Mexico’s second-largest airline goes bankrupt. Source: http://www.google.com/hostednews/afp/article/ALeqM5hqNO7FYmZF83sO37n9mQCAksLH8g. The labor unions didn’t want to take a pay cuts, so the company went bankrupt and now they have no jobs.
Apparently the executives didn’t want to take a pay cut either… lol I’ve never really liked the “blame it on the poor workers” argument.
Me either, but now they are all out of jobs. I’m sure a lot of the low end people can get absorbed into other airlines. The other airlines may have to expand to meet the bankrupted airline’s customers.
And management decided to stop selling and cancel tickets, thus, reducing the company’s revenue. Btw, who was blaming the “poor workers”? What evidence do you have that the union workers were poor? Also, what standard are you using to determine “poor”?
Are you asserting that management and unions have the same bargaining power.. in the real world?
My apologies, I didnt mean materially poor in particular. I meant it in the “aww, poor workers” sense.
Anyway, they probably are poor in the material sense, at least, compared to the union bosses.
No.
One positive aspect of labor union not agreeing to allow pay cut is that the entrepreneurs will try to find innovative way to make new deal and draw investment. If there was pay cut, the drive for searching new profitable deal would have been much lesser, possibly resulting in low morale and even greater financial crisis.
There’s an old saying in pro-wrestling: when a promotion is hot, it can seemingly do no wrong, but when it cools down it can seemingly do no good. This can be safely applied to all business.
If you ever lived through any large business falling apart, you’ll know how it is. Everything seems to be fine and dandy. Then suddenly the mad scramble to the save the company from bankruptcy starts. As well as the inevitable blame game. Unions will blame owners and bosses for having spent so much on, say, first class airline tickets while the management will blame unions for having refused to, say, cut retirement benefits in the past. Usually both allegations are true but there’s usually so much more to it. A healthy large company can afford to waste ungodly amounts of money and still turn a profit to keep shareholders happy, trust me. The system is geared that way. There are very few large companies run according to what would be defined as sane and sound principles in the small business sector: the system’s geared that way. That’s why I always say Liberarians & co should stop defending large companies and wasting their time lecturing CEOs and concentrate on small business owners, artisans etc.
Anyway, they probably are poor in the material sense, at least, compared to the union bosses.
Ya, there’s another group that I bet absolutely never even thought of taking a pay cut. I am no apologist of unions, I just value labor/consumer movements as checks to power.
There’s ya problem. British Airways has a similar problem in that is became too large by virtue of being supported by the state, and then like all good state endevours is crippled by greedy unions!
Labor movements are checks to power? Huh? They are movements to sieze power violently.
So entrepeneurs don’t try to make money unless the unions take away more and more of it. In fact, left to themselves, they would all create low morale and financial crises.
And leaving things exactly is they were is an even greater financial crisis than going bankrupt and closing down the firm.
The consumers, we the people, will suffer the most if the firm closes down. Deciding about who is right, labor unions or management, will probably never end, specially at the time of crisis. Entrepreneurs who may be from any side, union or managment, sees things differently, whose only motive is to gain his subjective or monetary profit by satisfying the consumers with proper utilization of available means of production.
Closing something down is always an option and an easy one. Keeping things going and with high morale is the challenging one and increases economic activities.
How do you get power back from a source that has taken it illegitimately and refuses to surrender? All checks to power are violent, if not aggressive.
“Anyway, they probably are poor in the material sense, at least, compared to the union bosses.”
How so?
you didn’t mean for that to be a zinger?