SCMP Wednesday, July 11, 2001


The state of the union

GLENN SCHLOSS

His book Confessions of a Union Buster sits in the offices of the embattled Aircrew Officers' Association (AOA) as it takes on Cathay Pacific Airways in one of the biggest industrial-relations disputes to hit Hong Kong in years.
The author is Marty Levitt, a former consultant to American bosses in what he describes as the "dirty business" of breaking unions. After an almost spiritual conversion, Mr Levitt became an adviser to workers at odds with their employers - such as the Cathay pilots.
And he is proving an important behind-the-scenes influence in the dispute, having spent three weeks in Hong Kong at a critical stage of the negotiations, briefing senior AOA office holders on tactics and running seminars for rank-and-file members.
That advice might now come in handy following Monday's showdown, when the airline fired 49 pilots in whom it claimed it had lost confidence. These sackings are three last week over flight delays. Among the ranks of those whose jobs were terminated were union secretary David Clapson and Brad Harris, a committee member involved in the negotiations.
The association is now in a fight for its survival, accusing Cathay of trying to break it. The airline denies any union-busting agenda and instead accuses the association of trying to drag the company down.
In an interview with the South China Morning Post, Mr Levitt was full of fighting talk and unprovable predictions about management's tactics in the industrial battle.
He predicted the company might "plant illegal contraband or drugs" in cockpits or "sabotage" equipment and try to blame the pilots for this, although he admitted it would be unlikely to do anything that would endanger pilots or passengers. He also claimed management could sow discord among union members by circulating poisonous rumours among spouses, alleging their partners were involved in sexual affairs - although he could not provide any solid evidence to substantiate this or any of his other allegations.
"I participated in that field for 20 years," said Mr Levitt, basing his forecasts on his own experience as a "union buster" until 1987, when he switched sides. He has since worked as an adviser to employee groups in America.
"It's a form of terrorism; it's ruthless. You have already seen firsthand that they [Cathay] are creating victims," he said, referring to the sackings.
Responding to Mr Levitt's warnings about dirty tricks, Cathay's corporate-development director Tony Tyler said he was shocked, adding the claims were outrageous and that was not the way Cathay worked. Mr Tyler said he doubted any airline would use such tactics.
Mr Levitt is a charismatic figure, an eloquent and passionate speaker - even on a telephone line from his base in Las Vegas, where he advises unions in the desert city's casinos and from which he travels across America consulting various clients, including other airlines.
He defected from the well-paid side of management after a problem with alcohol and says his current work is a way of making amends. "I got so wealthy and so spoiled and so successful that I started to believe I was invincible. I started to hurt myself and my family," he said.
The union buster turned friend of organised labour claimed Cathay had in recent years been using the services of consultants - calling them "professional hitmen" or "hired guns" - to do the work he once did.
Although he could offer no firm evidence of this, he cited recent Cathay actions as fitting this pattern. These included the airline's decision, revealed last week, to stop the union distributing material to pilots through mailboxes at Cathay headquarters and its refusal to continue deducting association dues directly from pilots' wages and handing them to the AOA.
The airline has also stopped referring to pilots by rank on payslips, calling them Mr or Ms instead, said Mr Levitt. "All those are steps in the process [of breaking a union]. It's like a production," he said.
Mr Levitt, who spent three weeks in May advising pilots and holding seminars, said he believed the union pilots would win 90 per cent of what they were seeking and that their plans were "viable". "They don't have to pay anybody to tell them to stay united," he said.
Although the union's willingness to turn to an American adviser with no known experience of working in Hong Kong is seen by some outside observers as a sign of desperation among the pilots, Mr Levitt's advice was "stick with your leadership, stay calm and stay united".
"The company's not done with its attacks; there are more coming, as long as they [the pilots] are prepared."
The general-secretary of the pilots' association, John Findlay, said he kept Mr Levitt's book in his office.
"This is a carefully orchestrated plan by Cathay to attack the pilots and break the union," said the professional unionist, who previously worked in Britain for civil-service employees' groups.
Asked at a press conference held in the wake of the sackings whether the association believed Cathay was trying to break the union, Mr Findlay pointed to a list of the union's allegations against the airline, allegations cited as examples of the way the company was attempting to escalate the dispute.
Among the claims were accusations that management had not sought genuinely to negotiate, employing "take it or leave it" tactics, attacking the union's management committee in an attempt to "divide and rule", and chartering mainland flight crews.
