All UAL wants for Christmas is Labor Agreements

[ual747mech]

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On 12/17/2002 5:52:20 PM Boomer wrote:


Other Labor Groups on this Board have been quick to criticize Mechanics for looking at this charade and calling it for what it was. Tilton admits above that the first round of cuts was a bandaid and that more were coming. The ATSB saw it, the Mechanics saw it: why couldn't the IAM and the rest of the Unions?

When does 7 million become 22 million?
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Hey Boomer, I'm a Mechanic. I would rather go with the bandaid than the current proposal, wouldn't you? I knew the Cuts will be a lot bigger once we went into bankruptcy. Now we need a tourniquet instead of a bandaid.

 

[ual747mech]

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On 12/18/2002 607 PM Bob Owens wrote:

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On 12/17/2002 5:18:57 PM UnitedChicago wrote:


Do you have any compelling argument as to why he would deny such a motion? Key word: compelling.
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See the NWA/AMFA/PEB proceedings that took place in Philadelphia. Aircraft Mechanics are not paid above "market rates" for their skills, the industry is still facing a severe shortage of qualified mechanics in the future. Despite the financial difficulties the airlines face their is no reason why mechanics should give their skills and expertise to the airlines, the creditors or the travelling public for a discount. Its their labor, they have the right to demand a fair price for it, if the airlines or the creditors or the travelling public dont want to pay, they have the right to withhold it. Mechanics have been hit with more PEBs than any other work group and those PEBs came to the conclusion that double digit increases were required. How much will the creditors get back if the mechanics strike? It would be in the mechanics best long term interests to see SWA expand rather than take a pay cut to prop up a money losing airline. Normally mechanics can expect to make it back to top pay in 5 years or less if they stay in the industry, however many leave the industry permanently following a layoff, especially younger workers. SWA pays their mechanics more than UAL yet they make money. Obviously the advantage that SWA has is not lower paid mechanics. As SWA grows they will continue to take more work in house. While a pay cut for mechanics may on the surfice appear to benifit the creditors the fact is that forced pay cuts could easily result in a strike or other form of self help that would easily cost more than any savings that would be seen from the paycut. The mechanics, as the sole party to reject the prior referendum on pay cuts has demonstrated that they are unwilling to accept pay cuts despite the dire predictions of what would happen if they didnt. If they would not volunteer to give back why would any one assume that forced pay cuts would be received passively? Therefore a forced paycut would more than likely lead to confrontation with this skilled workforce that could not be easily replaced or controlled. This would lead to a further decrease in value of the assets of UAL.

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Hey Bob!! This isn't the PEB. This is Bankruptcy Court!!

 

[Boomer]

The point is that a bandaid was never gonna fix the problems.

What is the purpose of going through all the bs and drama of voting yourself concessions that are not going to fix anything?

Is this really just a pavlovian reflex exercise in which management just keeps shocking the workers until whatever they want to do becomes OK?

 

[kcabpilot]

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On 12/21/2002 239 AM ual747mech wrote:

The fact is every employee group had to participate in order for the ATSB to give us the loan. Any employee group not ratifying, like we did, meant the ATSB not giving us the loan therefore we will end up in Bankruptcy, which we are in now.

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Even if the Mechanics had ratified the last proposal the ATSB would still have denied the loan guarantee. The Mechanics did not put UAL nto the situation it is in today. Stop blaming yourself for something you didn't do.

Get a grip.

 

[ual747mech]

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On 12/21/2002 1:28:49 AM Boomer wrote:

The point is that a bandaid was never gonna fix the problems.

What is the purpose of going through all the bs and drama of voting yourself concessions that are not going to fix anything?

