ALPA BOS F/o Rep. Update - June 25
- Thread starter USA320Pilot
- Start date
LGA Fleet Service
Veteran
Both 320 and the BOS F/O rep want to make names for themselves, were we in Norway the name would be Quisling...
SoftLanding
Senior
- Jul 25, 2005
- 255
- 1
Interesting comment
I believe Quisling was executed in short order after the end of WWII.
Am not advocating execution of said "fellas".
SoftLanding
88 B.T.D.
Advanced
Also what he fails to say is this offer was prior to filing bk. Taking the offer at that time would show JG he could return to the 'trough' after the waiting period specified in the 'ask' post bk filing.
He needs to be ignored. Plain and simple. I'll start doing my part right now.
I will support my reps who understand what Glass and co. is trying to do and rail against the GAG reps who don't.
The fight for the profession will continue. The sad part about it is that we have to fight members of the profession itself and try to make them understand what is being done.
That is a real challenge.
pilot
I will support my reps who understand what Glass and co. is trying to do and rail against the GAG reps who don't.
The fight for the profession will continue. The sad part about it is that we have to fight members of the profession itself and try to make them understand what is being done.
That is a real challenge.
pilot
hp_fa
Veteran
- Feb 19, 2004
- 3,290
- 178
Nah, the real challange is ignoring pompous idiots who claim divine knowledge of what nearly everyone thinks, posts that "knowledge" as fact and then dares you to say otherwise. I just remember that and also that people do have the right to free expression but that right stops when it gets to my eyes and ears.
I just need to remember that once in awhile.
Ardenian
Advanced
Geez, this guy sounds a lot like the idiot at US Air that sent out this message to all the LaGuardia pilots just before LOA 93 hit us begging for ALPA to capitulate...
===========================================================
Dear Fellow Pilot:
There is a Wall Street rumor that David Bronner has received offers to sell key assets, in particular the A320 fleet, which would effectively lead to the fragmentation and liquidation of US Airways. As I understand it, Bronner is frustrated with ALPA and the other unions to inability to adjust to the LCC reality and wants to cut his loses and recover as much of his investment as possible.
Is it true? There is no way of knowing, but the thought makes sense because Bronner probably does not want to go through a "formal reorganization". US Airways does not have a CEO with the interest to run the company in bankruptcy and Virgin America make sense as an suitor. If true, ALPA probably has one chance to prevent this from happening and that is this week at the MEC meeting.
According to the 2003 Annual report, US Airways own 46 A320 family aircraft, and all owned aircraft are pledged as collateral for various loans. Furthermore, gave up the right to keep 25% of the proceeds of any asset sales in the last ATSB agreement.
To me the issue is not fragmentation OR liquidation, it's fragmentation AND liquidation.
Unfortunately, the "house of cards" is starting to collapse and it is an open question whether even that will be enough to stop the "run on the bank" as creditors and the ATSB start protecting themselves rather than hoping for a turn-around. Apparently, Bombardier has already started in this direction, requiring the company to find alternate financing for several of the CRJ deliveries and American Express is accelerating payments of $75 million.
As for ALPA being able to stop any of this, the only way is to capitulate and give the company far in excess of $295 million a year as stipulated in the latest company "proposal".
Respectfully,
name deleted by moderator
Ardenian
Advanced
WOW! Two lies in one shot! Did Garland "tell the truth" when he claimed that LOA 93 was MORE than the Sept 6th deal?
Garland was VERRRRY quiet when the head of the Negotiating Committee showed the full MEC how LOA 93 cost $5 million LESS than Garland’s Sept. 6th deal (which, by the way, had a 23% paycut in it)! Guess who conveniently “forgot†that!
$5 million LESS, say it again 320, $5 million LESS!
delete by moderator
A quote from Aristotle comes to mind when he said, "Character is that which reveals moral purpose, exposing the class of things a man chooses or avoids."
Mod comments: don't disclose identities.
Ardenian
Advanced
Hey USA320pilot...read what that jerk from LGA wrote to the pilots! Maybe we wouldn't have taken concessions so deep if we didn't have the weak willies like him writing to the pilots AND LAKEFIELD that we should "capitulate!"
Can you imagine a UNION MEMBER writing to the CEO begging for concessions? Do you know this dude? His reputation as weak is ironclad.
Ardenian
Advanced
You'll have to ask Garland, and his pals Lance "The AFA is ready to sign, they're just waiting for the pilots" Svendsen and Ray "Retirement party at a hotel on strike" Belz.
OP
USA320Pilot
Veteran
- May 18, 2003
- 8,175
- 1,539
- Thread Starter
- Thread starter
- #57
BoeingBoy:
The company's initial offer, which was presented on a Power Point presentaiton, was effectively the America West contract with the JetBlue work rules.
I attended most of the MEC meeting's during LOA 93 negotiations and viewed the presentation. Moreover, in the days before the bankruptcy II filing there was a 13-day MEC meeting at the Key Bridge Marriott.
I sat there and heard the MEC discussions, talked with the Advisor's, and watched the MEC deliberate, both at the table, in the lobby, in the bar, and in the restaurant.
There was hardly unity.
As you know, the code-a-phone is often used to communicate third-party messages and to show solidarity, but solidarity hardly existed during LOA 93 discussions.
The final straw came on September 6 (just prior to bankruptcy), when late at night at the MEC meeting (which I did not see you there...how come?) the MEC via "roll call" 4-8 voted to not send out the company's proposal for vote.
In fact, according to Garland Jones:
Jim:
Can't think of anything I gave away. I can, however, think of a lot of things I fought to keep, but we ended up losing due to the 2004 PIT/PHL Reps use of the Roll Call vote.
For example, I fought to get the Sept. 6, 2004 Proposal out to the line pilots for their vote, but the PIT/PHL Reps refused, on a 4-8 Roll Call, to allow that to happen. And what did we lose?
We went from 19.33% to a 1.25% Equity position, and a reduced Profit Sharing Plan, due to escape clauses that the Company added after we entered bankruptcy on Sept. 12. And we also went from a 50% reduction in our DC Plan Contribution (for example, from 40% to 20%) to a flat 10% for everybody post bankruptcy.
What else? Read on. And why did we lose all of this? Because of some High School graduate's "gut feeling" that we could get a "better deal" after we went bankrupt!
What sheer stupidity. Ranks right up there with "just let the judge decide." Right. He terminated the IAM's DB Plan and authorized the complete abrogation of their existing contract, allowing the Company to impose, if the IAM didn't ratify what was then on the table, Jerry Glass' last and worst offer!
I gave the following list of items away? In a pig's eye, Dyson. Write the 2004 PIT/PHL Reps, and 3 members of the prior NC, because that's where the responsibility lies.
Garland
In addition to our drastically reduced Equity Position, our now diminished Profit Sharing, and losing a DC Plan that still had 1/2 of its original value, we lost the following once we entered bankruptcy:
1. DC qualified monies for July thru Sept. 12, 2004: In the company's Sept. 6 proposal, they would have been paid on schedule. In the TA, now paid no later than Nov. 30, 2005.
2. Notional monies: In the company's Sept. 6 proposal, they would have been paid lump sum. In the TA, they will not be fully paid until 30 months after retirement.
3. Fragmentation Protection: Had it in the Sept. 6 proposal, gone in the TA.
4. 279 minimum aircraft fleet and minimum block hour guarantee: Had it in the Sept. 6 proposal, gone in the TA.
5. Equity: 19.3% in the Sept. 6 proposal, 8.5% maximum in the TA.
6. Contingent Acquisition Rights: Had them in the Sept. 6 proposal, gone in the TA.
7. Various Allegheny-Mohawk merger protections: Had them in the Sept. 6 proposal, gone in the TA.
8. Displacement rights to MDA while in bankruptcy: Had it in the Sept. 6 proposal, gone in the TA.
9. Training out of seniority during bankruptcy: Prohibited in the Sept. 6 proposal, allowed in the TA.
10. Vacation: 28 days in the Sept. 6 proposal, 21 days in the TA.
By the way, another sterling effot by the RC4 was their hand-picked Negotiating Committee Chairman Doug Mowrey's decision to give up most of the new stock offering.
________________________________________
BOS Pilots,
The PHL Reps continue their assault on our MEC Officers, as illustrated by John Crocker's memo copied below. His charges are answered by MEC Vice Chairman Kim Snider in his 4th Qtr. MEC Vice-Chairman's report.
Crocker and Ciabattoni remind me of the Nazi's in the 1930's when they needed somebody to hate in order to rise to power. They chose the Jews, and Crocker and Ciabattoni chose your MEC Officers. Tactics are the same, however, and that's to tell the people what they want to hear, no matter if it's a lie, as long as it promotes hatred.
So why don't they go after our Sec/Tresurer, Mike D' Angelo? They hate Mike with a passion, but as Mike is known to be a bit volatile they're afraid of getting their ass whipped if they start telling their lies about him.
