27 May 2018 United CEO’s “Personal” Decision Against NRA Deemed “Political” by Experts and Employees
It was another “Tim Cook moment” for corporate America – this time involving United Airlines CEO Oscar Munoz. And, once again, it came courtesy of the National Center’s Justin Danhof.
Munoz, answering a question posed by the National Center’s Free Enterprise Project (FEP), was forced to answer for what he called a “personal” decision he made on behalf the company. It’s a decision that offends supporters of the Second Amendment. And, after FEP’s questioning and
Munoz digging in his heels, it became clear he offended the business community as well as his employees.
FEP’s participation in the United shareholder meeting is a great example of how it is working hard to keep the business community loyal to the free market and investors rather than harming themselves with forays into partisan politics.
The term “Tim Cook moment” came from when Justin enraged the otherwise serene Apple CEO in 2014 by questioning him about the company’s risky use of government-subsidized “green” energy. Cook spat back at Justin: “If you want me to do things only for ROI [return on investment] reasons, you should get out of this stock.” When Facebook CEO Mark Zuckerberg got mad someone pointing out the importance of shareholder opinion a year later, it was called his Tim Cook moment.
Now it’s Munoz’s turn to assume the mantle.
In Corporate America’s newest Tim Cook moment, Justin took Munoz to task at United’s shareholder meeting for his recent decision to cancel a discount airfare for National Rifle Association (NRA) members traveling to the group’s annual convention. This was Munoz’s decision, made in response to the school shooting in Parkland, Florida.
Justin Danhof, Esq.
At United’s meeting, Justin asked:
I suppose you are ignoring the fact that the NRA had nothing to do with what happened in Parkland and that the perpetrator had zero affiliation with the NRA. But, hey, congratulations on your virtue signaling. What exactly did investors get out of that? The company is willfully giving up money. That’s an odd choice for an airline company in a hyper-competitive industry…
[Bekrshire Hathaway CEO Warren] Buffett… explain[ed] that corporations that make in-the-moment political decisions are subject to the fickle nature of politics and are constantly reacting to events rather than standing on consistent principles.
Can you tell us – your investors – how it makes sound business sense to alienate millions of potential customers who support the 2nd Amendment, and explain why you have this right while Warren Buffet has this wrong?
Munoz replied that his decision “wasn’t political.” Instead, he claimed it was “personal with regard to my family at United.” He noted that one of the Parkland victims was the daughter of a United pilot.
In FEP’s post-meeting press release, Justin said:
[T]his explanation insults the intelligence of United’s investors and customers. United has 90,000 employees and has been around for nearly 100 years. In all that time, has no other United employee or a family member experienced gun violence? That’s hard to believe. It would seem the company, like so much of the mainstream media, regularly ignores shootings in areas such as the South Side of Chicago [where United is headquartered]…
United fell in line with the liberal mob. Of course its decision was political… [H]e refused to address how this decision might affect United’s business. That should concern the company’s investors. That’s a leadership failure of epic proportions.
The business media picked up on the story, and there was no good news for Munoz.
Inc. actually reached out to dozens of members of Munoz’s corporate “family” and found that, of its sample, United employees disagreed with his decision by a 4-1 margin]. Inc. reported:
The CEO of United Airlines often speaks his mind. But now some United employees aren’t very happy about what he has to say.
It’s all about what happened Wednesday at the company’s annual shareholders meeting.
There were the usual airline-issue kinds of things on the agenda: rising fuel prices, the search for a new CFO.
But then there was also an activist investor from an organization called the National Center for Public Policy Research, who came with an agenda of his own. And CEO Oscar Munoz took the bait…
Munoz’s response was stunning and frank, according to Bloomberg: “Sir, it wasn’t political. It was personal with regard to my family at United.”
And those three words resonated and rebounded around the Internet quickly: “It was personal.”
Inc. reported these responses from United employees about Munoz’s decision and his stated reason for making it:
- “It is a political decision.”
- “If it was political then he doesn’t speak for us that do support the NRA. If it was personal, then I suggest he step down since he [can’t] seem to separate personal decisions from business decisions.”
- “It was his personal opinion. Not mine! Shame on him.”
- “He doesn’t speak for me and he is NOT my family!”
In a discussion about the meeting on CNBC, the majority of the guests – as Justin pointed out – thought the move as a bad one for the company in a competitive market:
- “He doesn’t own the company. It’s not Munoz Air.”
- “A decision like this is big enough that he has to go in front of the board and pitch it to them and sell it. And, if he sells is right, they are all gonna be on board with him.”
- “If it’s such a no-brainer, the board would say yes.”
That last comment was from the CNBC host!
FEP’s activism did not escape the notice of the NRA itself, which wrote about it on the website of their America’s 1st Freedom magazine:
Corporations might have thought they were immune to criticism after they sided with outspoken liberals in their decisions to denounce the NRA and the firearm industry, but if shareholder meetings are any indication, they are being called to answer for their decision.
Justin Danhof, director of the National Center for Public Policy Research’s Free Enterprise Project (FEP)—a national proponent of free-market investor activism—has been making the rounds at annual meetings of shareholders and criticizing the political move, saying companies are bowing to outside pressure rather than doing what’s best for the shareholders…
Hats off to Danhof and the FEP. It’s time that big business hears from someone on the other side of the aisle. Maybe once the corporate leaders start seeing the effect on the bottom line, they’ll recognize the voices of reason.