JCBA from My Seat
Captain Mike Burr
Chairman-LGA
The Lost Decade
To give my critics their first bit of ammunition, I’ll start with a brief recap of what we’ve lost at the hands of misguided management since 2003 and beyond. Post 9/11, we began an era of pay cuts, furloughs, failed AA initiatives with cute marketing names and a leadership succession which followed the brilliant business strategy of “shrinking to profitability.” We were along for the ride as we watched the greatest airline in the world slide backwards in ranking and prestige.
2003. 23% pay cuts to preserve our pensions followed immediately by 23% raises for top level managers and the SERP that protected executive pensions even in liquidation. 2011. Bankruptcy of convenience. Pensions frozen. 1113 term sheet threats. LFBO1. LFBO2. Bankruptcy contract. Profit Sharing sold for $12 Million (after a decade of hidden profits, hard to criticize).
Exit Bankruptcy. MTA, MOU to get us to JCBA. Common shareholders receive equity. Dividend declared for the first time since the early 1980s. Record profits. Declining oil prices. BABOOM!! Finally the cannon shot we’ve been waiting for. New Management Team that we were instrumental in recruiting. New Culture!! Out with the old, in the new!!
Oops, Not so fast.
The New Bosses
Make no mistake, service at the National level is tiresome, thankless, and often takes its toll on the personal lives of those involved. Regardless of differing opinions, my hat is off to each member that has dedicated their time at the expense of their families in the service of our pilot corps.
Mr. Parker visited the BOD at APA’s request on the second day after the board grew to 22 with our new CLT, PHL, and PHX brothers. On display was unity that made me proud as the “New Boss” told the new boss, “ABSOLUTELY NO TO SCOPE CHANGES.” That yielded fruit and Scope was eventually off the table thanks to membership and BOD solidarity augmented by the tenacity of Scope Chairman Tim Hamel. Unity goes a long way and we must use this leverage to our advantage moving forward.
Membership Ratification? The MOU clearly defines the JCBA as an amendment, outlined the 30-day post single carrier determination timeline and set the arbitration guidelines. According to the APA Constitution and Bylaws, amendments shall be ratified by the BOD. DFW, LGA, and MIA wanted to ensure 45 days for membership ratification as a provision of the 30-day extension. The other domicile representatives didn’t want to “muddy the water” with added details beyond the 30 days. The “Division of the House” started to take shape as the extension deadline approached in mid October.
The APA granted a 30-day extension. Management agreed to allow time (45 days) for membership ratification. Their much-anticipated offer was presented and it looked like the offer was contrived in haste and scribbled on a cocktail napkin in the eleventh hour. Insulting to say the least. Certainly there was nothing business-like in their first proposal. Concessions? Who ever said anything about concessions? Delta’s pay once we have Delta’s revenue was the new management mantra. Concessions?!? The new boss with the new culture had arrived.
With lines being drawn in the sand, the BOD began to make Congress look like a well-oiled machine. Both sides had the same goal, to achieve the best outcome for the membership. Membership ratification was bounced back and forth like a Ping-Pong ball at the Olympics. The slim majority believed more could be gained in areas of pay and work rules. The minority believed we were finished and any further counter was “regressive.”
President Wilson took the last proposal to Kirby on December 17 and when questioned, responded, “I have a new boss and they aren’t happy.” The company sensed a divided board and seized the moment.
Valuations
The membership has been quite vocal in two areas, membership ratification and valuations. The valuations do not come close in value to the wages being offered. It’s not just about pay in my opinion. Contract concessions should only be traded for contract gains and should not be weighed against the offer of market wages being offered. I will not provide details here as valuation data is available on the APA website. Valuations become a critical aspect of the arbitration process should we proceed down that road. The company and the APA differ in valuations on almost every front. We’re regarded as a cost unit and not the leaders of the operation. The valuations are a red herring being utilized to distract us from the seemingly innocuous asks in the company’s proposal.
