Quoting PHXFlyer16 (Reply 98): 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.

Forgive the sarcasm, but no airline worldwide, even the Gulf carrers, could compete with my slave-staffed airline based in Somalia.

Quoting PHXFlyer16 (Reply 97): 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.

And massive amounts of unneeded military spending.

[Edited 2013-03-29 12:03:19]

Quoting L410Turbolet (Reply 99):

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

Oh Lord... Leave the EU and live on an island right in the middle of Europe? Smart move.  
Leaving the EU would hit your economy pretty bad, that is for sure.

We are a slighly off topic, don't you think so?

Quoting L410Turbolet (Reply 99): 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.

Read a bit more on history, my friend : France has paid back, to the last cent the loans from the Marshall plan. It was a matter of pride for De Gaulle who didn't want to owe any debt to anybody.
General Marshall was a great man and a visionaire but we aren't gullible enough to believe that our American friends did it for philanthropic reasons only : An affluent European economy was the greatest protection against any soviet ... *transgression*... plus a convenient outlet for commerce.

Quoting L410Turbolet (Reply 99): the French in particular spent the entire Cold War actively sabotaging NATO

I'd be really grateful for references on that subject, because I really don't know what you're talking about.

Quoting L410Turbolet (Reply 99): liberated by the Yanks, the Brits, the Canadians and even the bloody Poles).

Tss Tss Tss, you are being unfair to the Australians, the New-Zelanders, the Indians, the Senegalese, the Malians, the Moroccans, the Algerians and Tunisians, the Chadians, the Nepalese Gurkhas ... every year, the flags of these countries are displayed in my big prioral gothic Church... and the bells toll.
You won't teach us remembrance of past debts, I'm afraid.

Quoting douglasyxz (Reply 101): Oh Lord... Leave the EU and live on an island right in the middle of Europe? Smart move.

Works very well for Switzerland thank you very much. Growth rates much higher than in the EU, unemployment much lower, very low public debt, many recent years with budget surplus, top ranks in innovation and competitiveness, a first class social + health + school system despite reasonable tax rates. I don't know a lot about Norway but they seem to be doing quite OK as well (difference being that the Swiss do not have any commodity boom).

Just saying.

Quoting Pihero (Reply 102): I'd be really grateful for references on that subject, because I really don't know what you're talking about.

I think what he has in mind is France leaving the joint military command of NATO in 1966 under Charles de Gaulle and only joining it again under Sarkozy in 2009.

I won't be part of any debate whether this is "sabotage" of NATO or smart geopolitics or whatever else, just trying to second guess which facts of history could have been alluded to by the poster.

Quoting mozart (Reply 103): I think what he has in mind is France leaving the joint military command of NATO in 1966 under Charles de Gaulle and only joining it again under Sarkozy in 2009.

A myopic view with blinkers... Just what I thought.

Quoting mozart (Reply 103): I won't be part of any debate whether this is "sabotage" of NATO or smart geopolitics or whatever else, just trying to second guess which facts of history could have been alluded to by the poster.

Non. Vaut mieux pas. (better not )
Regards.

Quoting Pihero (Reply 104): A myopic view with blinkers... Just what I thought.

Again, not my view (the topic is far more complex and off topic), just second guessing. I hope the poster comes back and clarifies whether this is what he had in mind.

The whole thread should be more focussed on HOW she sent the message..
Maybe she is right, maybe she is not.
But she decided to use a quite unintegrating wording.

Quoting Aviaco (Reply 106): Maybe she is right, maybe she is not. But she decided to use a quite unintegrating wording.

Exactly.

I personally find that she was unnecessarily aggressive and conflictual. So are some of the union leaders (Bsirske is quite a warrior himself), but that doesn't justify her choice of tone.

Sure, Lufthansa needs to reduce personnel cost, but is it really necessary to make the employees your enemies?

Quoting PHXFlyer16 (Reply 97): . So now the EU has set the precedent that bank accounts can be raided by the government to cover debts.

