Do You Think Concessions Are Likely Now?

[funguy2]

Maybe the US Airways employees can take away from the $4.5mil that the company seems to have honored a contract with an employee. Now US Airways employees can say, "You honored your employee contract with former CEO Dave Seigel, now its time to honor your contract with the <insert number> members of <insert union>".

That would be a nice way to spin it, and still point out that $4.5mil could have been spent elsewhere.

Another thought is this... Maybe the annual salary of the CEO's and other execs are in line with industry standards, but between Wolf, Gangwal, their CFO (forget the name, sorry), and now Seigel, they have spent roughly $40mil in 5 years. That's a fair chunk of change. Maybe the company should consider up-front signing bonus for new execs + contract terms (i.e. 3 years unless we fire you)... I would guess they might spend less than $40mil every five years.

 

[mweiss]

funguy, you're right, of course, but you can't ignore that US has lost $3B over that time. That $40M is a whopping 1.3% of the loss.

Or, put another way, US Airways took in $91,135,000,000 during that time. The $40,000,000 is 0.044% of the earned revenue.

The numbers are big!

 

[funguy2]

Speaking of which... I wonder what kinds of retainment bonuses, golden parachutes, etc, are being negotiated / arranged for Lakefield. Perhaps this might lead into what his priorities might be...

(i.e. does he get a sale bonus like Wolf? Or maybe a $1mil bonus after 1 year of service + agreement for another year, etc). If his personal compensation is tied to the return of profitability and long-term success of US Airways, then that may be a good sign for employees. If his success is tied to a transaction, then that might be a bad sign. If there are no bonus type things, I would think its more debatable the reason (i.e. no bonus because he's Bronner's buddy, or no bonus because he's temporary, or no bonus because its hard to establish what the direction should be this time, etc).

 

[diogenes]

funguy2,

you are absolutely correct - a leader (I know, non-existent at U) should NOT ask the troops to do something he would not do himself.

If it's ok for dave to re-interpret the contracts, a la the Airbii farmout, then it is absolutely fair game for the BOD to get creative with dave's severance.

I'm sure he'd understand.

 

[ktflyhome]

diogenes: I have been wondering where you have been these days, glad to see you back. I miss you insight and input.

 

[diogenes]

thank you ktflyhome,

with spring in full bloom, the better half has kept me busy with spring clean-up and projects (damn, that job jar looks fuller every time I turn my back on it! )

 

[USA320Pilot]

I believe ALPA and the AFA will agree to new contracts. I'm unsure of the other employee groups because I do not talk with them as much. However, I do believe the majority of the LGA employees will agree to participate.

For any employee group that does not agree to participate in the new business plan, David Bronner told the unions last week that the company will go forward "with or without employees."

Respectfully,

USA320Pilot

 

[USA320Pilot]

Just one more point...

US Airways ALPA Communications Committee Chairman Captain Jack Stephan said he expects Lakefield -- whose strength is his "team-building expertise" -- to work with the unions in developing new business strategies, rather than alienating them.

"The pilots already committed to the process to return this airline to profitability," he said.

US Airways’ other unions, including those representing its flight attendants, mechanics and communication workers, should also be "more prone to listen" to Lakefield than they were to Siegel, Stephan said.

See Story

Respectfully,

USA320Pilot

 

[Light Years]

I believe ALPA and the AFA will agree to new contracts. I'm unsure of the other employee groups because I do not talk with them as much. However, I do believe the majority of the LGA employees will agree to participate.

Wow, the LGA employees. Not sure about pilots, but isnt that the smallest base (less than 200 F/As)? And the most junior? They'd be the first to go in the resulting furloughs.

I think people will participate if it makes sense, and only in productivity, not in pay. I dont think any group will pass contracts that outsource other people's (and thier own) jobs. With the exception of the pilots if they essentially agree to give away all of the airlines flying with LOA 91.

 

[USA320Pilot]

Light Years:

I understand US Airways' Flight Attendants top of scale pay is $41.05 per hour and at 95 hours per month can earn $46,797 per year.

The America West Flight Attendants get paid $37.59 per hour and at 95 hours can earn $42,852 per year.

If the US Airways Flight Attendants get paid $37.59 per hour (the America West hourly wage rate) and increase their pay cap to 105 hours per month, than the employee could earn $47,363 per year, which is about the same annual income as today.

I understand US Airways management will be looking for this type of AFA work rule change, which will not appreciably affect a Flight Attendants annual income. The intent is to fly about 20% more block hours with the current fleet, current flight crew active employees, with new productivity due to the Reserve Time Balancing System change/increased pay caps, to average down unit costs.