Is this really just a pavlovian reflex exercise in which management just keeps shocking the workers until whatever they want to do becomes OK?
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We didn't know that wasn't enough concession, did you? The fact is every employee group had to participate in order for the ATSB to give us the loan. Any employee group not ratifying, like we did, meant the ATSB not giving us the loan therefore we will end up in Bankruptcy, which we are in now. Like I said, I knew Bankruptcy will be a lot worst. I bet you didn't believe the Company was really in trouble huh? You probably thought they were bluffing huh? Also, you better hope the IAM will negotiate to improve what the Company is proposing to us because if we turn it down again it just going to get worst. Look at history of Bankrupt Airlines my friend.

 

[wts54]

Decision Took Mechanics' Vote Into Account

The ATSB deliberated for several hours Wednesday before making its decision, Mr. Montgomery said. The airline had asked the ATSB to rule as close as possible to the Dec. 2 due date for the assorted loan payments.

Thursday's scheduled wage-cut vote by United's mechanics wouldn't have affected the board's decision, he said. Even though the mechanics haven't yet agreed to any cost-cutting measures, the ATSB took United's latest offer into account.

 

[Boomer]

On 11-06-02, the ATSB requested additional documentation relating to the UAL application. In that letter, the ATSB wanted to know the details of UALs' revenue projections while at that same time, the new CEO for U was saying that revenue had fallen off a "cliff." In many electronic and print media outlets, this was taken as a bad omen for UALs loan prospects. On this board, on different threads it was widely discussed and forecast that the ATSB would reject UALs application and that it may indeed have been preferrable for the Company to use Chpt. 11 as a means to do so rather than have to negotiate cost reductions with labor. Different commentators from differing political stripes kept saying the same thing, the numbers just did not add up.

UAL basically said the same thing when they originally asked for some 9 billion in concessions and then settled for under 6 billion. If UALs numbers were over 30% off when they figured out how much it would take to get costs in line with "revenue" figures that were "optimistic" what are the real numbers?

So how can anyone say that not taking concessions was the best route prior to the chapter 11 filing?

1) The airline did not demonstrably have a handle on what they needed to reduce in costs relative to revenue: the ATSB request for more information.

2) The split between what UAL said they needed (9 Billion) and what they settled for (less than 6 Billion) did not go unnoticed on Wall Street or in front of the ATSB.

3) The questions concerning how UALs' estimation of the relationships between cost and revenue could reasonably be off by more than 30% gave UALs competition, the other airlines, the opening needed to draw serious attention to the defficiencies in the ATSB application.

4) UALs revenue projections, if true, meant that the other carriers were not being straight with their employees when talking about the need for possible wage reductions.

5) Chapter 11 offered the best opportunity to end the Union influence on the Board of Directors and return control of the Company to the Company.

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ATSB request for more info.
http://www.ustreas.gov/offices/domestic-fi.../ual11-6-02.pdf
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Excerpt from Business Coalition Analysis of UAL ATSB application.
"...In Evaluating UAL’s Application to the ATSB
United Airlines’ (UAL) loan guarantee application to the Air Transportation Stabilization Board (ATSB) has generated much commentary from airline executives, Wall Street analysts and industry consultants. Most commentators either argue that UAL should reorganize inside a bankruptcy process or that a Chapter 11 filing is inevitable because, in their view, the ATSB will not approve UAL’s application..."
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[ual747mech]

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On 12/21/2002 2:36:15 AM kcabpilot wrote:

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On 12/21/2002 239 AM ual747mech wrote:

The fact is every employee group had to participate in order for the ATSB to give us the loan. Any employee group not ratifying, like we did, meant the ATSB not giving us the loan therefore we will end up in Bankruptcy, which we are in now.

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Even if the Mechanics had ratified the last proposal the ATSB would still have denied the loan guarantee. The Mechanics did not put UAL nto the situation it is in today. Stop blaming yourself for something you didn't do.

Get a grip.
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No, I'm not blaming us the mechanics for UAL's sorry predicament that it's in. I blame past management for that. What irritates me is a lot of you fellow mechanics were willing to go straight into bankruptcy when it will be a lot worst than working things out outside of Bankruptcy. Did you guys knew that? probably not. A lot of our fellow mechanics were saying the company's got money, they're hiding it(just like enron). Some say lets hold out, vote it down, we'll get a better offer next time. I don't get it when the unions and the company were telling everybody how serious things were and a lot of us mechanics didn't believe them. Oh well, sometimes we all
learn the hard way. I guess this is what happens when most of us don't believe what the company and IAM is saying anymore.

