Alaska Airlines & The Machiavellian Lay Off

It was a few weeks back when my uncle awoke and showered, preparing for yet another day at Alaska’s Oakland Airport facility.  So far, he’d avoided the economic flu that had afflicted millions of other Americans.

He maintained a modest salary working in a managerial capacity for Alaska Airlines.  His position would provide excellent retirement benefits so long as he stayed for a certain period of time (around fifteen years).

Alaska, like most large corporate entities, had attracted my uncle through their generous pension plans, which would reap excellent and hard earned rewards if he stayed with company for a certain period of time.  Based on this reliance, my uncle chose Alaska over other airline companies.

Before his employment with Alaska, he served twenty years in the U.S. Air Force, servicing cargo planes on the flight line.  Given his superb credentials, Alaska hired him.  For over twelve years my uncle was the faithful servant of a corporate giant.

By all reasonable standards he was the perfect employee.  Notwithstanding a one hour commute each day, his twelve year tenure reflected an employee who rarely showed up late or missed a day of work.  He didn’t have a single blemish on his record.  Well, apparently except for his age.

On that fateful day, he drove the one hour commute, parked and met up with his co-worker, another veteran of the Air Force who had worked as an Alaskan employee for twelve years.  They discussed the weather, the weekend, and the fact that it was pay day.  They entered their offices, sat down at their computers, and logged into their employee accounts to retrieve their pay checks.  Their accounts were empty.  There were no funds.

Just at that moment, they saw one of the big wigs waltzing down the stairs towards them.  He looked serious-like, carrying a small stack of papers in his hand.  They looked at one another.  The pit of their stomachs began to tighten.  A lump formed in their throats.  They looked back towards the over weight big wig as he completed his final approach.  He entered their office and gave them a look of half sympathy and half “this is how its got to be.”  As he closed the door behind him he took a deep breath and looked at these two loyal, hard working employees.

“I absolutely hate to be the one to tell you this fellas, but we’re downsizing and, unfortunately, your positions are two of the jobs that have been eliminated.”

After some discussion back and forth, the following occurred:

“Alaska is offering you a four month severance package along with partial retirement in return for your guarantee that you will not sue the company for your discharge.  I have the papers right here and you’ll need to sign them before leaving.  This is a ‘take or leave it’ offer and will not be available to you after you walk through that door.”

It was an ultimatum.  Either my uncle and his co-worker could walk out of that office without a pension of any kind, without the last two weeks of their pay, and without a severance package.  Yes, they’d still be able to sue the company for obvious age discrimination (none of the other younger, similarly situated employees who had less-than-thrilling track records were being laid off), but they’d be without any sort of income except for whatever funds were in savings.  Refusing to take the offer would leave these faithful employees in the precarious position of being unable to pay their mortgages, car payments, etcetera.

Or, they could accept the terms of the offer thrust upon them unsuspectingly; without notice of any kind.  At least they’d have four months of financial security.  With a constructive gun to their head, they decided to sign the agreement and walked out with a four month cushion to find work.

Companies Turning Machiavellian

This past year, while most airline industries have shown losses, Alaska turned a profit of $8 million.  But, $8 million is apparently not enough.  Therefore, some executives who were unsatisfied with their million dollar bonuses decided to downsize and minimize future expenses.  What better way to do that than to cut out all those hard working and dedicated employees who are approaching retirement age?  What better way to minimize future expenses than to minimize future pension payouts?

Unfortunately, in these hard economic times, Alaska’s treatment of these faithful, middle class, hard working Americans has become the general rule rather than the exception to the rule.   In an effort to maintain and expand profits, companies are engaging in Machiavellian-like tactics to trim expenses.  The purpose of a corporation, after all, is to maintain and expand profit.  So what if a few unfortunate souls get in the way?

Should Morals Mix With Business?

Should a corporation operate without a moral center; without a moralistic compass that will guide their decisions?  If morals are not to be meshed with the underlining and sole purpose of generating profit, then certainly a policy of early termination to avoid payment of full pension benefits should be endorsed.  Even where the employee is only fifty years old, has an unblemished record, ample expertise in his field, and is completely dependable.

The problem with the problem is that the solution solves nothing. To prove my point is a post by Seth Godin, a brilliant marketing consultant who has published several dozen books:

Carnegie apparently said, “Take away my people, but leave my factories and soon grass will grow on the factory floors……Take away my factories, but leave my people and soon we will have a new and better factory.

Is there a typical large corporation working today that still believes this? Most organizations now have it backwards.

The factory, the infrastructure, the systems, the patents, the process, the manual… that’s king. In fact, shareholders demand it.

It turns out that success is coming from the atypical organizations, the ones that can get back to embracing irreplaceable people, the linchpins, the ones that make a difference. Anything else can be replicated cheaper by someone else.

In other words, Alaska shot themselves in the foot when they fired my uncle and his co-worker.  Not only did they lose loyal and hardworking employees, they tarnished their public image.  Surely, a company that prides itself in a code of principles and values will outlast that of a company hell bent on greed and profits?  As a soon-to-be-lawyer who takes pride in living with an elevated code of principles, I would at least like to think so . . . .

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A brief disclaimer: The events and descriptions are not to be taken as an accurate rendition or recreation of actual events.  The quotes do not reflect actual statements made by an agent of Alaska on behalf of Alaska.  These quotes were merely provided for illustration purposes.