I'm an Australian, based in the Washington, DC, area of the United States. I spend a lot of time there with Jasmine, Australia's best-known speedsolver of the Rubik's Cube. Prior to the US, Jasmine and I were based in London, UK. We have also lived previously in the United States and Australia.

I have worked for an Australian business rules and compliance company since 1999 in Australia, the US and the UK. I have also lectured in IT and Law related topics at King's College, London, and at The Australian National University.

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Employee involvement in cost-cutting: an interesting article about American Airlines

Over the weekend, I came across an interesting article in The Christian Science Monitor (via Boing Boing) which shows that corporate cost-control can be about empowering employees to a much greater extent than the media often suggests. The article's (quite compelling, I think) suggestion is that when companies need to get their costs of doing business down, management needs first to instil awareness of the issue throughout the company, and then to be receptive to employees' suggestions about potential efficiencies.

The article is based on the experience of American Airlines, which has recently returned to profitability after five years of losses:

Two American Airlines mechanics didn't like having to toss out $200 drill bits once they got dull. So they rigged up some old machine parts - a vacuum-cleaner belt and a motor from a science project - and built "Thumping Ralph." It's essentially a drill-bit sharpener that allows them to get more use out of each bit. The savings, according to the company: as much as $300,000 a year.

And it was a group of pilots who realized that they could taxi just as safely with one engine as with two. That was instituted as policy has helped cut American's fuel consumption even as prices have continued to rise to record levels.

...

While the other so-called legacy carriers are also slashing labor costs and increasing efficiency in an effort to compete with successful low-cost airlines, American has been the most aggressive in emulating the positive employee relations of low-cost rivals. Indeed, when American's management intensified its cost-saving efforts, it didn't turn to high-priced outside consultants. Rather, it asked its employees, since they do their jobs day in and out and know them probably better than anyone else.

There are probably a couple of reasons for involving employees heavily: first, their experience working at a detailed level in the business; and second, good employer-employee relationships are less likely to result in industrial action.