AMR Faces Union Stalemate in Bid for $800 Million Labor Savings

[WorldTraveler]

And?

My point stands.

If you really want to get technical, I'm willing to bet Bob was referring to AMT's, and not GSE mechanics like yourself.




The NMB investigation is wrapping up, so there's movement. We were told to expect a decision one way or the other w/in 3 weeks or so. I expect the ultimate resolution in short order thereafter.

I couldn't care less if it drags on past 2012; I'm in no hurry.

Unless the NMB decides to allow all 9 representation election results stand (or was it 8) with the unions not winning any of them, the process will drag on as investigations of the investigators and their board and all manner of involvement from all three branches of the federal government will be called upon to settle the results....
in the meantime, DL should be making prognostications about profit forecasts for the final quarter - allowing the associated profit sharing calculations to be made - in the next few weeks, highlighting perhaps the biggest difference between the PMDL and PMNW employee groups and providing one more challenge for the unions to overcome in convincing PMDL employees of the value of the unions.
The PMDL people are probably hoping the process will be dragged out a little while longer so the company can find some other justification for a pay raise, providing the most powerful tool DL mgmt has used to help fight off unionization attempts for 50 years or more.

I wouldn't doubt that DL has lost some mechanics to AA in NYC since by Bob's own word AA is starting mechanics several steps up the scale; given that NYC is a junior city for many airline employees due the high cost of living, any carrier that is willing to "trump" other carriers' offers will probably get people to move.
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It was precisely because of the high cost of living and the poor state of maintenance facilities that DL chose not to take over Pan Am's maintenance facilities; AA has had more extensive maintenance operations in NYC for quite some time.

 

[Kev3188]

Unless the NMB decides to allow all 9 representation election results stand (or was it 8) with the unions not winning any of them, the process will drag on as investigations of the investigators and their board and all manner of involvement from all three branches of the federal government will be called upon to settle the results....

The only ones not settled are for the F/A's, ramp/stores, and above wing/res. The other elections already "stand." Why bring them up?

in the meantime, DL should be making prognostications about profit forecasts for the final quarter - allowing the associated profit sharing calculations to be made - in the next few weeks, highlighting perhaps the biggest difference between the PMDL and PMNW employee groups and providing one more challenge for the unions to overcome in convincing PMDL employees of the value of the unions.

Great. the question that should be asked is why the company continues to divide the workgroups when it comes to profit sharing. I'd actually be okay with it if they didn;t use such a convoluted formula. In fact, no one I spoke to in HR can even explain it, or it's rationale.

The PMDL people are probably hoping the process will be dragged out a little while longer so the company can find some other justification for a pay raise, providing the most powerful tool DL mgmt has used to help fight off unionization attempts for 50 years or more.

PAFCA's been there over 50 years? Didn't know that...

As for an increase in compensation, they have a ways to go. Anything at this point is more accurately described as restoration.

I'm topped out on either scale. Moving to DL's table (and benefits) will mean a cut for me.

Like I said, I'm in no hurry.

 

[Runwaysticker]

They cant agree on how many ways to slice thier limes, DL cut 10 slices, NW 16 slices, you may retire under your current contract like myself at AA.

 

[WorldTraveler]

The only ones not settled are for the F/A's, ramp/stores, and above wing/res. The other elections already "stand." Why bring them up?




Great. the question that should be asked is why the company continues to divide the workgroups when it comes to profit sharing. I'd actually be okay with it if they didn;t use such a convoluted formula. In fact, no one I spoke to in HR can even explain it, or it's rationale.



PAFCA's been there over 50 years? Didn't know that...

As for an increase in compensation, they have a ways to go. Anything at this point is more accurately described as restoration.

I'm topped out on either scale. Moving to DL's table (and benefits) will mean a cut for me.

