Article 4 Industry Comparable Pay rate

[Rogallo]

The company did not pay down its debt right before filing for Ch 11.   To the contrary, AA borrowed more money in the months leading up to the bankruptcy filing, as summarized by the linked article.   By filing with over $4 billion in cash,  AA did not have to beg lenders for DIP loans nor did it have to beg lenders for exit financing to pay off DIP loans.   Quite a different experience from UA's bankruptcy.   

 
Could we say Unprecedented?

 

[WeAAsles]

The company did not pay down its debt right before filing for Ch 11.   To the contrary, AA borrowed more money in the months leading up to the bankruptcy filing, as summarized by the linked article.   By filing with over $4 billion in cash,  AA did not have to beg lenders for DIP loans nor did it have to beg lenders for exit financing to pay off DIP loans.   Quite a different experience from UA's bankruptcy.

Give the man who reads a cigar. And had AA required DIP financing the cuts that would have been requested would have been deeper than the ones actually made. Also had AA done what UAL had done our pensions more than likely would have gone to the PBGC rather than being frozen as they currently are.

The PBGC is currently underfunded by over 30 Billion and will more than likely require some type of Federal bailout. IF the Taxpayers approve it. They certainly won't approve a full bailout as people will say "Well we don't have a pension, why should we pay for theirs?"

 

[Chuck Schalk]

Give the man who reads a cigar. And had AA required DIP financing the cuts that would have been requested would have been deeper than the ones actually made. Also had AA done what UAL had done our pensions more than likely would have gone to the PBGC rather than being frozen as they currently are.

The PBGC is currently underfunded by over 30 Billion and will more than likely require some type of Federal bailout. IF the Taxpayers approve it. They certainly won't approve a full bailout as people will say "Well we don't have a pension, why should we pay for theirs?"

can you explain why the company was not able to dump the pension?   ( hint it was not the TWU)

 

[Chuck Schalk]

is there anyone who does not think this bankruptcy was orchestrated to bust the union contracts?

 

[WeAAsles]

can you explain why the company was not able to dump the pension?   ( hint it was not the TWU)

No it ultimately was not. But they did put some pressure on it. It was mostly Josh Gotbaum who made the case that AA did not need that relief especially after AA and Co had been given more time to shore up those funds after the other airlines were gaining an unfair advantage as there's had been thrown on the PBGC. Many different individuals lobbied for that freeze.

 

[WeAAsles]

is there anyone who does not think this bankruptcy was orchestrated to bust the union contracts?

Of course it was to a degree. The law makes it easy for them to do so. But AA also were able to gain relief from a mountain of other debt as well. They dumped financing agreements on facilities and planes we weren't using anymore. They were still even making payments on Fokers.

And they did sell that London townhouse of theirs for a profit.

If we don't like the laws on the books Chuck then we ought to pay attention and fight a lot harder to get them changed instead of pointing the blame in every other direction because we're too apathetic to try.

 

[scorpion 2]

 

 

 
2. The Committee has concluded that there is no additional economic value beyond the current company offers that can be provided to the company's labor organizations without endangering AMR's reorganization and the rights and economic interests of non-union creditors and parties in interest. Accordingly, the Committee decided today that it will oppose any new efforts to transfer additional economic value from general unsecured creditors to American's unionized employees.

http://blogs.star-telegram.com/files/amr-creditors-committee-statement-re-section-1113-matters1.pdf
 

So if the equity deals were cut in August of 2012 how did they know ahead of time what the "me too" amount would be? Our equity stake was (4.8%) and didnt change after it was signed off on but months later when the pilots got a deal our "me too" was paid as part of our equity allocation which had already been set months earlier?  Could someone explain this?  There was also a memo of understanding between the pilots and the company which improved their contract by 500 mill over 6 years if a merger between US and AA took place. This kicked in in Jan of 2013. What happened to the twu "me too" on that one or was their a time constraint attached to the provision?  