I amalways amazed at the type of sweeping statement that is the normal reporting ways of US journalists.
Far from raiding the banks, the Cyprus government is bailing the banks out, on the deposits that are, to say the least, unclear. See a more objective report from the Brits no one can accuse of excessive love for the EU :

http://www.bbc.co.uk/news/business-21922110

Quoting PHXFlyer16 (Reply 97): 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.

You can't compare both continents, even if you reject the blame on a European model : 15% of the US population is under the poverty threshold... that's 46.2 million people. ... 15.7 % have no medical coverage... That's 48.6 million people
As a comparison, France poors are 7.1% of the population and everybody has access to medical care.

Reference : http://www.census.gov/prod/2012pubs/p60-243.pdf

Quoting PHXFlyer16 (Reply 97): 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.

Yes, you're right : not a very good idea.
And no, you're wrong, the EU can print money, too but has refrained from doing so.

Quoting Pihero (Reply 108): I amalways amazed at the type of sweeping statement that is the normal reporting ways of US journalists. Far from raiding the banks, the Cyprus government is bailing the banks out, on the deposits that are, to say the least, unclear. See a more objective report from the Brits no one can accuse of excessive love for the EU :

What are you talking about? The article clearly states "At both banks, deposits above 100,000 euros will be used by the government to contribute billions towards the bailout." This was requested by the EU. So now, not only do they tax, but they seize assets that have already been taxed.

Quoting Pihero (Reply 108): You can't compare both continents, even if you reject the blame on a European model : 15% of the US population is under the poverty threshold... that's 46.2 million people. ... 15.7 % have no medical coverage... That's 48.6 million people As a comparison, France poors are 7.1% of the population and everybody has access to medical care.

And your point? We are talking about the economic environments in Europe and the US. So EU countries tax the crap out of everyone to provide benefits that are not sustainable long-term. So does the US, just not to the same extent.

Our nation was founded on hard work and people who came to America to earn their own way. They didn't want or need handouts from the government. If someone doesn't want to work, or educate themselves so that they can find a job then that is their issue. It is not my responsibility or the responsibility of the government to pay for lazy people. Want medical coverage? Get a job. There are programs for the elderly and disabled.

Quoting Pihero (Reply 108): Yes, you're right : not a very good idea. And no, you're wrong, the EU can print money, too but has refrained from doing so.

My mistake. I meant that individual countries within the EU cannot print currency so nations like Cyprus are at the mercy of the EU's demands to raid bank accounts.

Quoting Aviaco (Reply 106): The whole thread should be more focussed on HOW she sent the message.. Maybe she is right, maybe she is not. But she decided to use a quite unintegrating wording.

What does it matter? We are going to focus a whole thread on HOW someone delivered a message? Who cares! She did it. I think it is right and fair to focus on WHY she delivered the message. The economic realities are WHY she delivered the message and are much more worthy of discussion than asking of someone delivered a message too harshly. We can wrap that up in two seconds! Was it harsh? Maybe. But who really cares? What is the driver? Why is she saying what she's saying. That is just as worthy of discussion.

[Edited 2013-03-29 15:50:43]

Quoting mozart (Reply 103):

I do know very well Switzerland is in good shape. But they have always been independent and neutral.
I was referring to Czech, currently member of EU and the quote of an A.netter to LEAVE the Titanic.

The statement of Mrs. Menne is not wrong from LH's point of view. The company must become more efficient, there is no doubt about. The timing and the way she said it will probably not help in the negotiations. One has to bear in mind that there is more trouble ahead when LH staff and aircraft will be transferred to 4U. Then we have two levels of payment inside one company with even one more reason for a union to start fighting LH.

What worries me most is the fact that LH had though about the BA solution to give up the European connections before they decided to use 4U.

