ALPA says NO!

[DB Cooper]

Reuters Market News
United Airlines pilots reject cost cut proposal
Thursday August 29, 8:00 pm ET
CHICAGO, Aug 29 (Reuters) - Pilots at UAL Corp.''s (NYSE:UAL - News) United Airlines said on Thursday they rejected the latest cost-cutting proposal from management, calling the terms "totally and wholly unacceptable."
Steve Derebey, spokesman for the Air Line Pilots Association, said his union basically handed the request for overall cuts from all labor unions totaling $1.5 billion per year over six years back across the table.
"We told the company that their proposal was just totally and wholly unacceptable," Derebey told Reuters. Asked what specifically was objectionable, he said: "the scope and the magnitude."
Derebey declined to specify the size of the pay cuts sought by the No. 2 U.S. airline, but characterized them as "much higher" than 20 percent.
AMT''s concur with Mr. Dereby, their term sheet is also unacceptable.[:knockout:]

 

[UAL777flyer]

Oh boy, let the games really begin. Considering what the ALPA NC agreed to in the first ERP, I can only imagine what the company was asking for this time. This certainly doesn't bode well for the company's efforts to restructure outside of bankruptcy. Not having ALPA onboard is a crucial blow. It ought to get real interesting now.

Incidentally, there is supposed to be another BOD meeting on Saturday.

 

[767jetz]

This is now getting out of hand. As most who frequent this board know, I have been one of the Yes-leaning pilots on the first ERP. The first ERP was in the vicinity of $1.2B over 3 years with all parties participating. Now we're up to $6B over 6 years??????!!!!!!

How does a proposal, that the company agrees will work with their restructuing plan, get changed so drastically? The ATSB is playing games with the power they obviously have. Is this an effort to beat down labor? Or are they making the requirments so outlandish because the know it will never fly, and don't really want to co-sign any more loans?

I'm starting to think we should tell them where to go! Then get a loan at ANY rate from someone else, and "muddle through."

Let's see... USAir and AVOLAR fiasco cost about $2B. UAL wants a $2B dollar loan. ATSB wants labor to give up $6B over the next 6 years.

Can someone please make just A LITTLE sense of this for me, before I sign up for that truck driving school? TruckMasters I think it is? UAL777flyer? Anyone?[:knockout:] [(] [:blackeye:] [:0] []

 

[gatemech]

So does this mean we (the mechanics) are not the bad guys anymore? I honestly believe that GW figures in this somewhere. Also that Those at the top want UA to fail. Get the money from another source.

AA's CEO stated that they have blamed labor too long. This is not labors fault. He is not asking for concessions.

 

[Rhino]

Selecting the RIGHT CEO is more important. I don't think that will happen til after this is settled one way or the other.

There are very few candidates who could walk in at this juncture and be effective in forestalling Ch 11. Those very few candidates are unlikely to be willing to spend all their personal capital coercing/coaxing such agreements.

I think any chance UAL has of avoiding BK is up to the folks in place now.

No other group (because they have by far the most to lose) works with management more than the pilots (at any threatened airline). An impasse at this late date is quite foreboding.

 

[UAL777flyer]

gatemech,

Carty hasn't asked for wage concessions: yet. Still early in the game for AA. But remember this. If UA successfully restructures by obtaining an ATSB loan guarantee or bankruptcy, AA is going to be under considerably more pressure because they compete head to head against UA in numerous markets. And UA will be a more competitive carrier. So I think the jury is still out on what AA will do to fix their problems.

767jetz,

I wish I could make sense of it, believe me. But I believe more and more each day that this company is inevitably going to declare bankruptcy. And trust me when I tell you that you haven't even begun to see ugly yet, if that happens.

