Consequences Of Section 1113

[savyinvestor]

Bush will not enter this fray. USA320 does not want to lose his $200,000 per year income that includes salary and benefits anymore than his colleagues. In order for this not to happen his fellow employees will have to accept poverty wages and benefits. The IAM has nothing to gain by reopening their contract. CWA is getting an offer that is no less than an insult and from what I've read the AFA negotiations are so vague you could fly a 777 through them. So give it up already 320! Savy :down:

 

[USA320Pilot]

The benefit of operating a all Airbus fleet in today's environment are signficant.

Could this be another Company Restructuring IAM-M Option?

Last Friday in his weekly message to employees Bruce Lakefield left little doubt that the airline and its unions remain far apart. In fact, the IAM will not meet with the company until August 31, he said. Lakefield talked about his frustration with the process and he indicated the IAM-M might be misrepresenting issues. Lakefield said that the IAM-M offered to provide the company with ideas to save $80 to $100 million per year, but when asked to provide the information to the airline, the IAM has refused to provide the suggestions.

Could the IAM be misrepresenting information to its members and the news media?

Meanwhile, it is anticipated that ALPA will obtain a TA as soon as this week and then the pace of negotiations will pick up with the other unions. However, it appears that part of the IAM-M’s strategy is to wait until the Board of Arbitration issues its Opinion & Award later this month on the A320 heavy maintenance-outsourcing grievance. If the Company wins the award and does not obtain a cost-effective contract with the IAM, once the airline has a competitive cost structure in place (except for the IAM, the airline could return to the capital markets and replace all of the Boeing aircraft with Airbus and EMB-190/195 jets.

US Airways’ new business plan will focus on 75% point-to-point and 25% hub flying. With the industry transitioning to a hybrid LCC/network carrier business model, the Airbus aircraft would be a perfect replacement aircraft to offer a lower CASM and more RASM in today’s environment. Then the company could expand its MDA division to fight the new EMB-190 JetBlue threat.

US Airways’ Boeing fleet consists of 158 aircraft that could be replaced in 3 to 4 years with A330, A321, A320 and EMB-190/195 aircraft, which could eliminate virtually the entire Maintenance Department. US Airways’ current Boeing fleet consists of:

B767s - 10
B757s - 31
B737-400s - 47
B737-300s – 70

US Airways currently has 10 A330-200, 13 A321, and 6 A320 aircraft on firm order with delivery’s scheduled between 2007 though 2009. Separately, on June 17 Lakefield told the ALPA MEC that he was meeting with the Airbus senior vice president of North American Sales the next day to discuss new Airbus delivery’s to begin in 2005 (provided US Airways has a competitive cost structure) and that the European jet manufacturer “wanted to help US Airways.â€

If the carrier wins the grievance and elects to have an all Airbus/Embraer fleet, this would permit the company to pull down Pittsburgh heavy maintenance and close the facility, close most of the Charlotte maintenance facility (line maintenance hangar); as well as eliminate all Boeing heavy maintenance, some GSE, shop work, and plant maintenance. That would leave the mechanics with minimal positions with only A330 heavy overhaul and line maintenance work at the hubs, focus, and larger cities.

If the company flew an all Airbus fleet of 279 aircraft, the company would create significant economies of scale and improved marketing to boost revenues by rationalizing the fleet. I have not looked at the specific numbers, however, a leisure Airbus seat configuration under America West contracts could have a lower CASM than a combined Airbus/EMB fleet with the larger aircraft carrying more passengers in high-density markets.

For example, the new replacement aircraft could be equipped with modern IFE systems and have a smaller First Class section to boost revenue. For example the A321s could go from 26 to 8 aircraft, the A320s from 16 to 8 and the A319s from 12 to 8 first class seats, which would increase the number of seats on each aircraft from 169 to 184, 142 to 150, and 120 to 124 seats, respectively.

Other benefits would be improved productivity by more easily interchanging flight crews to reduce “sit around†times at hub and focus cities, a higher flight crew pay-to-block-hour ratio, reduced pilot training costs, reduced pilot staffing to account for a training float, less pilot training and maintenance management positions, smaller parts inventory, and reduced maintenance HR costs.

In the long-term, there would be less pilots required, however, in the short-term there would be more pilots required to man the operation due to the training float and the need for more instructor pilots and check airman.

Another transition cost saving would occur in the short-term because the company would have about a 4-year “holiday†from conducting heavy maintenance.

The company has publicly offered the IAM-M to participate in the new business plan and to cost effectively conduct overhaul in-house. In a press release on October 21, 2004 the company said "it is willing to work with the IAM to explore ways to bring future Airbus heavy maintenance work in-house," but up to this point the IAM-M has refused to enter into discussions.

