AMR Corporation Plans to Cut 1,600 Jobs

[Bob Owens]

I agree with those who think the number is "a lot". The senior folks are really going to screw the junior folks if they get their way on this.



I think it's a reasonable assumption that the layoffs would have been significantly larger in number if you hadn't agreed to those concessions. Not to mention that the court would have slashed your salary by more than you conceded.

Thats your assumption. I disagree. In the past we've seen layoffs with or without concessions and with wages being paid to workers being a smaller and smaller part of overall CASMs industry wide its doubtful that wages are a meaningful component in determining capacity. Capacity determines the need for headcount, not wages. SWA, JETBlue, AirTRan and Continental all pay more than AA, DL, UA or USAir but its the last four that have cut most of the capacity.

As far as what the court would have done thats another assumption. Prior to AAs massive pay cuts, which came out to an immediate 25% cut, the courts had only mandated a 14% cut. After AA got their cuts the BK carriers went back for more. So if AA had gone BK the best they probably would have seen was 14% like the others, the others would have lacked an arguement for a second round of cuts. Our "outside of BK" Bankruptcy concessions hurt every worker in the industry.

 

[eolesen]

Again, you ignore the fact that while CO, B6 and FL might pay more on an hourly basis, they have a lower cost per employee when you factor in the actual costs of health care and retirement.

And before you start pointing fingers at CAL for still having a pension plan, don't gloss over the fact that CO's pre-1983 pension obligations were all dumped on the PBGC. As far as retirement liabilities go, they're a younger airline than SWA.

 

[Skymess]

As far as what the court would have done thats another assumption. Prior to AAs massive pay cuts, which came out to an immediate 25% cut, the courts had only mandated a 14% cut. After AA got their cuts the BK carriers went back for more. So if AA had gone BK the best they probably would have seen was 14% like the others, the others would have lacked an arguement for a second round of cuts. Our "outside of BK" Bankruptcy concessions hurt every worker in the industry.

I completely agree. We lowered the bar for all other union employees.

 

[FA Mikey]

As far as what the court would have done thats another assumption. Prior to AAs massive pay cuts, which came out to an immediate 25% cut, the courts had only mandated a 14% cut. After AA got their cuts the BK carriers went back for more. So if AA had gone BK the best they probably would have seen was 14% like the others, the others would have lacked an arguement for a second round of cuts. Our "outside of BK" Bankruptcy concessions hurt every worker in the industry.

But isnt that just an assumption as well?

 

[FWAAA]

But isnt that just an assumption as well?

Of course not; it's gospel.

My favorite part is the assertion that UA and US would not have been able to secure additional paycuts from their employees, as if those paycuts were obtained solely because of the AA restructuring.

Almost as ludicrous is the allegation that AA would have obtained much smaller paycuts had it filed Ch 11 without any chance of a second or third round of concessions. Never addressed is this issue: UA closed its heavy airframe overhaul bases at IND and OAK, getting out of the business completely and throwing thousands of mechanics out of work. Had AA filed for Ch 11 protection, would it have closed its overhaul bases? Or did UA close its bases because of the AA concessions?

Then we'll once again hear the nonsense that the 2003 concessions did not contemplate furloughs and that the mechanics suffered twice; once thru the paycuts and a second time thru massive job loss. Completely ignored is this fact from the 2002 10-K:

On March 31, 2003, the Company reached agreements with the leaders of the three major unions representing American employees and announced changes in pay plans and benefits for non-unionized employees (including officers and other management) which will meet the targeted contributions. Of the approximately $1.8 billion in savings, approximately $1.0 billion are to be accomplished through wage and benefit reductions while the remaining approximately $.8 billion would be accomplished through changes in work rules which would result in additional job reductions.

http://phx.corporate-ir.net/phoenix.zhtml?...9MSZudW09MTE%3d

My guess is that the revisionist history will continue as usual.

 

[Maark767]

Thats your assumption. I disagree. In the past we've seen layoffs with or without concessions and with wages being paid to workers being a smaller and smaller part of overall CASMs industry wide its doubtful that wages are a meaningful component in determining capacity. Capacity determines the need for headcount, not wages. SWA, JETBlue, AirTRan and Continental all pay more than AA, DL, UA or USAir but its the last four that have cut most of the capacity.

