Analyst Jamie Baker says AA won't cut labor costs as much as Horton would like

[eolesen]

Bob, you're sooooo stuck in the 80's.....

I don't see anyone sticking around waiting for AA to shrink. They're certainly not waiting for your labor. The carriers who "scooped up" PA & EA's workers realized too late how much of a mistake it was.

 

[Bob Owens]

If past is precedent, AA will put it's version of a "dream list" out as it's last best offer. The TWU/APA/APFA will figure out what it's least-worst option is to make it palatable for at least a vote, and that will be that. All of you at AA would do well to see what other airline employees came out of the 113 process with in order to figure out what may be in store.

We already gave up more outside of BK than others did in BK. Unlike 2002 we aren't going into this after receiving raises, in fact we are going into this lower than ever before. UAL will weigh into this, if competitors are able to give raises AA will have to justify why they need concessions that would put their workers even further behind those competitors. That's why Horton is running around citing Delta as a major competitor, Delta is non-union so they have no contract to compare to. What will AA cite? I have no doubts they will plan their strategy around OH in the hopes that by creating fear and uncertainty try and use them as leverage to wind up with the lowest costs. Despite all the rumors about how Horton hates OH I believe that the decision o retain in house OH was based on making sense financially and that has not changed. If OH did not make sense then why did the company want to push for increasing the capacity of OH instead of using it's limited capacity as an excuse to outsource?

Each BK is different, this is the first one I've seen where a carrier went in with $4 billion in cash, record revenues and a record order for new aircraft on the books.

 

[chris perry]

Bob, you're sooooo stuck in the 80's.....

I don't see anyone sticking around waiting for AA to shrink. They're certainly not waiting for your labor. The carriers who "scooped up" PA & EA's workers realized too late how much of a mistake it was.

American Airlines scooped them up left and right apparently,most are older than me. Matter a fact they,are much older so age had no bearing.

 

[eolesen]

That's exactly my point, Chris. AA inherited EA's labor problems by hiring the workers. I see it in Bob ( former EA) and in the guys behind the APAPDP group in MIA.

 

[Kellerguy]

We already gave up more outside of BK than others did in BK.

I hope you are able to get beyond the state of denial while you still have a chance to help fellow workers. If there is any truth to this it would imply you were far far ahead of those others in pay and benefits prior to their BK. That is not a plausible stand to take to your fellow creditors. Wasting what breath you have to defend the past is hurting your opportunity to change the future.

I somehow sense that there are three interests in play the (1) union, (2) those "represented" by the union, and (3) management. Isn't the real playoff here between the first two? AA could care less if they had the highest compensated workers in the industry, they only care about whether the total cost is competitive. That is where the rub is, I think the union will fight to keep more jobs (dues) than to improve the lot of the workers.

There are only a few weeks, maybe a few months you will have to get the best deal or else the company will single handedly decide what the best deal is. This is not unique to the TWU, the same goes for the pilots and f/a. Most of the real issues are found in out dated and or stupid work rules targets at forcing higher employment numbers than are necessary. The future is about recognizing that and getting rid of it everywhere.

 

[700UW]

There is no way you gave up more per employee than we did at US Airways.

Our pension was terminated and 46% of the workforce in mtc was laidoff, and thats not counting, wage, benefit and work rule losses.

 

[FWAAA]

I am a little baffled at the title of this post..."AA WON'T CUT LABOR COSTS AS MUCH AS HORTON WOULD LIKE."....

I don't get it, Horton is the boss now, I would imagine he will get what he wants as far as labor goes.

It's a prediction by Jamie Baker, the same idiot analyst from J P Morgan who didn't see the bankruptcy filing coming and told his client he saw AA restructuring outside bankruptcy instead.

Now he's prognosticating that Horton won't be successful in cutting labor costs as much as others are predicting.

I predict that labor costs will be reduced by several multiples of the amount Jamie Baker is predicting, thru headcount reduction, productivity gains and some payrate reductions on certain employees (not every workgroup).

 

[FWAAA]

Delta pays their workers more than AA and word is out that another increase is on the way.

Sure, once we get our retro those guys will leave. Now they are also sticking around to make sure that the pension and retiree medical isn't voted away as well.

I anticipate that those guys are going to be very disappointed.

 

[damajagua]

We already gave up more outside of BK than others did in BK. Unlike 2002 we aren't going into this after receiving raises, in fact we are going into this lower than ever before. UAL will weigh into this, if competitors are able to give raises AA will have to justify why they need concessions that would put their workers even further behind those competitors. That's why Horton is running around citing Delta as a major competitor, Delta is non-union so they have no contract to compare to. What will AA cite? I have no doubts they will plan their strategy around OH in the hopes that by creating fear and uncertainty try and use them as leverage to wind up with the lowest costs. Despite all the rumors about how Horton hates OH I believe that the decision o retain in house OH was based on making sense financially and that has not changed. If OH did not make sense then why did the company want to push for increasing the capacity of OH instead of using it's limited capacity as an excuse to outsource?

