NO ESCAPE IN THE SKY !

Synopsis: Communication For Productivity Letters written to some 7500 Workers / Managers / Union Leaders, following a period of strike / Go slow / Murders (1979 - 1987), at Mumbai factory of Larsen & Toubro Ltd. This direct / open / honest communication led to a remarkable atmosphere of trust between Workers and Management, which, in turn, increased productivity at 3% per year (ave).

29 Aug 1986

To:

Dear Friends                  

NO ESCAPE IN THE SKY  !

If you  have problems on  earth can you  run-away in  the sky to escape?  Perhaps. But if you  have problems  in the  sky, where can you run for an escape ?

Sometime back, I wrote  to you regarding  the loss-making public-sector  (Govt) companies  which  are trying  to  cut costs.   But because the Govt. owns  these companies ( and the public owns the Govt? ), they can never become bankrupt  !

They can go on making losses forever !  - as long as you and I keep paying taxes.

But a  "private-sector" company  (owned by  share-holders) cannot afford to make a loss.  It  cannot even afford a lower profit ! -whether it is L&T or Eastern Airlines of America.

What is happening to Eastern Airlines ?     

-      12% drop in income despite 5% increase in capacity    

-      Fierce competition from other airlines    

-      Loss during Jan/Feb/March 1986  - Rs. 144 crores    

-      Loss during April/May/June 1986 - Rs. 57  crores

-      Forced  to cancel  5%  of daily  flights  due to  MAINTENANCE BACKLOG.

After reading this, any wonder that "Texas Air" (another airline company) purchased Eastern Airline ?

Although taken over by "Texas Air", Eastern Airline is fighting a bitter battle of survival.

Chief Executive Joseph Leonard has issued following orders :

1.  Freeze all expansion-plans

2.  cut operating costs by Rs. 130 crores within one year

3.  Senior managers to cut expenses

4.  Cancel Miami - London flight

5.  From Charlotte city, cut 41 flights (out of 53)

6.  Sell-off many Boeing 727 airplanes

7.  Lay-off (send home temporarily) surplus employees

8.  Within 3  months, cut  fuel-bill by  Rs. 100  crores (already     achieved)

9.  For 4600 pilots, flight attendants and non-contract workers,     cut pay and benefits by 20% (already done).

When  International Association of  Machinist - IAM  (the Labour-Union), refused  to agree for a similar  20% cut in  the wages of the 12,000 workers, the management  had no choice but to sell the company to "Texas Air" !

And this has forced Joseph Leonard to write to all employees,

"We  may have  to  consider,  however  reluctantly, a  period  of consolidation or even retrenchment ".

What Joseph is trying to tell his co-workers is that,

-      "  When a  company is  fighting  for survival,  there are  no    sides  such as  the  Union  and the  Management  (and  the    supervisors and officers ! ). There is no  escape from the    sky ! "

H.C. PAREKH