AMR Files 1133 motion

[TWU informer]

AA's competitors don't have identical labor costs. The widely-repeated $800 million is AA's labor cost disadvantage measured against the average of the competitors' labor costs.

Compared to UA/CO's labor costs, AA's labor costs are $440 million higher. Compared to DL's labor costs, AA's costs are $900 million higher. Compared to US' labor costs, AA's costs are $2.2 billion higher (overall, US employees are very low-wage, except for AMTs).

The $800 million is the average cost disadvantage. You don't spend hundreds of millions on a Ch 11 case and piss off your employees and just go for average savings, you go for better than average, which is what AA did. Employee relations wouldn't be unicorns and rainbows if AA were just cutting employee expenses by $800 million. If you're gonna piss everyone off, might as well make it worth your while.

Can you break those cost down by specific work group and then again by pay/benefits/pensions?

I no longer want to view the pie with one "labor cost" piece of pie cut out of it.
I want to see the labor cost piece of pie broken down by management/labor groups and then by pay/benefits/pensions for each of those groups. SPECIFICS you know?
AA claims in the 1113 filing that management and support ranks have been reduced by a large percentage since 2002.
Not in my area, there are now more than ever!

Or do we all have to continue to be subjected to paying for the over inflated mangement/union headcount with our pay and benefits?

 

[Mrs. McFly]

AA's competitors don't have identical labor costs. The widely-repeated $800 million is AA's labor cost disadvantage measured against the average of the competitors' labor costs.

Compared to UA/CO's labor costs, AA's labor costs are $440 million higher. Compared to DL's labor costs, AA's costs are $900 million higher. Compared to US' labor costs, AA's costs are $2.2 billion higher (overall, US employees are very low-wage, except for AMTs).

The $800 million is the average cost disadvantage. You don't spend hundreds of millions on a Ch 11 case and piss off your employees and just go for average savings, you go for better than average, which is what AA did. Employee relations wouldn't be unicorns and rainbows if AA were just cutting employee expenses by $800 million. If you're gonna piss everyone off, might as well make it worth your while.

How on true, and that they did! Looking at your numbers where we stand, though, it is beginning to make more sense as to why some from US are pushing the merger talk on here. Even with our imposed cuts, we are still going to be in higher brackets. Everyone should just leave us alone and let us sort this out instead of trying to kick us when we are down.

 

[ord78]

If you're gonna piss everyone off, might as well make it worth your while.

I respect many of the long time posters here who have a breadth of knowledge far greater than mine. But I will say this again here and it reflects what WT has been saying for some time. And while I cannot speak for the members of the TWU or APA I know as well as I sit here that for a great many of my fellow members of the APFA this move by the company is it's death knell. Over 34 years I have witnessed countless flyers walking off the trip swearing never to fly AA again because of the attitude and service received onboard. And while that phenomenon has been irregular at best I can guarantee it's going to become common place in short order.

What's the 1 common denominator amongst brand loyal customers to switch brands? The behavior and attitude of 1 single employee. That is a common element in any marketing students learning history, and apparently it's lost on the 6th floor of center pork. And while many may find the fact that employees would intentionally piss off the paying customer we all know it's a fact of life. I don't count myself as one such employee but I'm going to start seeing it a whole lot more. And like WT has said AA runs an enormous risk being the only operator in bk and this is one of the primary reasons for that risk.

All it will take is a few hundred top tier f/c international customers to switch and the revenue stream is toast. So yeah, this is going to piss everyone off but it's hardly a worthwhile effort unless the real intent is ch 7.

 

[Buck]

If the union representing you cannot provide you the documents you desire, maybe as a stock holder can gain access to them.

 

[FWAAA]

If the union representing you cannot provide you the documents you desire, maybe as a stock holder can gain access to them.

Generally, the answer is no. State corporate law generally makes clear that stockholders are entitled to very little information from the company. Why? Stockholders elect the directors to serve as their representatives - similar to my Congress example above. Similar to the USA, corporations are generally governed as democratic republics, not democracies.

In the specific case of AMR, the stockholders are entitled to nothing - they won't even get a vote on the plan of reorganization.

