Striking a deal – or just on strike?

30 March 2010
How not to negotiate: first, adopt a loud and provocative public position. Second, make unspecified but worrying threats. Third, refuse to budge. Fourth, wait and watch everything collapse around you. Fifth, go back to step one. This is a potted and perhaps slightly unfair summary of the dispute between British Airways (BA) and the Unite union, which at the time of writing was still hopelessly unresolved. Is it naive of me to imagine that by the time you read this a deal will finally have been done? I hope not. But if you are reading this stranded at a far-flung provincial airport waiting for an alternative flight home, then I apologise for tempting fate. Negotiations can be difficult. Buyers do not need to be told that. But, to earn the label “negotiation”, the talks have to involve movement – that is, compromise – on both sides. Simply restating (and not shifting from) an original position may make you feel good and, to some people, look tough, but it is not negotiating. Serious negotiations also involve grappling meaningfully with underlying issues. As the distinguished industrial correspondent Geoffrey Goodman wrote in the Guardian last month, both sides in the BA/Unite bust-up have failed to grasp “the fundamental truth behind the dispute: the global battle for survival that encompasses all airlines. The entire business is in a crisis similar to that which has transformed the global car industry – too many companies chasing a rapidly changing market, affected by increasing global fuel costs and environmental problems and internal investment conflicts that have been completely changed by the banking and financial collapse.” It’s a mess, in other words. What lessons can we draw from it? First: honesty. Of course the dispute got dragged into the electoral cycle and became, whether either side wanted this or not, political. It was pretty futile for anyone to deny this. The denials were worrying, though, because they implied that both parties were not being straightforward about their intent. To start a negotiation with the aim of completing it satisfactorily you have to be pretty honest about your aims. That goes for both sides. If you cannot even agree about the context, which is the reality of the situation described by Goodman, then it is going to be hard to make progress. Second: pragmatism. Unless BA managers are intent on destroying workforce morale, and unless Unite wants to see its members’ future jeopardised, then we must presume that both sides want to reach a deal. So what were/are they waiting for? It is as if the leaders of both sides are playing to different internal audiences: BA chief executive Willie Walsh wants to convince investors he is serious about reducing costs aggressively, so the temporary disruption of a strike is a price worth paying. The union leadership has to convince its members that it has stuck out for a proper deal so a strike may be necessary for appearances’ sake. But a phoney war only adds to the confusion. Better to do a deal in the first place. BA has big problems: a huge pensions deficit and high costs compared with the rest of the industry. It must negotiate a better future, with the agreement of staff. But, in every sense, it is barely getting off the runway at the moment. Stefan Stern writes for the Financial Times (stefan.stern@ft.com)
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