Southwest CEO No-Confidence Drive Joined by Fourth Union

(Bloomberg) -

Southwest Airlines Co. baggage handlers and airport ground-operations workers have joined other labor groups in calling for the ouster of Chief Executive Officer Gary Kelly over flight disruptions and what they call the misguided use of cash.

Leaders of Transport Workers Union Local 555 approved a resolution calling for the replacement of Kelly and Chief Operating Officer Mike Van de Ven, President Greg Puriski said in an interview Wednesday. Labor groups representing Southwest’s flight attendants, pilots and mechanics this week also have called for the two executives to step aside.

The unions criticized Kelly for spending billions of dollars on stock buybacks instead of plowing the money into updates of the airline’s aging computer system and for focusing too much on cost controls. The unions represent about 36,000 of Southwest’s 52,300 full-time workers, based on company numbers. Pilots, flight attendants and mechanics are in contract talks with Southwest.

“The culture of Southwest is just not the way it used to be,” said Puriski, whose union represents workers who load bags and cargo onto planes, direct aircraft at gates, stock planes with food and beverages and oversee onboard weights and balance. “It’s profits before people now, which is very disheartening. We just don’t like the direction of our company.”

Southwest reiterated a statement issued Monday saying the no-confidence votes were an effort to pressure the airline into meeting demands during contract talks.

“We want to work with them, not against them,” Randy Babbitt, Southwest’s senior vice president for labor relations, said of the unions.

The labor groups cited technical breakdowns that affected flight operations during the busy summer and holiday travel seasons over the past several years, including last month’s computer failure. The airline, which reported record profits each of the past three years, is investing about $500 million in a new domestic reservation system that will come online in phases over the next three years.

Southwest is “studying every single angle” to determine what caused an aging router and its backup system to fail in the July disruption, Kelly has told workers. While those computers were restored about 12 hours later, flights continued to be canceled or delayed for several days as the carrier attempted to get crews and planes in the right locations. Disruptions also occurred in 2015 and 2014.

Southwest spent $700 million to buy back stock in the second quarter to complete a $1.5 billion repurchase program, and its board authorized another $2 billion plan in May.