Like I said, I'm in no hurry.

question 1 - because 95% percent of PMNW non-pilot employees have open labor contracts subject to representation confirmation...if I missed the PAFCA, forgive me. Either way, DL appears to have labor representation resolved for nearly all of the FAA licensed groups - pilots, dispatchers, and mechanics - with I presume sim techs in that group (not sure if they are licensed or not).
question 2 - why should DL or any company allow represented employees to enjoy the higher pay and benefits of their non-represented employees? either you choose to be represented with the implications of what that has for your salary and benefits or you choose not to be represented w/ whatever those implications are. For the represented employees, the baseline was PMNW contracts.... for non-represented employees, it was the DL published scales and benefit costs.
Perhaps the reason why the unions didn't receive any more votes is because either the DL pay/benefits plan was better or at worse was not any worse when factoring in the cost of representation.
Despite characterizations otherwise, it is an economic decision - and the reason why DL has succeeded at keeping unions as low as they have is because DL controls the pay levels and will set them high enough to make that calculation not favorable for representation... it is the way DL has managed its HR policies for decades - the BK provided a deviation from that policy but DL appears committed to returning to average or better compensation - which makes it really difficult for a union to demonstrate that it brings value.
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comment 3 - of course all network airline employees are in the rebuilding stage w/ respect to pre BK pay and benefit levels... that may be a different calculation for each employee depending on how they value benefits since union contract airline employees typically have better benefits packages than DL employees while DL employees have higher cash compensation - salary and profit sharing. In AA's case it includes the 2003 cuts... the question is how much each carrier is returning and how quickly... it will be each employee who will have to validate if the unions can do that any faster than DL mgmt has done - or in the case of many people on this forum, whether the TWU has been of any help to their employees at AA.

 

[Kev3188]

question 2 - why should DL or any company allow represented employees to enjoy the higher pay and benefits of their non-represented employees? either you choose to be represented with the implications of what that has for your salary and benefits or you choose not to be represented w/ whatever those implications are. For the represented employees, the baseline was PMNW contracts.... for non-represented employees, it was the DL published scales and benefit costs.
Perhaps the reason why the unions didn't receive any more votes is because either the DL pay/benefits plan was better or at worse was not any worse when factoring in the cost of representation.

I'll keep that in mind when I'm doing my part to help them earn their Shared rewards pay outs...

As for CBA's, and their implications, if DL is going to abide by them while we're in laboratory conditions-and again, that's fine- then they need to do so completely. Not just when it suits them...

 

[FWAAA]

Pray tell, what the hell do the problems at Delta have to do with AA's perceived labor cost disadvantages?

Guys, I realize that the Delta forum gets very little traffic and discussions there are infrequent, but must every thread in the AA forum turn into a "let's discuss Delta" thread? It's boorish to show up at the French Club to discuss the activities over at the Spanish Club and it's not very polite to discuss your love of Devil worship at most churches on Sunday - so perhaps the discussion of everything Delta could happen, oh, say, over at the Delta forum? Or would that be too much to ask?

 

[Frank Szabo]

Pray tell, what the hell do the problems at Delta have to do with AA's perceived labor cost disadvantages?

Guys, I realize that the Delta forum gets very little traffic and discussions there are infrequent, but must every thread in the AA forum turn into a "let's discuss Delta" thread? It's boorish to show up at the French Club to discuss the activities over at the Spanish Club and it's not very polite to discuss your love of Devil worship at most churches on Sunday - so perhaps the discussion of everything Delta could happen, oh, say, over at the Delta forum? Or would that be too much to ask?

A former DL employee is here simply because it's boring at the Delta forum, as you say.

 

[WorldTraveler]

I'll keep that in mind when I'm doing my part to help them earn their Shared rewards pay outs...

As for CBA's, and their implications, if DL is going to abide by them while we're in laboratory conditions-and again, that's fine- then they need to do so completely. Not just when it suits them...