 

[WeAAsles]

So if the equity deals were cut in August of 2012 how did they know ahead of time what the "me too" amount would be? Our equity stake was (4.8%) and didnt change after it was signed off on but months later when the pilots got a deal our "me too" was paid as part of our equity allocation which had already been set months earlier?  Could someone explain this?  There was also a memo of understanding between the pilots and the company which improved their contract by 500 mill over 6 years if a merger between US and AA took place. This kicked in in Jan of 2013. What happened to the twu "me too" on that one or was their a time constraint attached to the provision?

Did we have a "me too" agreement with usair? The "Me too" had nothing to do with any agreements made between the unions and usair management. They were made to gain our approval to their overtures to grab a merger or possible hostile takeover of AA.

What you're thinking about are two very different and very distinct set of circumstances.

 

[WeAAsles]

can you explain why the company was not able to dump the pension?   ( hint it was not the TWU)

Chuck I was able to search and find something that should be very interesting to you and the readers. This is the PBGC Director Josh Gotbaum on Fox Business on May 15 . You should watch this in it's entirety as it's very interesting but if you're only interested in AA, that part starts in at 4:20

  http://video.foxbusiness.com/v/3568812803001/insuring-private-pensions-part-one/#sp=show-clips

In Part 2 Director Gotbaum talks why he believes there would NOT be any Government bailout in the future if there are not changes made to the plan that he's looking for. Raising the premiums.

"Thus far no one has proposed that legislation"

"According to the CBO the PBGC will run out of money in the next 7 or 8 years"

 

[FWAAA]

 
So if the equity deals were cut in August of 2012 how did they know ahead of time what the "me too" amount would be? Our equity stake was (4.8%) and didnt change after it was signed off on but months later when the pilots got a deal our "me too" was paid as part of our equity allocation which had already been set months earlier?  Could someone explain this?  There was also a memo of understanding between the pilots and the company which improved their contract by 500 mill over 6 years if a merger between US and AA took place. This kicked in in Jan of 2013. What happened to the twu "me too" on that one or was their a time constraint attached to the provision?  

As you pointed out, the pilots were originally offered 13.5% equity, which they turned down when they rejected the LBFO.    Then, after the judge permitted AA to abrogate their contract, they finally settled with Horton on their new contract, which contained, you guessed it, 13.5% equity.
 
When Judge Lane initially denied AA's motion to abrogate, there was much chest-thumping and celebrating around here.   The revisionist historians paint the pilots' rejection as having brought them improvements, implying that had the TWU rejected their contracts, the TWU would have seen improvements.
 
When all was said and done, the pilots settled for the same pay rates, the same 401k contribution and the same equity as they turned down earlier.    I posted above the only improvements they saw, and the only one that improved anyone's pay was that the A319s were placed in the other narrowbody pay band instead of their own cheaper pay band.   
 
As to the pilots' contingent MOU with Doug Parker - that wasn't covered by the Me-Too provision.    The Me-Too provision promised that everyone would share improvements if any union were able to get improvements out of AA (Horton) in bankruptcy.   The pilots succeeded in cutting the reductions down from 20% to 17% and thus all employee saw their labor cost reductions reduced to 17% from the term sheets' 20%.   Parker didn't offer the TWU anything like he did the pilots, and Horton's AA bankruptcy me-too provisions didn't cover the promises that Parker made to the AA pilots.   

 

[Chuck Schalk]

thus far, no TWU supporter has given us supporting evidence that the TWU has enhanced our careers over the last 20 years.  Anything that we kept (pension for one) or got from AA we paid for through concessions.  in 2003, I was there at the so called negotiations when TWU Rep Bob Gless was in charge of M&R negotiations.  They put a sheet up on the screen and it showed what the values were of our contract.  example:  if we gave up a weeks vacation that was worth x amount of dollars,  if we gave up overtime pay not to exceed time and half at anytime was worth x amount of dollars,  how much of a pay cut for each percentage would be worth x amount of dollars.   It was clearly stated that if you wanted to keep something then you had to offset it by giving something else up.  That is what you call negotiations?  
 
many leaders at the table were saying to protect the pension,  so we had to give concessions to keep it.   the only reason why we had it longer is because we paid for it!  
 
the theory that the TWU had anything to do with keeping the pension after 2003 is incorrect.
 
lets go back again,   what has the TWU done to enhance our careers in M&R?
 
start with #1.......
 