 

[Bob Owens]

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On 12/21/2002 1:22:49 AM ual747mech wrote:

Hey Bob!! This isn't the PEB. This is Bankruptcy Court!!
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The reason I cited the PEB is that the testamony given during the PEB hearings led the board to determine that a double digit raise was justified.

If you had accepted the cuts you would now be making less money and still looking at Bankruptcy. Lets face it starting from a lower rate does not give you an advantage except for the fact that you may have become accustomed to a lower standard of living. USAIRs concessions apparently did not help them, they are looking at even more concessions now.The fact is the cuts will not help UA save themselves from a bad business model. Your wage decreases will simply end up being matched by competitors leaving UA in the same position they were in before. Their likely reaction is to come back again for further concessions, the cycle continues just as it did at EAL, Pan Am and TWA. I'd consider it being better to keep the money and force the company to take a different approach towards returning to profitability.

 

[ual747mech]

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On 12/21/2002 2:17:17 PM Bob Owens wrote:

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On 12/21/2002 1:22:49 AM ual747mech wrote:

Hey Bob!! This isn't the PEB. This is Bankruptcy Court!!
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The reason I cited the PEB is that the testamony given during the PEB hearings led the board to determine that a double digit raise was justified.

If you had accepted the cuts you would now be making less money and still looking at Bankruptcy. Lets face it starting from a lower rate does not give you an advantage except for the fact that you may have become accustomed to a lower standard of living. USAIRs concessions apparently did not help them, they are looking at even more concessions now.The fact is the cuts will not help UA save themselves from a bad business model. Your wage decreases will simply end up being matched by competitors leaving UA in the same position they were in before. Their likely reaction is to come back again for further concessions, the cycle continues just as it did at EAL, Pan Am and TWA. I'd consider it being better to keep the money and force the company to take a different approach towards returning to profitability.


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Hey Bob, Yup you're right. We are better off taking our company into bankruptcy now instead of working things out outside of bankruptcy. Even though it's going to cost the company and the employees a lot more we're still better off huh Bob? You sure is looking out for us huh Bob? You really care about us. Yea you're right, American and the rest of the industry will match US Air and the rest of the lower scale airlines huh Bob? When is that going to happen Bob? Bob, you're so good you can predict the future huh? I bet you're a millionaire huh Bob?

Hey Bob, here's facts from the AFA to back up what I've been trying to tell you in the past.

To get through the reorganization, United had to line up financing to provide it with cash on hand as it navigates the process. Bankruptcy is an expensive endeavor, with legal and bankruptcy consultants’ fees totaling in the hundreds of millions of dollars when all is said and done. The most important condition to us is that the lenders are requiring the airline to reduce its costs by about $2.4 billion annually. This is over and above the reductions planned for in the Recovery Plan we were working under outside of bankruptcy. Those cost reductions must be secured by mid-February. Thus, things will happen very fast.

We worked incredibly hard to stay out of bankruptcy because we knew that changes to our Contract inside bankruptcy would be much greater. There is no way to sugar coat this, these changes are going to hurt, so be prepared.

Our negotiating committee will work to minimize the cuts as much as possible within the conditions set forth by the lenders. AFA will work with management to ensure that the cuts we face are targeted so that they have the least impact on our quality of life. We are participating in these discussions because we have a chance to shape the way the cuts are applied. If we just walked away, management would take its last offer to the bankruptcy court judge and ask for the changes to be made to our Contract. Not negotiating leaves all of the control in the hands of management. We want to keep as much control over this impossible situation as we can. In the end, you will get a chance to vote on any agreement we reach.