Kev,
Correct me if I’m wrong but I believe shared rewards are given equally to all DL employees in (or frontline at least) w/o respect to PMDL or PMNW.
You indicate that you would like to be able to participate in DL’s richer profit sharing payouts but did the PMNW ramp not receive from DL a payout that was contractually due them for concessions granted to NW during or shortly after BK?
Each individual will have to decide which compensation scheme – PMNW-union represented contracts or DL non-contract scales and benefits – provide the best compensation for their particular circumstance, including whatever future pay raises or profit sharing DL might choose to give its employees.
As you well know, the network/legacy carrier of the industry has had to make enormous changes to adapt to the brutal reality of the deregulated marketplace – and those changes have been felt by airline employees, esp. within the network/legacy sector more than among any other group.
Thus, one of the clear measures of success in the network carrier segment is the ability of companies to adapt and change to the new reality of air transportation – a reality that moves practically every year.
Delta entered deregulation much further down the pecking order among US airlines = not sure even if I remember but perhaps 5th or 6th place. Much of DL’s success has been because they have had management who has recognized opportunities and threats to its existence and who have managed to convince labor of the need to transform the business – ultimately to labor’s benefit.
While many rightly hail WN as a model of success particularly with regard to its labor relations, the reality is that WN has had to make few changes to its business model and even when those changes have been necessary it has never required sacrifices of the nature network carrier employees have made, esp. since much of that sacrifice in the network carrier segment has come because of needed reductions in the size of the business, something WN has never had to face.
But it is equally accurate to say that over the years DL employees have embraced their employers’ vision of where the company has needed to go and the company has rewarded the employees as good as if not better than the industry’s employees. DL pilots recognized the value of the 777LR and agreed to open new markets to the company – and new work opportunities for DL pilots – with hardly a discussion. The DL and NW pilots together recognized the value of the merger in creating a megacarrier and reached an unheard of agreement before the merger which allowed DL and NW to merge faster than any other merger has occurred and allowed the company and the employees to obtain those benefits also faster than has happened in any other merger. The speed with which DL transformed itself in the early 2000s – including its short BK by airline standards - rom an airline heavily dependent on connecting leisure traffic using widebodies on domestic routes to one that has been the world’s largest international airline shows how quickly change can happen when all parties cooperate. Indeed, even though the PMNW union contracts had specifications that specific aircraft types “belonged to NW’s represented employees” (and which similarly exist at other airlines), DL moved the 330s and 744s to JFK and ATL and the 777s and 767s to DTW and MSP in order to create more revenue opportunities for the company – and enhanced profit sharing for PMDL and PMNW employees, even though the representation issues weren’t settled. DL could have waited for the representation issues to be resolved or tried to use PMDL employees (other than the pilots who are already covered by the “fence”) to operate the three new DTW-Asia flights, but DL instead said that the aircraft are for the benefit of all DL employees, PMDL or PMNW, and DTW has gained a net of 3 new Pacific destinations that could not have been otherwise possible. DTW based PMNW employees, esp. FAs have clearly benefitted from the merger because DL didn’t “fence” aircraft or hubs but used all of the company’s resources where they most made sense.
In contrast, look at WN who is basically putting a fence around much of the FL ATL operation… protecting FL pilots but also restricting them from participating in the larger growth of the company.
It is this kind of flexibility that has allowed DL to prosper and which it has offered to the PMNW employees – offering compensation increases in return for increased flexibility.
Now since this is an AA aviation forum, we both can’t help but notice the significant deterioration that has happened to AA, historically a VERY WELL run company, IN PART (but hardly the whole reason) because AA has not had the flexibility to adapt to the changing dynamics of the airline industry that some of its peers have had.

While there are those AA fAAns who clearly would love to pretend that no one has figured out how to do it right, the evidence is overwhelming that labor friction has never resulted in a viable airline.
There are a whole lot of AA employees who know full well that the path their airline is on is unsustainable - and they are NOT willing to close their eyes to what works in the airline industry while they flush the investments of their careers down the drain.