Garland
BCC: MEC
--------------------
ALPA MEC VICE-CHAIRMAN'S REPORT (Presented to the MEC at the Fourth Quarter 2005 Meeting)
Kim Allen Snider
4 Q05
Analysis on Pre-and Post-Bankruptcy Filing Stock Values
Below are the financial calculations that establish the consequences of not accepting the Company's offer of 19.33% of the Company stock and do not include the US Airways pilots receiving any of the value of the new US Airways attributed to the AWA stockholders.
Some have suggested that since it is possible that once again management might have tried to change a deal (after entering bankruptcy) that there was no opportunity lost by not accepting the offer of 19.33% of the Company stock. Such thinking is in a word "goofy" as no negotiator wants to be dealing from a weaker position instead of a stronger position.
Additionally, anyone familiar with the bankruptcy process knows that the unsecured creditors get the "left-overs" from the process. This is important because the additional stock that the US Airways pilots would be entitled to at the 19.33% level would have simply decreased the amount of stock "left-over" from the bankruptcy process for the unsecured creditors and would not have affected the stock allocation to the new equity investors.
The loss of stock caused by rejecting the Company's offer, prior to bankruptcy, of 19.33% of the stock has turned out to be much greater than it originally appeared. This is due to several factors beyond the obvious reduction from 19.33% to 8.5% of Company stock to be provided the pilots of US Airways under the Transformation Agreement:
o No stock offset was required prior to bankruptcy for full profit sharing verses a 50% stock reduction after bankruptcy (reducing the 8.5% to 4.25%).
o The 19.33% of Company stock due under the terms prior to bankruptcy would not have been reduced by equity investments greater than $250 million.
Under the terms of the Transformation Plan Agreement (LOA #93), the US Airways pilots are to receive 1.25 million shares of stock. This amount was arrived at because the 8.5% was reduced to 4.25% to offset "full" profit sharing (as allowed in LOA #93). Also, under the terms of LOA #93, pilots only receive stock based on a percentage of the first $250 million of new equity plus the $115 million pre-investment value of US Airways.
$250 m + $115 m = $365 m. $365 m times 4.25% = $15.5 million value at $15/share.
LOA #93 also called for the US Airways pilots' equity to match US Airways management's equity. This provision would not hold up with the Bankruptcy Judge because management could claim (and did claim) that almost all of the equity going to management was going to America West management and almost none was going to US Airways management.
So what would the US Airways pilots' equity claim be under the pre-bankruptcy offer? Since prior to bankruptcy the equity was not limited to just the first $250 million of new equity, the numbers add up like this. The entire $565 million of new equity would have been added to the $115 million pre-investment value and multiplied by the full 19.33% (equity % unreduced for profit sharing).
$565 m + $115 m = $680 m. $680 m times 19.33% = $131.44 million value at $15/share.
This, however, does not reflect the full loss of stock value suffered by the US Airways pilots. As the $131.44 million was based on $15 per share, the pre-bankruptcy pilots stock would have been 8.763 million shares. At the present stock price of $32 (as of December 5th) those 8.763 million shares would have been worth $280.5 million:
$33 times 8.763 m shares = $280.5 million.
At the present stock price of $32, our 1.25 million shares are worth $40 million:
$33 times 1.25 m shares = $40 million.
A loss of $240.5 million (280.5 m -40 m) of value plus another $7.5+ million additional dollars of value lost for each additional dollar the stock price goes up!
Q&As on Pre-and Post-Bankruptcy Filing Stock Values
As a disclaimer the following discussion corrects the major misstatements by the PHL and PIT representatives about the consequences of not accepting the Company offer, prior to bankruptcy, of 19.33% of the Company stock. This discussion will not correct every misstatement made about this issue as that would take more time and space than is practical to cover in this set of Q&As.
Q. Did our investment advisor make the statements attributed to Him?
A. No, the statements are taken out of context and have nothing to do with Michael Glanzer's review of the math involved in making these calculations. For example, Michael Glanzer warned the MEC if a "labor war" broke out (especially with the pilots) that the investors would most likely abandon ship. Fortunately, such a "labor war" never took place at US Airways and the investors stayed with the Company through the bankruptcy process.
Q. Is the value of 1.25 million shares plus the 1.1 million options we are receiving greater in value or less in value compared to the equity called for in LOA # 93?
A. The combined value of 1.25 million shares of stock and 1.1 million options is more than the value of 1.45 million shares of stock that we claimed in our bankruptcy court filings that we were due under LOA #93.
LOA #93 also called for the US Airways pilots' equity to match "US Airways management's" equity (up to 7.7 million options) after adjusting for profit sharing. Unfortunately, this provision would not hold up with the Bankruptcy Judge because management could claim (and did claim) that almost all of the equity going to management was going to America West management and almost none was going to US Airways management.
Q. Was the 19.33% called for and received under the Restructuring Agreement or offered in negotiations prior to bankruptcy less than 19.33% of the total equity of US Airways?
A. No, both times the 19.33% was qualified as "19.33% of the fully diluted common stock" which means that the pilots receive 19.33% of the total equity of US Airways. The fact that preferred or other special classes of stock exist is taken into account during adjustments for the fully diluted basis.
Q. Did management state that they would lose investors if ALPA demanded the full stock due to the pilots?
A. No, since the pilots did receive the full amount of stock due (see discussion above) this is a trick question. In addition, the issue with investors had to do with profit sharing, not stock.
Q. Is it likely the Company would use an 1113 motion to reduce a 19.33% stock offer if the 19.33% had been accepted prior to bankruptcy?
A. No, 1113 motions have to do with successfully reorganizing the company. Since the 19.33% would have only reduced the unsecured creditors' stock to the same level as the first bankruptcy, the unsecured creditors would have most likely once again settled for the same 2 cents on the dollar as before. The important point is that none of the 19.33% would have come from the new equity owners and that is why an 1113 motion was not likely or justifiable before Judge Mitchell.
Q. Was the September 6th Company proposal's value basically comparable to the total economic value of LOA #93?
A. Yes, although economic returns and protections were lost (as predicted by all our advisors), the overall value is similar. The September 6th Company proposal did have a 23% pay cut, but it also contained only a 50% reduction to pensions, instead of the flat 10% DC Plan in the post-bankruptcy LOA #93.
Q. Was pay parity ever offered by management in the Transition Agreement negotiations?
A. No.
Q. Did Kim Snider give away pay parity in Transition Agreement negotiations?
A. No, the Transition Agreement negotiations, like all negotiations, are under the guidance and review of the MEC, who in this case unanimously ratified the Transition Agreement. (When is the last time you can remember the MEC unanimously ratifying anything!) Transition Agreements (formerly known as Fence Agreements) historically do not provide large economic gains as they deal with protecting each of the pilot groups from management's favoritism. The Transition Agreement also provides a process to reach a merged employment agreement (which will contain significant economic gains).
Q. Did Kim Snider agree to give up the second stock vesting in January of 2005?
A. No, in fact Kim Snider assisted our bankruptcy council Richard Seltzer in winning a rare victory for labor as Judge Mitchell ruled in favor of ALPA's position that the US Airways pilots should receive the second stock vesting.
Q. Did the US Airways pilots get nothing in the Transition Agreement?
A. We did not get "nothing" but we did accomplish all of the items in the MEC charging resolution for the negotiations:
(1) Operational merger commitment.
(2) Interim protection of flying and related matters.
(3) Company acceptance of seniority integration per ALPA policy.
(4) Process to negotiate a merged employment agreement.
(5) Releases, FPL, ALPA expenses, reciprocal positive space travel.
(6) Expedited dispute resolution process.
(7) Other issues relevant to the proposed transaction (EMB-190s at Mainline).
Q. What is the potential increase in shares each pilot would have received with 19.33% of the stock?
A. Based on 3,316 full pilot shares, each US Airways pilot would have received an additional 2,265 shares presently worth about $72,500 (at $32/share as of December 5th). Even if management reneged on 1/3 of the stock due, each pilot would have still received about $50,000 more worth of stock.
-----------------------
CROCKER'S MEMO:
Fellow Pilots,
I said there would be more coming on the "MEMO."
Snider and Pollock think if you keep repeating something it makes it
true.
My rebuttal is in UPPER CASE.
Fraternally,
John A. Crocker
Chairman [LEC 41, PHL]
Memo
To: Bill Pollock
From: Kim Snider
CC:
Date: November 14, 2005
Re: Requested Analysis on Pre-and Post-Bankruptcy Filing Stock Values
Below are the financial calculations that establish the consequences of not accepting the Company offer of 19.33% of the Company stock and do not include the pilots receiving any of the value of the new US Airways attributed to the AWA stockholders. Our Investment Banker Michael Glanzer has reviewed these calculations.
OUR INVESTMENT BANKER MICHAEL GLANZER IS THE VERY SAME MICHAEL GLANZER THAT HAS AN ESTABLISHED RECORD OF PROVIDING HIS VERY INACCURATE, YET INCREDIBLY EXPENSIVE ASSUMPTIONS TO ALPA, APPARENTLY TO PROVIDE JUSTIFICATION FOR TAKING THE PATH OF LEAST RESISTANCE. AT NO TIME HAS MICHAEL GLANZER EVER BEEN A PROPONENT OF HOLDING MANAGEMENT ACCOUNTABLE. HIS VERY EXPENSIVE ADVICE ALWAYS PROMOTES CAPITULATION.
