Bronner! Well Restructureourselves, Or With You!

[usfliboi]

From the...


AFA HOTLINE 12-04
April 19, 2004

CEO DAVE SIEGEL RESIGNS

It was announced at today's Board of Director's meeting that CEO Dave Siegel has resigned. Bruce Lakefield, current US Airways Board member and a longtime associate of Dr. David Bronner, Chairman of the US Airways Board of Directors, will replace him.

After today's announcement, Dr. Bronner held a conference call with the International Presidents of AFA, ALPA, IAM, and the CWA. The following is what has been reported by the CWA regarding that call:

"Dr. Bronner briefs union leaders on Siegel's quitting...

On a conference call this evening Dr. Bronner made the following four points to union leaders regarding Dave Siegel's quitting as CEO of US Airways:


1. Siegel's quitting doesn't change the need for restructuring the airline. "We'll do it by ourselves or with you."
2. The decision that Siegel would leave was made to keep the process of restructuring US Airways going.
3. Dr. Bronner has "complete confidence" in the rest of the US Airways management team.
4. "US Airways is a good franchise. Some think it's great, some think it's just OK. But it's not going to survive without change."

Dr. Bronner said the new CEO will be Bruce Lakefield, a person with an extensive financial background and a longtime associate of David Bronner.
There was no further discussion on the call."

The Board meeting will continue on Tuesday, April 20, 2004.

As soon as additional information becomes available, this Hotline will be updated.

Perry Hayes
MEC President

 

[usfliboi]

I believe more than ever, cuts and major ones are coming. Bronner will get it done with unions help or without. If anything unions are in more danger than before in having to give more. Unions leaders need to stop whining and work with this guy or well just kick the unions leaders out. Regardless, te cuts are coming and I can almost smell what the Bronner is cookin!

 

[Phoenix]

it's not going to survive without change."

Employees have given several billion dollars of concessions.

Unlimited Rat Jets are now authorized.

The pensions are already gone.

20,000 employees are furloughed and slowly being offered employment at Express.

There are several hundred systematically, deliberately, perpetrated contractual violations.

The Dr. doesn't have a clue as to how true his words are. "If present trends continue there certainly won’t be a USAirways.â€￾

But personally I think that is the “going forward planâ€￾ that Chip Munn so enthusiastically embraces.

 

[Phoenix]

pardon me...


Respectfully,

Phoenix

 

[usfliboi]

I think hes saying the past is in the past now get ready to face reality ! Hes making it very clear here, work with him or dont work. Plain and simple.

 

[ktflyhome]

Go ahead and work with him all you want....no body is stopping you. :huh: :blink:

 

[USA320Pilot]

With a top finance guy as the new chief executive, could US Airways orchestrate a pre-packaged bankruptcy that would preserve current equity and the loan guarantee if a union(s) resist the upcoming restructuring?

Today the Washington Post reproted Lakefield has been working with the ATSB during recent weeks. See Story. Hummm???

If true, could the airline reject excess facilities, gates, and labor contracts and then impose new agreements on all parties who do not embrace change?

Respectfully,

USA320Pilot

 

[BoeingBoy]

USA320Pilot,

Your link lead me to the sign-up page so I don't know if I read the same article. Here's what I saw:

"It appears that [Lakefield] has been a very active board member and has been involved in some of the key strategic initiatives they have undertaken recently, the negotiations with the ATSB [Air Transportation Stabilization Board] and the labor talks," said Standard & Poor's analyst Philip Baggaley.

I took that to mean the ATSB talks back in Feb, not more recently. Certainly didn't see "during recent weeks" in there.

Jim

 

[ClueByFour]

With a top finance guy as the new chief executive, could US Airways orchestrate a pre-packaged bankruptcy that would preserve current equity and the loan guarantee if a union(s) resist the upcoming restructuring?

Today the Washington Post reproted Lakefield has been working with the ATSB during recent weeks. See Story. Hummm???

If true, could the airline reject excess facilities, gates, and labor contracts and then impose new agreements on all parties who do not embrace change?

Wait, you mean like the last "pre-packaged" "fast-track" trip thru bankrupty, which half the airline analysts in the world have said was poorly managed, inadequate, or both?

Further, Lakefield's involvement with the ATSB has absolutely no bearing on what the ATSB might do with him at the helm versus Siegel. None. To suggest otherwise is sensationalistic at best.

Finally, it's entirely possible that not all major creditors (notably GE and the ATSB) would support anything but a Chapter 7 filing.

 

[USA320Pilot]

Interesting points...

1. Siegel's quitting doesn't change the need for restructuring the airline. "We'll do it by ourselves or with you."

2. The decision that Siegel would leave was made to keep the process of restructuring US Airways going.

3. Dr. Bronner has "complete confidence" in the rest of the US Airways management team.

4. "US Airways is a good franchise. Some think it's great, some think it's just OK. But it's not going to survive without change."