An unnamed Cathay director was alleged to have told staff at a meeting that the union would be broken within a year.
"All those bullet points [in the list] are classic examples of union-busting tactics," said Mr Findlay.
A glum-faced union president, Nigel Demery, added: "It is written about in books, and Cathay has clearly read those books."
Cathay's Mr Tyler denied the airline was trying to break the pilots' association in the current dispute. "It is extraordinary that they are saying that when they are on the record suggesting they are trying to bust the company," he said. He cited comments attributed to Mr Demery about "guerilla tactics" and the possibility of the dispute lasting three, six, nine months or one year. Mr Tyler claimed Mr Demery had said: "We will drain the resources of the company."
Asked whether the airline would prefer not to have to negotiate with a pilots' body, Mr Tyler replied: "We've never said we won't deal with a union." Cathay had managed to negotiate successfully with industrial bodies representing ground staff and cabin crew in Hong Kong and around the world without disruptions ensuing, he said. "This is the one we don't seem to be able to reach agreement with, the only one."
He said Cathay was not using a consultant for industrial-relations advice, as suggested by Mr Levitt, although it did employ a public-relations firm for media work.
He questioned the union's decision to seek advice from Mr Levitt, as his experience was in the United States, where conditions were different from Asia. "It is terribly dangerous for them to be guided by someone who doesn't know the company, Hong Kong and the way things work here," said Mr Tyler.
Mr Tyler linked the association's decision to consult Mr Levitt with what he described as an effort by the US Airline Pilots' Association to "export their pay scales around the world". The American union had sent members to the SAR to advise the local association, he said.
Recent pay rises of 30 per cent or more for pilots of United Airlines and Delta Air Lines could not be followed in Asia because Asian airlines were not in the same business environment as their counterparts in America, where competitors also adopted salary increases, said Mr Tyler.
Unionist legislator Lee Cheuk-yan, who is a member of The Frontier party, said the AOA was an unusual type of union for Hong Kong. It was well-organised, well-funded and - with more than 90 per cent of Cathay pilots as members - relatively strong, he said. AOA union dues amounted to one per cent of each pilot's salary.
Mr Lee, who is general-secretary of the independent Hong Kong Confederation of Trade Unions, said the sacking of pilots was a "declaration of war". "Very obviously, Cathay's objective is to break the union. Their objective is not to solve the problem."
Observers believe the current industrial action - with pilots effectively "working to rule" by following a "maximum-safety strategy" - is an extension of the 1999 dispute. Then, pilots objected to a management proposal to cut senior pilots' salaries in the wake of the Asian financial crisis and resorted to a "sick out" strategy of reporting they were not feeling well enough to fly. The pilots eventually gave in, but only after inflicting massive disruptions on the airline's schedule.
Investment analyst Timothy Ross of UBS Warburg was sceptical about claims Cathay was on a union-busting exercise. "It might be lurking in the back of their mind; it would be a very brave person who had a crack at it," he said.
The cost would be too great, said Mr Ross, citing potential losses in the valuation of the airline and a lower market position resulting from a protracted industrial dispute designed to cripple the union.
"It might end up being something of a pyrrhic victory," he said.
But economics professor Ho Lok-sang of Lingnan University said Cathay's sacking of pilots sent a clear signal it wanted no more industrial disruptions.
Speculation is building that the airline has received an indication that the Government is prepared to tolerate disruptions to the travelling public to ensure future peace on the industrial front.
This follows comments from Chief Executive Tung Chee-hwa that pilots seemed to take action "every couple of years" and were some of the highest paid in the world. Those comments were viewed as being supportive of the airline and putting pressure on the pilots.
Cathay's Mr Tyler said officials had told the airline that it was up to it, as a private company, to settle the dispute and that they hoped disruptions would be brought to an end.
"It seems to me that what has been said publicly by the Government is that they are expressing the views of the vast majority of the people of Hong Kong and that they want this over," he said.
At the press conference on Monday evening, following the sackings, AOA president Mr Demery sought to use the British background of Cathay's major shareholder, the Swire group, against the airline.
He said company executives were acting "almost as if they are a colonial hong" by firing people without giving valid reason, as required under employment laws in Britain.
"You, the people of Hong Kong, can decide who are the victims and who are the villains," he said.
Glenn Schloss (
schloss@scmp.com ) is a staff writer for the Post's editorial pages.