AS FOR THE ACCURACY OF HIS PREDICTIONS, UNTIL RECENTLY THE MEC BLINDLY ACCEPTED HIS WORD. WHEN HIS ADVICE WAS CHALLENGED LAST YEAR, IT WAS PROVEN TO BE INCREDIBLY INACCURATE. HIS STATEMENTS THAT THE COMPANY WOULD LIQUIDATE WITHIN A WEEK IF IT ENTERED CHAPTER 11 WITHOUT A PILOT AGREEMENT WERE PROVEN FALSE. THEY DID NOT LIQUIDATE, MR. GLANZER. HIS STATEMENT THAT NO ONE WOULD INVEST IN A "CIVIL WAR," REFERENCING A DIVIDE IN THE PILOT'S UNION, WAS ALSO PROVEN FALSE. THE IAM AND AFA WERE THREATENING TO STRIKE, YET INVESTMENTS CAME FORTH IN LATE 2004. OUR INVESTMENT BANKER MICHAEL GLANZER ACTUALLY TRIED TO CAMOUFLAGE HIS INACCURATE GUESS WITH THE STATEMENT THAT THE INVESTMENT COMMUNITY ONLY LOOKS AT THE PILOT'S UNION, NOT ALL OF LABOR.
PLEASE REMEMBER HOW ACCURATE MR. GLANZER'S VERY EXPENSIVE ADVICE HAS BEEN AS YOU READ THE REST OF THIS LITTLE PIECE OF KIM SNIDER'S MENDACITY.
The loss of stock caused by rejecting the Company's offer, prior to bankruptcy, of 19.33% of the stock has turned out to be much greater than it originally appeared.
HE CONVENIENTLY FAILS TO MENTION JUST HOW MUCH STOCK ALPA IS ACTUALLY RECEIVING NOW! ALPA WILL BE RECEIVING LESS STOCK THAN LOA 93 CALLS FOR! BUT BILL POLLOCK AND KIM SNIDER QUIETLY FAIL TO BRING THIS TO THE PILOT'S ATTENTION. WE HAVE ALREADY BEEN HAD, AND WHAT ARE POLLOCK AND SNIDER DOING ABOUT IT? NOTHING!
THE SEPTEMBER 6TH PROPOSAL CALLED FOR "REASONABLE EFFORTS TO PROVIDE
THE PILOTS A SHARE OF THE FULLY DILUTED COMMON STOCK EQUITY OF THE COMPANY NO LESS THAN 19.33%" THIS IS AKIN TO A BELIEF THAT ACCEPTANCE OF THE SEPTEMBER 6TH PROPOSAL (OR THE AUGUST 25TH PROPOSAL THAT WAS UNANIMOUSLY REJECTED BY THE MEC) WOULD HAVE ENSURED A FLEET OF 279 AIRCRAFT EVEN AS THE 279 NUMBER WAS REMOVED FROM THE AFA AND IAM AGREEMENTS.
NOTICEABLY MISSING FROM THIS DISCUSSION IS A DELINEATION OF TYPES OF STOCK. LOA 84 GAVE ALPA 19.33% OF THE CLASS A COMMON STOCK OF US AIRWAYS. THIS WAS NOT 19.33% OF THE TOTAL EQUITY OF US AIRWAYS. MANAGEMENT AND RSA HELD THE MAJORITY OF THE EQUITY IN PREFERRED STOCK.
THIS IS TYPICAL OF THE MIS-INFORMATION CAMPAIGNS OF BILL POLLOCK AND HIS TWO PARTNERS, KIM SNIDER AND JACK STEPHAN.
This is due to several factors beyond the obvious reduction from 19.33% to 8.5% of Company stock to be provided the pilots of US Airways under the Transformation Agreement:
HOW ABOUT THE REDUCTION FROM 8.5% TO LESS THAN 4.25% BY THE PLAN OF REORGANIZATION, MR. SNIDER? THIS IS A PUBLIC DOCUMENT! BEFORE THE VOTE TO ACCEPT PROFIT SHARING! AND IT REFERS TO JUST COMMON STOCK, NOT ALL COMPANY STOCK.
THERE IS PREFERRED, CLASS A COMMON, CLASS B COMMON, AND COMMON STOCK. SURELY KIM SNIDER AND MICHAEL GLANZER UNDERSTAND THIS. WHY DO THEY FAIL TO DISCUSS IT?
ALL ALPA EQUITY, INDEED ANYTHING CONTRACTUAL, WAS THERE FOR THE TAKING WHILE IN BANKRUPTCY; WITNESS MR. PARKER'S COMMENTS ABOUT THE ABILITY TO RIGHT-SIZE OUR FLEET DURING BANKRUPTCY, AND BILL POLLOCK'S VOTE TO ACCEPT THE REDUCED PROFIT SHARING AND BY EXTENSION, THE REDUCED STOCK ALLOCATION AT JERRY GLASS'S INSISTENCE.
No stock offset was required prior to bankruptcy for full profit sharing verses a 50% stock reduction after bankruptcy (reducing the 8.5% to 4.25%).
THE PLAN OF REORGANIZATION PROVIDED FOR LESS THAN 4.25% OF COMMON EQUITY TO BE DISTRIBUTED TO ALPA! WHETHER OR NOT ALPA ACCEPTED PROFIT SHARING!
AMAZINGLY, KIM SNIDER OMITS ANY DISCUSSION OF BILL POLLOCK CASTING THE TIE-BREAKING VOTE TO GIVE IN TO JERRY GLASS'S DEMANDS AND REDUCE THE AMOUNT OF THE PILOT'S PROFIT SHARING. THIS ALONE COLORS THE ACCURACY OF THE REST OF THIS POLITICALLY-BASED ASSUMPTION.
THE OFFSET WAS WELCOMED AND ENCOURAGED BY KIM SNIDER, BILL POLLOCK, AND THEIR SUPPORTERS THAT WANTED THE MEC TO "LET MY DADDY VOTE."
The 19.33% of Company stock due under the terms prior to bankruptcy would not have been reduced by equity investments greater than $250 million.
BUT KIM SNIDER OMITS THE FACT THAT THE 19.33% OF COMMON STOCK ALPA RECEIVED FROM RESTRUCTURING II WAS INDEED REDUCED BY ONE-FOURTH DUE TO FORFEITURE OF THE THIRD VESTING DUE TO CANCELLATION OF STOCK ON EMERGENCE FROM BANKRUPTCY, AND WAS ALMOST REDUCED TO ONE-HALF DUE TO BILL POLLOCK'S AND KIM SNIDER'S INACTION IN THE FACE OF JERRY GLASS'S DEMAND THAT ALPA DELAY THE SECOND VESTING OF STOCK UNTIL OUT OF BANKRUPTCY.
THE COMPANY OPENLY RENEGED ON THE CONTRACTUAL PROVISION FOR EQUITY IN LOA 93! WE ARE NOT RECEIVING ALL THE STOCK LOA 93 CALLS FOR! IT SEEMS THAT KIM SNIDER AND BILL POLLOCK WANT YOU TO BELIEVE THAT, EVEN THOUGH THE COMPANY RENEGED ON THE EQUITY PROVISIONS OF LOA 93, THEY WOULD NOT HAVE RENEGED ON AN EARLIER PROPOSAL CALLING FOR AN EVEN GREATER SHARE.
DO THEY ALSO BELIEVE ALPA WOULD HAVE FORCED US AIRWAYS TO MAINTAIN A 279 AIRCRAFT FLEET?
Under the terms of the Transformation Plan Agreement (LOA #93), the US Airways pilots are to receive 1.25 million shares of stock. This amount was arrived at because the 8.5% was reduced to 4.25% to offset "full" profit sharing (as allowed in LOA #93).
NO, KIM SNIDER, THIS IS YET ANOTHER LIE. THE AMOUNT OF STOCK ALPA WILL RECEIVE WAS REDUCED BECAUSE MANAGEMENT RENEGED ON THE PROVISION OF THE FULL AMOUNT OF STOCK DELINEATED IN LOA 93. THEY TOLD ALPA THAT THEY WOULD LOSE OTHER INVESTORS IF ALPA DEMANDED THE FULL CONTRACTUALLY REQUIRED AMOUNT OF STOCK. THEY KNOW ALPA WILL NOT FIGHT, SO THEY JUST ASKED THE BANKRUPTCY JUDGE TO TAKE OUR STOCK.
Also, under the terms of LOA #93, pilots only receive stock based on a percentage of the first $250 million of new equity plus the $115 million pre-investment value of US Airways. $250 m + $115 m = $365 m. $365 m times 4.25% = $15.5 million value at $15/share. LOA #93 also called for the US Airways pilots' equity to match US Airways management's equity. This provision would not hold up with
the Bankruptcy Judge because management could claim (and did claim) that almost all of the equity going to management was going to America West management and almost none was going to US Airways management.