 

[WorldTraveler]

Buck,
there is more than enough information in the 6000 plus pages the company made public, even with the blackout that exist all over some pages.
.
What should be clear to anyone who reads even a few pages of the documents is that AA has every intention of reducing its pay to levels of true low cost carriers, not LCC. They make page after page of comparisons to their performance to low fare carriers, to the presence of low fare carriers in their markets, and of their costs, including labor, to low fare carriers.
.
There is no doubt that AA wants low fare carrier costs - including aircraft costs - while pursuing revenue comparable to its current peer legacy airlines.
It notes it has lost significant ground to its network carrier peers.
Specific to costs, it is interesting to note that AA has a graph in the document showing that its intended cost goal is one-tenth of a cent lower than DL's costs, down 15% from AA's current costs - and easily 10% below UA's.
Apparently, it believes if it can maintain costs comparable to DL's, it can survive.
.
For those looking for specific cost comparisons between airlines by workgroup, they are largely not in the document.
There are plenty of workrule and payscale comparisons between AA and its peer airlines along with lengthy discussions of why the cuts AA is seeking are necessary.
.
There are many, many pages of duplicated items in the document... and the CBAs themselves take up a huge portion of the filing.
.
It is way too important of a subject for any AA employee not to take the time to read what the company is saying about its position as well as requesting from the court.
.
and yes, ORD78, this train wreck has been in the making for decades. It doesn't take being a rocket scientist to see what happened to dozens of other airlines before and realize the same thing would happen to AA... yet, far too many people were far too defensive of AA to believe it could happen - and so today we watch the process play out, right on cue.

 

[Buck]

Why Are American Airlines Workers Fuming? (NYSEAL, NYSE:UAL, NYSE:LCC)

American Airlines’ move to do away with labor contracts to cut costs was met with swift criticism from worker unions on Wednesday.

AMR Corporation, which filed for bankruptcy protection in November after suffering huge losses, said it wants to cut $2 billion annually in expenses, including saving $1.25 billion in labor costs, likely to be achieved by cutting thousands of jobs. The company filed a request to cancel contracts with the bankruptcy court in New York on Tuesday.

“With losses mounting and oil prices rising, there is growing urgency to move more quickly,” AMR chief executive Tom Horton said in a letter to employees. “The bankruptcy law provides a process for the court to address such a situation as has been done in virtually all prior successful airline restructurings.”


Horton’s promise that employees will get negotiated settlements and unions will not be ignored did not earn him any friends with airline workers’ groups.

The Airline’s flight attendants’ union reacted strongly, calling American’s move “draconian” and saying Horton was “ignoring the voices of his employees.” The union added that it did not believe the court would approve the request. “The company can succeed only if it convinces the judge that the contract changes it seeks are necessary, fair and equitable. In reality, its draconian demands are none of those things,” union president Laura Glading said in a statement.

The Allied Pilots’ Association said that it would try to “secure a contract that is at the very least comparable to what our network-carrier peers obtained” in other airline restructurings.

AMR also wants to keep its arguments to the bankruptcy court private. “The confidential material contains sensitive and confidential information that should not be publicly disclosed, and the disclosure of which could harm AMR,” the company filing read.

 

[robbedagain]

GOOD LUCK TO ALL OF YOU!

 

[Buck]

For those looking for specific cost comparisons between airlines by workgroup, they are largely not in the document. There are plenty of workrule and payscale comparisons between AA and its peer airlines along with lengthy discussions of why the cuts AA is seeking are necessary.

The cost comparison by work group was what was ask for.

 

[TWU informer]

For those looking for specific cost comparisons between airlines by workgroup, they are largely not in the document.
There are plenty of workrule and payscale comparisons between AA and its peer airlines along with lengthy discussions of why the cuts AA is seeking are necessary.

The whole premise of the reorg plan is that it will be FAIR across the workgroups.

Using the 20%-20%-20%-20%-20% figure. Broken into Pilot/FA/TWU/ARP/Management

Yet there is NO proof that this is true.

The whole motion reads just like every document filed in AMFA vs AA Lawsuit. All kinds of claims and declaration but zero proof of the claims other than those company paid minions making signed declarations which in the AMFA vs AA lawsuit we PROVED to be not as forth coming as the initial claim, twisted facts if you will. It these folks making the declarations actually had accurate figures, I doubt that AA would be in this position to begin with and that the hiring of consulting firms and advisors would be required.

I figure that if this going to cost my carreer in the end, and someone in management wants to "declare" something to be FACT in Federal Court, then we should be entltled to proof of that claim. It isn't like they have never been proven to being less than honest and forth coming in the past, thank you.