Fork in the Road
Yogi Berra said it best, “If you come to a fork in the road, take it.” Here’s some food for thought to aid your decision as we approach the fork.
Left Fork - Current Proposal, Yes Vote:
Take a good look at the wealth of information on the APA website. You’ll find everything you need to do a quantitative and qualitative analysis: JCBA Education Material Overview, By The Numbers - JCBA Pay Review, JCBA Contract Language Overview, JCBA Contract Language, Valuations, MTA January 2016 Mid-Contract Pay Rate Adjustment Interactive Calculator, Arbitration Explanation Letter From APA Legal, Excise Tax Summary, MOU and the APA Contract Comparison. You’ll have all the current information on which to base your decision.
Vote "Yes" for at least one of these reasons; you want the pay increase now, the contract concessions either don't effect you or do so very little, you care little about the AA pilots behind you, you will retire before the end of this contract.
Right Fork - No Vote, Proceed toward Arbitration:
Vote "No" if you do not want to trade permanent contract concessions for a market rate of pay because over time, that diminishes your contract, which reduces your future negotiating leverage. Vote No if you believe any contract concessions should be traded fairly for contract improvements, especially in this environment. Vote No if you are worried about the nebulous language in the Excise Tax provision. 60% of our pilots have the non-contractual, most expensive, Value Plan medical insurance. Guess which one can go away at any time, especially with the threat of a 40% excise tax? The large pay increase is only a reflection of how far below the market rate your pay is today and the present contract has a built in market rate adjustment in less than one year.
Bear in mind that the top six executives have 2,193,230 restricted stock units that vest when certain 2015 thresholds are met. That’s $31.3M for Parker at $50/share. Step one is completion of the JCBA process. He also committed to ”maintain his annual target total compensation below his peers at Delta Airlines and United Airlines until the compensation payable to the Company’s larger work groups are adjusted in line with such peers.” He has a personal incentive to pay us without concessions to our contract. Next step is the seniority integration and obtaining single carrier certification. Then comes the AAL board determined synergies from the combined single carrier. Time equates to money NOT in their pockets.
Should we proceed to arbitration, under the terms of the MOU, the arbitrator cannot grant the company many of the things they are demanding. This puts them in a situation of having to deal with us to attain their goals - but ONLY if we are willing. We can proceed to arbitration with a closed Green Book and a demand for implementation. Any contractual gives must be balanced with gets, e.g., HBT for duty rig fix.
My Vote
I’ll be voting NO. I voted No to approve the final JCBA on January 3rd. My reasons are simple. I firmly believe we should not trade pay for concessions regardless of the imbalance. We were promised market rates of pay when we handed Parker and Kirby the keys. There was no mention of contract gives. Any company contractual asks should be balanced with contractual gains. The pay proposal is generous but doesn’t nearly make up for lost wages, lack of profit sharing and will only have us above our peers at Delta for less than one year. In going for great, we deserve to be paid the greatest.
Secondly, I voted No because the APA BOD failed to adhere to policy manual procedures with regards to TA ratification. We rushed, met unnecessary company deadlines, voted without contract language, ignored vice waived policies I believed should have been followed. The justification was we are not in section six negotiations and therefore the MOU and C&B Article XII.F applied.
I will vote NO. I do not fear arbitration. I will forgo one month’s retro and my 2015 raise to protect what’s left of our bankruptcy riddled contract. Our proposal of December 17 was affordable and reasonable. They said No and gave everyone else a raise.
If you don't have the time to peruse the information about the JCBA (LBFO3) or can't attend a roadshow, just ask yourself this one question; Has management ever wanted a deal that turned out was good for you? It's only as complicated as you want to make it. Good luck with your vote, you will live with it well past this contract. Some of us won’t see another.
The New Team will live with the New Culture at the New American. You and your vote determine the flight plan.
It’s Not over with Unity and a NO Headwind. Ask any Flight Attendant.
In Unity,
Mike