Quoting PHXFlyer16 (Reply 109): Our nation was founded on hard work and people who came to America to earn their own way. They didn't want or need handouts from the government. If someone doesn't want to work, or educate themselves so that they can find a job then that is their issue. It is not my responsibility or the responsibility of the government to pay for lazy people. Want medical coverage? Get a job. There are programs for the elderly and disabled.

After this post,, what I can say is let's agree to disagree. We've already taken too much bandwidth.
As for the "bail out ", it's about saving the bank (s), i.e; protecting the ^people who would be hit the hardest by a bank default. That has now been avoided, and honestly, I don't give a damn about Russian deposits - at the origin of the debacle when Greek assets were lost.

Quoting PHXFlyer16 (Reply 109):

What you don't understand is that there is a different culture of communication in the US, Europe, China, Japan...
You cannot just transfer your hire and fire behavior to the rest of the world and assume you are the only one who knows the right way.

What's happening in Cyprus is that EU is about to prevent the entire country from falling into bankruptcy. And the request that Cyprus citicens do contribute to that help. It was not the EU that led to this situation, it was the Cyprus government and their financial economy.

I fully agree with you, Pihero.

[Edited 2013-03-29 16:31:57]

[Edited 2013-03-29 16:33:03]

Quoting PHXFlyer16 (Reply 109): We are going to focus a whole thread on HOW someone delivered a message? Who cares!

Different parts of the world have different mentalities and sensitivities. In the US people seem to be much less sensitive how things are said. The fact that in the US many people haven't got more than a rudimentary mastering of the English language goes hand in hand with that (extremely reduced vocabulary, simplistic syntax and grammar, all direct speech, plenty of unnecessary filler words), as goes the fact that it is much more common for leaders to use language which comes across as "muscular" and "sleeves rolls up". In Germany such language comes across as offensive, and in France it comes across as both offensive and vulgar. The Americans might think that the French are all softies, but the French tend to think that Americans are uneducated and simple-minded.

Furthermore, Germany is a country where employers and employees typically are not confrontative. There are some spats around the time contracts get negotiated, but other than that they actually collaborate very well. There are many reasons for that, some cultural, some are rooted in how careers typically develop and how the labour market works. In such a context confrontational language like the one used by the CFO of Lufthansa stands out.

Of course these are gross generalizations, I only make them to illustrate the point why HOW this type of message is delivered matters much more in a European context than it would in the US. That's life, get used to it.

I think you can sum up European mentality towards money this way:

Pay Cut Requested By VW CEO

http://blog.checkeredflag.com/my_web...02/pay-cut-requested-by-vw-ceo.htm

The German media reported it in much more detail. The CEO basically said he makes more than enough money and asked for less. Europeans are simply much less obsessed with money than Americans are.

I've lived in Germany for 10 years and now in the US. I think I am qualified to draw a comparison.

That's why you'll often get Americans thinking they have it better with lower taxation and that the more personal wealth = more happiness. And you'll often get Europeans thinking they have it better with more vacation, infrastructure, education, health care etc....and where high personal wealth is not impressive at beast and obscene at worst.

Two world views. To each his own.

I hope the two latest posts on this thread will help forumers understand each other across an ocean better.
Thank you both, Mozart and Tommytoyz.

Quoting tommytoyz (Reply 114):

Very true. Although it is worthwhile noting that there are huge differences between European countries.

I made that experience recently when I was invited to speak at a conference in France and a recent Swiss popular vote about executive pay was brought up. I was asked to explain why the Swiss who tend to be economically liberal had - as the panel chair put it - "voted to cap the salaries of big bosses". It took a long time to explain to (the French part of) the audience that the vote was not about capping salaries and that extremely high compensation packages were still going to be happening in the future. What was voted was that shareholders have a say in executive compensation instead of just the board, in order to prevent boards packed with friends of management to do them a favour so that those managers who are on other boards return the favour. Also the vote wants to prevent that executives get big compensation packages when the company isn't doing well, or simply for accepting employment or as a golden parachute. The vote was an expression of Swiss mentality that there is nothing wrong with having or earning lots of money as long *as it is deserved*. In Switzerland, "justice" means that you get what you truly earn, not what some buddy on the board hands you as a personal favour. It is that Swiss notion of justice that was meant to be put in place.

