Jet Airways Reverses Layoffs, Naresh Goyal Apologizes

raj must be gloating

also


what does it say about management?

pissed off with the chairman?

This is a bad for business and employment both. It is a LOSE-LOSE situation.

Companies will be loath to hire anyone, thereby lakhs of jobs will no longer be created.
Companies would shy away from setting up in India.

If Employees can resign and go anytime citing better opportunities, why can't employer ask a employee to leave citing bad economic conditions?

For readers to chew on:
Jet has defaulted on payment for ATF Fuel in the last week. What does it say about its condition?

Now that capitalism has fallen on hard times, and economies need to be bailed out by governments, socialists think their hay days are back again. But I do not what how kicking out Nano wasting thousands of crores in investment and thousands of lost job is a receipe for getting out of economic crisis. If socialists are going to stiffle industries and businesses, how do they expect economy to create wealth and jobs?

Corporate units in modern era depend on zillions of specialized skills and tasks, many of which may only be needed for short-term basis or during project life-cycle. Businesses also go thru economic cycles of expansion and downturn, requiring hiring spree during expansion and lay offs during business downturn. How can government or mobsters force businesses to do payroll as if it is some kind of entitlement? It can create chilling effect on new business investments and bankrupt the existing businesses. Why would anybody start a new business if mob can force him to do payroll even when his business can not afford to pay it? How can his business survive if he can not cut costs during business downturn? That is a surefire recipe for bankruptsy for any business. Is that how socialists intend to get back to power by artificially creating shortages, unemployment, scarcities and human misery - so they can pose as saviors and champions and fool the masses?

>>Jet has defaulted on payment for ATF Fuel in the last week. What does it say about its condition?

a theory floating around is that they were looking for a government bail-out. hence the whole hulla boo about laying off employees and defaulting payments.

>>how kicking out Nano wasting thousands of crores in investment and thousands of lost job is a receipe for getting out of economic crisis.

that was not socialism.raj thakarey or mamata banerjee do not in any way come across as followers of socialism.they are followers of goondaism.

>>If Employees can resign and go anytime citing better opportunities, why can't employer ask a employee to leave citing bad economic conditions?

how many companies will be happy if the employees drop in a mail on friday evening stating that he is quitting effective tomorrow morning?

>>Companies will be loath to hire anyone, thereby lakhs of jobs will no longer be created.
Companies would shy away from setting up in India.
You still think that companies would be hiring in lakhs? please wake up.

I beleive that companies should be free to fire employees if they are loss making. But what Jet did was the theater of the absurd. You don't just call up 850 'employees' on fine morning and say that they are fired. There are definately more descreate ways to go about it esp without giving 850 'employees' a chance to group together. The 'employees' is in quotes because i read somewhere that they are not on the payroll of Jet anyways but rather on probation. Oracle and other IT cos have fired/laid off enough employees but I have never seen them on the streets.

Dark Lord

"a theory floating around is that they were looking for a government bail-out. hence the whole hulla boo about laying off employees and defaulting payments."

I thought it has to cut back operations, lay off staff, default on payments and seek relief from government because it has suffered huge losses and faces a sharp economic downturn for protracted period.

Are you suggesting that all those billions in losses aviation industry has suffered is a ploy to get bail-out from government? What other options it has other than bailout, and cut back in its operations/staff during economic downturn it is going thru?

Kerty:

""What other options it has other than bailout, and cut back in its operations/staff during economic downturn it is going thru?""

and yet you have nothing but contempt for ordinary folks struggling to get by, when they ask for a bailout when they are about to be fired? economics 101 is it? or perhaps commonsense 101?

>>I thought it has to cut back operations, lay off staff, default on payments and seek relief from government because it has suffered huge losses and faces a sharp economic downturn for protracted period.

This is what i dont get. They were almost never making profits. Jet acquired sahara and Kingfisher acquired Deccan and then Jet and Kingfisher essentially enter into a non-compete agreement. So the top 4 four airlines are one now. They have the pricing power now.

>>Are you suggesting that all those billions in losses aviation industry has suffered is a ploy to get bail-out from government? What other options it has other than bailout, and cut back in its operations/staff during economic downturn it is going thru?

I am suggesting that the people were fired off (not payroll employees but those on probation) not because they were making losses. And moreover, why should the government bail-out airlines? employment?? greater economic good?? economic crisis??

oops, he changed his mind and even apologized. kerty's economics 101 lectures to him, need to be delivered with a modicum of conviction.

cs

"oops, he changed his mind and even apologized. "

When government and mobsters hold a gun, far worse can happen. If somebody points a gun or promises a better deal, I would apologize too, wouldn't you?

We do not know what transpired behind closed doors but whatever happened can't be that promising or healthy for the nation looking for roadmap to sound economic culture. When big business, politicians and mob power creates a nexus, results are not going to be pretty. It can mother corruption that would be hard to contain. Don't be surprised if it short-changes economic welfare of nation to secure the welfare of few.

ha ha, Kerty, you could do a comedy script. poor naresh goyal, threatened by "government and mobsters"

Dark Lord

"They were almost never making profits. Jet acquired sahara and Kingfisher acquired Deccan and then Jet and Kingfisher essentially enter into a non-compete agreement. So the top 4 four airlines are one now. They have the pricing power now."