KIM SNIDER SHOWS HE CAN ACCEPT THAT CERTAIN PROVISIONS OF LOA 93 DID NOT SURVIVE MANAGEMENT'S ATTACKS DURING BANKRUPTCY, YET HE STILL MAINTAINS THAT A PRE-BANKRUPTCY AGREEMENT WOULD EMERGE UNSCATHED!
THE BS METER IS IN THE RED!
So what would the US Airways pilots' equity claim be under the pre-bankruptcy offer?
MORE CONJECTURE, MAYBE WE SHOULD ASK, "WHAT WOULD THE US AIRWAYS PILOTS' EQUITY CLAIM BE UNDER LOA 93 IF MANAGEMENT DID NOT REDUCE OUR AMOUNT OF STOCK WHILE ALPA STOOD IDLY BY?"
Since prior to bankruptcy the equity was not limited to just the first $250 million of new equity, the numbers add up like this. The entire $565 million of new equity would have been added to the $115 million pre-investment value and multiplied by the full 19.33% (equity % unreduced for profit sharing).
BUT ONLY IF THE COMPANY DID NOT 1113 ALPA. IT APPEARS KIM SNIDER BELIEVES THAT EVERYTHING ELSE THE COMPANY DEMANDED OR TOOK SINCE THEN WAS ABSOLUTELY NECESSARY FOR THEIR SURVIVAL, SUCH AS THE VM/DH DEBACLE.
$565 m + $115 m = $680 m. $680 m times 19.33% = $131.44 million value at $15/share. This, however, does not reflect the full loss of stock value suffered by the US Airways pilots. As the $131.44 million was based on $15 per share, the pre-bankruptcy pilots stock would have been 8.763 million shares. At the present stock price of $33 (as of November 10) those 8.763 million shares would have been worth $289 million: $33 times 8.763 m shares = $289 million.
At the present stock price of $33, our 1.25 million shares are worth $41.25 million: $33 times 1.25 m shares = $41.25 million.
A loss of $247.75 million (289 m ï¿∏41.25 m) of value plus another $7.5+ million additional dollars of value lost for each additional dollar the stock price goes up!
That comes out to $82,583 of stock value lost for each of our 3,000 pilots.
APPARENTLY BILL POLLOCK AND KIM SNIDER BURNED A LOT OF THE MIDNIGHT OIL COMING TO THIS DISINGENUOUS CONCLUSION!
THIS IS DISHONESTY, PURE AND SIMPLE, FROM THE VERY SAME MAN THAT RULED THAT THE PILOTS WOULD NEVER GET A CHANCE TO VOTE ON THE TERMINATION OF THEIR PENSIONS. THE AVERAGE PILOT, AFTER 25 YEARS OF SERVICE WOULD HAVE RETIRED WITH A LUMP SUM WELL IN EXCESS OF $1,000,000, AND IN SOME CASES, IN EXCESS OF $2,000,000. THAT'S RIGHT; BILL POLLOCK ENSURED THAT EVERY PILOT WOULD HAVE THEIR EARNED RETIREMENT STRIPPED FROM THEM. TO BUY EMB-170'S NO LESS! HE PERSONALLY RULED THAT THE PILOTS' ONLY DEFENSE AGAINST THIS LARCENY, THE ABILITY TO VOTE, WOULD BE TAKEN AWAY FROM THEM. THE POTENTIALLY SEISMIC REPERCUSSIONS FROM THIS ACTION BY POLLOCK ARE JUST NOW BEGINNING TO BE FELT BY OUR ASSOCIATION.
DO NOT FORGET THAT THE SEPTEMBER 6TH COMPANY PROPOSAL THAT POLLOCK AND SNIDER PUSHED SO HARD FOR CONTAINED A 23% PAYCUT. EVEN THE BANKRUPTCY JUDGE THOUGHT THAT WAS WAY TOO HIGH, HE REDUCED IT IN HIS 1113E RULINGS FOR THE OTHER LABOR GROUPS. THE AVERAGE PILOT, NOW FLYING 95 HOURS PER MONTH, WOULD HAVE ON AVERAGE LOST MORE THAN AN ADDITIONAL $7,500 EACH YEAR IN PAY ALONE. ADD IN WHAT THAT WOULD DO TO DC CONTRIBUTIONS, AND YOU GET A CLEAR PICTURE OF THE BS POLLOCK AND SNIDER CONTINUE TO PUSH ON THE PILOT GROUP.
ALSO, DO NOT FORGET TO ADD IN THE PAY PARITY THAT KIM SNIDER SO QUICKLY AND EASILY OFFERED TO GIVE AWAY DURING THE AMERICA WEST TRANSITION NEGOTIATIONS, AND THE PILOTS HAVE LOST EVEN MORE AT THE HANDS OF THESE "LEADERS!"
IF YOU COMPARE PAY (A DEFINITE) WITH THIS STOCK HALLUCINATION, YOU GET A CLEAR PICTURE OF THE CONTINUING MIS-INFORMATION CAMPAIGN OF BILL POLLOCK AND KIM SNIDER.
JUST HOW MUCH DID YOU MAKE FROM THE 19.33% EQUITY SHARE ALPA RECEIVED FROM RESTRUCTURING II IN 2002? REMEMBER, BOTH POLLOCK AND SNIDER WERE WILLING TO ACQUIESCE TO GLASS'S DEMAND THAT THE PILOTS GIVE UP THE SECOND VESTING, A FULL 25% OF ALPA'S SHARE OF COMMON STOCK, IN DECEMBER 2004. AND DO NOT FORGET THE FACT THAT THE PILOTS LOST THE LAST VESTING OF STOCK FROM RESTRUCTURING II, YET ANOTHER 25%.
WITH THIS HISTORY IN MIND, AND ESPECIALLY THE LANGUAGE CONTAINED IN THE SEPTEMBER 6TH PROPOSAL, IS THERE ANY PILOT AT US AIRWAYS NAIVE ENOUGH TO BELIEVE THAT ANY OF THE COVETED SEPTEMBER 6TH AGREEMENT WOULD HAVE SURVIVED CHAPTER 11? JUST LOOK AT HOW MUCH OF LOA 93 HAS BEEN DISREGARDED BY JERRY GLASS WITH THE TACIT APPROVAL (OR OUTRIGHT ASSISTANCE VM/DH GRIEVANCE DELAY OF SIX MONTHS) OF CHAIRMAN POLLOCK.
Another unfortunate piece to this issue is that 70% of the stock that we lost in this process went to the PBGC, with the rest going to the other unsecured creditors.
THIS IS CREATING HISTORY THAT NEVER TRANSPIRED. WE WERE NEVER GUARANTEED ANY STOCK. WE WERE OFFERED ONLY "REASONABLE EFFORTS TO PROVIDE..."
The PBGC, with most of that windfall, increased the funding for the IAM and AFA pension participants who lost their pensions in this bankruptcy.
THIS WAS DUE TO THE BANKRUPTCY JUDGE'S RULING. REMEMBER THE SEPTEMBER 6TH PROPOSAL'S LANGUAGE - "SUBJECT TO BANKRUPTCY COURT APPROVAL."
HOW IRONIC THAT MOST OF THE STOCK WE LOST OUT ON IN THIS PROCESS IS BEING USED TO FUND OTHER EMPLOYEE GROUPS' PENSIONS.
MORE IRONY... IT IS THE VERY SAME MEN THAT VOTED AWAY YOUR PENSION WITHOUT YOUR HAVING ANY SAY IN THE MATTER HAVE THE NERVE TO EVEN
MENTION THE WORD "PENSIONS!"
These stock shares are in addition to the 1.1 million shares of stock options or more that would still be required to make up for the diluting affect of management's stock, as our stock values are to be on a fully diluted basis.
FULLY DILUTED COMMON EQUITY, NOT PREFERRED EQUITY. THIS LITTLE DETAIL IS HIDDEN IN LOA 93. KIM SNIDER AND BILL POLLOCK HOPE YOU WILL NOT FIND IT.
The increased stock that the US Airways pilots would have received if the Company offer of 19.33% had been accepted would have resulted in a reduction in the stock distribution to the PBGC and other unsecured creditors, and would not have affected the new equity investors.
THIS PEGS THE BS METER. THIS IS MERE SUPPOSITION BY KIM SNIDER AND BILL POLLOCK. THERE IS NO EVIDENCE TO PROVE THAT THIS WOULD HAVE HAPPENED.
LOA 93 STATES THAT "NOTHING IN THIS AGREEMENT SHALL PREVENT ANY OTHER PARTY IN INTEREST FROM OBJECTING TO ANY ASPECT OF ANY PLAN OF REORGANIZATION..."
THE PBGC WOULD GET THEIR MONEY, FROM ONE SOURCE OR ANOTHER. BUT THE PILOT'S STOCK IS THE EASIEST SUPPLY OF CASH.
THE DECEPTION CONTINUES:
In other words, the new investors would not have had a basis to object to the increased stock distribution to the pilots since that increase would have come at the expense of the PBGC and other unsecured creditors, similar to the pilot allocation of 19.33% of all Company stock in our first bankruptcy.
