Choices for the Dying

Philippine Daily Inquirer

Saturday, September 19, 1998

Pinch of Salt

By NINEZ CACHO OLIVARES

THESE are times that try management's soul and the union should have realized early enough that it can't have it both ways—not when the company. Philippine Airlines, has been bleeding non-stop.

Management was being more than reasonable when it offered the union 20-percent ownership of PAL and three board seats, with each employee getting 60,000 shares of stock worth P300, 000. The offer also carried with it a pledge to refrain from cutting salaries and to rehire retrenched employees who have not received their separation pay. In return, management asked union for a long-term industrial peace guarantee which time equals that of PAL’s proposed rehabilitation program.

Unfortunately, union officers just couldn't see farther than their collective nose. Earlier, they dismissed the 20-percent stock ownership participation claiming that their shares would be diluted anyway through future stock purchase options. They rejected the management's proposals claiming that a union "cannot just wholesale surrender its right to collective bargaining."

It is a most stupid reasoning since there will be nothing for union with which to bargain. The PAL union will be forced to surrender wholesale, its right to collective bargaining with PAL's closure. A 10-year industrial peace merely suspends their right to collective bargaining for that period of time.

Ten years may seem too long a suspension time of union rights. However, given the reality of a crippling crisis that can plague Asia and the world for six more years plus PAL's own financial woes exacerbated by the airline pilots' strike, that length of time is not that unreasonable.

As for the union's fear of a dilution of shares, this can be prevented if employees take advantage of stock purchase options every time. If they can't cough up the money, it is no longer management's fault. That's the way of corporations, especially those that need fresh infusion of capital.

The problem with the PAL union is that it wants things both ways, with the union getting the best of both worlds without any sacrifice whatsoever.

Since the Edsa revolt, some unions have become much too unreasonable in their demands. They want to have a big say in management and expect management to keep on providing the best benefits for them even when the companies clearly operate at a loss. Yet when management offers them a say in its affairs through the offer of board seats, they turn down the offer, conjuring up images of their shares of stock being easily whittled down. They know the company can't go on without some sort of retrenchment program and other cost-cutting measures. The management itself took on salary cuts but the union still wanted it all. PAL unions appeared to think that Lucio Tan and his partners' well of money can't ever run dry. Asian crisis or no.

Also to this day. PAL unions seem firm in their belief that government won't let go of the airline and will take over from Tan and company.

Suspicion is high that the PAL unions prefer government to own and operate the airline just as it used to during the Marcos years. For these employees, as long as the government owns PAL, any and all airline losses can be absorbed. PAL can continue operating at a loss. After all, the government can never run out of money and the employees, like too many government employees, can always bank on getting everything for almost nothing.

It is of course possible that even as PAL announced it will stop operations on Sept. 23, the airline will resurface under a different name, with a new set of owners and a new management team. It is almost impossible for a country not to have a nationwide based airline going since trade and industry, not to mention other sectors, cannot operate without it. Even other foreign airlines will have to skip the Philippines as a destination without a ground maintenance crew around.

While coming up almost immediately with a new airline to replace PAL won't be very difficult to do, there's still nothing in it for the PAL unions, including the pilots and cabin crew unions. Under a new company and new owners, PAL union officers and members can't expect to have the upper hand in any bargaining effort. When PAL closes, the union closes with it. The new owners, with a new management team, will have the advantage of hiring airline employees of their choice and at their terms.

All that huffing and puffing of the past months from the PAL union will neither get the company back nor give PAL employees the benefits they enjoyed under PAL. Too many airline employees who will have lost their jobs because of truculent union leaders will find themselves jobless for a long period of time.

Airline employees have been trained for airline jobs and if there are no airlines to work for, they will have no option but to look for unrelated employment. This may prove to be a hard task, given the difficult economic conditions today.

PAL employees once out of their jobs, will find that it was their union, not PAL management that did them in.

Still on a truculent note, a PAL union leader, in rejecting the final PAL management offer for a 10-year suspension of collective bargaining, claimed that the offer was "like having to choose between two coffins." Not quite. There may be a coffin waiting for a comatose patient or one whose heart stopped beating temporarily and another coffin already ready for an embalmed body. The difference is that the coffin for the comatose patient may wait to be filled for another 10 years with the hope of the patient recovering. The coffin bearing the embalmed body is definitely ready for a burial, with no hope for a resurrection.

Even in the worst situation, there is always a choice. PAL employees are being stupid in leaving their fate and future to their union leaders.