The French had difficulties understanding this and many were disappointed because they had hoped that another country was going to serve as an example for capping executive pay. in France the culture is much more one where "justice" is comparing how much one has versus someone else. People get all excited about an executive making x times more than a clerk, and people get all excited about executives making large sums of money. Large sums of money are obscene in their own right, hardly is a look taken of whether the compensated is deserved or not. Therefore there also is a lot of talk of capping the highest compensation as a multiple of the lowest wage, with all being regulated by law. The idea of shareholders - who often are seen as evil capitalists exploiting poor workers - deciding how much they pay management and possibly approving big pay checks is unthinkable. Here "justice" is not as much merit driven but more jealousy driven, it is not "pay what you deserve" but "a certain amount of money is too much for you and why do you get more than someone else".

There is a similar movement in Switzerland where the Socialist Party wants to put in place legislation that the highest compensation cannot be more than 12 times the lowest, similar to what many people in France call for. It is however almost 100% certain that such a proposition will not be adopted by voters in Switzerland (in France they don't even get asked). Switzerland is fixing what economists call the "principal-agent-problem", France is trying to solve a moral problem.

There is obviously a lot more in the background in terms of culture, history (having the French revolution or the Swiss urge for freedom in your DNA changes quite a number of things), how labour relations have developed over time, how careers develop, how people get trained, etc.

Lastly an interesting anecdote from Germany: there a couple of weeks ago the union leader at Volkswagen *defended* the high salary of the CEO and said he wouldn't have any problem for him to even take his full compensation pack. He said "I prefer paying EUR 16 million to the CEO of Volkswagen who generates several billions of profits and secures our jobs in the long run than to pay just a tenth of that to the CEO of Peugeot who generates losses and threatens the long terms prospects of the company and its employees". That statement shows that usually there usually isn't a big divide between employers and employees in Germany. Both sides understand that they need each other and that they need to get on with each other. Obviously there are often differences, even substantial ones, but it's rarely "us versus them".

Which is why the statement and tone by Lufthansa's CFO raise eyebrows for its divisive and confrontational nature. To many people in the US who are used and like jingoism and confrontational "straight talk" this may seem "soft". But that is because they omit to recognize that there are people and entire countries in Europe who are absolutely pro-business and pro-freedom and anti-big government, whilst nevertheless espousing a model of collective collaboration and collective responsibility. France may be more towards one end of the spectrum and - rightly or wrongly - is used as the example where a certain business model goes wrong. But Germany and even more so Switzerland are examples of countries where a variant of the European model actually works (and I am sure that there are other countries, except that I do not have as much insight/own experience/own cultural background as in these three).

Therefore: yes, Lufthansa needs to transform and lower personnel costs. But a statement like the one by Ms. Menne is foolish, unnecessary and in the end counterproductive.

Quoting Aviaco (Reply 106): The whole thread should be more focussed on HOW she sent the message.. Maybe she is right, maybe she is not. But she decided to use a quite unintegrating wording.

That is not surprising considering the aggressive approach VERDI has taken in recent conflicts. And we know that VERDI is usually tamer than the pilots and FA unions.

The statement is a product of her frustration with the Unions continuing to want more and more. She was trying to make it crystal clear that it won't be tolerated. That strikes will not get workers what they want.

If you give a mouse a cookie...

Hi all!!!

IMO Ms. Menne should just take her broom and fly off to someplace for inappropriate behavior.

Problem at hand is that, most of the LH employees on the grond ahve had at least 10-15-20 if not more years with the company. They have taken concession after concession, and have made the company what it is today. Ms. "High-and-Mighty" should take a course in human rescources/public relations.