See Story

Michael Glanzer’s report was simple: either US Airways must change or die to adjust to the realities of the marketplace.

I certainly do not like what is happening and we have the best mechanics and related in the business, but up to this point, the IAM-M has given the company no other option and could make them self irrelevant to the process going forward.

However, maybe the company isn't really that concerned about the IAM-M. Could the IAM-M be playing right into the company’s hands and actually by not participating in the new business plan, make them self irrelevant to the restructuring process?

Therefore, why risk a labor fight? Simply provide a caveat that profit sharing goes only to those employees who support the new business plan and then seek to eliminate those employees who do not want to support hte new business plan. In the case of the IAM-M, if the company wins the A320 greivance, why risk a strike when you can have a single manufacturer fleet, that is modern and provides the greatest efficiency, and then make the union(s) who do not participate in the new business plan irrelevant to the process?

By the way, I did not originate this idea and it's being discussed at the highest levels of the company.

Respectfully,

USA320Pilot

 

[ClueByFour]

The company will not survive a Chapter 11 filing with a sucessfull s1113 motion and the subsequent self-help from the IAM, and nobody is going to finance 100+ aircraft in the interim.

If the IAM walks, the company goes with it.

 

[MrAeroMan]

The company will not survive a Chapter 11 filing with a sucessfull s1113 motion and the subsequent self-help from the IAM, and nobody is going to finance 100+ aircraft in the interim.

If the IAM walks, the company goes with it.

[post="169401"][/post]​

That is not necessarily true. There is a way they can restructure without participation from the IAM and still survive if they walk out on the airline. It's not an easy nor preferable route but it can be done and may in fact occur.

Time will tell.

 

[savyinvestor]

I'll bet against that IMHO. Savy

 

[MrAeroMan]

I'll bet against that IMHO. Savy

[post="169403"][/post]​

The way the negotiations are going right now you may be right but it won't be long and the outcome of the overhaul grievance will be known. Once that is out and if the company wins the arbitration the carrots to AFA and CWA may get a little sweeter and what's left for the IAM will be very bitter. IMHO if the company wins the grievance, and I think they will, then the IAM will have painted themselves into a corner and their life without UAIR will begin sooner rather than later. Fear not though. That's what they all want anyway right? Therefore, when it happens, no one will be disappointed nor will they be upset. It'll be a win win for all involved. Break out the champaign Mr. Roach!

 

[savyinvestor]

So, suppose US Airways ends up in Ch 11, and suppose management goes for a quick Sec 1113 motion to impose new terms on recalcitrant unions (e.g. IAM, potentially CWA).

Do the IAM and CWA give management what it needs? Or do they continue to refuse?

Second question: assuming one or more of the unions refuse, and the judge imposes new terms, do those unions strike (as they are entitled to do)?

Last question: suppose, following a successful Sec 1113 motion by US Airways, one or more unions strike. Suppose, in fact, it is the IAM. Would ALPA cross the picket line, if the alternative was the collapse of US Airways?

[post="169319"][/post]​

I think its fair to say USA320 and his colleagues would cross so fast it would make your head spin!!!!!!!!!!!! By the way, have they ever crossed before? Savy

 

[700UW]

The benefit of operating a all Airbus fleet in today's environment are signficant.

Could this be another Company Restructuring IAM-M Option?

Last Friday in his weekly message to employees Bruce Lakefield left little doubt that the airline and its unions remain far apart. In fact, the IAM will not meet with the company until August 31, he said. Lakefield talked about his frustration with the process and he indicated the IAM-M might be misrepresenting issues. Lakefield said that the IAM-M offered to provide the company with ideas to save $80 to $100 million per year, but when asked to provide the information to the airline, the IAM has refused to provide the suggestions.

Could the IAM be misrepresenting information to its members and the news media?


The company has publicly offered the IAM-M to participate in the new business plan and to cost effectively conduct overhaul in-house. In a press release on October 21, 2004 the company said "it is willing to work with the IAM to explore ways to bring future Airbus heavy maintenance work in-house," but up to this point the IAM-M has refused to enter into discussions.

See Story

Michael Glanzer’s report was simple: either US Airways must change or die to adjust to the realities of the marketplace.

I certainly do not like what is happening and we have the best mechanics and related in the business, but up to this point, the IAM-M has given the company no other option and could make them self irrelevant to the process going forward.

However, maybe the company isn't really that concerned about the IAM-M. Could the IAM-M be playing right into the company’s hands and actually by not participating in the new business plan, make them self irrelevant to the restructuring process?

By the way, I did not originate this idea and it's being discussed at the highest levels of the company.