Air lines in USA have a long history of mergers as a way of surviving. Air lines on the brink of failures are usually bailed-out/acquired by stronger airlines. Airlines that were strong at one time eventually do become sick and get saved/acquired by other airlines that are still strong enough. That has been the story where aviation industry has been mature. In India, Government ran the Aviation and private aviation industry is fairly young. The industry is not robust enough to be able to bail out its own sick players internally. It must look up to foreign airlines or Indian government. I am sure aviation industry is still treated as as a government's baby, and government baby-sits it by diapering everything that the industry does. Rising fuel costs, security fears, declining travelship, competitive market place, economic downturn and fears of recession, staggering losses suffered by people in stock market etc have hurt the aviation industry and prospects for quick recovery are bleak. That means industry has to change its business plans, it has to lobby government to acknowledge the need for dramatic changes in the industry. It has to find rescuers, be they foreign players or Indian government. Layoffs during Diwali could very well be the drama staged by the industry to get the attention of powers that be.

"I am suggesting that the people were fired off... not because they were making losses."

It could very well be that they staged the drama of layoffs. But there is no dispute that they are making huge losses and something has to give sooner or later or else everybody loses their job.

"why should the government bail-out airlines? employment?? greater economic good?? economic crisis??"

Government should not bail out individual corporations or business entities. They should rise or fall according to market play. Government has vital interests only in maintaining economic infra-structure - and towards that end, it might have intervene whenever major failure in infra-structure is imminent. That is why government maintains major stakes in energy, transportation, banking, money supply etc. Is vitality of aviation industry vital for economic infrastructure? If so, government might consider it in national interest to intervene and bail out the industry.

Kerty:

""They should rise or fall according to market play.""

the myth of the "free market" continues. market play? indeed, "free market" is a bit, to quote sridhar, like cricket (play!) without umpires. it is always a question of how much regulation at various levels, never a question of no regulation, "let the market forces play freely". not even adam smith, as is conventionally assumed, championed the mythology of free market. economic models are good as long as they are models, far away from the real muck of society, of employees and employers living out real life, not in a bubble constituted by abstract economic models and managerial fantasies.

CS

I have shut the doors of Quizno Restaurant and laid off people. That was pure market play. Nobody bailed me out. I lost a fortune on it. I know people who have closed businesses because their businesses were not profitable. If there is not enough market for products or services they sell, market will force them to fold their tents. Not a rocket science. People in the real world do not live by theories or cliches.

>>I have shut the doors of Quizno Restaurant and laid off people. That was pure market play. Nobody bailed me out. I lost a fortune on it.

sorry to hear that.

>>economic models are good as long as they are models, far away from the real muck of society, of employees and employers living out real life, not in a bubble constituted by abstract economic models and managerial fantasies.

Economic models is based on study of real life. There is no use of an economic model which is not based on real life and such a model is generally thrown in garbage bins very soon if a model is not based on real life. The use of model is to explain or predict the incidents in real life, from why people tend be obey laws to how market determines the price.

>>Is vitality of aviation industry vital for economic infrastructure? If so, government might consider it in national interest to intervene and bail out the industry.

That is the right question to ask. All aviation players indulged in extreme price competition in the hope to gain market share and loyalty among flyers. But flyers didn't stick to a particular airlines rather went by fares. Other than the Jet-kingfisher-Deccan-Sahara grand alliance, there are a few LCC's left, the spice jet, indigo, Go air etc. Jet, I believe, employs around 13,000 people. The crisis will definitively not because these 13,000 would be unemployed(the crisis will be for congress as elections are approaching but not for the economy).

The government decides the taxes and FDI limits but it does not decide the fares. The airlines are free to fix them. The airlines cannot blame the government for their present condition.

By the way, post the grand alliance, kingfisher plans to cut salaries by 90% (pilots i believe).

Kerty:

""I have shut the doors of Quizno Restaurant and laid off people. That was pure market play. Nobody bailed me out."'

Sincerely sorry to hear that. Nobody disputes that market forces are not at work; or that they do not force business to close up. however a submarine store is not quite the same as Chrysler corporation or the aviation industry. your earlier talk about infrastructure etc. was more to the point. at the end of the day economic and managerial models are derived from society and its problems, not the other way around! models do not dictate what should be done in real socieites; societies influence the construction of models and these models become useless after society changes. and so the process goes. to point to some abstract model alone is suicide. if that were the case, Amartya Sen, Gary Becker or now Paul Krugman would never get a nobel prize for economics; remember a guy who got the prize in 1997 for coming up with the perfect model for making money out of derivatives. just a few months later all those who followed his model lost billions of dollars and the govt. had to step in. models are good tools to think thru the chaos of society, but they are not articles of worship for most thinking economists. that is my point. models do not capture the real suffering of people when they are laid off in the thousands. the original claim of economics is to enhance the well-being of society, via the economy, not to produce more money per se.