As far as what the court would have done thats another assumption. Prior to AAs massive pay cuts, which came out to an immediate 25% cut, the courts had only mandated a 14% cut. After AA got their cuts the BK carriers went back for more. So if AA had gone BK the best they probably would have seen was 14% like the others, the others would have lacked an arguement for a second round of cuts. Our "outside of BK" Bankruptcy concessions hurt every worker in the industry.

Are you for real??? Did you pull this nonsense out of a hat (deleted by moderator)??? We are waaaaay better off being a carrier that stayed out of BK. Pensions retained, high wages, incentive pay... Please....

 

[Bob Owens]

Are you for real??? Did you pull this nonsense out of a hat (deleted by moderator)??? We are waaaaay better off being a carrier that stayed out of BK. Pensions retained, high wages, incentive pay... Please....

High wages? Incentive pay? Where did you pull that out of? We are number 5 in pay, with the least amount of Holidays (paid at half pay if you have to work), lowest vacation accrual, lowest sick time accrual, strait time for mandatory training, and a half billion threshhold before theres any profit sharing-the worst profit sharing plan-it has never paid anything.

The Pension? Well until I start collecting its more of a promise than a benifit. A lot can happen between 46 (the average age in our Local) and 65. I've already put in 23 years and $120,000 worth of concessions to keep it, In hindsight, even with the stock market crash I'd rather have had the SWA 7+% match on 100% of earnings anyday. Even if I only put in what the company matched and stuffed in a zero interest account I'd have $190,000 in contributions alone. Until I start collecting I can only assume its worth what the PBGC would give me if the company filed today.

Are you actually a union worker at AA?

 

[Bob Owens]

Of course not; it's gospel.

My favorite part is the assertion that UA and US would not have been able to secure additional paycuts from their employees, as if those paycuts were obtained solely because of the AA restructuring.

Almost as ludicrous is the allegation that AA would have obtained much smaller paycuts had it filed Ch 11 without any chance of a second or third round of concessions. Never addressed is this issue: UA closed its heavy airframe overhaul bases at IND and OAK, getting out of the business completely and throwing thousands of mechanics out of work. Had AA filed for Ch 11 protection, would it have closed its overhaul bases? Or did UA close its bases because of the AA concessions?

Then we'll once again hear the nonsense that the 2003 concessions did not contemplate furloughs and that the mechanics suffered twice; once thru the paycuts and a second time thru massive job loss. Completely ignored is this fact from the 2002 10-K:



http://phx.corporate-ir.net/phoenix.zhtml?...9MSZudW09MTE%3d

My guess is that the revisionist history will continue as usual.

A 10K is not a labor contract. Show me where in the contract it says that the additional job losses were tied to the agreed upon concessions. The dollar figure was met with direct concessions from TWU members, the savings from addition job losses through attrition and productivity gains was not figured in-the company scored double. Show me where in the figures presented and agreed upon by the union it agreed to additional job cuts to reach the figures presented.


The fact is that my assumptions on what may have happened in BK are just as valid as the assumption that AMR would have filed BK at all.

My guess is that the revisionist history will continue as usual.

I view it as a mechanic who has been in the industry for 30 years and witnessed it first hand, your view is from 10K reports and what the airlines say happened.

What happened to the other airlines and their overhaul is a little more complex than you make it out to be. There are many factors that led to the abandonment of heavy overhaul by AA's competitors, not the least was the fact that we undercut all of AA's competitors time after time, most significantly in 1995 with the introduction of SRPs. So from 1995 to 2003 AA had been replacing highly paid A&P mechanics with low paid SRPs, later reclassified as OSMs. When hard times came the other carriers were screwed. They had no way to compete with AA in overhaul, so they sent it out. AA had put SRPs in through attrition, the other carriers would have had to convince the unions on their property to allow the company to reduce some members pay by half in order to set up a competitive pay structure-that wasnt possible, both from a union standpoint and a management one so they were forced to send it out. I believe that after the recall periods expire and the economy rebounds that we will see some of those and other carriers try and secure contracts that grant them OSM like classifications and start to bring work back in house again.