Regards,

USA320Pilot

 

[700UW]

Interesting Counterpoints:

CEO Is Being Closely Monitored at Ailing US Airways

By Dan Fitzpatrick, Pittsburgh Post-Gazette

Mar. 6--Could David Siegel's days be numbered at US Airways?

The airline's chief executive officer is 3 1/2 weeks from being able to
walk away from the Arlington, Va.-based carrier for any reason and collect $4.5
million in severance pay. This window, built into his contract during
bankruptcy last year, is available for only 30 days, starting April 1.

Siegel maintains he is not going anywhere in April -- at least not
voluntarily. "While my contract contains protections should I resign from
my position in April, I -- intend to stay and work with the board and our
employees to complete our restructuring."

Whether others want Siegel to stick around longer isn't as certain.

His future really is in the hands of US Airways' chairman and largest
stockholder David Bronner, who backed his highest-paid employee when the
pilots union late last year called for Siegel's ouster . More recently,
however, the Alabama state pension fund chief has told people privately
that he is reconsidering the management issue as US Airways inches closer to
Bronner's summer deadline for a turnaround .

Another potential check on Siegel's future is the pilots union. Although it
backed off from its public call for Siegel's resignation, the pilots are
using their recent agreement to reenter concessionary talks as leverage to
change the "corporate culture" of the nation's seventh-largest airline,
implying the removal of the CEO.

Asked about Siegel this week in an interview, Bronner said Siegel's job was
safe -- for now. "You can't consider it at this time with the difficulties
you are in," he said, adding it would be "foolish on my part to say any
more than that." Bronner also made it clear he would be watching Siegel closely
and grading him on his performance.

"If he is successful and he wants to stay, you absolutely stay with him
forever," he said. "If he is not successful, you have to make a change. No
different than any other organization. It is just the real life in the real
world we all live in."

Bronner was not Siegel's first choice as savior of US Airways. He had wooed
David Bonderman, a wealthy Texas investor who turned around Continental
Airlines while Siegel worked there in the 1990s and picked Siegel to lead
that airline's Continental Express division.

But after Siegel solicited a $200 million bid from Bonderman's Texas
Pacific Group in 2002, Bronner stepped in with a better offer. He also argued that
the relationship between Siegel and Bonderman constituted a "sweetheart
deal" and cast doubt on whether US Airways could fairly evaluate competing
bids.

Siegel, said local airline analyst Bill Lauer, is in an "awkward position
of working for a company whose largest shareholders are strangers to the
original engagement." Bronner's "definition of success may be very
different than what David Bonderman's might have been."

After one of his first meetings with Siegel, in September 2002, Bronner
said he was "very impressed -- I think he is very capable of making US Air
successful." He let Siegel run the airline without any interference from
the top and, according to Bronner, there were "long months" when the pair did
not talk at all beyond regular board meetings after the airline emerged
from bankruptcy last spring.

Only in recent months have the two men started to talk on a more regular
basis, with Bronner in the last two weeks assuming more of a leadership
role usually reserved for the CEO. He convinced the pilots to join negotiations
following months of rancor between that union and management, and offered
fellow US Airways board member Bruce Lakefield as a potential liaison
between the two sides.

In winning over the pilots, Bronner tried to convince them that his pension
fund did not invest $240 million so that Bronner could make a lot of money
personally -- striking a contrast between himself as two other airline
investors, Carl Icahn and Bonderman, Siegel's old boss.

He also admitted that mistakes had been made by management, a frank
admission that surprised some pilots. After the Feb. 20 meeting, the pilots
quickly granted authority to enter wide-ranging contract negotiations with
the company.

"In one two-hour presentation, Bronner solicited more action from the pilot
group than David Siegel has in all his presentations," said pilots
spokesman
Jack Stephan.

The rare outreach by a chairman to unions showed that "Bronner is willing
to take his own management and hang them out to dry," said Lauer, the local
airline analyst.

Bronner is showing a "willingness to take management as a group and taint
them as a mutual enemy," and the pilots' overtures to Bronner have
"resulted in marginalizing mana gement and David Siegel," Lauer said. The pilots
"wanted him gone. In many respects, they now have him gone. They are
dealing right with the voice from Alabama on this."

Asked in an interview to assess Siegel, Bronner said Siegel "has done
magnificently" in a crisis situation and "I think we have a spectacularly
great management team.

"Did they make some mistakes from an outsider point of view? Of course.
Everybody makes mistakes." But, "when you look at the financial things they
have been able to pull off, it is incredible."

Siegel, Bronner said, has "certain areas where (he is) better than in other
areas." He said he realizes that Siegel, who declined to discuss his
relationship with Bronner, is as frustrated as the unions are. But, he
added, at some point both management and labor need to put aside their
disappointments and deal with the situation.