 
 

 

[scorpion 2]

As you pointed out, the pilots were originally offered 13.5% equity, which they turned down when they rejected the LBFO.    Then, after the judge permitted AA to abrogate their contract, they finally settled with Horton on their new contract, which contained, you guessed it, 13.5% equity.
 
When Judge Lane initially denied AA's motion to abrogate, there was much chest-thumping and celebrating around here.   The revisionist historians paint the pilots' rejection as having brought them improvements, implying that had the TWU rejected their contracts, the TWU would have seen improvements.
 
When all was said and done, the pilots settled for the same pay rates, the same 401k contribution and the same equity as they turned down earlier.    I posted above the only improvements they saw, and the only one that improved anyone's pay was that the A319s were placed in the other narrowbody pay band instead of their own cheaper pay band.   
 
As to the pilots' contingent MOU with Doug Parker - that wasn't covered by the Me-Too provision.    The Me-Too provision promised that everyone would share improvements if any union were able to get improvements out of AA (Horton) in bankruptcy.   The pilots succeeded in cutting the reductions down from 20% to 17% and thus all employee saw their labor cost reductions reduced to 17% from the term sheets' 20%.   Parker didn't offer the TWU anything like he did the pilots, and Horton's AA bankruptcy me-too provisions didn't cover the promises that Parker made to the AA pilots.   

Ok thanks, that explains the merger part of their negotiations and the 522 mill.  
 
We received a "me too" allocation in our equity stake that was 35.42% of total stock grant or 1.7% of the 4.8%.  Our 4,8% never changed from day one but now 1.7% of it has a "me too" payout. The pilots didnt get their reduction from 20% to 17% until Dec. The 4.8% equity was calculated in Aug four months earlier but stayed 4.8% and now had "me too" attached to it. I dont recall a 3% reduction on any of our concessions but if there were any maybe someone can tell us what they were?  

 

[WeAAsles]

thus far, no TWU supporter has given us supporting evidence that the TWU has enhanced our careers over the last 20 years.  Anything that we kept (pension for one) or got from AA we paid for through concessions.  in 2003, I was there at the so called negotiations when TWU Rep Bob Gless was in charge of M&R negotiations.  They put a sheet up on the screen and it showed what the values were of our contract.  example:  if we gave up a weeks vacation that was worth x amount of dollars,  if we gave up overtime pay not to exceed time and half at anytime was worth x amount of dollars,  how much of a pay cut for each percentage would be worth x amount of dollars.   It was clearly stated that if you wanted to keep something then you had to offset it by giving something else up.  That is what you call negotiations?  
 
many leaders at the table were saying to protect the pension,  so we had to give concessions to keep it.   the only reason why we had it longer is because we paid for it!  
 
the theory that the TWU had anything to do with keeping the pension after 2003 is incorrect.
 
lets go back again,   what has the TWU done to enhance our careers in M&R?
 
start with #1.......
 
 
 

Thus far no supporter of ANY major legacy airline union has been able to cite me any example of gains outside of carriers who did not either cease existence and lost all or went through the BK process and still survive today? Be that in alphabetical order. AFA, ALPA, AMFA, APA, APFA, CWA, IAM, IBT, TWU and others. As well as any non union counterparts. Braniff, Eastern, Pan Am, TWA, Continental, Northwest, Usair, United, Delta and American Airlines. 7 names down out of 10 in the musical chairs called the Airline Industry.

