In his Dateline Washington column on United's Esop (Airline Business, October), Mead Jennings arrives at erroneous conclusions based on what can only be described as misinformation. Allow me to put the record straight.
* United's Esop structure is unique in business history in that it contains a sunset provision designed to enable and support the continuation of employee ownership beyond 2012.
* There is no reason to believe that the United Esop will 'go away' or be 'diluted' by employee retirements. One of the remarkable facts about United's turnaround since the Esop was adopted is that its employee base has expanded to meet market demand while operating costs have been reduced. Newly hired members of the pilots' and machinists' unions share in the Esop.
* The performance of United's flight attendants since the inception of the Esop has clearly demonstrated their recognition that, although they chose not to be employee owners, they have a significant and personal stake in the company's future.
This heightened sense of responsibility is evidenced in passenger attitude research that shows a steady rise in customer satisfaction scores. We continue to hold the door open and believe that our flight attendants will before too long decide that they want to be employee owners.
* Mead Jennings' column cites unnamed sources who question whether the Esop has actually boosted profits, but offer nothing but their scepticism as evidence. The facts contradict this view.
For example, since the Esop worker grievances are down by 78 per cent; the reduction of sick leave time has saved $10 million; the reduction of on-the-job injuries has saved $5 million; task team initiatives have resulted in more than $25 million in annual savings; and costs are down and productivity is up. Profits are made of such a record.
The point is that United's Esop has involved more than the largest employee ownership venture ever. It has also involved a profound change in the company's culture and in the attitude of our employees.
Without a full understanding of this shift - which is ongoing - one cannot begin to understand what the people of United have accomplished in just two years, and are working to achieve in the years ahead in terms of performance, equity and profitability.
Yes, the recovery of the market has helped. What matters, however, is that, because of the Esop and the renewed dedication of its employees, United has been able to make the most of the opportunity by responding to market growth and meeting fiercely intense competition around the world.
Not long ago it would not have been possible; today it is only the beginning.
John Kiker
Vice president corporate communications
United Airlines
Chicago, IL, USA.
Source: Airline Business
