Originally Posted by
Dave Fitzgerald
This is the argument. Pay vs. profit sharing. Profit sharing is a relatively new thing. A way for management to reduce regular pay.
You don't think they play with the numbers? Absolutely they do. Every time any of the unions are in contract talks, management hides money and profits. Lots of ways to do it. In the past, management used this to buy new ground equipment. See a new bag cart? We must be in contract talks. Those things are indestructible. I know, they try!
We all would be better off with higher pay, instead of profit sharing. Times are good right now, but they won't be for long. That extra check will go to zero real quick.
This is where a little knowledge is dangerous.
Baggage carts are part of capital balance sheet calculations. They are not part of profit and revenue. Accounting rules do not make it easy to alter profit. I'm not saying accountants can't fudge figures, but I am saying I don't believe this to be true of United.
If you study the company's expenses one begins to get a clearer picture of what is happening. For the full year of 2017 United spent over $1 billion more on landing fees and airport rent and $600 million more on salaries, benefits, and payroll taxes. Delta flies out of Atlanta, Minni, and Salt Lake and United flies out of Newark, Ohare, and Dulles. Delta's workforce is larger than United's, but less than a 1/4 of Delta's workforce is unionized most of United's workforce is unionized.
Bottom line Delta has a $ 1 billion advantage right out of the gate. It's not nefarious. It's business 101.
You are correct though that pushing more pay into Profit Sharing can help a company reduce labor costs when times get slow by reducing total pay for labor. I, for one, do not see this as a bad idea. We want our corporations to have some ability to adapt when times are slim and share when times are good.