Each BK is different, this is the first one I've seen where a carrier went in with $4 billion in cash, record revenues and a record order for new aircraft on the books.

You are right that every bankruptcy is different. Different judge, different lawyers, different union;
But same results: employees are totally screw and rape by the process. End results less pay
changes to work rules that help the company and screw the employees etc etc.
I find it very misleading for the unions on the property to be promising ANYTHING else.
We are F.........K!!!!!!
Sorry but that is the honest truth.

 

[Buck]

Can anyone point to the differences between "pre-deregulation/regulation (1978)" and PanAm /Eastern to the need for reregulation and/or the AMR bankruptcy?

What does Pan AM/Eastern have to do with the industry today? The economics of today are a little different? Employee's are a different type today and so is the industry.

 

[Kellerguy]

Can anyone point to the differences between "pre-deregulation/regulation (1978)" and PanAm /Eastern to the need for reregulation and/or the AMR bankruptcy?

What does Pan AM/Eastern have to do with the industry today? The economics of today are a little different? Employee's are a different type today and so is the industry.

Not sure many similarities with PanAm--that was a case of arrogance on the part of PanAm, and some major management blunders. EA was more a case of egos taking the airline down, both sides perhaps, but IMO more so so a case of Bryan willing to take death leaps. Its been a while, so maybe I;m not remembering this correctly. But as to Buck's question, I see tremendous similarities with EA ryan and the APA attitudes prior to the last regime change. Once Bates got in there was a sense of reality that returned to negotiations, but even he is hard pressed to take back bad news to the membership. I think that is the biggest failure of labor today, the deals they are entangled in don't pay off for when times are good and provide relief for times that are difficult. I don't think unions today have it in their DNA to consider variable compensation plans, which allow fast contraction when needed, and terrific benefits in the good years.

As for the need for re-regulation, forget it, the horse is out of the barn and has been for a long time, the public and therefore the regulators want cheap fares. That goes for both political parties! This is about survival for the long term. Unfortunately there is one too many airlines still operating that is causing industry revenue issues. I for one do not want AA to be the one taken out!

 

[tech2101]

Sure, once we get our retro...

What? You are kidding, are you not?

 

[Buck]

Not sure many similarities with PanAm--that was a case of arrogance on the part of PanAm, and some major management blunders. EA was more a case of egos taking the airline down, both sides perhaps, but IMO more so so a case of Bryan willing to take death leaps. Its been a while, so maybe I;m not remembering this correctly. But as to Buck's question, I see tremendous similarities with EA ryan and the APA attitudes prior to the last regime change. Once Bates got in there was a sense of reality that returned to negotiations, but even he is hard pressed to take back bad news to the membership. I think that is the biggest failure of labor today, the deals they are entangled in don't pay off for when times are good and provide relief for times that are difficult. I don't think unions today have it in their DNA to consider variable compensation plans, which allow fast contraction when needed, and terrific benefits in the good years.

As for the need for re-regulation, forget it, the horse is out of the barn and has been for a long time, the public and therefore the regulators want cheap fares. That goes for both political parties! This is about survival for the long term. Unfortunately there is one too many airlines still operating that is causing industry revenue issues. I for one do not want AA to be the one taken out!

That is eaxactly what I am talking about. You have different egos today, a different mindset. Unionism is not what it was. Maybe industrial unionism has failed to change with deregulation. As for regulation, the industry is already semi-regulated with government oversite, the passenger bill of rights and possibly the NMB, RLA and TSA. Today the industry is regulated, but in a different sense.

 

[BoeingBoy]

As for regulation, the industry is already semi-regulated with government oversite, the passenger bill of rights and possibly the NMB, RLA and TSA. Today the industry is regulated, but in a different sense.

No industry is totally deregulated in this country and hasn't been in a very long time. "Deregulation" of the airlines was only partial economic deregulation, not full freedom from all regulation. Just look at all the government alphabet agencies that still have a say in how an airline operates - OSHA, EPA, DOT, FAA, etc, etc, etc.

Jim

 

[Duke787]

Delta pays their workers more than AA and word is out that another increase is on the way.

Sure, once we get our retro those guys will leave. Now they are also sticking around to make sure that the pension and retiree medical isn't voted away as well.

I went to the BK lawyers presentation to ORD's TWU employee's after work today. She certianly didn't mention anything about getting full retro. She specifically said we don't know what is going to happen in regards to concessions, until AA comes along with 1113 openers. She did say expect concessions, it will be painful, and it will happen fast. I'm not sure what leverage Bob thinks we have, but it isn't much. I would believe the BK lawyer before I would believe Bob about BK.

One of the things the labor lawyer mentioned was for all TWU members to act as one, not different voices, not to appear weak.