LOA 93 STATES THAT "NOTHING IN THIS AGREEMENT SHALL PREVENT ANY OTHER PARTY IN INTEREST FROM OBJECTING TO ANY ASPECT OF ANY PLAN OF REORGANIZATION..."
SEPTEMBER 6TH COMPANY PROPOSAL: 23% PAY REDUCTIONS; GROUP 2 CAPTAINS DOWN TO $117/HR. - $9000 ANNUAL LOSS OF INCOME.
AWA TRANSITION AGREEMENT: KIM SNIDER GIVES AWAY PAY PARITY OFFERED TO US AIRWAYS PILOTS (WHILE AWA PILOTS GET RETIREMENT PARITY) - $8000 ANNUAL LOSS OF INCOME.
DEFINED BENEFIT PLAN: DESPITE BILL POLLOCK'S INSISTENCE THAT DAVE SIEGEL WILL MAKE US WHOLE 60% OF LAST THREE YEARS' PAY LOST FOR YOUR ENTIRE RETIREMENT.
These men have cost you plenty of money, and they continue to allow the company to pilfer your quality of life.
Could this exercise be just a smoke screen to distract you from the upcoming loss of your seniority?
What was promised to whom?
Fellow pilots, we work under LOA 93 because this pilot group ratified it. However we need to keep the target in our sights: the JNC and a decent contract, and a date of hire merged seniority list.
Do not lose focus.
John Crocker
BoeingBoy, I know that you have read the information above before, but you selectively left the information from Garland Jones and MEC Vice Chairman Kim Snider out of your post? How can that be? Have you had a memory lapse?
Moreover, how about the information from ALPA's investment banker Michale Glanzer, which the PHL/PIT Reps. disregarded?
Again, the information posted above came from a MEC Representative, the MEC Vice Chairman, and ALPA's Financial Advisor. It clearly shows everything ALPA lost including what could have been over $100,000 per pilot in equity plus countless contract itmes.
I ask again, how come you conveniently left this information out? Oh well, since I was sitting at the MEC table on September 10 (as a voting member and I participated in multiple closed door confidential ALPA meetings) and I attended almost every MEC meeting leading up to the September 6 Meeting, I guess I would not know what happened, right?
Best regards,
USA320Pilot
The company's initial offer, which was presented on a Power Point presentaiton, was effectively the America West contract with the JetBlue work rules.
I attended most of the MEC meeting's during LOA 93 negotiations and viewed the presentation. Moreover, in the days before the bankruptcy II filing there was a 13-day MEC meeting at the Key Bridge Marriott.
I sat there and heard the MEC discussions, talked with the Advisor's, and watched the MEC deliberate, both at the table, in the lobby, in the bar, and in the restaurant.
There was hardly unity.
As you know, the code-a-phone is often used to communicate third-party messages and to show solidarity, but solidarity hardly existed during LOA 93 discussions.
The final straw came on September 6 (just prior to bankruptcy), when late at night at the MEC meeting (which I did not see you there...how come?) the MEC via "roll call" 4-8 voted to not send out the company's proposal for vote.
In fact, according to Garland Jones:
Jim:
Can't think of anything I gave away. I can, however, think of a lot of things I fought to keep, but we ended up losing due to the 2004 PIT/PHL Reps use of the Roll Call vote.
For example, I fought to get the Sept. 6, 2004 Proposal out to the line pilots for their vote, but the PIT/PHL Reps refused, on a 4-8 Roll Call, to allow that to happen. And what did we lose?
We went from 19.33% to a 1.25% Equity position, and a reduced Profit Sharing Plan, due to escape clauses that the Company added after we entered bankruptcy on Sept. 12. And we also went from a 50% reduction in our DC Plan Contribution (for example, from 40% to 20%) to a flat 10% for everybody post bankruptcy.
What else? Read on. And why did we lose all of this? Because of some High School graduate's "gut feeling" that we could get a "better deal" after we went bankrupt!
What sheer stupidity. Ranks right up there with "just let the judge decide." Right. He terminated the IAM's DB Plan and authorized the complete abrogation of their existing contract, allowing the Company to impose, if the IAM didn't ratify what was then on the table, Jerry Glass' last and worst offer!
I gave the following list of items away? In a pig's eye, Dyson. Write the 2004 PIT/PHL Reps, and 3 members of the prior NC, because that's where the responsibility lies.
Garland
In addition to our drastically reduced Equity Position, our now diminished Profit Sharing, and losing a DC Plan that still had 1/2 of its original value, we lost the following once we entered bankruptcy:
1. DC qualified monies for July thru Sept. 12, 2004: In the company's Sept. 6 proposal, they would have been paid on schedule. In the TA, now paid no later than Nov. 30, 2005.
2. Notional monies: In the company's Sept. 6 proposal, they would have been paid lump sum. In the TA, they will not be fully paid until 30 months after retirement.
3. Fragmentation Protection: Had it in the Sept. 6 proposal, gone in the TA.
4. 279 minimum aircraft fleet and minimum block hour guarantee: Had it in the Sept. 6 proposal, gone in the TA.
5. Equity: 19.3% in the Sept. 6 proposal, 8.5% maximum in the TA.
6. Contingent Acquisition Rights: Had them in the Sept. 6 proposal, gone in the TA.
7. Various Allegheny-Mohawk merger protections: Had them in the Sept. 6 proposal, gone in the TA.
8. Displacement rights to MDA while in bankruptcy: Had it in the Sept. 6 proposal, gone in the TA.
9. Training out of seniority during bankruptcy: Prohibited in the Sept. 6 proposal, allowed in the TA.
10. Vacation: 28 days in the Sept. 6 proposal, 21 days in the TA.
By the way, another sterling effot by the RC4 was their hand-picked Negotiating Committee Chairman Doug Mowrey's decision to give up most of the new stock offering.
________________________________________
BOS Pilots,
The PHL Reps continue their assault on our MEC Officers, as illustrated by John Crocker's memo copied below. His charges are answered by MEC Vice Chairman Kim Snider in his 4th Qtr. MEC Vice-Chairman's report.
Crocker and Ciabattoni remind me of the Nazi's in the 1930's when they needed somebody to hate in order to rise to power. They chose the Jews, and Crocker and Ciabattoni chose your MEC Officers. Tactics are the same, however, and that's to tell the people what they want to hear, no matter if it's a lie, as long as it promotes hatred.
So why don't they go after our Sec/Tresurer, Mike D' Angelo? They hate Mike with a passion, but as Mike is known to be a bit volatile they're afraid of getting their ass whipped if they start telling their lies about him.
Garland
BCC: MEC
--------------------
ALPA MEC VICE-CHAIRMAN'S REPORT (Presented to the MEC at the Fourth Quarter 2005 Meeting)
Kim Allen Snider
4 Q05
Analysis on Pre-and Post-Bankruptcy Filing Stock Values
Below are the financial calculations that establish the consequences of not accepting the Company's offer of 19.33% of the Company stock and do not include the US Airways pilots receiving any of the value of the new US Airways attributed to the AWA stockholders.
Some have suggested that since it is possible that once again management might have tried to change a deal (after entering bankruptcy) that there was no opportunity lost by not accepting the offer of 19.33% of the Company stock. Such thinking is in a word "goofy" as no negotiator wants to be dealing from a weaker position instead of a stronger position.
Additionally, anyone familiar with the bankruptcy process knows that the unsecured creditors get the "left-overs" from the process. This is important because the additional stock that the US Airways pilots would be entitled to at the 19.33% level would have simply decreased the amount of stock "left-over" from the bankruptcy process for the unsecured creditors and would not have affected the stock allocation to the new equity investors.
The loss of stock caused by rejecting the Company's offer, prior to bankruptcy, of 19.33% of the stock has turned out to be much greater than it originally appeared. This is due to several factors beyond the obvious reduction from 19.33% to 8.5% of Company stock to be provided the pilots of US Airways under the Transformation Agreement:
o No stock offset was required prior to bankruptcy for full profit sharing verses a 50% stock reduction after bankruptcy (reducing the 8.5% to 4.25%).
o The 19.33% of Company stock due under the terms prior to bankruptcy would not have been reduced by equity investments greater than $250 million.
Under the terms of the Transformation Plan Agreement (LOA #93), the US Airways pilots are to receive 1.25 million shares of stock. This amount was arrived at because the 8.5% was reduced to 4.25% to offset "full" profit sharing (as allowed in LOA #93). Also, under the terms of LOA #93, pilots only receive stock based on a percentage of the first $250 million of new equity plus the $115 million pre-investment value of US Airways.
$250 m + $115 m = $365 m. $365 m times 4.25% = $15.5 million value at $15/share.
LOA #93 also called for the US Airways pilots' equity to match US Airways management's equity. This provision would not hold up with the Bankruptcy Judge because management could claim (and did claim) that almost all of the equity going to management was going to America West management and almost none was going to US Airways management.
So what would the US Airways pilots' equity claim be under the pre-bankruptcy offer? Since prior to bankruptcy the equity was not limited to just the first $250 million of new equity, the numbers add up like this. The entire $565 million of new equity would have been added to the $115 million pre-investment value and multiplied by the full 19.33% (equity % unreduced for profit sharing).