Most of the time in the AMFA vs AA Lawsuit, those making claims were actually going by what their minions were telling them. Which turned out the data was false, but was what they knew to be true from the false data they were given.

I want confirmation that I am not being raped by AA Management and/or Another Work Group with superior representation. It must be proven to really be fair and equitable now that AA has claimed in court documentation that this is basis of the plan from beginning to end.

Example: There are several claims of underpaid management and support staff. But zero proof that they can do their jobs to being with. Which many cannot and that is fairly easy to prove. So who cares what AA pays them. If they cannot even do the job, minimum wage would be a contribution to the massive losses and not even addressed in the 1113 motion. There is all not mention of comparing the numbers of heads required to "support" management compared to LCC's which could be a rather large inflated number given they cannot do their jobs and someone else has to. This where the bean counter math always fails. Can the headcount do the job to begin with and how many are required compared to others.

 

[TWU informer]

What should be clear to anyone who reads even a few pages of the documents is that AA has every intention of reducing its pay to levels of true low cost carriers, not LCC. They make page after page of comparisons to their performance to low fare carriers, to the presence of low fare carriers in their markets, and of their costs, including labor, to low fare carriers.

Can please give me a page reference to back up this claim? I must have missed this strategy.
Instead, I read that AA was claiming to keep the take home pay status quo and make other cuts, even though the health insurance changes alone equal a huge take home pay cut. This is just another example of claims in the motion that are twisted at best, but false in reality.

Even the idea that a network carrier can match low cost carriers in cost structure while providing a completely different service and product just shows you the reason why many analyst claim this is a failed plan before it even gets started.

It is more like bean counter fantasy island than a true business plan.

Did the courrier that filed it with the court exclaim "Da Plane, Da Plane" once it was accepted by the court clerk?

 

[Overspeed]

The whole premise of the reorg plan is that it will be FAIR across the workgroups.

Using the 20%-20%-20%-20%-20% figure. Broken into Pilot/FA/TWU/ARP/Management

I am not sure about the Bases but in DFW and I hear across all the line stations AA has added tons on management. They tell us it was to undo the Danny Martinez management restructure that didn't work according to them. The point is, AA added tons of management way beyond what Martinez cut so they will be reduce from a bloated management number on the line. Is that the same thing in the bases? Management should be cut back 40% to make up for all the fat added on top of the previous fat.

 

[Buck]

I am not sure about the Bases but in DFW and I hear across all the line stations AA has added tons on management. They tell us it was to undo the Danny Martinez management restructure that didn't work according to them. The point is, AA added tons of management way beyond what Martinez cut so they will be reduce from a bloated management number on the line. Is that the same thing in the bases? Management should be cut back 40% to make up for all the fat added on top of the previous fat.

I am not sure about the entire base, however in the 737 group there are two basic groups. There is a uber manager over all 737 work. Then there is one unter manager over 3 different bays, he mostly works days and sometimes long hours. Then there are two more unter managers over 3 other bays, for dayshift and an afternoon shift.

There is no way to know what the rest of the base holds.

 

[TWU informer]

PART FIVE: TWU—MECHANICS & RELATED EMPLOYEES,
STOCK CLERKS, AND MAINTENANCE CONTROL TECHNICIANS
Page 3

During the negotiation of its 2003 CBAs with TWU, American proposed the total dollar
amount of labor cost reductions that were necessary for the Company to avoid filing for Chapter
11, but allowed TWU to decide how to take the necessary labor cost reductions. TWU decided
to make changes in areas such as pay, holidays, vacation, sick time, and overtime, where the
Union presumably, and understandably, assumed it would later be able to negotiate a restoration
of these concessions when the airline industry returned to “normalcy.” Now, however, it has
become clear that day will never come. Weel Decl. ¶

Another failed ASSUMPTION by the TWU

I still remember TeAAm TWU, Rick Mullings, Kevin Hammack, Kevin Thompson, Kevin Gorremans, and Kirk Wells claim we saved 10,000 jobs and three maintenance bases with this TWU decision. What say those ignorant fools now?

 

[FrequentFlierCA]

As others have said, remember than an 1113 filing does not mean that the contracts are going to get voided, just that AA wants to. And is that really a surprise? They have been saying it basically since Day 1 of the Chapter 11 filing.

There is still time to negotiate consensual deals. If I remember correctly, several bankrupt airlines last decade filed their 1113 motions and then reached agreements with their unions. I hope the same happens at AA.