Respectfully,

USA320Pilot

 

[Light Years]

USA320,

As a furloughed F/A, I would take the America West contract lock stock and barrel any day over MAA as it would hardly be a noticable difference to a junior F/A (from mainline).

But let me point out that the pay you list above would be for MAINLINE flight attendants only. Making these concessions would result in yes, higher productivity. That would be a good thing if the company was growing under mainline contracts. Its not. Its growing under the shady guise of MidAtlantic and mainline express, along with outsourced, contract jet flying.

So the higher productivity will result in furloughs, pushing more and more of the workforce slowly into MAA, where they'll make $20,000 if they are lucky. Five years and under seniority is already there.

It would be one thing to agree to it if it resulted in growth and profitability, its another to vote your peers, and eventually yourself into the poverty wage alter ego division or out of a job altogether.

 

[Furloughd4now]

Why don't they just offer early out to those FAs making over $40/hr and bring back the furloughees that make $23??? Even though I am approaching the 5 year mark, I'd take the $23, for an extended period to get the company back on its feet.

They should have done this when they had the chance in '01. That's what they're waiting for. I know it (this subject) has been drained in previous postings, but over time it is feasible. It's happened in many, many businesses and they've recaptured theirs costs quickly.

 

[USA320Pilot]

Light Years:

Light Years said: "So the higher productivity will result in furloughs, pushing more and more of the workforce slowly into MAA, where they'll make $20,000 if they are lucky."

USA320Pilot comments: With all due respect, I believe your comment above is wrong. For the new business plan to be effective, the company must dramatically increase mainline block hours with the 279 fleet. The company wants to increase mainline block hours from about 1,005,000 per year to 1,280,000 per year with more focus city point-to-point flying. The company wants to do this with current flight crew personnel. Management believes this can be accomplished with changes to the Reserve System (Reserve Time Balancing) and work rules changes.

I have personally discussed this with Dave Siegel and I am skeptical this can occur with current employees, but apparently Resource Planning has indicated the numbers work.

Regards,

USA320Pilot

 

[JonC]

:unsure: Now that the big announcement is old news, I can't help but think that concessions and pay cuts are going to be a very hard sell to all employee groups. It's going to be very hard to put aside the fact that we can hand over 4.5 million to one employee with 2 years seniority, but still ask another employee with 27 years seniority to accept pay and benefit cuts, or we cease to exist. The possible thinking might be, why do you need $10,000 more from me, when you have so much for Dave? Want your thoughts on this matter.

Unfortunately, I think U management brought in another hatchet man. Siegel's reputation is too dirtied for employees to "trust" him. So, I think we'll see another replay of accept concessions or we'll liquidate the airline. The frustrating thing is, they might liquidate anyway - I think a BK and a TWAish scenario is a likely possibility. They go bankrupt to void their obligations to employees and then sell the physical stuff off. (Maybe to Branson or someone else looking for a "just add water" airline.).

Just a few thoughts from the observers' bench.

Jon
TPA

 

[Light Years]

Why don't they just offer early out to those FAs making over $40/hr and bring back the furloughees that make $23??? Even though I am approaching the 5 year mark, I'd take the $23, for an extended period to get the company back on its feet.

They should have done this when they had the chance in '01. That's what they're waiting for. I know it (this subject) has been drained in previous postings, but over time it is feasible. It's happened in many, many businesses and they've recaptured theirs costs quickly.

Amen!

But why would they bring us back at $23 when they can have us at $17? Or better yet get someone new at $12?

The US Airways system seniority list is going to look interesting soon. The most junior F/A is late 99 seniority. So within a year, there will be no more B-scale F/As! Why would they eliminate the B-scale who are not only enormously cheaper and more productive, but also considered by mgmt to be more "cooperative", less unionista, and better "marketing" (in other words stupid)?

Because, they've gotten themselves a "C" scale instead, in fact a whole alter ego airline. From a union busting point of view, its set up beautifully: pick an existing contract (AA Eagle) and force it upon the group in the midst of other concessionary issues, under a liquidation threat. This way nothing can be negotiated. Then set it up to be extremely unattractive to the eligible employees-no medical, you can pass and keep your recall rights (HA!) and travel. Also make sure that the aircraft agreed to can handle most if not all of the airlines current and future flying.

Early outs for senior F/As would cost money, but not as much as they'd save by refreshing the workforce with the existing junior half they have laid off and waiting. But in the long term, being sneaky and vindictive appears to be the plan. Plus, they know they'll be gone eventually anyway. Until then, they'll shake the tree to help them along, through discipline, terminations, sick policy changes, outrageous concessions, and just forcing people to quit for thier sanity.

These people are scumbags. :down: