The airline’s 77,000 workers had better hope they do. A poor image–a new survey of fliers by J. D. Power and Associates gives the airline mediocre grades for service–is only one of the problems United’s new worker-owners will have to fix, and fast. Costs are another. The deal calls for employees to trade $5 billion in wage cuts and work-rule changes for at least 53 percent ownership, but the unions have promised their members that higher productivity won’t mean layoffs. Without strong growth in air travel, that pledge will be tough to keep. One likely tactic is the creation of U-2, a short-haul airline within the airline that would offer low fares and no-frills service. The new operation would blur job descriptions and require fewer workers per plane. That’s common practice at upstart carriers like Kiwi International, where pilots haul baggage and help clean the cabin. Whether United’s culture can embrace the new egalitarianism on some planes but not on others is anybody’s guess.
Under the deal that stockholders and union members are expected to approve, the biggest bloc of shares would go to United’s 8,000 pilots, making United the nation’s largest employee-controlled company. Although the new shareholders will control only a minority of seats on the board, there’s fear that newly empowered union members–especially the high-paid ones in the cockpit–will want to tell management how to run the show. “Nobody has ever proved that pilots know how to run anything but airplanes,” warns Northwestern University aviation expert Aaron Gellman. The unions counter that the enthusiasm of the new worker-owners will fly United into the black. If former Chrysler Corp. vice chairman Gerald Greenwald heads the airline as expected, keeping workers’ spirits high when the stock price drops, as is bound to happen in a cyclical industry, may prove his toughest task.