Look at the CEO situation. Why the delay in announcing a new leader? Announcing one now gives pivotal momentum to the concession efforts, as it will give labor an idea of who they'll be dealing with for the forseable future. So why no announcement? I'm starting to think that they're having trouble enticing a strong candidate to take the job under the present circumstances. Maybe there are too many strings attached. Maybe the compensation package isn't enough. Who knows. But the BOD should know that it's absolutely critical to name a new CEO ASAP. And it would seem that UA is having difficulty finding someone willing to take on this dysfunctional mess.

 

[AirplaneFan]

----------------
On 8/29/2002 933 PM

This is now getting out of hand. As most who frequent this board know, I have been one of the Yes-leaning pilots on the first ERP. The first ERP was in the vicinity of $1.2B over 3 years with all parties participating. Now we're up to $6B over 6 years??????!!!!!!

How does a proposal, that the company agrees will work with their restructuing plan, get changed so drastically? The ATSB is playing games with the power they obviously have. Is this an effort to beat down labor? Or are they making the requirments so outlandish because the know it will never fly, and don't really want to co-sign any more loans?

I'm starting to think we should tell them where to go! Then get a loan at ANY rate from someone else, and "muddle through."

Let's see... USAir and AVOLAR fiasco cost about $2B. UAL wants a $2B dollar loan. ATSB wants labor to give up $6B over the next 6 years.

Can someone please make just A LITTLE sense of this for me, before I sign up for that truck driving school? TruckMasters I think it is? UAL777flyer? Anyone?[:knockout:] [(] [:blackeye:] [:0] []
----------------

How do you figure USAir and AVOLAR cost UAL $2B? IMHO, Avolar was not a bad idea (NetJets is doing phenomenally well) and it seems to be the wave of the future. But if management is to be faulted it might have been on the way the idea was presented, but the idea itself was sound. UAL was trying to grow the airline, but the idea was stopped by its unions who now want to fault management for not coming up with other revenue streams.

On the other issue, it does seem excessive for UAL management to look for 6 years of concessions IIFF they only have a short-term problem. I have often thought that perhaps the pilots could just give management a bridge loan and not depend upon ATSB. Of course, I don't think what UAL is experiencing is a short-term problem and more concessions are going to be necessary.

 

[UnitedChicago]

UAL777Flyer:

I don't believe that it's a bad thing that they haven't named a new ceo yet.

So the pilots have said "no" (for now - this is just starting to play out) and mechanics keep saying "we do not want to negotiate with an interim ceo".

So why would the BOD want to officially name a ceo now? If the BOD can say...agree to concessions and we name john doe ceo...don't you think that's a powerful chip?

After 6 months, I highly doubt the recruiters are scratching their head at this point.

The longer the uncertainty ceo-wise, the better management has negotiating wise.

 

[Cosmo]

I suspect that the delay in naming a new leader has a lot to do with the very great possibility that United will need to file for Chapter 11 bankruptcy in the near future, and nobody wants to arrive at United only to announce such a filing a month or two after being named CEO. I believe that any leader worth having would rather arrive after the bankruptcy filing has been made, and then show the world how he/she turned United around and made it a growing, profitable and world-beating operation again. That would be much better for his/her reputation.

Remember, Creighton initially said that he didn't want to preside over United's bankruptcy, even in a "caretaker" role (in fact, I think he's beginning to believe that such a filing is more or less unavoidable, and that may explain why he's basically faded into the background). I imagine that such feelings would be even more prominent in somebody who would hope to have a long stay as the leader of United.

But having said that, I can certainly understand the frustration of United employees at the company's lack of direction in the absence of a good, new long-term leader (and leadership team). Sadly, though, I'm afraid that this situation will remain unchanged for a while longer.

I wish you all the best during these very tough times. And I will show my support for all the folks at United by continuing to fly with you as much as I can.