Yes it is a company, and yes they have to make cash--why does everyone feel the easiest way is to cut the personel costs where lots of other costs could be cut???

Does LH really need all those new aircraft---if most of the fleet is now paid for???
Does LH really need all those comfort offices and FENG-SHUI gardens in their FRA offices?
Does LH really need to destroy company identity and cohesion?
.......And if she succeeds, she gets the BIG bonus??

In a theoretical world it works, in real life, it is just bogus crap.

I could be nasty now and tell you what you could do with the broom stick, but I don't do that.

On your three questions

yes
yes
yes

and they explore all the other means and ways where costs can be cut. From what can be heard, the score is better than expected.

Read what Mozart and others wrote about corporate culture and how "big boni" are looked at in Europe.

People are doing their job and what Ms. Menne does ain't easy, as one can see from your post.And again, no one is forced to work for a specific company. FRA has a high employment rate and the number of unemploed is small. That goes for most major airport cities in germany.

Quoting chootie (Reply 119):

There are peope that have seen the structure of their compesnation changed over the past 15 years, true. In the past the company could do exteremely well and they would not see any benefit of that although it was their work and their effort which also contributed to that success. Therefore employee benefit schemes were introduced. Or do you think shareholders should be the only ones benefiting from exceptionally good years? I'd be surprised to hear you say that.

Changes in compensation structure has allowed Lufthansa to be successful and arguably among the most sucessful airlines in Europe in the past 8-10 years. This success secured the jobs of those people that were there. And what is more it has also created thousands of additional jobs, at LH and at suppliers and contractors. What is it that you don't like about employment?

Why you think that personnel costs are the only ones being reduced is a mystery to me, maybe you are simply misinformed. Many operational changes are happening, the network is being restructured, drastic cuts are being made on the passenger front (just ask any of the top tier members of Miles & More, they will tell you that being a HON Circle or Senator card holder is today much devalued compared to many years ago), and lastly you forget the biggest effort of them all: shifting non-hub short haul flying to Germanwings. The company is making HUGE efforts to modernize itself and transform itself to be ready for the next decade, it is taking some very substantial strategic risks in doing so (shifting pax to Germanwings bears a huge risk) - so there is much more than only cutting personnel cost. On top of that shareholders have to contribute as well: they do not receive any dividend, instead the capital is used to fund that transformation and also the integration of new, more cost efficient planes into the fleet.

Sorry to say but I do find your point of view extremely narrow. I do recognize that many people at Lufthansa make sacrifices and huge efforts. But that whining about them being the only ones, that fantasy about them "deserving" more salary (what for?) and always jealously looking at how much managers get is unhelpful and actually quite sick.

Quoting mozart (Reply 116): the union leader at Volkswagen *defended* the high salary of the CEO and said he wouldn't have any problem for him to even take his full compensation pack. He said "I prefer paying EUR 16 million to the CEO of Volkswagen who generates several billions of profits and secures our jobs in the long run than to pay just a tenth of that to the CEO of Peugeot who generates losses and threatens the long terms prospects of the company and its employees

The logic and smart thinking in this attitude should be widely informed among the unión leaders of several countries around the world, including mine.

LH must adapt to the new reality or face serious degradation of their position in Europe. If the unions fail to see this, the further degradation of the company could take the discussion about wages to a discussion about lay offs, ala IB, and I guess that is the worst case scenario for them.

Just curious, no one from the LH unions commented anything about the words of Mss. Menne ?

Rgds.
G.

Some points:

1) LH is not asking employees to take a pay cut or accept working conditions like the ME3.

2) The employees are asking for a pay raise that is substantially above inflation.

3) LH has high costs not just because of its employees. It has an older fleet. It has a diverse fleet. It has several brands to maintain and several hubs. And its hubs have limitations.

4) LH faces rapidly growing threats, from U2 and FR in Europe to the ME3 on long haul and TK within Star Alliance.