Respectfully,

USA320Pilot

[post="169397"][/post]​

You are posting false information once again!

Could it be you are the one misleading everyone?

March 15, 2004

Dear Sisters and Brothers,

In response to the demonstrations by IAM members at US Airways’ airport terminals in Pittsburgh, Philadelphia, Charlotte and Boston, the airline agreed to meet with the Machinists Union to discuss items IAM members have identified that, if enacted by the company, would provide US Airways with significant cost savings.

The initial meeting took place in Philadelphia on March 10, 2004 when US Airways Corporate Officers, local management and finance personnel met with IAM representatives from Districts 141 and 141-M, local committees and our economic advisor.

Both Districts presented significant cost savings proposals. District 141 identified more than a dozen items that would save the company money. District 141-M explained the significant cost savings the company could realize by repairing certain aircraft components in-house with IAM members instead of shipping the components to vendors. IAM and US Airways financial experts are currently working on the valuation of the IAM’s proposal.

US Airways has committed to continue working with the IAM to identify ways to reduce the carrier’s costs. Additional meetings between District 141 and US Airways are already scheduled for the week of March 22 in Philadelphia to continue evaluating and refining our ideas. District 141-M representatives will be meeting with the Senior VP of Maintenance this week in Pittsburgh to further discuss the IAM’s cost saving ideas.

We thank all members that participated in the March 5 demonstrations. Your support and solidarity is what forced US Airways to listen to our ideas.

Sincerely and fraternally,

Scotty Ford
President
IAM District 141-M

Randy Canale
President
IAM District 141

March 30, 2004

US Airways Update

To All IAM Members Employed by US Airways:

Dear Sisters and Brothers,

On March 24, 2004 US Airways CEO David Siegel addressed his employees, shareholders and passengers through an Internet video web cast. Siegel tried using fear, rewriting history and criticizing your union’s leadership to gain employee support for additional pay, benefit, and work rule concessions. He failed miserably, and looked like a CEO making a very public plea to save his job in the face of his own miserable failure.

Siegel claimed that the airline has been avoiding the issue of high employee costs. He apparently has forgotten that District 141 and 141-M members are already providing the carrier with $278 million in annual cost reductions as a result of the company’s bankruptcy.

Thousands of employees have been furloughed, and active employees are working harder, earning less and paying more for healthcare to ensure the future of US Airways.

Further demonstrating the IAM’s commitment to US Airways, District 141 and 141-M Representatives have been meeting separately with members of Siegel’s management team to ensure the airline operates in the most efficient manner possible. The $80-100 million the company could save by enacting the IAM’s recommendations would be achieved without necessitating changes to collective bargaining agreements.

Similarly, IAM officials have held constructive meetings with US Airways Chairman Dr. Bronner to develop a positive working relationship. The IAM’s commitment to a viable and competitive US Airways is without question.

Siegel’s tunnel vision, however, prevents him from acknowledging the substantial participation of IAM members in the airline’s recovery. He clearly appears to be out of touch with what is occurring within his own company.

Incredibly, Siegel also used the web cast as a platform to renegotiate his employment contract, offering to reduce his compensation to a level comparable to the CEO’s of low cost carriers. But those CEO’s and their company’s are successful, and similar compensation for David Siegel would still be too much and cannot be justified.

As graphs appearing in the March 1, 2004 issue of Aviation Week & Space Technology demonstrate, US Airways has lowered personnel costs by 12 percent since 2002. However, the company’s non-personnel costs actually increased by more than 4 percent. By comparison, ALL of US Airways' competitors were successful in REDUCING non-personnel costs during that same period.

It is painfully evident that David Siegel’s bankruptcy restructuring did nothing but reduce labor costs while failing to similarly reduce non-labor costs.

Siegel’s business plan seems to be centered on scaring employees. Unfortunately, he is 20 years too late to scare airline employees into believing that repeated concessions could save an airline. Airline after airline has demonstrated that no amount of employee concessions could save a company from its own incompetent management.

Siegel likes to blame the unions for US Airways’ problems, but it was he who a year ago claimed to the business community, the Air Transportation Stabilization Board, and his employees that he a had a business plan to make US Airways successful.

It was the employees that gave David Siegel the tools he said he needed to make the plan work. However, he has failed us all and it is now time for him to do the right thing. David Siegel must begin working with, not against, his most important asset, his employees. Otherwise, he should step aside and give the job to someone capable of handling it.

