American Airlines Ex-CEO Bob Crandall Shares His Crazy Cost-Saving Strategy
Former American Airlines CEO Bob Crandall fired a guard dog at a Caribbean outpost to keep costs down. Just look at the self-satisfied gleam in Crandall's eye. This is no mere cocktail party story, but a defining act of corporate leadership for his grandkids to cherish.
Crandall either reflects poorly on American Airlines, or the dollar-driven management style that makes Wall Street giddy. Crandall's successor, Donald Carty, was ousted for his own cost-saving strategy: asking unions to accept almost $2 billion in salary cuts while showering executives with lavish retention bonuses. Something to keep in mind next time you ask for peanuts or a pillow.
The enlightening clip comes from NBC travel maestro Peter Greenberg's excellent two-hour behind the scenes look into American Airlines, which occasionally airs on CNBC.
Wonder What Goes On Behind the Scenes at the Airlines? [Peter Greenberg]
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Hrm, anyone feel like taking a trip to the caribbean? I hear there are some excellent warehouses for robbing....
Man, that's the kind of crazy, old guy story you listen to and nod while slowly moving away from the teller.
The woes AA experienced in the 80's and 90's can be attributed to Crandall. During my heavy flying experience in the 90's I seldom flew AA because of the flight attendant's surely attitudes and the fact that I always had baggage trouble on AA.
I hate American Airlines. I had so many miserable AA experiences in the late 90s and early 00s that now I pay extra to fly with someone else.
Graybeard investors may remember that it was this sack o' shit that introduced "yield management" software to Sabre
(then proprietary to AA) which unleashed the whole stupid,pointless fare structure that the big carriers use to this day.This stupid system assures that if a plane is carrying 321 passengers to Phoenix,they paid 321 different fares. This started the whole whack-a-mole fare chase that utterly destroyed any brand loyalty that some customers had.Now while this good 'ol boy is enjoying a comfy retirement,the damage that he did lives on.Fuck you,Crandall and the plane you rode in on...
Holy crap! Workers of America Unite! Corporate America HATES you! I am sure this asshole did not cut costs by reducing his salary...
LOL - Why didn't AA just get a tape of Crandell saying "We gotta cut costs..." and then fire him?
Wait... he put the dog on part time?! It's a dog! You have to feed it regardless of whether it's working that night. Having it there some nights would cost the same as having it there every night. Unless they were renting the dog, I guess. But what sort of whack-job rents a dog? This guy is hilarious. I think it would be best for him to tell that story without insisting it literally happened as such.
So the the next year I said, let's take off the doors to the warehouse. The thieves aren't going to check if the place has doors. The the next year I go back and I say, do we really need the security cameras?
What a dick.
@ju_ju_eyeball: It astounds me how completely snowed much of America is... US corporations have been in a massively "fuck you" snowballing mode since the 80's. B
But hey, you can buy really cheap shit so who cares. We're selling out country out, but who cares... we can get 25 pair of Malaysian underwear at WalMart for $1.95...
Seriously, this is what a CEO of a major airline worries about??? Firing a dog???
This is VERY telling.
Verbatim quote: "Don't feed the dog." Cost cutting through animal cruelty, and this something he's proud of! [Don't mistake me for one of those PETA-type nutjobs, I'm actually eating steak as I type this.
]
Hell yes let's all go to the carribbean. Unless you're afraid of a recorded dog lol.
@Bay State Darren: No worries, there's a big difference between PETA nutjobs and those of us who think maybe giving a dog FOOD is a nice idea.
Typical modern business short term thinking. Save a small amount of money immediately (a security guard's salary) in a way that increases the chance of a much larger cost later (when and if the warehouse gets robbed) and do so in a way that shows utter callous disregard for your employees thereby driving both employee loyalty and employee moral into the toilet.
This guy's proud that he saved $2/hour by weakening his own company. Idiot. Not fit to manage a convenience store.
@Bay State Darren: I wish I was eatig steak while reading the consumerist. I had a sirloin steak burger earlier...but its just not the same.
"I was so busy being an 80's guy that I forgot to cure my.........boneitis"
As offensive and shameful as that story is, isn't it made 10 times worse by the fact that it took him, oh, five years to develop that clever cost-cutting plan?
If you want and expect good service with safety, fly a foreign-based carrier if possible. Their costs are lower and their service is usually better than domestic airlines in North America.
Such airlines may pay lower wages than US-based airlines, but for the staff (hired from their country, not the US) the wages are good by their countries' standards. I won't name companies, but I'm talking about airlines from Korea, the Philippines, Thailand, and similar countries.
@ju_ju_eyeball: YES! :)
Please tell me the interviewer called this guy an idiot right after he said it happened just that way.
Unfortunately, AA is the dominant airline for most of the Caribbean, so people are stuck flying them no matter what.
Also, talk about not knowing your market - if it's really a small Caribbean island, people WILL know when the guy's working or not because it's a small, gossipy world. Also, how nice of him to cut the guy's job to part time in a part of the world where jobs are fairly scarce to begin with.
Yeah, this guy is a nut, but one with power to mess with people's lives. It's like a little boy who decides to knock over his Lego tower just because he's bored.
Bob Crandall needs to be given a golden parachute without a rip-cord followed by a quick push out of one of his planes.
Here's to hoping his kids apply the same cost saving management to his nursing care.
I worked for AA for 7 years and they suck even worse to work for. People hate to work there and they treat their customers like shit. Great "legendary" CEO has a lot to do with it. To this day, there is no trust even among the management groups there because of bobby boy. Glad I'm not there anymore. FUCK YOU AA AND BOB
I bought the CNBC DVD on this show. I love watching it ever now and then!
@humorbot:
Possibly, but he'll have been measured (in the middle management position he was doubtlessly in at the time) on incremental savings.
There has to something left for next year.....
(If he was in a senior management position, this is just confirmation of the man's dire incompetence.
What a f-tard!
The really ironic thing is that, halfway through the interview, they replaced the interviewer with a tom brady fathead and a tape recorder that said "uh huh" and "interesting" in an endlessly repeating loop.
cost cutting indeed!
Micromanagement!