$565 m + $115 m = $680 m. $680 m times 19.33% = $131.44 million value at $15/share.
This, however, does not reflect the full loss of stock value suffered by the US Airways pilots. As the $131.44 million was based on $15 per share, the pre-bankruptcy pilots stock would have been 8.763 million shares. At the present stock price of $32 (as of December 5th) those 8.763 million shares would have been worth $280.5 million:
$33 times 8.763 m shares = $280.5 million.
At the present stock price of $32, our 1.25 million shares are worth $40 million:
$33 times 1.25 m shares = $40 million.
A loss of $240.5 million (280.5 m -40 m) of value plus another $7.5+ million additional dollars of value lost for each additional dollar the stock price goes up!
Q&As on Pre-and Post-Bankruptcy Filing Stock Values
As a disclaimer the following discussion corrects the major misstatements by the PHL and PIT representatives about the consequences of not accepting the Company offer, prior to bankruptcy, of 19.33% of the Company stock. This discussion will not correct every misstatement made about this issue as that would take more time and space than is practical to cover in this set of Q&As.
Q. Did our investment advisor make the statements attributed to Him?
A. No, the statements are taken out of context and have nothing to do with Michael Glanzer's review of the math involved in making these calculations. For example, Michael Glanzer warned the MEC if a "labor war" broke out (especially with the pilots) that the investors would most likely abandon ship. Fortunately, such a "labor war" never took place at US Airways and the investors stayed with the Company through the bankruptcy process.
Q. Is the value of 1.25 million shares plus the 1.1 million options we are receiving greater in value or less in value compared to the equity called for in LOA # 93?
A. The combined value of 1.25 million shares of stock and 1.1 million options is more than the value of 1.45 million shares of stock that we claimed in our bankruptcy court filings that we were due under LOA #93.
LOA #93 also called for the US Airways pilots' equity to match "US Airways management's" equity (up to 7.7 million options) after adjusting for profit sharing. Unfortunately, this provision would not hold up with the Bankruptcy Judge because management could claim (and did claim) that almost all of the equity going to management was going to America West management and almost none was going to US Airways management.
Q. Was the 19.33% called for and received under the Restructuring Agreement or offered in negotiations prior to bankruptcy less than 19.33% of the total equity of US Airways?
A. No, both times the 19.33% was qualified as "19.33% of the fully diluted common stock" which means that the pilots receive 19.33% of the total equity of US Airways. The fact that preferred or other special classes of stock exist is taken into account during adjustments for the fully diluted basis.
Q. Did management state that they would lose investors if ALPA demanded the full stock due to the pilots?
A. No, since the pilots did receive the full amount of stock due (see discussion above) this is a trick question. In addition, the issue with investors had to do with profit sharing, not stock.
Q. Is it likely the Company would use an 1113 motion to reduce a 19.33% stock offer if the 19.33% had been accepted prior to bankruptcy?
A. No, 1113 motions have to do with successfully reorganizing the company. Since the 19.33% would have only reduced the unsecured creditors' stock to the same level as the first bankruptcy, the unsecured creditors would have most likely once again settled for the same 2 cents on the dollar as before. The important point is that none of the 19.33% would have come from the new equity owners and that is why an 1113 motion was not likely or justifiable before Judge Mitchell.
Q. Was the September 6th Company proposal's value basically comparable to the total economic value of LOA #93?
A. Yes, although economic returns and protections were lost (as predicted by all our advisors), the overall value is similar. The September 6th Company proposal did have a 23% pay cut, but it also contained only a 50% reduction to pensions, instead of the flat 10% DC Plan in the post-bankruptcy LOA #93.
Q. Was pay parity ever offered by management in the Transition Agreement negotiations?
A. No.
Q. Did Kim Snider give away pay parity in Transition Agreement negotiations?
A. No, the Transition Agreement negotiations, like all negotiations, are under the guidance and review of the MEC, who in this case unanimously ratified the Transition Agreement. (When is the last time you can remember the MEC unanimously ratifying anything!) Transition Agreements (formerly known as Fence Agreements) historically do not provide large economic gains as they deal with protecting each of the pilot groups from management's favoritism. The Transition Agreement also provides a process to reach a merged employment agreement (which will contain significant economic gains).
Q. Did Kim Snider agree to give up the second stock vesting in January of 2005?
A. No, in fact Kim Snider assisted our bankruptcy council Richard Seltzer in winning a rare victory for labor as Judge Mitchell ruled in favor of ALPA's position that the US Airways pilots should receive the second stock vesting.
Q. Did the US Airways pilots get nothing in the Transition Agreement?
A. We did not get "nothing" but we did accomplish all of the items in the MEC charging resolution for the negotiations:
(1) Operational merger commitment.
(2) Interim protection of flying and related matters.
(3) Company acceptance of seniority integration per ALPA policy.
(4) Process to negotiate a merged employment agreement.
(5) Releases, FPL, ALPA expenses, reciprocal positive space travel.
(6) Expedited dispute resolution process.
(7) Other issues relevant to the proposed transaction (EMB-190s at Mainline).
Q. What is the potential increase in shares each pilot would have received with 19.33% of the stock?
A. Based on 3,316 full pilot shares, each US Airways pilot would have received an additional 2,265 shares presently worth about $72,500 (at $32/share as of December 5th). Even if management reneged on 1/3 of the stock due, each pilot would have still received about $50,000 more worth of stock.
-----------------------
CROCKER'S MEMO:
Fellow Pilots,
I said there would be more coming on the "MEMO."
Snider and Pollock think if you keep repeating something it makes it
true.
My rebuttal is in UPPER CASE.
Fraternally,
John A. Crocker
Chairman [LEC 41, PHL]
Memo
To: Bill Pollock
From: Kim Snider
CC:
Date: November 14, 2005
Re: Requested Analysis on Pre-and Post-Bankruptcy Filing Stock Values
Below are the financial calculations that establish the consequences of not accepting the Company offer of 19.33% of the Company stock and do not include the pilots receiving any of the value of the new US Airways attributed to the AWA stockholders. Our Investment Banker Michael Glanzer has reviewed these calculations.
OUR INVESTMENT BANKER MICHAEL GLANZER IS THE VERY SAME MICHAEL GLANZER THAT HAS AN ESTABLISHED RECORD OF PROVIDING HIS VERY INACCURATE, YET INCREDIBLY EXPENSIVE ASSUMPTIONS TO ALPA, APPARENTLY TO PROVIDE JUSTIFICATION FOR TAKING THE PATH OF LEAST RESISTANCE. AT NO TIME HAS MICHAEL GLANZER EVER BEEN A PROPONENT OF HOLDING MANAGEMENT ACCOUNTABLE. HIS VERY EXPENSIVE ADVICE ALWAYS PROMOTES CAPITULATION.
AS FOR THE ACCURACY OF HIS PREDICTIONS, UNTIL RECENTLY THE MEC BLINDLY ACCEPTED HIS WORD. WHEN HIS ADVICE WAS CHALLENGED LAST YEAR, IT WAS PROVEN TO BE INCREDIBLY INACCURATE. HIS STATEMENTS THAT THE COMPANY WOULD LIQUIDATE WITHIN A WEEK IF IT ENTERED CHAPTER 11 WITHOUT A PILOT AGREEMENT WERE PROVEN FALSE. THEY DID NOT LIQUIDATE, MR. GLANZER. HIS STATEMENT THAT NO ONE WOULD INVEST IN A "CIVIL WAR," REFERENCING A DIVIDE IN THE PILOT'S UNION, WAS ALSO PROVEN FALSE. THE IAM AND AFA WERE THREATENING TO STRIKE, YET INVESTMENTS CAME FORTH IN LATE 2004. OUR INVESTMENT BANKER MICHAEL GLANZER ACTUALLY TRIED TO CAMOUFLAGE HIS INACCURATE GUESS WITH THE STATEMENT THAT THE INVESTMENT COMMUNITY ONLY LOOKS AT THE PILOT'S UNION, NOT ALL OF LABOR.
PLEASE REMEMBER HOW ACCURATE MR. GLANZER'S VERY EXPENSIVE ADVICE HAS BEEN AS YOU READ THE REST OF THIS LITTLE PIECE OF KIM SNIDER'S MENDACITY.
The loss of stock caused by rejecting the Company's offer, prior to bankruptcy, of 19.33% of the stock has turned out to be much greater than it originally appeared.
HE CONVENIENTLY FAILS TO MENTION JUST HOW MUCH STOCK ALPA IS ACTUALLY RECEIVING NOW! ALPA WILL BE RECEIVING LESS STOCK THAN LOA 93 CALLS FOR! BUT BILL POLLOCK AND KIM SNIDER QUIETLY FAIL TO BRING THIS TO THE PILOT'S ATTENTION. WE HAVE ALREADY BEEN HAD, AND WHAT ARE POLLOCK AND SNIDER DOING ABOUT IT? NOTHING!