 

[jersey777]

I cannot speak for the ground contracts but as flight attendants our pay scale is far far above United, USAir and Delta, all of whom have had their contracts gutted in bankruptcy court. United tops out at around $41.00 an hour with no incentive and no international pay. International flight attendants at American get paid $49.14 up to 70 hrs and over $56.00 an hour for hours after that. Give me our pay scale for each and every day I work over their few extra days vacation and holiday pay any time. Anybody who thinks that we would have done better in bankruptcy court is living in la la land.

 

[Bob Owens]

I cannot speak for the ground contracts but as flight attendants our pay scale is far far above United, USAir and Delta, all of whom have had their contracts gutted in bankruptcy court. United tops out at around $41.00 an hour with no incentive and no international pay. International flight attendants at American get paid $49.14 up to 70 hrs and over $56.00 an hour for hours after that. Give me our pay scale for each and every day I work over their few extra days vacation and holiday pay any time. Anybody who thinks that we would have done better in bankruptcy court is living in la la land.

You shouldnt have said "anybody" then, maybe it applies to flight attendants but not mechanics. In your case maybe the concessions was a better choice, but not for me. We are number 5 in pay (according to the company negotiations website)and the gap between us and SWA is approaching $10/hour. Are you paid more or less than SWA?

 

[jersey777]

We are paid quite a bit less then SW and thank goodness for them because they have raised the bar for all airline employees. CO is also paid slightly better then us. Because of these two groups we have a leg to stand on in negotiations.

 

[Bob Owens]

We are paid quite a bit less then SW and thank goodness for them because they have raised the bar for all airline employees. CO is also paid slightly better then us. Because of these two groups we have a leg to stand on in negotiations.

CO went bankrupt, twice.

Basically from an employee standpoint AA went BK , except the employees were the only ones who really took a hit. Sure we have the Pension but we paid $120k over 6 years towards it, in the meantime the cash value of the plan went up around $7k.

Like I've said before we will never know if AA would have actually filed or not. Employee costs are only a third of airline expenses. when a company goes BK employee costs are never the sole cause.

 

[FrequentFlierCA]

AA was at one point minutes away from going to the courthouse. Speculation to the contrary is just noise to distract us from the fact that AMR was indeed in the most dire of situations.

As for CO and WN being a bit ahead in terms of salary, without accepting your methodology for reaching that conclusion I have to bring up the point that you are not necessarily entitled to have the best pay in the industry. Plenty of other airlines pay their employees less (some significantly). I would say that if your performance is the best you should be paid the highest. Sadly with AA that is not the case as it has middling placements in most rankings. So what makes you deserving of industry-leading salaries?

 

[L1011Ret]

AA was at one point minutes away from going to the courthouse. Speculation to the contrary is just noise to distract us from the fact that AMR was indeed in the most dire of situations.

As for CO and WN being a bit ahead in terms of salary, without accepting your methodology for reaching that conclusion I have to bring up the point that you are not necessarily entitled to have the best pay in the industry. Plenty of other airlines pay their employees less (some significantly). I would say that if your performance is the best you should be paid the highest. Sadly with AA that is not the case as it has middling placements in most rankings. So what makes you deserving of industry-leading salaries?

According to depositions taken in the RPA legal case, the Board of Directors was not thinking of Chapter 11 at that time.

 

[toroshark]

AA was at one point minutes away from going to the courthouse. Speculation to the contrary is just noise to distract us from the fact that AMR was indeed in the most dire of situations.

As for CO and WN being a bit ahead in terms of salary, without accepting your methodology for reaching that conclusion I have to bring up the point that you are not necessarily entitled to have the best pay in the industry. Plenty of other airlines pay their employees less (some significantly). I would say that if your performance is the best you should be paid the highest. Sadly with AA that is not the case as it has middling placements in most rankings. So what makes you deserving of industry-leading salaries?

I am curious to what rankings you would use to justify the mechanics rankings? Can you come up with one that doesnt factor in managements mistakes (chromealloy apu's, no checks, raping our parts)? Please tell me o'mighty one how much I am personally worth!