So who has done well then? Southwest Airlines. Not really a legacy airline but an airline that has been consistently PROFITABLE. Being profitable is what can get the people who work for them more and they have gotten more. Now some like to compare UPS and Fedex into the mix. #1 they never competed against a dozen other competitors and #2 they fly boxes not people. 

Now onto the Pension. Did we pay to keep it in 03? YES!!! Of course we did. Should we have? That's up to you to decide? Has any of the readers ever done the math on what your pension would have been if it had been frozen in 03? What if they had gone BK and it was then thrown on the PBGC for pennies on the dollar? We have some former Eastern and TWA people who work with us who would LOVE to have what we still do. They've told me what the PBGC has said they'll be getting when they retire. It's not pretty.

Yes if Tulsa had far less work then the line guys would be making more money, absolutely. And the fact is even though posters will say otherwise the two groups can't stand each other. I've been reading the posts on here for years. So it comes down to money, not people or jobs just money. The American Capitalist in all of us. If I can get rid of everyone else I will have more for ME. So then who's above you who wants you out the door next?


"By any objective standard, these terms, however difficult, are better than any negotiated in bankruptcy for a mechanic and related group since 9/11. More jobs, preservation of existing pension benefits, the lowest outsourcing in the industry, and pay raises two times that secured by other unions dealing with bankruptcy.  Our members deserve better than what the Company has offered, but our Union has clearly made the best of a bad situation."

http://twu514.org/blog/2013/02/22/comparing-the-twu-bankruptcy-mr-agreement-to-other-unions/

 

[WeAAsles]

Ok thanks, that explains the merger part of their negotiations and the 522 mill.  
 
We received a "me too" allocation in our equity stake that was 35.42% of total stock grant or 1.7% of the 4.8%.  Our 4,8% never changed from day one but now 1.7% of it has a "me too" payout. The pilots didnt get their reduction from 20% to 17% until Dec. The 4.8% equity was calculated in Aug four months earlier but stayed 4.8% and now had "me too" attached to it. I dont recall a 3% reduction on any of our concessions but if there were any maybe someone can tell us what they were?  

Your "Me too" was built directly into your contract. Remember all the other TWU represented groups had already agreed to a 20% reduction when the company turned around and lowered what they were asking from the APA to 17%. So your reduction bargaining was at 17% rather than 20%.

"The May offers included “me-too” clauses that stated that any further improvements in valuation or profit sharing received by other work groups would be extended to bargaining units that consented to accept the company offers.  These so-called “me-too” clauses became active when AMR improved its offer to the pilots’ union last week.
 
Plans to restart negotiations for the two TWU work groups that did not accept earlier offers has been communicated to AMR.  Negotiators for the Maintenance and Stores bargaining units are expected to meet with the company after the "me-too" talks conclude."

http://blogs.star-telegram.com/sky_talk/2012/06/twu-meets-with-american-on-tuesday-in-dallas-to-negotiate-me-too-clauses.html

Read more here: http://blogs.star-telegram.com/sky_talk/2012/06/twu-meets-with-american-on-tuesday-in-dallas-to-negotiate-me-too-clauses.html#storylink=cpy

 

[WeAAsles]

Ok thanks, that explains the merger part of their negotiations and the 522 mill.  
 
We received a "me too" allocation in our equity stake that was 35.42% of total stock grant or 1.7% of the 4.8%.  Our 4,8% never changed from day one but now 1.7% of it has a "me too" payout. The pilots didnt get their reduction from 20% to 17% until Dec. The 4.8% equity was calculated in Aug four months earlier but stayed 4.8% and now had "me too" attached to it. I dont recall a 3% reduction on any of our concessions but if there were any maybe someone can tell us what they were?  

 
1.7% in recognition that another labor group on the property received additional equity without additional concessions ( the “me too” agreements )
http://www.twu.org/Portals/0/AMRBK/aa_distribution_plan_powerpoint.pdf