The Allied Pilots Association's Cold War on American Airlines
Captain Lloyd Hill's confrontational plan backfired, and now he's out of a job.
In this short century, Dallas-Fort Worth has had its share of executive disasters.
Dave Edmondson at RadioShack. Dick Brown at Electronic Data Systems. Tom Hicks at his bankrupt sports group.
But here’s my nod for one of the worst runs at the top of the executive food chain: Capt. Lloyd Hill, former president of the Allied Pilots Association.
Hill’s influence as chief of American Airlines’ pilots union ended officially in June, after he didn’t seek reelection and his allies didn’t win enough votes to even make the runoff. Hill’s tenure was actually hobbled more than a year earlier, when the union board censured him and his top lieutenant and attempted to take control of the agenda.
But for about 20 months, Hill’s power was ascending, and he ripped through the scene like a tornado. He damaged the airline, crippled the APA, and alienated almost every constituency, including passengers, the White House, and other unions.
Hill’s strength was supposed to be his bulldog attitude toward management. He confronted American with an all-out blitz—a big-dollar, high-profile attack campaign to pressure executives into signing a new labor contract.
He believed the window of opportunity would close quickly, so he did almost anything to make a scene and generate headlines. Within a few months of taking office, Hill and his team sent a scathing letter to American CEO Gerard Arpey, claiming that the company’s sick-leave policies had pushed pilots to suicide.
“Enjoy your blood money and your union-busting,” Hill wrote. “We’ll see you in court, in the newspapers, and on the picket line.”
The letter made the front page of the local daily. And soon, the union was slamming American on billboards and urging fliers to register complaints. Pilots picketed Anheuser-Busch, Wells Fargo, and the office of Roger Staubach, a director of the airline’s parent company and a beloved figure around these parts.
To supposedly ratchet up the heat on management, pilots plotted ways to delay flights for three to four hours, unbothered by the fact that angering customers wouldn’t help the cause.
All the public posturing backfired spectacularly. When Hill took over in 2007, American executives were the unsympathetic figures, often cast as greedy and self-serving. They had won millions of dollars in bonuses, while the rank-and-file was stuck with budget-busting concessions made years earlier to stave off bankruptcy.
Hill’s attacks changed the dynamic. They made American management look rational and responsible. The more outrageous the union’s behavior, the easier it was for executives to stiff-arm the APA and wait for the Hill administration to implode.
Contract talks went nowhere, the union wasted millions of dollars, and pilots lost three years of negotiating time. Today, the best defense of Hill is that the union probably wouldn’t have scored a new contract regardless of who was leading the effort.
Sounds right, given the difficulties faced by American’s other, more conciliatory labor groups. But Hill’s record still offers a lesson—and not just for labor leaders.
“You can’t take this stuff personally, like Lloyd did,” says pilot Tom Hoban. “It’s a business.”
Jerry Jones used to say, “Don’t let your money get mad.” He was dealing with player contracts, but the theme was the same. As frustrations rise, it’s natural for tempers to flare, but losing your cool equates to losing credibility, especially in public.
In a letter to APA members early this year, a local officer explained why the board sanctioned Hill and appointed a separate group to monitor the national officers. APA leaders had spent so much on attack campaigns that deficit spending hit $6.6 million in 2009, and the efforts still “failed miserably.”
The APA was viewed “as a union of hard-line radicals, out of touch with reality, and intent on pursuing a scorched earth agenda,” the letter said.
The APA’s new leaders, led by pilot David Bates, seem to appreciate nuance and diplomacy, a promising sign. Bates plans to meet with Arpey, something that Hill repeatedly refused to do. Hill believed that such events were no more than public relations, and that the union shouldn’t be in the teamwork business.
But executives, like politicians, should know about stagecraft and how to play the game. Hill’s unyielding stance on Arpey turned a small symbol into a PR slam-dunk for the opposition.
In Bates’ first press conference, he said the union would abandon the confrontations and work with management, while staying vigilant on its most important issue: job security.
“There’s a saying: A company gets the union it deserves,” Bates says, noting the frustration that pilots felt from pay cuts. “The pendulum had swung too far in one direction.”
Bates’ pay fell by half after the 2003 concessions, because layoffs knocked him down a seat. The careers of many other pilots have stalled. The primary problem is a lack of growth at American. The airline has been steadily cutting capacity to try to restore profits.
Total aircraft are down 25 percent since the concessions and more than 12 percent in three years. Still, American’s parent lost nearly $3.6 billion in 2008 and 2009, and lost $516 million in the first half of 2010.
American wants labor groups to be more productive, because the airline has some of the industry’s highest costs—and most persistent losses. But more pilot hours translate into fewer jobs and promotions, unless American can grow again.
“For three years, we’ve been in a cold war with management,” says Scott Shankland, elected secretary-treasurer on the Bates slate. “We’re trying to start détente now.”
Trusting and verifying would be real progress, especially post-Hill. But to get a new contract and revive American’s growth story, people will have to tear down a wall.
Mitchell Schnurman is the business columnist for the Fort Worth Star-Telegram. For the past five years, his column has been named the “Best in Business” by the Society of American Business Editors and Writers.