Sincerely and fraternally,


Scotty Ford
President
IAM District 141-M

http://www.iam141.org/PDF/LettertoLakefiel...posals62404.pdf

 

[savyinvestor]

Will the company win the arbitration? They didn't abrogate the contract did they? Seems fair to me, but who said life was fair. Kinda like having the pilots contract abrogated and paying them commuter wages or better yet have one of the wholly owned do the flying. No problem there right? Savy

 

[funguy2]

Folks, if any union strikes, the doors will be shut almost immediately. I think everyone here knows that.

[post="169346"][/post]​

I think US Flyer is right. Chances are if a union strikes, there will be no picket line to cross.

 

[cavalier]

The way the negotiations are going right now you may be right but it won't be long and the outcome of the overhaul grievance will be known. Once that is out and if the company wins the arbitration the carrots to AFA and CWA may get a little sweeter and what's left for the IAM will be very bitter. IMHO if the company wins the grievance, and I think they will, then the IAM will have painted themselves into a corner and their life without UAIR will begin sooner rather than later. Fear not though. That's what they all want anyway right? Therefore, when it happens, no one will be disappointed nor will they be upset. It'll be a win win for all involved. Break out the champaign Mr. Roach!

[post="169404"][/post]​

MY my Mr. air man, you sure are full of sarcasm which means in reality you are full of frustration, anger and hate.

I used to play the part you are, it was a game, fun time for a life as a caregiver. You see I also have played with ham radio for years and did the same thing only this medium is written rather than spoken.

I hope it all works out for the people left, I really do. But I must agree with you about the IAM, it’s a lose lose situation for them. The IAM will survive because they are big. I was part of them in the early 70's, they are everywhere, but they will have lost the airline industry and all those airlines workers dues and that will hurt, but it will hurt the workers much more then the union leaders, that's for damn sure.

 

[funguy2]

US Airways’ Boeing fleet consists of 158 aircraft that could be replaced in 3 to 4 years with A330, A321, A320 and EMB-190/195 aircraft, which could eliminate virtually the entire Maintenance Department. US Airways’ current Boeing fleet consists of:

B767s - 10
B757s - 31
B737-400s - 47
B737-300s – 70

1. US Airways does not have 3-4 years. They have 30-60 days, by your own information.

2. If US Airways goes Ch.11, there is no guarantee that the 279 aircraft agreement doesn't get changed... In fact, there have been reports which suggest 160 mainline airplanes is about the right size... And if that happens, I suspect ALPA will no longer be in such a giving mood.

 

[MrAeroMan]

MY my Mr. air man, you sure are full of sarcasm which means in reality you are full of frustration, anger and hate.

I used to play the part you are, it was a game, fun time for a life as a caregiver. You see I also have played with ham radio for years and did the same thing only this medium is written rather than spoken.

I hope it all works out for the people left, I really do. But I must agree with you about the IAM, it’s a lose lose situation for them. The IAM will survive because they are big. I was part of them in the early 70's, they are everywhere, but they will have lost the airline industry and all those airlines workers dues and that will hurt, but it will hurt the workers much more then the union leaders, that's for damn sure.

[post="169414"][/post]​

Sorry Cav but you're wrong again. There is no frustration, anger or hate here. There is reality. The IAM thinks they have the company over a barrel when in actuality it appears they may have played right into the companies hand. I think the leadership knows that and that is the real reason they are playing hardball.
You and I agree on one thing. The ultimate losers here are the dues paying members.

 

[cavalier]

Sorry Cav but you're wrong again. There is no frustration, anger or hate here. There is reality. The IAM thinks they have the company over a barrel when in actuality it appears they may have played right into the companies hand. I think the leadership knows that and that is the real reason they are playing hardball.
You and I agree on one thing. The ultimate losers here are the dues paying members.

[post="169419"][/post]​

If they know this, why in the world play hard ball?

Save face maybe?

The IAM is about to get creamed, I feel it down to my bones and if the airlines survives it will be a shadow of it's former self.

I am glad you are emotional balanced MrAeroMan

 

[nycbusdriver]

My 2 cents--

If ALPA has an agreement in place (which will likely have a requirement that all unions pony up before ALPA's part takes effect,) and the IAM refuses to play, then the pilots will likely walk across the backs of IAM members to get to work if they have to.

I think the airline might be able to weather an IAM strike. Most of the IAM people here on the forum are pretty hard core, but I suspect there are a fair amount of A&P licensed IAM members out there who do not want to see the IAM burn their jobs to the ground for what they may consider ill-conceived stances. With contractors, supervisors and those unwilling to fall on their swords for the IAM line of rhetoric, the company just may be able to keep enough going until outside maintenance contract can be put into place where needed and/or permanent replacement workers can be hired. (There are lots of A&P's out there, just as ALPA always finds there are lots of pilots out there when they set up a picket line.)