September 15, 1998
Opinion
Editorial
There is a fresh wind coming from the Philippine Airlines, the national flag-carrier which has been battered by labor unrest and corporate losses.
In exchange for a no-strike provision for ten years, the firm’s union, the PALEA, had accepted in principle the proposal of the majority owner to donate 20% of the firm’s equity to the workers.
As if that were not enough, the owners have also agreed to grant three seats to the 15-man board of directors which would provide the workers a change to influence the direction of the company. In addition, the PALEA will continue to be recognized as a bargaining unit in the duration of the ten-year period.
Is Mr. Lucio Tan, the majority owner, and his government partners foolish in granting these extraordinary privileges to the unions? Not at all. We believe they are doing it for pragmatic reasons and for mutual interest.
The owners now realize that they cannot turn the company around without the cooperation of the workers. They tried to do it their way before like insisting on downsizing without prior consultations with the workers. What the company got was bad image and a threat of sabotage, two black eyes which an airline company cannot afford.
They must have also realized that an airline company cannot be a fully private company because it is really imbued with public interest. Even if the airline is owned by Lucio Tan, one can never remove the claim of Juan de la Cruz in the company.
We hope that this creative plan within PAL succeeds. This airline used to be a leading service company in Asia until corporate problems, labor strikes, and bias by international regulating agencies lowered its world rating.
Whoever thought of this sharing scheme must be congratulated. It looks like the guy is familiar with Kelso, the economist-theoretician who thought that entrepreneurs should share their wealth or else they lose everything.
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