Oh BTW Bob, how should we vote on our contract? Are we better off taking it to the Judge? even though theres a great risk of our contract getting voided? BTW Bob, the last airline that got a labor contract rejected they imposed a 60% paycut and they are still around today. So stick around Bob because we will need your expert advice soon!!

 

[Boomer]

,

 

[kcabpilot]

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On 12/21/2002 6:05:13 PM ual747mech wrote:

Hey Bob, Yup you're right. We are better off taking our company into bankruptcy.....

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Look ual747mech, Niether you, nor the Mechanics "took this company into bankruptcy". We could all work for FREE and they still wouldn't be close to the figure they claim they need to get by.

So stop laying awake at night consumed with guilt and shame. Hold your head up.

 

[ual747mech]

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On 12/22/2002 12:12:13 PM kcabpilot wrote:

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On 12/21/2002 6:05:13 PM ual747mech wrote:

Hey Bob, Yup you're right. We are better off taking our company into bankruptcy.....

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Look ual747mech, Niether you, nor the Mechanics "took this company into bankruptcy". We could all work for FREE and they still wouldn't be close to the figure they claim they need to get by.

So stop laying awake at night consumed with guilt and shame. Hold your head up.
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Hey bud, what makes you think I'm filled with guilt and shame. "No, I don't blame us why we are bankrupt." Like I said what irritates me is having fellow mechanics like you who were willing to go straight into bankruptcy, not willing to give the plan a chance. I bet you didn't think what you were told was real huh? It's nothing but a big conspiracy to screw you huh? I think you're the one consumed with guilt and shame. I knew we needed to help out but I didn't want to make it worst than necessary, which is what bankruptcy does. Let me ask you something, how should we handle things from here on. Should we take whatever the company and the Union negotiate or vote it down like before? You seem to be an expert in this field.

 

[Bob Owens]

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On 12/21/2002 6:05:13 PM ual747mech wrote:

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Hey Bob, Yup you're right. We are better off taking our company into bankruptcy now instead of working things out outside of bankruptcy. Even though it's going to cost the company and the employees a lot more we're still better off huh Bob? You sure is looking out for us huh Bob? You really care about us. Yea you're right, American and the rest of the industry will match US Air and the rest of the lower scale airlines huh Bob? When is that going to happen Bob? Bob, you're so good you can predict the future huh? I bet you're a millionaire huh Bob?

Oh BTW Bob, how should we vote on our contract? Are we better off taking it to the Judge? even though theres a great risk of our contract getting voided? BTW Bob, the last airline that got a labor contract rejected they imposed a 60% paycut and they are still around today. So stick around Bob because we will need your expert advice soon!!
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Well you are already in bankruptcy and if the mechanics would have voted yes the only difference is that they would be making less today than they are. No I'm not a millionaire, like you WERE supposed to be.
The risk is there but if the mechanics make it clear that they will strike then that risk is lessened unless the Judge already feels that liquidation is inevitable.
Continental did get their contract voided but that was before the new regulations were put in effect. It was the early days of Deregulation and unemployment was at its highest rate since the Great Depression.Continental entered and emerged from Bankruptcy twice.
The problem with the concessions was the fact that they were to last until 2008. That could easily be extended to 2010. Usually the economy and the industry rebounds in less than two years, we are already two years into this and you want to jump into a concessionary deal that could last 8 years or more. Looking back at 94 you faced a similar challenge, you gave concessions. In hindsight do you feel that was the best move? Don't you think that you would have been better off if you had that extra $50K in the bank instead of company stock?

 

[Busdrvr]

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On 12/22/2002 8:02:06 PM Bob Owens wrote:

Well you are already in bankruptcy and if the mechanics would have voted yes the only difference is that they would be making less today than they are. No I'm not a millionaire, like you WERE supposed to be.
The risk is there but if the mechanics make it clear that they will strike then that risk is lessened unless the Judge already feels that liquidation is inevitable.
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Bob, you're missinformed. The IAM agreement had ATSB approval as a stipulation for the wage cuts. No Approval, No new contract. Period.