United Airlines Reducing Local Workforce On Guam

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Guam will still be major hub, but dozens of jobs in question

By Mar-Vic Cagurangan

HAGÅTÑA, Guam (Marianas Variety Guam, Sept. 20, 2012) – With at least 90 local jobs at stake, United Airlines will shut down its contact center, outsource the cargo division and reduce airport operations employees on Guam; but a company spokesman debunked speculations that the territory will be demoted to a sub hub.

Koji Nagata, UA director for Asia/Pacific Communications, said the current collective bargaining agreement accommodates displacement rights and other options for employees who will be affected by the streamlining initiatives.

"It is difficult to determine at this time how many positions will be eliminated," Nagata said in an email to Variety.

Nagata said the Guam Contact Center currently has 48 employees, while the cargo department has 42, including agents, management and clerical employees.

"Although we will be closing our contact center, the city ticket office will remain open and we are working to determine the right mix of full-time and part-time employees that will be needed to staff that facility," Nagata said. "As to the cargo vendor, we will choose a vendor once we have evaluated all proposals."

Outsourced

The company-wide outsourcing plan – which was protested by UA employees in Houston, Texas last month – is part of the cost-cutting measures that the carrier has been adopting since the merger between United and Continental went into effect last year.

Quoting an anonymous letter sender, the Guam Blog wrote yesterday that Brian Wessling, regional director for airport operations, "started outsourcing things as simple as wheelchairs for passengers and is escalating to larger and larger contracts."

A local union representative for UA declined to comment yesterday.

Earnings decline

Despite the workforce reduction, Nagata said "Guam will continue to be one of 10 worldwide hubs for United."

He said the streamlining plan "was part of company-wide initiatives to increase efficiency and achieve sustained profitability."

In its second quarter financial report released in July, the world’s largest carrier reported a 37 percent decline in its earnings from a year ago, resulting from the one-time integration costs and sluggish sales growth.

United posted a net income of $339 million compared to $538 million a year earlier. Operating expenses climbed by 4 percent, mostly due to a 5.6 percent increase in fuel expenses.

In the transcript of the earnings conference call in July, Jeffery A. Smisek, UA chief executive officer and president, said the carrier’s second quarter performance declined on metrics such as on-time arrival, mishandled bag rates, and cancellations.

"We recognize that we added new stress to the system by simultaneously converting to a single passenger service system, implementing hundreds of new processes and procedures, rerouting aircraft across our network and harmonizing our maintenance programs," Smisek said in the transcript posted on the UA website. "Those changes were in large part responsible for the degradation in our operational performance."

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