American Airlines finally plummeted into bankruptcy last week, eight years after workers’ wage concessions seemed to have helped parent AMR plot a route out of disaster. Managers hadn’t wrung enough from the workforce in 2003, some claimed. The staff hadn’t pulled their weight since, said others. Many concurred that the “discipline” of bankruptcy would have been good for American.
Even taking into account the virtues of the US bankruptcy regime and the poor record of aviation industrial relations, this is a counsel of despair. Managers should not simply reach for the “reset” button as soon as trouble hits.
But, as the AMR tale illustrates, it is hard to persuade people to make sacrifices and even harder to judge whether those sacrifices will be sufficient. How can employers – and governments – convince people to give up benefits, wages and jobs in their collective self-interest?