DL and AF/KL saw months ago softness in transatlantic traffic and decided to aggressively pull down capacity this winter; some thought DL was failing by walking away from so many markets and so much capacity but DL used its flexibility to reduce headcount and shift resources around – and after this week which has seen dramatic change in the value of the dollar (which very much effects foreign visits to the US esp. during the winter) and the deterioration in even the strongest European economies, DL’s changes don’t look so dumb any more – and you as an employee will likely not have to pay for DL’s inability to adapt to the changing marketplace.
For much of deregulation, labor has paid a high price for airline mgmt’s inability to see or adapt to the changes in the marketplace. DL wants the freedom to ensure that you and other DL employees will no longer have to pay that price - and they are willing to reward you for that flexibility – both to pursue new opportunities when they arise and to withdraw from them when they no longer exist.
In an industry where change has often been painful and from which employees have rarely benefitted, I believe DL is succeeding at building a significantly different business model – to the benefit of the company and its employees.

Many other airline employees would love to be in the position of having to pay for the inability of the industry to adapt,
even if their fans would rather not hear about success.
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When the house is burning down, it is no longer time for "you might want to schedule a session to strategize on your departure from this edifice." Standing around and talking about how nice the neighbors are does no good when their house is burning down; if you've got to tell them that the only way out is jumping through the window and down 2 stories, then that is the news they have to hear - good, bad, or ugly.
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But you and I know that success doesn't sell newspapers... failure and scandal does.
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This forum might well have to close up shop if the failing companies in the industrty cease to exist.
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I look forward to the day when there is nothing left to talk about on the AA forum here because things are going so well.

 

[Bob Owens]

I've been trying to tell these people there have been changes, however untested. There have been legitimate Chapter 11 filings since 31 Oct. 2005 but no strategic filings, as were the Delta/Northworst/United filings BEFORE the law change. I have my doubts now that this group wants to be the test case re: what happens to a greedy corporation and its officers when filing for a tactical advantage over its workers in bankruptcy.

I had thought differently for quite some time but now I'm of the opinion it won't happen - just many threats from the company and their goon squads/unions who have been bought and paid for.

Arpey has made a big deal about the "morality" of a bankruptcy filing but it's evident, as you say, he and his fellow CPAs have the sense of morality one could expect to see in books about Adolf Hitler or Benito Musselini as with their darlings, the twu.

Not interested in the rhetoric anymore. Crap or get off the pot, boys.

Also this isnt 2005 where every carrier had recently dumped thousands of workers on to the street, the Unions would not risk a strike then, they will now, especially the Pilots since that shortage is the most acute and getting worse by the day.

 

[Kev3188]

Kev,
Correct me if I’m wrong but I believe shared rewards are given equally to all DL employees in (or frontline at least) w/o respect to PMDL or PMNW.

Wrong.

You indicate that you would like to be able to participate in DL’s richer profit sharing payouts

No, I said they should be paid equally, and use a more transparent formula. CBA's are a minimum, not a max. We (PMNW) contribute just as equally as anyone else. The company has had a chance to bridge that gap, but continues to divide and conquer instead. That's fine by me; like I said, I'm in no hurry to give up my CBA, since the benefits that come with it are worth more than a profit sharing check.

but did the PMNW ramp not receive from DL a payout that was contractually due them for concessions granted to NW during or shortly after BK?

It was due 12/10.

DL’s success has been because they have had management who has recognized opportunities and threats to its existence and who have managed to convince labor of the need to transform the business

Or just purged those who have become inconvenient...

The DL and NW pilots together recognized the value of the merger...

~50k in incentives has a way of doing that...

 

[southwind]

And?

My point stands.

If you really want to get technical, I'm willing to bet Bob was referring to AMT's, and not GSE mechanics like yourself.




The NMB investigation is wrapping up, so there's movement. We were told to expect a decision one way or the other w/in 3 weeks or so. I expect the ultimate resolution in short order thereafter.

I couldn't care less if it drags on past 2012; I'm in no hurry.

1. Do you not work the ramp?
2. Sorry to disappoint, not a GSE mechanic !
3. Are you planning on leaving "The Evil Delta" , when the NMB comes back with a "Not Guilty" ?

