Magazine article Personnel Journal

Employee Ownership Flies

Magazine article Personnel Journal

Employee Ownership Flies

Article excerpt

John Samolis used to have nightmares. As vice president of labor relations at United Airlines, he's weathered stormy transactions. After several previous attempts at consummating an employee stock ownership plan (ESOP), an agreement was finally signed last July.

UAL Corp., parent of United Airlines, awarded various employee groups 55% of the company's stock in exchange for a $5 billion bundle of wage, productivity and benefit concessions. That makes United the largest employee-owned corporation in America. Included in the agreement are the 8,700 members of the Airline Pilots Association and the International Association of Machinists that represent the 24,000 mechanics and ground-service workers. The Association of Flight Attendants (AFA), which represents 20,000 or about a quarter of all employees, has refused to join the plan. But Samolis says the company is still seeking their eventual buy-in. Meanwhile, employees won the right to fill three seats on the 12-member board of directors.

"This is going to be a real test for the HR area," says Samolis, whose company is No. 50 on the PERSONNEL JOURNAL 100 list. "Are we going to survive and prosper? Is this going to supply a template for the industry?

U.S. business and labor leaders--including Labor Secretary Robert Reich--have hailed the historic experiment as one that may set pace for other models of corporate governance in the future. After a decade of several buyout attempts, rumors of takeovers, mergers and downsizing drives, United Airlines is taking off on a grand experiment that will expand the normal boundaries of bridgebuilding and corporate responsibility. It will be a major challenge since the total employee work force of 74,400 has not been as united as its namesake would suggest.

Samolis says that he's prepared for the daunting task. His background in psychology helps. In the early '70s, he worked for the city of Cleveland and the federal government in the area of drug prevention and education. Part of his job was to seek community support from the the private sector. As he became more familiar with the business community, he gradually made a switch to private industry and began his career in labor relations. In 1983, he came on board at United. For three years he served as director of labor relations for the airline's ground employees. Three years later, he was promoted as an officer to his current position. "It (the transition) made sense--the interpersonal skills, the psychology background to deal with individuals and then labor unions," he says. …

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