THE SEPTEMBER 6TH PROPOSAL CALLED FOR "REASONABLE EFFORTS TO PROVIDE
THE PILOTS A SHARE OF THE FULLY DILUTED COMMON STOCK EQUITY OF THE COMPANY NO LESS THAN 19.33%" THIS IS AKIN TO A BELIEF THAT ACCEPTANCE OF THE SEPTEMBER 6TH PROPOSAL (OR THE AUGUST 25TH PROPOSAL THAT WAS UNANIMOUSLY REJECTED BY THE MEC) WOULD HAVE ENSURED A FLEET OF 279 AIRCRAFT EVEN AS THE 279 NUMBER WAS REMOVED FROM THE AFA AND IAM AGREEMENTS.
NOTICEABLY MISSING FROM THIS DISCUSSION IS A DELINEATION OF TYPES OF STOCK. LOA 84 GAVE ALPA 19.33% OF THE CLASS A COMMON STOCK OF US AIRWAYS. THIS WAS NOT 19.33% OF THE TOTAL EQUITY OF US AIRWAYS. MANAGEMENT AND RSA HELD THE MAJORITY OF THE EQUITY IN PREFERRED STOCK.
THIS IS TYPICAL OF THE MIS-INFORMATION CAMPAIGNS OF BILL POLLOCK AND HIS TWO PARTNERS, KIM SNIDER AND JACK STEPHAN.
This is due to several factors beyond the obvious reduction from 19.33% to 8.5% of Company stock to be provided the pilots of US Airways under the Transformation Agreement:
HOW ABOUT THE REDUCTION FROM 8.5% TO LESS THAN 4.25% BY THE PLAN OF REORGANIZATION, MR. SNIDER? THIS IS A PUBLIC DOCUMENT! BEFORE THE VOTE TO ACCEPT PROFIT SHARING! AND IT REFERS TO JUST COMMON STOCK, NOT ALL COMPANY STOCK.
THERE IS PREFERRED, CLASS A COMMON, CLASS B COMMON, AND COMMON STOCK. SURELY KIM SNIDER AND MICHAEL GLANZER UNDERSTAND THIS. WHY DO THEY FAIL TO DISCUSS IT?
ALL ALPA EQUITY, INDEED ANYTHING CONTRACTUAL, WAS THERE FOR THE TAKING WHILE IN BANKRUPTCY; WITNESS MR. PARKER'S COMMENTS ABOUT THE ABILITY TO RIGHT-SIZE OUR FLEET DURING BANKRUPTCY, AND BILL POLLOCK'S VOTE TO ACCEPT THE REDUCED PROFIT SHARING AND BY EXTENSION, THE REDUCED STOCK ALLOCATION AT JERRY GLASS'S INSISTENCE.
No stock offset was required prior to bankruptcy for full profit sharing verses a 50% stock reduction after bankruptcy (reducing the 8.5% to 4.25%).
THE PLAN OF REORGANIZATION PROVIDED FOR LESS THAN 4.25% OF COMMON EQUITY TO BE DISTRIBUTED TO ALPA! WHETHER OR NOT ALPA ACCEPTED PROFIT SHARING!
AMAZINGLY, KIM SNIDER OMITS ANY DISCUSSION OF BILL POLLOCK CASTING THE TIE-BREAKING VOTE TO GIVE IN TO JERRY GLASS'S DEMANDS AND REDUCE THE AMOUNT OF THE PILOT'S PROFIT SHARING. THIS ALONE COLORS THE ACCURACY OF THE REST OF THIS POLITICALLY-BASED ASSUMPTION.
THE OFFSET WAS WELCOMED AND ENCOURAGED BY KIM SNIDER, BILL POLLOCK, AND THEIR SUPPORTERS THAT WANTED THE MEC TO "LET MY DADDY VOTE."
The 19.33% of Company stock due under the terms prior to bankruptcy would not have been reduced by equity investments greater than $250 million.
BUT KIM SNIDER OMITS THE FACT THAT THE 19.33% OF COMMON STOCK ALPA RECEIVED FROM RESTRUCTURING II WAS INDEED REDUCED BY ONE-FOURTH DUE TO FORFEITURE OF THE THIRD VESTING DUE TO CANCELLATION OF STOCK ON EMERGENCE FROM BANKRUPTCY, AND WAS ALMOST REDUCED TO ONE-HALF DUE TO BILL POLLOCK'S AND KIM SNIDER'S INACTION IN THE FACE OF JERRY GLASS'S DEMAND THAT ALPA DELAY THE SECOND VESTING OF STOCK UNTIL OUT OF BANKRUPTCY.
THE COMPANY OPENLY RENEGED ON THE CONTRACTUAL PROVISION FOR EQUITY IN LOA 93! WE ARE NOT RECEIVING ALL THE STOCK LOA 93 CALLS FOR! IT SEEMS THAT KIM SNIDER AND BILL POLLOCK WANT YOU TO BELIEVE THAT, EVEN THOUGH THE COMPANY RENEGED ON THE EQUITY PROVISIONS OF LOA 93, THEY WOULD NOT HAVE RENEGED ON AN EARLIER PROPOSAL CALLING FOR AN EVEN GREATER SHARE.
DO THEY ALSO BELIEVE ALPA WOULD HAVE FORCED US AIRWAYS TO MAINTAIN A 279 AIRCRAFT FLEET?
Under the terms of the Transformation Plan Agreement (LOA #93), the US Airways pilots are to receive 1.25 million shares of stock. This amount was arrived at because the 8.5% was reduced to 4.25% to offset "full" profit sharing (as allowed in LOA #93).
NO, KIM SNIDER, THIS IS YET ANOTHER LIE. THE AMOUNT OF STOCK ALPA WILL RECEIVE WAS REDUCED BECAUSE MANAGEMENT RENEGED ON THE PROVISION OF THE FULL AMOUNT OF STOCK DELINEATED IN LOA 93. THEY TOLD ALPA THAT THEY WOULD LOSE OTHER INVESTORS IF ALPA DEMANDED THE FULL CONTRACTUALLY REQUIRED AMOUNT OF STOCK. THEY KNOW ALPA WILL NOT FIGHT, SO THEY JUST ASKED THE BANKRUPTCY JUDGE TO TAKE OUR STOCK.
Also, under the terms of LOA #93, pilots only receive stock based on a percentage of the first $250 million of new equity plus the $115 million pre-investment value of US Airways. $250 m + $115 m = $365 m. $365 m times 4.25% = $15.5 million value at $15/share. LOA #93 also called for the US Airways pilots' equity to match US Airways management's equity. This provision would not hold up with
the Bankruptcy Judge because management could claim (and did claim) that almost all of the equity going to management was going to America West management and almost none was going to US Airways management.
KIM SNIDER SHOWS HE CAN ACCEPT THAT CERTAIN PROVISIONS OF LOA 93 DID NOT SURVIVE MANAGEMENT'S ATTACKS DURING BANKRUPTCY, YET HE STILL MAINTAINS THAT A PRE-BANKRUPTCY AGREEMENT WOULD EMERGE UNSCATHED!
THE BS METER IS IN THE RED!
So what would the US Airways pilots' equity claim be under the pre-bankruptcy offer?
MORE CONJECTURE, MAYBE WE SHOULD ASK, "WHAT WOULD THE US AIRWAYS PILOTS' EQUITY CLAIM BE UNDER LOA 93 IF MANAGEMENT DID NOT REDUCE OUR AMOUNT OF STOCK WHILE ALPA STOOD IDLY BY?"
Since prior to bankruptcy the equity was not limited to just the first $250 million of new equity, the numbers add up like this. The entire $565 million of new equity would have been added to the $115 million pre-investment value and multiplied by the full 19.33% (equity % unreduced for profit sharing).
BUT ONLY IF THE COMPANY DID NOT 1113 ALPA. IT APPEARS KIM SNIDER BELIEVES THAT EVERYTHING ELSE THE COMPANY DEMANDED OR TOOK SINCE THEN WAS ABSOLUTELY NECESSARY FOR THEIR SURVIVAL, SUCH AS THE VM/DH DEBACLE.
$565 m + $115 m = $680 m. $680 m times 19.33% = $131.44 million value at $15/share. This, however, does not reflect the full loss of stock value suffered by the US Airways pilots. As the $131.44 million was based on $15 per share, the pre-bankruptcy pilots stock would have been 8.763 million shares. At the present stock price of $33 (as of November 10) those 8.763 million shares would have been worth $289 million: $33 times 8.763 m shares = $289 million.
At the present stock price of $33, our 1.25 million shares are worth $41.25 million: $33 times 1.25 m shares = $41.25 million.
A loss of $247.75 million (289 m ï¿∏41.25 m) of value plus another $7.5+ million additional dollars of value lost for each additional dollar the stock price goes up!
That comes out to $82,583 of stock value lost for each of our 3,000 pilots.
APPARENTLY BILL POLLOCK AND KIM SNIDER BURNED A LOT OF THE MIDNIGHT OIL COMING TO THIS DISINGENUOUS CONCLUSION!