 

[UAL24]

BK is a done deal. Paul Whiteford has been labeled, right or wrong, an exceeding concessionist since he took over 10months ago. If Paul says the concession package is wholly unacceptable it must be beyond belief bad. The news quote above says it asked for something far in excess of 20%. What that is made up in only the shadow knows. Me thinks it will have significant and massive furloughs attached to it on top of significant pay givebacks and reduction or outright termination of the B-plan and unlimited RJ flying. If they want 1.5bill ayear from labor and they have proposed a combined 450mil from the IAM that leaves an awfully large gap for the pilots and FA's to make up. Assuming the FA's give 70 million a year in compensation relief that is a compensation reduction of $106,730 per pilot based on the current seniority of 9182. We actually only have just under 8900 active so that figure goes up. I think even a jaded paycheck jealous individual could look at this concession as entirely unacceptable. That would put half of our pilot list at 30,000 a year or less. Assuming just dollars of course.
I think this proposal is ugly by design because the execs want a BK and they need to make the pilot group look inflexible for the judge to offset the amount of coordination that has been given by ALPA over the last year. If it is not a wholesale gutting of the contract then it is a wholesal gutting of the 400 fleets way of life and since Paul is on the 400 he gets a little excited. If that is the case I say no big deal, bring on the IRP's. Either way mark your clocks. We are absolutely unequivocally going to be in Bankruptcy 1month from today. This is MGT intention and they are chuckling throwing this red herring out their thinking that if they get lucky and capitalize on the Pilot Groups generally concessionist attitude all the better. If they don't take it they will go with plan A the BK. This is truly unbelievable if they have spit in the face of the only group that has worked with them this year and rewarded the IAM with a relative slap on the hand by comparison. Stunned.

 

[michael707767]

One of two things is going on here. First, management is trying to go to bankruptcy, and proposed cuts they knew the unions would not accept, in an effort to make the unions look bad. The second option is this....basically managment really has no idea how to get this company on track, and therefore wants to shift all the burden for it to labor. If they had a good plan for the future, the cuts would not have to be so deep.

 

[UAL777flyer]

UnitedChicago,

I don't see it that way, although I do understand where you're coming from. The longer UA goes without a permanent CEO, the more NOTHING gets fixed or accomplished. That also means that the same individuals who are not respected or trusted are running the company. We have wasted precious time since 9/11 doing NOTHING but treading water.

The sooner we get a new senior management team in here, the sooner UA can have some forward momentum for a change and maybe start to fix this company for the better. Until that happens, nothing of substance is going to be accomplished.

 

[airplanenut]

I think that bankruptcy has already been decided on. The question is the timing. They are usually announced over a weekend so which one would it be. I can't see it happening close to Sept 11 as that is just too much emotional havoc on employees and families. It would have be done early enough not to disrupt the busy holiday flying season. A bankruptcy in the news over the holidays would stress out passengers and jam up the res lines of people checking on flights. This eliminates the Thanksgiving to New Year time frame. It would also likely happen before the new year in my opinion. This leaves October, second or third weekend as the most likely filing date if it happens. The new CEO would come in after the filing with the blessing of the new owners (creditors). United flies the normal schedule through the end of the year. New CEO has a couple of monthes to make plans for 2003 and beyond. Big change start in Jan/Feb 2003 like "right-sizing" the fleet etc. I hope this doesn't happen but this is the what I expect to happen.

 

[kcabpilot]

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On 8/30/2002 2:39:50 AM

This is truly unbelievable if they have spit in the face of the only group that has worked with them this year and rewarded the IAM with a relative slap on the hand by comparison. Stunned.
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"slap on the hand"?

You should read that Mechanics "demand" sheet again UAL24, and pay particular attention to the first page.

Signing that would be the absolute death of United Maintenance.

 

[Blueskies/400 UpperDeck]

I personally think your new CEO has already been decided...contingent on UAL entering BK. Their FIRST priority will be to dissovle the ESOP. I then expect them to attack all the contracts with a vengence. If UAL comes out of BK with a ATSB loan backing and a competitive edge, we have not even began to see the earthquake that will be created with the verosity of competitiveness. This is a complex situation that cannot be allowed to create an unfair advantage against the carriers that have maintained financial stability. This is without a doubt, going to get ugly...for ALL of us!