, higher taxes, less incentive to work and earn higher wages.

Quoting Pihero (Reply 93): I daresay the US is far closer to bankrupcy than France. ... or the EU.

Lots of problems in both the US and Europe, but if you honestly believe the above statement, well... let's just say you are contributing to the problem.

Quoting AAIL86 (Reply 95): Exactly. None of us would like it if our manger bolted in and informed us that we would have to be compensated based on what workers in other less developed regions make.

Guess what? The world doesn't care! Yes we would all hate for that to happen, but you have to accept the reality of markets. You cannot artificially manipulate markets. It has never worked and it continues not to work.

So you're saying that because people don't like it and because they need to earn more than other competing airlines that LH should just pay more and continue to raise prices and lose more and more passengers to the competition.

The economy is now global. And there are some very large emerging economies. That's reality. Compete or die.

Quoting Pihero (Reply 94): When these *tired old socialists* participate in paying 150%u20AC per year per Czech citizen, the first thing in order is say "Thank you".

Now, imagine how the Americans must feel... if it wasn't for their Marshall Plan you'd be still sitting on WW2 ruins making sure you are not working too hard. They paid for the reconstruction of half of Europe from which it benefits to this day and yet the French in particular spent the entire Cold War actively sabotaging NATO (I guess it must have been out of sheer gratitude for being liberated by the Yanks, the Brits, the Canadians and even the bloody Poles).

Quoting Pihero (Reply 94): Of course, you can elect to leave the EU...

If there was a viable option how to leave the Titanic, I certainly would.

[Edited 2013-03-29 12:25:44]