BA boss is losing the war of words
LAST Friday, as BA announced plans to raise more than �600million through a debt issue and new terms with its pension fund, chief executive Willie Walsh said that the move “puts to bed any suggestions that British Airways is in any sort of risk.
LAST Friday, as BA announced plans to raise more than �600million through a debt issue and new terms with its pension fund, chief executive Willie Walsh said that the move “puts to bed any suggestions that British Airways is in any sort of risk.”
This was the same Willie Walsh who, at BA's annual meeting three days earlier, had warned unions opposing his plans for 3,700 job losses that the proposed changes were “essential” to the airline's short-term survival and long-term viability.
Moreover, when a shareholder accused him of “talking down” the airline, company chairman Martin Broughton said Mr Walsh had given a “realistic assessment” of the problems BA faced and added his own view that the company was in “a fight for survival”.
The contradiction which some may infer from these remarks is more apparent than real. Mr Walsh's statement of any threat to BA having been “put to bed” is presumably subject to the company achieving cost savings on the scale he proposes.
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However, even the appearance of a mixed message is likely to prove unhelpful in the company's negotiations with the GMB and Unite trade unions, which ahead of last week's AGM expressed disappointment that their proposals for cost savings, including a 2.6% pay cut and freeze in salaries until 2011, had not been accepted by the company.
Mr Walsh's boast in May that he would work for nothing during July has already fallen flat, it having been suggested last month that the airline's entire workforce might do the same.
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While his sacrifice would, of course, be much larger in cash terms compared with a BA employee on, say, �18,000 a year, there can be little doubt which of them would miss a month's salary the most - and it wouldn't be Mr Walsh.
Now, according to the unions, BA is demanding permanent changes in terms and conditions on the part of rank and file employees when the same is not being required of higher earners. Mr Walsh might have the cold reality of economics on his side, but he is in danger of losing the PR battle.
n City Minister Lord Myners yesterday accused the Conservatives of “missing the point” with their plan to abolish the Financial Services Authority and to split its functions between the Bank of England and a new Consumer Protection Agency.
The point allegedly being missed, according to Lord Myners, is that “consumer protection is important for financial stability”. So it is, but this misses the rather wider point that the “tripartite” split of responsibility between the FSA, the Bank of England and the Treasury has demonstrably failed.
Responsibility for financial stability needs to be handed to a single body and, as the Tories have correctly concluded, that body is the Bank of England.