Amfa Negotiations

[UAL_TECH]

Negotiation notes

Rosemont, Illinois
December 29, 2004 2150

Chief Judge Eugene R. Wedoff will conduct the hearing on UAL’s 1113© motion. The current date is set for January 10 but may be moved up on the calendar. The hearing takes place in the United States Bankruptcy Court for the Northern District of Illinois in downtown Chicago.

Meanwhile, the Negotiating Committee (NC) passed another offer across the table to the company. From the company’s point of view, this was a 100% offer. It contained the full amount ($96 million) in cuts that the company wanted. Its main features: eliminate Success Sharing ($30 million), a 1% base wage cut, and a $14 million credit for narrow body offshore HMV/OSV. All other cuts were the same as the 12/22 AMFA proposal.

After the NC explained the details of the offer, the company said that it would need at least 48 hours to provide an answer. This would put their response into next week. The NC registered their displeasure with this slow response as the court intends to convene soon. AMFA needs time to bring any consensual agreement to the membership for ratification.

Following discussion among the NC members, Delle decided to call Chief Operating Officer, Pete McDonald, in an attempt to receive a more timely response to AMFA’s offer. Mr. McDonald indicated to Delle that he would call the company negotiators and try to move things along. The NC received a call a few hours later from the company negotiators. The company would return to the table and give a response to the offer.

Before the company returned one NC member argued that it would be irresponsible to allow the company term sheet to be imposed by the court. He added that an offer that kept the protection date, kept the current medical plan, and offered a reasonable replacement pension plan as a goal worth pursuing.

The company returned in the late afternoon. It gave zero value for Success Sharing. It agreed with the wage rate reduction, holiday reduction, premium pay increase delay, and overtime pay reductions. It agreed to 747/777 HMV/OSV but would not assign any value offshore narrow body aircraft. It assigned a partial value for outsourcing fueling. Much discussion and disagreement followed regarding the full value for the fuelers. It’s still not settled.

The company assigned a total value of $46 million to its accepted items. That left AMFA short by $50 million. The meeting broke up with NC members each starting to consider what path to take as the clock counted down toward court. The NC reconvenes at 0800 tomorrow.
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Best call this the 'Have it My Way or The Highway' negotiating tactic.
Which will bite their a$$ in the end.

JMHO&PO,
B) UT

 

[ualdriver]

Did the AMFA local LEC's provide the negotiating committee with any direction as to what the membership wanted in terms of items that should be negotiated away? Since the company is tying such low valuations to the items that AMFA is willing to give up (as they did ours), did the company give AMFA the opportunity to take a straight pay cut as they did ALPA? Our TA said 8% and a bunch of undervalued crap (like the 70% sick leave and the expensive health insurance) or 18% and we keep the little we had left in the contract, but the membership decided to go for a pay cut because the company's valuations for the other stuff were so low.

 

[gatemech]

If the Success Sharing has no value maybe they should end the program. You just don't hand out money when you don't have it!!!

I'm going to go get some lubricant so it won't hurt as much when we get F***ED !!!!!

 

[C54Capt]

I'm going to go get some lubricant so it won't hurt as much when we get F***ED !!!!!

[post="233808"][/post]​

gatemech,

I don't know whether it was the context of your statement or the fact that your analogy creates a visual, but it made me laugh out loud. Thanks for making my day with your humor. Hang in there, better days are ahead. I hope.

 

[767jetz]

I'm not going to get in the middle of AMFA's negotiating strategy, but IMO the Success Sharing only has value to the company if employees participate. It is an incentive that has a tangible return to the company in the form of On Time Performance, and Intent to Repurchase. Remember, the Success Sharing is not a guaranteed amount. It starts at 0% and goes up if goals are met. If we miss a goal and get no money, that's not a pay cut, but rather a missed oportunity to get a bonus.

Also, if one group does not participate it makes it harder for other groups to reach the goals and make their bonus. I believe ALPA looked into this and came to the same conclusion.

