Major corporate shake-up: The PAL-SMC repurchase
These changes will definitely be directly impacting on the entire airline induThis week's final consummation of the PAL repurchase of the 49% share of the country's flag carrier, for a staggering US $1.3 billion, is no doubt the country's biggest corporate shake-up this quarter, if not of the entire year. It signals many strategic and long range developments in the airline business and thus we can foresee that many major changes in management and operations are soon to be announced.stry and the market, as well as on the leadership and management style in the region's oldest airline. It is a very important deal because the San Miguel Group led by the amazing Ramon Ang is turning over the management back to the Capitan again, the one and only Lucio Tan.
It has been reported that Ramon Ang, in very brief span of two years, has grown San Miguel's investment of US $500 million to more than double that amount and sold it back to the Tan Group for a whopping US $1.3 billion. That will definitely push higher San Miguel's profit margin this year as other SMC-owned companies are doing exceedingly well under Ramon Ang's outstanding corporate leadership and business excellence. People are now betting on the question as to who between Ang and Tan is the real winner. Which firm is a better dealer: San Miguel or the Tan's group? Among San Miguel's major achievements in PAL was the massive fleet renewal program which involved various purchase agreements with AIRBUS and the purchase of many brand new aircrafts including A330 and A321 NEO.
This column will not dare to discuss the financial and investment aspects of the deal. That may not be our cup of tea. We should rather focus on this major deal's implications on how management would now treat its employees and relate with unions in solving many labor problems and industrial relations issues. People in the know are aware that PAL has three unions, namely the richest, which is the ALPAP, the pilots' union; the FASAP, which is the labor organization of flight stewards and attendants, and of course, the biggest and may be the most aggressive, the PALEA. We also know that many big labor cases are pending with the labor tribunals, with the Court of Appeals and the Supreme Court, including, of course, that rather controversial alleged flip flopping in the FASAP case before the highest court of the land.
Human Resources professionals and practitioners have been watching the different styles of Lucio Tan and Ramon Ang in dealing with people-related issues and concerns, from hiring to retiring and even firing personnel as well as in negotiating collective bargaining agreements, addressing concerted activities and in dealing with labor arbiters, Commissioners and justices. Labor relations lawyers in the country are still amazed at how Lucio Tan then wrapped up a breakthrough deal with PALEA, during the ERAP presidency, when the union then agreed to have an unprecedented ten-year CBA moratorium, Mr. Tan was able to convince that union to give up all salary and benefits increases for ten years in exchange for shares of stocks given for free to each union member.
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