 

[Kev3188]

1. Do you not work the ramp?
2. Sorry to disappoint, not a GSE mechanic !
3. Are you planning on leaving "The Evil Delta" , when the NMB comes back with a "Not Guilty" ?

1. That's no secret.
2. You've said before you were.
3. Who are you to predict what the NMB decision will be? Your group already threw in the towel. Will you leave if there's a revote for the remaining groups?

 

[WorldTraveler]

Kev,
thanks for clairifying regarding shared rewards. I have now learned that PMNW employees are indeed paid under the Performance Incentive Plan.... tell me based on the DL scale you would be on, would you have earned more under the DL or NW plans?
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DL's pay scales are minimums for their people as well - just as they are at any airline. But as you know, there has to be some justification for moving off of the scale in one direction or the other.
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But let's get to the heart of your question? It sure looks like you want to continue to maintain union representation but also have the better aspects of what DL offers... sort of like a smorgasbord.....the best of this category negotiated by the union, the best of this category directly from the company, and still have the right to dictate via collective bargaining how the compensation process moves forward.
Can you give us an example of where that type of system exists and then provide the rationale why a company should use it?
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Again,t he point that AA faces and which DL has avoided - and the majority of DL people in the latest votes said they do not want to have as part of their culture - is the inflexibility of labor contracts to adapt to the ever-changing realities of the industry.
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NW made some pretty dramatic demands of its labor groups - but managed to get the productivity it wanted. They were the most productive airline in 2000 and they maintained that momentum until the merger- but it came at the expense of laying off thousands of mechanics and extracting some pretty significant scope changes.
Tell us, Kev, looking at the NW situation from a 30K foot perspective, could more jobs have been saved if NW's unions were able to meet the company's needs w/o the degree of cuts that were extracted in BK.
In answering the above question, you might want to know - if you didn't already - that in the past decade, AA decreased its workforce by about 25%, DL by about 37%, NW by about 40%, and UA and US at or above 50%.
Could it be that cooperation and working w/ mgmt instead of fighting them might well result in the least amount of pain to employees?.
Would reducing the amount of cuts not be a goal that we would collectively like to have for our AA friends and colleagues in the industry?

 

[Kev3188]

Kev,
thanks for clairifying regarding shared rewards. I have now learned that PMNW employees are indeed paid under the Performance Incentive Plan.... tell me based on the DL scale you would be on, would you have earned more under the DL or NW plans?

Already answered earlier.
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But let's get to the heart of your question? It sure looks like you want to continue to maintain union representation but also have the better aspects of what DL offers... sort of like a smorgasbord.....the best of this category negotiated by the union, the best of this category directly from the company, and still have the right to dictate via collective bargaining how the compensation process moves forward.

Awful assumptive of you. You should know better.

That said, the company has repeated stated that they will take the best from both. We're still waiting.

NW made some pretty dramatic demands of its labor groups - but managed to get the productivity it wanted. They were the most productive airline in 2000 and they maintained that momentum until the merger- but it came at the expense of laying off thousands of mechanics and extracting some pretty significant scope changes.

I'm not-nor was I an AMFA member. Nor will I claim to speak from their perspective.

Could it be that cooperation and working w/ mgmt instead of fighting them might well result in the least amount of pain to employees?.
Would reducing the amount of cuts not be a goal that we would collectively like to have for our AA friends and colleagues in the industry?

Fealty is not always the answer.

 

[southwind]

1. That's no secret.
2. You've said before you were.
3. Who are you to predict what the NMB decision will be? Your group already threw in the towel. Will you leave if there's a revote for the remaining groups?

1. So are you saying you know some ramp employees, who left DL and went to AA or that you know some mechanics that did the same?
2. Never, not once, did I say I was a GSE mechanic !
3. Not predicting anything . Just wanted to know, since it seems you won't be able to function without a union, if the NMB comes back with a "Not Guilty", if your going to have to leave the company ?