 

[gatemech]

I believe the Success Sharing is a joke. A couple hundred $ every quarter. I don't know what the pilots get or any other group but my check doesn't even pay the heating bill. I would rather them leave my pay and benefits alone. We know that won't happen. I love the feeling of getting that LITTLE check one week and the company asking for thousands the next. The Success Sharing program cost millions. Maybe that is the reason nobody wants to give us exit financing.

The whole thing makes me sick.

C54Capt,

Glad you got a laugh. If you are ever at WHQ don't bend over to pick up anything.

Happy New Year to all
gatemech

 

[kcabpilot]

IMO the Success Sharing only has value to the company if employees participate.

[post="233873"][/post]​

Fine...whatever, but then it shouldn't be included in the business plan as part of our costs
The company uses it to add $30 million to what AMFA costs them but when you try to hand it back they claim it's worth nothing

They can't have it both ways. Either take it off one end or accept it back on the other.

 

[UAL_TECH]

I'm not going to get in the middle of AMFA's negotiating strategy, but IMO the Success Sharing only has value to the company if employees participate. It is an incentive that has a tangible return to the company in the form of On Time Performance, and Intent to Repurchase. Remember, the Success Sharing is not a guaranteed amount. It starts at 0% and goes up if goals are met. If we miss a goal and get no money, that's not a pay cut, but rather a missed oportunity to get a bonus.

Also, if one group does not participate it makes it harder for other groups to reach the goals and make their bonus. I believe ALPA looked into this and came to the same conclusion.

[post="233873"][/post]​

767jetz,

I don't think any of the AMFA M&R have been busting butt simply to meet the 'Success Sharing' goals to receive a piddly $200 boner. We do what we do because that is our job. 'Success Sharing' provides greater wealth (not incentives to work harder) for the 'Executive Class'. It is easier to sell a 'bonus' scheme to Da'Judge when you can claim that 'all' groups get it (only at a smaller percentage).

Smoke & Mirrors.................

It has a $30,000,000 value to the lenders but 'zero' value to the AMFA M&R. This is clearly another crock of horse dung and we don't buy it.
Maybe Da'Judge will.

B) UT

 

[UAL_TECH]

Did the AMFA local LEC's provide the negotiating committee with any direction as to what the membership wanted in terms of items that should be negotiated away? Since the company is tying such low valuations to the items that AMFA is willing to give up (as they did ours), did the company give AMFA the opportunity to take a straight pay cut as they did ALPA? Our TA said 8% and a bunch of undervalued crap (like the 70% sick leave and the expensive health insurance) or 18% and we keep the little we had left in the contract, but the membership decided to go for a pay cut because the company's valuations for the other stuff were so low.

[post="233766"][/post]​

ualdriver,
Yep, this idea has been discussed but how could we take a $14,000 annual pay cut?
You have to remember, our 'allocation construct' is not 18%, it is approx 23% now with the reduced ($96 Million) goal. The company has been jerking us around and we are beginning to grow a bit tiresome of their side talking, double standard rhetoric. I have seen the 'Phase 5' headcount sheet for component maintenance that reduces the number of AMFA M&R by 200 but increases the management headcount. How in the 'he11' can this be justified? We are on a rudderless ship here ualdriver and are pissing away tons of cash on consultants and lawyers but not doing the 'right' things. When you add in the 'talking heads' blowing smoke up our a$$, the confidence level goes right down the crapper.

They are looking to outsource PV, GQ, CT & GCT as they 'claim' an 11% savings but this is 'pre' concessionary contract savings.

We are getting 'The Hose' even if we can provide better and cheaper service.
This is their 'goal' to become a 'virtual' airline with only the 'Executive Class' and if you believe that these actions will not be impacted on ALPA in the not too distant future, then you are delusional as well.

Divide and conquer is the rue of the day.

Sucks doesn't it?

Take Care,
B) UT