THIS IS DISHONESTY, PURE AND SIMPLE, FROM THE VERY SAME MAN THAT RULED THAT THE PILOTS WOULD NEVER GET A CHANCE TO VOTE ON THE TERMINATION OF THEIR PENSIONS. THE AVERAGE PILOT, AFTER 25 YEARS OF SERVICE WOULD HAVE RETIRED WITH A LUMP SUM WELL IN EXCESS OF $1,000,000, AND IN SOME CASES, IN EXCESS OF $2,000,000. THAT'S RIGHT; BILL POLLOCK ENSURED THAT EVERY PILOT WOULD HAVE THEIR EARNED RETIREMENT STRIPPED FROM THEM. TO BUY EMB-170'S NO LESS! HE PERSONALLY RULED THAT THE PILOTS' ONLY DEFENSE AGAINST THIS LARCENY, THE ABILITY TO VOTE, WOULD BE TAKEN AWAY FROM THEM. THE POTENTIALLY SEISMIC REPERCUSSIONS FROM THIS ACTION BY POLLOCK ARE JUST NOW BEGINNING TO BE FELT BY OUR ASSOCIATION.
DO NOT FORGET THAT THE SEPTEMBER 6TH COMPANY PROPOSAL THAT POLLOCK AND SNIDER PUSHED SO HARD FOR CONTAINED A 23% PAYCUT. EVEN THE BANKRUPTCY JUDGE THOUGHT THAT WAS WAY TOO HIGH, HE REDUCED IT IN HIS 1113E RULINGS FOR THE OTHER LABOR GROUPS. THE AVERAGE PILOT, NOW FLYING 95 HOURS PER MONTH, WOULD HAVE ON AVERAGE LOST MORE THAN AN ADDITIONAL $7,500 EACH YEAR IN PAY ALONE. ADD IN WHAT THAT WOULD DO TO DC CONTRIBUTIONS, AND YOU GET A CLEAR PICTURE OF THE BS POLLOCK AND SNIDER CONTINUE TO PUSH ON THE PILOT GROUP.
ALSO, DO NOT FORGET TO ADD IN THE PAY PARITY THAT KIM SNIDER SO QUICKLY AND EASILY OFFERED TO GIVE AWAY DURING THE AMERICA WEST TRANSITION NEGOTIATIONS, AND THE PILOTS HAVE LOST EVEN MORE AT THE HANDS OF THESE "LEADERS!"
IF YOU COMPARE PAY (A DEFINITE) WITH THIS STOCK HALLUCINATION, YOU GET A CLEAR PICTURE OF THE CONTINUING MIS-INFORMATION CAMPAIGN OF BILL POLLOCK AND KIM SNIDER.
JUST HOW MUCH DID YOU MAKE FROM THE 19.33% EQUITY SHARE ALPA RECEIVED FROM RESTRUCTURING II IN 2002? REMEMBER, BOTH POLLOCK AND SNIDER WERE WILLING TO ACQUIESCE TO GLASS'S DEMAND THAT THE PILOTS GIVE UP THE SECOND VESTING, A FULL 25% OF ALPA'S SHARE OF COMMON STOCK, IN DECEMBER 2004. AND DO NOT FORGET THE FACT THAT THE PILOTS LOST THE LAST VESTING OF STOCK FROM RESTRUCTURING II, YET ANOTHER 25%.
WITH THIS HISTORY IN MIND, AND ESPECIALLY THE LANGUAGE CONTAINED IN THE SEPTEMBER 6TH PROPOSAL, IS THERE ANY PILOT AT US AIRWAYS NAIVE ENOUGH TO BELIEVE THAT ANY OF THE COVETED SEPTEMBER 6TH AGREEMENT WOULD HAVE SURVIVED CHAPTER 11? JUST LOOK AT HOW MUCH OF LOA 93 HAS BEEN DISREGARDED BY JERRY GLASS WITH THE TACIT APPROVAL (OR OUTRIGHT ASSISTANCE VM/DH GRIEVANCE DELAY OF SIX MONTHS) OF CHAIRMAN POLLOCK.
Another unfortunate piece to this issue is that 70% of the stock that we lost in this process went to the PBGC, with the rest going to the other unsecured creditors.
THIS IS CREATING HISTORY THAT NEVER TRANSPIRED. WE WERE NEVER GUARANTEED ANY STOCK. WE WERE OFFERED ONLY "REASONABLE EFFORTS TO PROVIDE..."
The PBGC, with most of that windfall, increased the funding for the IAM and AFA pension participants who lost their pensions in this bankruptcy.
THIS WAS DUE TO THE BANKRUPTCY JUDGE'S RULING. REMEMBER THE SEPTEMBER 6TH PROPOSAL'S LANGUAGE - "SUBJECT TO BANKRUPTCY COURT APPROVAL."
HOW IRONIC THAT MOST OF THE STOCK WE LOST OUT ON IN THIS PROCESS IS BEING USED TO FUND OTHER EMPLOYEE GROUPS' PENSIONS.
MORE IRONY... IT IS THE VERY SAME MEN THAT VOTED AWAY YOUR PENSION WITHOUT YOUR HAVING ANY SAY IN THE MATTER HAVE THE NERVE TO EVEN
MENTION THE WORD "PENSIONS!"
These stock shares are in addition to the 1.1 million shares of stock options or more that would still be required to make up for the diluting affect of management's stock, as our stock values are to be on a fully diluted basis.
FULLY DILUTED COMMON EQUITY, NOT PREFERRED EQUITY. THIS LITTLE DETAIL IS HIDDEN IN LOA 93. KIM SNIDER AND BILL POLLOCK HOPE YOU WILL NOT FIND IT.
The increased stock that the US Airways pilots would have received if the Company offer of 19.33% had been accepted would have resulted in a reduction in the stock distribution to the PBGC and other unsecured creditors, and would not have affected the new equity investors.
THIS PEGS THE BS METER. THIS IS MERE SUPPOSITION BY KIM SNIDER AND BILL POLLOCK. THERE IS NO EVIDENCE TO PROVE THAT THIS WOULD HAVE HAPPENED.
LOA 93 STATES THAT "NOTHING IN THIS AGREEMENT SHALL PREVENT ANY OTHER PARTY IN INTEREST FROM OBJECTING TO ANY ASPECT OF ANY PLAN OF REORGANIZATION..."
THE PBGC WOULD GET THEIR MONEY, FROM ONE SOURCE OR ANOTHER. BUT THE PILOT'S STOCK IS THE EASIEST SUPPLY OF CASH.
THE DECEPTION CONTINUES:
In other words, the new investors would not have had a basis to object to the increased stock distribution to the pilots since that increase would have come at the expense of the PBGC and other unsecured creditors, similar to the pilot allocation of 19.33% of all Company stock in our first bankruptcy.
LOA 93 STATES THAT "NOTHING IN THIS AGREEMENT SHALL PREVENT ANY OTHER PARTY IN INTEREST FROM OBJECTING TO ANY ASPECT OF ANY PLAN OF REORGANIZATION..."
SEPTEMBER 6TH COMPANY PROPOSAL: 23% PAY REDUCTIONS; GROUP 2 CAPTAINS DOWN TO $117/HR. - $9000 ANNUAL LOSS OF INCOME.
AWA TRANSITION AGREEMENT: KIM SNIDER GIVES AWAY PAY PARITY OFFERED TO US AIRWAYS PILOTS (WHILE AWA PILOTS GET RETIREMENT PARITY) - $8000 ANNUAL LOSS OF INCOME.
DEFINED BENEFIT PLAN: DESPITE BILL POLLOCK'S INSISTENCE THAT DAVE SIEGEL WILL MAKE US WHOLE 60% OF LAST THREE YEARS' PAY LOST FOR YOUR ENTIRE RETIREMENT.
These men have cost you plenty of money, and they continue to allow the company to pilfer your quality of life.
Could this exercise be just a smoke screen to distract you from the upcoming loss of your seniority?
What was promised to whom?
Fellow pilots, we work under LOA 93 because this pilot group ratified it. However we need to keep the target in our sights: the JNC and a decent contract, and a date of hire merged seniority list.
Do not lose focus.
John Crocker
BoeingBoy, I know that you have read the information above before, but you selectively left the information from Garland Jones and MEC Vice Chairman Kim Snider out of your post? How can that be? Have you had a memory lapse?
Moreover, how about the information from ALPA's investment banker Michale Glanzer, which the PHL/PIT Reps. disregarded?
Again, the information posted above came from a MEC Representative, the MEC Vice Chairman, and ALPA's Financial Advisor. It clearly shows everything ALPA lost including what could have been over $100,000 per pilot in equity plus countless contract itmes.
I ask again, how come you conveniently left this information out? Oh well, since I was sitting at the MEC table on September 10 (as a voting member and I participated in multiple closed door confidential ALPA meetings) and I attended almost every MEC meeting leading up to the September 6 Meeting, I guess I would not know what happened, right?
Best regards,
USA320Pilot
ClueByFour
Veteran
- Aug 20, 2002
- 3,566
- 37
I carried a proxy to an annual meeting the other day.
TheLarkAscending
Veteran
Quoting Samuel Johnson and William Shakespeare will not magically provide a :wacko: poster with integrity, honesty or credibility. Thanks for the laughs, though! 
