10/30/2005

Outsourcing, will it become the new airline trend?

One of the remedies that Northwest Airlines is attempting to implement into their bankruptcy case is the outsourcing of flight attendants, ground crews, and pilots occupations if they do not agree to revise their current labor contracts. This proposition to the courts if passed will eliminate hundreds of millions of dollars in debt for the company due to cheaper labor rates and intern eliminate thousands of currently held jobs. Personally, I do not believe this process is ethically sound on the airlines part. It seems to me as a devious way to terminate the contracts they cannot pay and force labor rates in the airline industry down more than they already are. The MSNBC article reported the fact that if this proposition receives the courts approval for Northwests request many other airlines are likely to follow suit.

4 comments:

ethan said...

I think that any way a company can turn itself around and make a profit are good. It should be ethical but other than that anything goes. If I were a company owner I would outsource if it would help me.

Logan said...

I agree with you Tyler, there is something unethical about the situation. Besides, outsourcing employment in order to get cheaper labor will eventually hurt Northwest in the future. Cheaper labor means less quality, and quality is an expected attribute of the airline industry.

Savannah said...

Outsourcing is a way for compaines to become more competitive. I have been wondering how long it would take for airlines to find new ways to cut costs so that they can stay in business. I think that outsourcing is up to the company and that they have that right if it will keep them in business.

Dr. Tufte said...

I think you all need to realize that this is also part of the bargaining process: if the unions are inflexible, you counter them with a threat to outsource. It doesn't mean that it has or will actually happen.

A bigger problem would be if the court allows this due to the circumstances of bankruptcy. If this is something that weak firms are allowed to do but strong firms are not, then it will just further weaken the latter.