• What’s Really Going on At Hawaiian Air? What’s Really Going on At Hawaiian Air? By Jeff Lilley For the past 70 years, Hawaiian Airline employees have been the engine for the company’s continued service to the people of Hawai‘i.
• What’s Really Going on At Hawaiian Air?
What’s Really Going on At Hawaiian Air?
By Jeff Lilley
For the past 70 years, Hawaiian Airline employees have been the engine for the company’s continued service to the people of Hawai‘i. Corporate heads have come and gone, generally leaving with a lot more money in their pockets. Hawaiian employees have taken many pay cuts in the past 20 years.
Some employee groups gave up their pension plans to preserve some of their pay. Pilots gave up pay to preserve their pensions. Everyone sacrificed to keep Hawaiian serving Hawai‘i.
Once again, Hawai‘i is faced with a choice. Should we accept corporate greed over ethical deeds? Joshua Gotbaum, court appointed trustee, plays fast and lose with the facts just like former Hawaiian honcho John Adams. Gotbaum’s job is to get Hawaiian out of bankruptcy, but Gotbaum has spent more time in and out of court advocating for his own pay and benefit package of more than $70,000 per month. The Office of the U.S. Trustee had to step in to limit his greed with a recommendation of a lower amount. He has also asked the court to award million dollar bonuses to Hawaiian executives should Hawaiian go out of business. It appears Gotbaum is doing his best to keep Hawaiian in bankruptcy to fill his own pockets.
He is telling employees, the court and the public the path out of bankruptcy can only be achieved on the backs of the employees. The purpose My under-funded pilot pension plan, according to Gotbaum, must go for Hawaiian to emerge from bankruptcy. Yet Gotbaum has yet to negotiate with Hawaiian’s largest creditor, Boeing.
Is Gotbaum just hoping Boeing will go away? The removal of John Adams who took $25 million from Hawaiian in a shady stock buy-back shortly before declaring bankruptcy is mainly thanks to Boeing. Following in the Adams tradition of corporate greed, Gotbaum. In order to protect his position and compensation has taken the unprecedented step of convincing a bankruptcy judge to make him an employee without ever having to even apply for the job.
Bankruptcy was declared in order to negotiate lower airplane leases with Boeing. Yet Gotbaum has turned it into a vendetta against the pilots’ retirement fund. Pilots gave UP pay to keep their retirement knowing they are required by law to retire at age 60. Hawaiian Airlines has made record profits over the past 9 months and can afford to fund the pension fund, get out of bankruptcy and continue the business plan established under the Paul Casey leadership. Gotbaum has avoided good faith negotiation with the pilots.
Hawaiian’s labor cost is one of the lowest among airlines of comparable size, but Gotbaum’s pay is not. Gotbaum received $600,000 per year, a reduction from the $840,000 he had requested. By comparison, Southwest CEO Hub Kelleher earned $320,000 in 2003 and JetBlue CEO David Neeleman earned $200,000 in, 2002,
Gotbaum’s greed is getting in the way. He needs to accomplish his trustee duties to protect the assets of Hawaiian Air and move on. His confrontational approach is draining assets through exorbitant consulting fees, lowering morale, increasing stress and diverting the energy of Hawaiian employees from accomplishing their mission of service to the People of Hawaii. The employees of Hawaiian intend to survive this process and continue to provide transportation services so vital to our community.
Hawaiian Air employees hold out hope. We have beaten back corporate greed before. We are in an even tougher situation today. Our fate, and in some was the fate of the people of Hawai‘i, are in the hands of a federal bankruptcy judge, a trustee with questionable motives and many high-paid lawyers and consultants all taking hard-earned profits from Hawaiian and from Hawaii.
We are hopeful the bankruptcy judge will eventually be able to see the value of the ethical deed of the employees and that community that has strengthened, and continues to strengthen, Hawaiian, verses the corporate greed that guides the actions of Gotbaum. Gotbaum has created a smoke screen using the pilot’s pension fund. As a distraction diverting attention from the main issue that brought about bankruptcy, the renegotiation of the Boeing leases.
Gotbaum is taking on management issues about which he has little expertise and which are not part of his trustee duties. Potentially. These management decisions, like the consolidation of Hawaiian operations in the main terminal can have a disastrous impact on the airline and on inter-island travelers.
Now Gotbaum has come out with a business plan – a plan that hinges on $10 million more in labor concessions. The media smoke screen provided by Gotbaum sugarcoats the fact they are looking for $10 million more in concessions in addition to the $15 million already given and continue to attack the pilots’ retirement plan. It is no coincidence these concessions add up to $25 million, exactly the amount John Adams took from Hawaiian before his departure. In the courtroom Gotbaum’s army of high-paid lawyers pursue a strategy of intimidation and union-busting, with the goal of forcing the pilots into a strike.
The employees of Hawaiian are facing their biggest survival challenge ever as Gotbaum threatens the very existence of Hawaiian Airlines. Gotbaum’s ego and his need to build a reputation as a tough-guy appear to be the motivations for his actions. If it doesn’t go his way he appears to be willing to shut down Hawaiian Air in spite of Hawaiian’s current high rankings for service and profitability.
The employees of Hawaiian are doing everything we can to keep Hawaiian flying.
We say no to corporate greed and yes to ethical deeds.
Jeff Lilley is the Chair, Legislative Affairs Committee for Hawaiian Air pilots
