Southwest Announces Layoffs Before Bargaining
An "egregious" negotiation tactic, Biden may be able to prevent 6,800 job losses
For the first time in the company’s history, Southwest Airlines is announcing involuntary furloughs. The move comes after months of lower than expected air travel due to COVID-19 and Congress’ failure to extend CARES Act funding to airlines.
The layoffs were announced through a series of Worker Adjustment and Retraining Notification (WARN) notices. These notices are filed with states where large job losses are expected to happen. According to the notices, over 6,800 employees would be affected including more than 1,200 pilots, 1,500 flight attendants, 1,110 customer service staff, and more than 2,500 ramp, cargo and other operation staff. The furloughs are expected to happen on either March 15th or April 1st. The company said that they were issuing the notices early since many states require WARN notices to be filed at least 90 days in advance. However, this also allows Southwest to use the notices as a bargaining chip with their unions and as a way to push Congress to get a relief package passed.
“Sending WARN Act notices either as a scare tactic or as an actual intent to furlough when other options available were not explored is about as sad as it gets,” said Lyn Montgomery, President of TWU Local 556.
While other airlines announced furloughs and layoffs in October when CARES Act funding ran out, Southwest has resisted. At the time they noted that the company had never been forced to furlough workers and said they had $14 Billion stocked away that would allow them to continue at the current rate for two more years.
The furlough announcement came after the company was unable to reach a deal with the unions that represent their workforce. According to the unions, Southwest was demanding a 10% pay cut across the board. The pilot’s union argued that there were more cuts that could be made before across the board wages were cut.
“Southwest Airlines has approximately $15 billion in cash on hand and is predicted to be the first airline to emerge in making money for its shareholders,” Dan Akins, airline economist and advisor to TWU Local 556, said in a statement.
TWU Local 556 said that instead of wage cuts, their members were willing to take additional voluntary leave. “Our members have raised their hands in creating cost savings in the hundreds of millions of dollars, and feedback from our members, including our survey, shows that we can meet these needs,” Montgomery, said in a statement. “Our union is fighting for every job. The fact that Southwest Airlines refuses to engage in either real bargaining or in allowing its employees to volunteer to make change is an affront to the brave women and men in the air, and it’s an egregious assault against our company culture.”
While furloughs appear to be in the future, there is also hope that they can be avoided. A new stimulus plan is being negotiated in Congress right now and President-elect Joe Biden has said that once he takes office, he will be looking at another larger plan. Air travel has also recently increased over the Thanksgiving holiday, possibly showing that Americans are more willing to travel during the holidays than they have been over the past few months. Finally, the furloughs are scheduled for mid-March, just as the vaccine is expected to start being available to the general public. While air travel won’t return to pre-COVID numbers, these could important tools that help thwart the furloughs and save thousands of good union jobs.