Coronavirus: How Companies Around The Globe Are Responding

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First up today on the PODCAST. The troubled travel industry and what it could indicate about the way. Large companies find their way out of the economic crisis presented by the corona virus internal memos from United Airlines forced to park jets. Do the extreme lack of travel demand. Show that the company plans to cut about thirty percent of its management jobs later this year and united warned pilots to prepare for what it calls a displacement that will impact about thirty percent of that workforce. United has accepted. Us government aid and as a result agreed not to make any job or pay cuts before September thirtieth. Remember that date white collar job cuts are coming. The United Airlines Syllabus joins us now with more good morning bill. Hey Joe this is the first what we will see likely for the entire airline industry. Play out over the next several months yesterday united told all of its management and administrative employees about eleven thousand in the entire company. That at least at least thirty percent of those jobs will be eliminated starting October first. Now the rest of the company and other ninety thousand were also receiving a memo and essentially in that memo. They said there will be changes. There also reports that separately. The pilots were told it could be as many as thirty percent of their jobs will be cut in the fall remember. It's just a couple of weeks ago. That United Airlines received approximately five billion dollars through the cares act that is included in there was three and a half billion in a grant money that was given directly to them from the Treasury Department in addition to a loan that they took off from the Treasury Department the condition on that loan and on the money that was given to them as part of a grant was. You can't fire anybody. You can't have mass layoffs before September thirtieth but to be clear united and really every single airline has been forecasting that there will be job cuts down the road so they needed this money to keep everybody employed at least September thirtieth but after September thirtieth united is now saying at least thirty percent of the white collar jobs going you'll see thousands more in terms of frontline employees as well and they're also trying to as much as possible. Cut The cost here. They told the machine Friday. Your hours are going to go down twenty five percent which is contractually allowed going from forty hours a week down to thirty hours a week. Guys this is what the airline industry is doing right now. It has the money in place to at least keep operations and employed through September thirtieth. But unless things change and it's not expected to anytime soon there will be other airlines announcing similar types of job cuts in the weeks and months ahead. Hey fell just in terms of being able to cut ours. Does that count to to to. Can you take the money and then say okay? We're not laying anybody off. But I'm GonNa take away twenty five percent of everybody's hours that's contractually contractually allowed and there are a number of people. Senator actually allowed the by the by the contract with airlines consecutively. Between while you're now you're getting into the spirit of the law. The spirit of the Law United said at the time when they took out the cares look. We're not going to be cutting hours or cutting pay and jobs. Well they certainly have not cut the jobs in terms of the pay. You're getting into this gray area in terms of what's allowed under the contract collective bargaining agreement between the machinists union and United Airlines and. Clearly united believes that. Look we're allowed to this contract to go from forty hours a week. Guaranteed could go as low as twenty two hours a week. We've told the union you're going to go down to thirty hours a week so They're they're certainly many machinists. Who are not happy about this. I reached out to united over the weekend. And they said look this is contractually allowed and what you have is an airline here. And they're not the only one guys I know of everyone's saying well. Why is you doing this? You will see this almost with every airline that they are doing whatever they want to cut their costs as quickly as possible. Phil but this goes to me. This goes back to the debate we had when we were. We were providing these loans right. Who's to say at the time? Even internally inside these airlines there was an expectation that they were going to have to lay people off even as they were taking the loans and so yes as we were saying and we sit on there many times. This program really saves the shareholders but doesn't necessarily shea saved the employees and the whole goal of course was to save employees. More than anything else. We were trying to keep employees in business. They airlines could have gone through bankruptcy. Gone out the other side and still kept the planes in the air obviously with less employees and so the question I have is. How do you think airline execs are going to respond to the public? When ten twenty percent whatever percent we think are going to employees are no longer on the payrolls. Come this fall. I think the executives will do the same thing that been doing from day. One Andrew Weaver at the White House when all of the airlines. Ceo's were called in every single one. Every single one said the same thing. Which is we need to make dramatic changes in fact while we were there united was saying. Look we're going to be having a number of employees thousands of employees taking unpaid leaves of absences because we need to cut the cost dramatically immediately and they even said at the time Andrew Kid. The money is appreciated. It is to keep the operations to keep going into bankruptcy immediately but we unless things change we will need to make changes in how many people work for each airline so yeah. Is there going to be backlash? Absolutely will people sit there? And how yeah? The airlines are not beloved anyhow by many people. I mean people criticize them on a number of fronts. This will be one more where they say they took the money and now they cut the jobs but to be clear. They warned all along. These job cuts are going to be necessary. It was it was known six weeks ago. It was known at the very time. That's the only point known is trying to get. It was known as they walked into the White House. It was known as they walked out of the White House. Exactly okay thanks. We have some other news in sort of high profile corporate personality category we works CO founder. Adam Newman filed a lawsuit last night against Softbank in its Vision Fund over that failed three billion dollar tender offer last month. Softbank said it would not move forward with the tender offer because several preconditions not the mad that frustrated minority shareholders including as you might imagine newman who were expecting a payout. Adam Newman expecting that. Pay Out of a billion dollars if you really read through the lawsuit and it's very similar to the same. There was another suit that had been brought against the company by the Special Committee of we work which was representing the minority shareholders. Did your boasts joins us with more on that story. Deidra Andrew dramatic and of course just the latest in this ongoing. We Work Softbank Saga. Now Adam Newman's complaint alleges that Softbank quote doubled down on their abuse of power and argues that its deteriorating. Financial position influenced its decision to renege on its obligations net. One remember that would have seen. Adam Newman receive nine hundred seventy million

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