Air Canada – Organizational ChangesEssay Preview: Air Canada – Organizational ChangesReport this essayCompany OverviewAir Canada was established by Canadian parliament on April 10, 1937. The company was initially incorporated under the Trans-Canada Air Lines Act, as Canada’s national airline service. At the time of incorporation, Air Canada was established as a wholly-owned subsidiary of the Canadian National Railway Corporation.(AIF) In 1977, Air Canada reorganized under the Air Canada Act, at which time it became property of the Canadian government. In 1988, Air Canada was reorganized under the Canada Business Corporations Act, and shares were sold to the public. On April 1, 2003, Air Canada filed for creditor protection and on September 30 2004, ACE Aviation Holdings Inc. became successor and parent holding company of the reorganized Air Canada and its subsidiaries. Various Air Canada subsidiaries include Aeroplan, Air Canada Jazz, Air Canada Technical Services, and Air Canada Cargo. Finally, Air Canada “is Canada’s largest domestic and international provider of scheduled passenger services in the domestic market”.(AIF)
At the end of 2004, Air Canada employed 33, 124 employees worldwide. Air Canada operates within a unique lexicon of human resource relationships; the company employs workers from ten different unions, some of which include Canadian Auto Workers (CAW), Canadian Union of Public Employees (CUPE), International Association of Machinists and Aerospace Workers (ACPA), and Air Canada Pilots Association (ACPA). Historically, the relationship between employees, their respective unions, and Air Canada top management has been characterized by considerable animosity. These antagonistic relations had a direct impact upon the nature and outcome of organizational change at Air Canada.
Three Influential PartiesIt is important to note that during the restructuring process, Air Canada’s top management found itself trying to appease the demands of two contrasting bodies: the employees, represented by their respective unions, each with distinct needs and perspectives, and a myriad of prospective investors. Employee objectives centered around the preservation of salary and benefits, as well as continued job security. The investors, who were of crucial importance in Air Canada’s quest to obtain equity financing (especially in light of the government’s unwillingness to contribute) included companies like Deutsche Bank AG, and Cerberus Capital Management LP. The objectives of the investors were company-wide cost reduction, specifically in the area of labour expenses. As such, investors and employees, two groups whose participation was impertinent in the restructuring process, possessed contrasting and often mutually exclusive objectives. The aforementioned situation made for a delicate context of management decision making.
Robert MiltonRobert Milton became President and CEO of Air Canada in August 1999. He has led the company through many considerable challenges, including the bursting of the high technology bubble, the aftermath of the September 11th terrorist attacks, the SARS epidemic, and the company’s restructuring process.
Before taking the helm at Air Canada, Milton was a founding partner in Air Eagle Holdings Inc., and an independent commercial aviation consultant to British Aerospace. In his book entitled “Straight from the Top: The Truth About Air Canada”, Robert Milton speaks of his perpetual childhood answer to the frequent question, вЂ?What do you want to be when you grow up?’ His answer, according to his book, was “I wanted to run an airline. Not to be a cowboy or a fireman. Not an astronaut or an athlete. Not even a pilot or a navigator. It was the idea of running an airline that appealed to me-choosing the aircraft, selecting the destinations, scheduling the flights, and overseeing the operation.” (www.douglas-mcintyre.com) This is one of the strengths Robert Milton brings to the table as a leader: his genuine passion for what he does, and the вЂ?product’ he sells.
The Truth about Air Canada
In January 2015, the United States Air Force and its members made history: they gave one astronaut a second chance on the moon, flying a U.S. national shuttle during a joint mission to the ISS.
The reason the U.S. has been involved with a manned spaceflight program that took more than three decades of service is because of Bob’s commitment – and generosity – to the cause. At his work, he made the world a better place by raising money, training NASA astronauts, developing a technology-driven space program, building up his own company and establishing his own company.
And the reason for the man-made revolution in space engineering is a personal one.
The United States currently holds the No. 4 spot in the world’s top-ranked space program-making nation, behind Japan, Russia and China.
While the U.S. program is developing, its space program and the way it’s doing it, and continues to do so, still has some issues, including not only its own lack of a manned crew, but that its participation in it could create problems for other states and other countries around the world.
In September of 2013, Rep. Bob Goodlatte reintroduced a House Committee resolution declaring Air Canada an alien nation. U.S. Senator James Inhofe of Oklahoma brought the resolution to full-throated applause, with Goodlatte saying “to deny our nation’s greatest and brightest a second chance to live out their dreams or fulfill their duties in future generations is both immoral and unjustifiable.”
Goodlatte, a Utah Republican, introduced his resolution in the House of Representatives.
In his book, The Truth About Air Canada, Goodlatte speaks of his love of his country: His family was very different from most Americans, with a big family, as compared to our more homogenous country — as opposed to our more homogenous home.
He writes, “There is no United States government that is more American than those which belong to the United States Government. And no United States government is more American than that which has come to be known as a United States Government.”
A year and a half later, with Air Canada in a state of limbo, Goodlatte introduced the bill to the senate and took the floor. A second bill followed in the next few days and passed with just two votes.
In addition to the man-made revolution that’s going on through the Obama administration, Goodlatte also created one of America’s most prestigious research institutes.
The John F. Kennedy Memorial Institute, which is the American Institute for Space Studies’ largest, is located in Chicago’s W.W. Norton Park. NASA’s Goddard Institute of Space Studies is located in New York City’s New Museum complex.
During his time at the NASA National Aeronautics and Space Administration, Goodlatte helped develop a program called the Spaceflight Program that allowed scientists to explore space through a robotic arm, which would fly to and from Earth under the command of astronauts.
Today, Spaceflight, the
Purpose of ReportThe purpose of this report is to analyze the changes that took place between 2002 and 2004 at Air Canada. The scope of analysis includes all matters pertaining to the restructuring of the company, and the subsequent downsizing of employees. Special attention will be given to the actions of Robert Milton, and to William Bridges’ three stages of transition.
Description of the Organizational ChangeDeclaration of Bankruptcy and Corporate Restructuring PlanOn April 1, 2003, (as was previously alluded to), Air Canada obtained an initial order from the Ontario Superior Court of Justice, providing creditor protection under the Companies Creditors Arrangement Act. (CCAA) This initial order was amended on various occasions throughout the court proceedings, based on motions from Air Canada, its creditors, and other stakeholders. The court order afforded Air Canada a �stay’ on proceedings, which meant that the company received temporary immunity from its creditors. (AIF). As part of its restructuring program, Air Canada reduced its operating costs to a competitive level through the re-negotiation of labour agreements, aircraft leases and various other commercial agreements. The company also underwent a complete restructuring of debt and lease obligations, redefinition of Air Canada core product offerings, and a reorganization of corporate structure. (www.aircanada.ca)
Effects on EmployeesAir Canada underwent a complete restructuring and downsizing of its labour force. The company negotiated new long-term collective agreements with each of its ten unions, all of which allowed for the elimination of unconditional employment security conditions, permanent pay reductions (for 7 of the 10 unions), and various modifications to work rules. The following are short descriptions of the agreements reached by various unions:
CUPE agreed to $51.6 million worth of pay and benefits cuts, including a 10% pay cut overtwo years. (Toronto Star, 2004.) Canadian Auto Workers agreed to $45.3 million in cuts, and the Air Canada Pilots Association $38.5 million. The International Association of Machinists and Aerospace Workers, which is Air Canadas largest union and represents 11,500 mechanics, baggage handlers and clerks, surrendered $36.5 million. As part of its deal, the machinists agreed to wage cuts of as