As an example, he cited the labor techniques of Minnesota meat-packer
George A. Hormel, the subject of a Bronner college thesis. Hormel, who built a
national business from a plant in southern Minnesota in part though good
relations with employees.

Bronner admitted that he and Siegel come from different perspectives. "He
is younger, hard-driving and he works his people really hard," Bronner said.

By comparison, Bronner described himself as a "confused bureaucrat" who is
more of a public official than he is a deep-pocketed investor. His hero, he
said, is former Manhattan District Attorney Robert Morgantheau, who took on
the mob in New York.

Bronner, through an assistant, declined comment about Siegel's contract,
which allows him to leave for any reason in April and still receive $4.5
million in severance plus three years of pension and health benefits.

The April provision, added to Siegel's three-year contract during last
year's bankruptcy, gives Siegel more freedom to leave the company if he
wishes to do so.

Prior to that, to collect his severance, he would have to be fired, have
his duties diminished or his salary reduced involuntarily.

Siegel, who signed a three-year contract in 2002, makes $600,000 a year in
salary, down from the $750,000 he agreed to originally due to a voluntary
cut in pay. He also has more than 1 million in stock options that do not
vest until 2006.

If Siegel stays, he and Bronner still have a lot to work out.

The money-losing airline currently is in danger of defaulting on $900
million in loans it received as part of its back-from-bankruptcy recovery
plan, and Bronner said there are discussions under way with the federal Air
Transportation Stabilization Board, which backed the loans that lifted US
Airways out of bankruptcy last March. "We are working on something that
basically allows us more flexibility and allows them to get some of their
money back," Bronner said.

The chairman is giving the airline until summer to straighten things out,
or he may have to consider more drastic actions, such as the sale of some
assets. The company already has solicited bids that range from $250 million
to $400 million.

But JetBlue Airways Chief Executive Officer David Neeleman, who expressed
an interest in the assets, last week said he doesn't think "US Airways is
serious about selling any of their assets" and is using such talk to
pressure unions into more concessions. The pilots and the company are
scheduled to start wide-ranging contract talks Tuesday. The Mechanics have
also agreed to join those talks.

Siegel, who in 2002 got off to a great start with US Airways workers amid
praise for their many union sacrifices and his promises of frank dialogue,
has lost what popularity he once had, now that he is approaching unions for
yet another round of concessions as part of a plan to cut $1.5 billion in
expenses.

Can he repair the relationship? "It is up to those people, really," Bronner
said.

"Once you get into a battle, I always want to stay with that person,"
Bronner said. But sometimes, "people's feelings get hurt." The way to
recover from that is to "get into the trenches" and "share the problems of
getting from a situation of 'I', 'I', 'I' to 'we', 'we', 'we.' "

 

[ClueByFour]

3. Dr. Bronner has "complete confidence" in the rest of the US Airways management team.

It's worth noting that as of 5 short months ago, Bronner had "complete confidence" in Siegel and the rest of the management team.

Seems that Bronner is a result driven guy. Looks like Bronner might be taking those who don't pack the hack to work in the Alabammy Corps.

 

[GeezLouis]

Usfliboi states:

I believe more than ever, cuts and major ones are coming. Bronner will get it done with unions help or without. If anything unions are in more danger than before in having to give more. Unions leaders need to stop whining and work with this guy or well just kick the unions leaders out.

Usfliboi, seems like you and Mr. Munn are ready to giveback TODAY! I'd hate to have you two as partners in a foxhole!!!

 

[usfliboi]

Usfliboi states:


Usfliboi, seems like you and Mr. Munn are ready to giveback TODAY! I'd hate to have you two as partners in a foxhole!!!

Well Glad were not in that hole..... It is crystal clear that bronner will get what he needs.... Todays comments by cwa that cwa wasnt gonna give with Dave and wont give to this one, is childish at best. Union leaders jobs are at stake here. They know if this company goes under, so does millions of dollars for their respective union coffers. Im tired of the one liners, lets see some of the union leaders leadership instead of "aint giving" attitude. Were not gonna get anywhere till both sides talk. To slam the door before talks start is irresponsible. Theres no doubt evyone by now knows the grave dire straits this company finds itself once again. In a few weeks im sure we will here once again a new slogan about this ceo about not giving etc. Lets hope it isnt as childish and we all can get somewhere together instead of blasting away at each other... Reality is the same as it was last week . Nothing has changed other than an new ceo , in fact reality dictates that movement has to happen sooner rather than later. If we dont move soon , i predict a bk filing by fall and contracts stripped. I dont want this thats why i supoort this team AND the last. I have faith this MBA ers know what they are doing.

 

[fatburger]

bankruptcy......................here we go again! 320's subtle spread of fear!

-fatburger-