Doubts Grow About Carty
- Thread starter RV4
- Start date
AAObserver,
your singleminded defense of a practice that is "common is business" is revealing. Just because it is common does not mean it is right. Everyone is an employee of the company, including Carty. Everyone should chip in to save the company. Don''t try to sell that stuff about it all being the union''s fault. I work at a non-union carrier, and I''m still not buying that.
Your angle seems to be that management is a higher class of person, and should therefore be spared any economic penalty for the failure of the company. That may have worked in another time, or another place, but it''s not working now.
your singleminded defense of a practice that is "common is business" is revealing. Just because it is common does not mean it is right. Everyone is an employee of the company, including Carty. Everyone should chip in to save the company. Don''t try to sell that stuff about it all being the union''s fault. I work at a non-union carrier, and I''m still not buying that.
Your angle seems to be that management is a higher class of person, and should therefore be spared any economic penalty for the failure of the company. That may have worked in another time, or another place, but it''s not working now.
This is ridiculous. All that the initial post says is that hindsight is 20/20. Buying TWA was bad given today''s economic situation...Carty has agreed that is the case. Stock buybacks were a bad idea given today''s economic situation. An article was written a week or two ago about this. Most airlines participated in stock buyback programs. As MiAAmi states in his/her comments, Carty reports to stockholders who basically demanded stockbuybacks. It raises prices by artificially squeezing supply (same demand less supply = higher prices). The idea is that price will maintain the relatively higher price and down the road you can sell at that higher price. Well, since Carty wasn''t able to foresee 9/11, SARS, Operation Iraqi Freedom, Anthrax, and this prolonged recession that teeters on the brink of double dipping (nobody knew Bush would be this inept on the economy given his dad''s demise). Ok, did any of you know this would all happen? Please step forward. Don''t tell me you knew the economy would recess...we all knew that. I''m talking exact severity!
Plus, I still believe that even in hindsight, TWA has many benefits. First and foremost, consider that TWA generated $3.3 billion in revenue annually. At AA''s lease rates, when it was purchased, TWA was at profitable levels. So, take 85% of that revenue (about $2.8 billion...that assume that some people flew TWA to avoid AA or have been turned off by AA since, or flew TWA for the cheap fares and now fly HP or WN for that reason) and attribut it to what was TWA. AA still hasn''t spent that much on the purchase. Also, consider that the frequent flyers of TWA (the highest value fliers, would have been up for grabs as individuals. For each person, AA would have to fight with UA, DL, CO, US, etc. for the future choice. AA was given instant access to thir desires as fliers while other carries had to spend money to HOPE to get some of their future business.
Your arguements lack sensibility and fail to grasp the decision making skills required to work at Carty''s level. If it were up to half the folks on this board, companies would have no profits, we''d fly 747''s to Witchita 20 times a day from Topeka, and they''d work 10 hours a week telling everyone they could make more at Jiffy Lube so it''s justified. Re-regulation would be a hot topic, because it''s simply the customers fault that things are the way they are...if we could just get rid of them, everything would be fine!
Plus, I still believe that even in hindsight, TWA has many benefits. First and foremost, consider that TWA generated $3.3 billion in revenue annually. At AA''s lease rates, when it was purchased, TWA was at profitable levels. So, take 85% of that revenue (about $2.8 billion...that assume that some people flew TWA to avoid AA or have been turned off by AA since, or flew TWA for the cheap fares and now fly HP or WN for that reason) and attribut it to what was TWA. AA still hasn''t spent that much on the purchase. Also, consider that the frequent flyers of TWA (the highest value fliers, would have been up for grabs as individuals. For each person, AA would have to fight with UA, DL, CO, US, etc. for the future choice. AA was given instant access to thir desires as fliers while other carries had to spend money to HOPE to get some of their future business.
Your arguements lack sensibility and fail to grasp the decision making skills required to work at Carty''s level. If it were up to half the folks on this board, companies would have no profits, we''d fly 747''s to Witchita 20 times a day from Topeka, and they''d work 10 hours a week telling everyone they could make more at Jiffy Lube so it''s justified. Re-regulation would be a hot topic, because it''s simply the customers fault that things are the way they are...if we could just get rid of them, everything would be fine!
Carty buys back stock at record levels.
Carty buys TWA which was 7% of the nations air capacity at a time when it was obvious that the economy was tanking and the capacity wasn't needed.
Carty damages the morale of AA employees by forcing a TWA acquisition and creating animosity within the worker's ranks.
Carty wrings his hands when the economy tanked and did not react decisively by mitigating his fiasco with the TWA asset buy, and dumping TWA.
He also signs a no-furlough clause with the pilots in order to get their acquiecence. This restricts his ability to quickly react to market downturns, with the exception of a large majority of ex-TWAers . . . which capacity wasn't needed in the first place.
Ditto for 9/11.
For 2 years, Carty enjoys a 30% pilot compensation advantage over rival Delta but still manages squader the advantage.
Carty stonewalls the pilots on contract negotiations.
Carty and the special 45 awarded specially protected pension funds when it was obvious that AA was in danger of Chapter 11. Carty keeps it secret until it's out publically by the SEC. "Surprised" when public and press reaction is negative. Appalling lack of judgement concerning public/media relations.
______________________________________
AAObserver wrote:
"But because of the union, you will most likely sit around and whine about how poorly you are treated instead of doing your job well."
IF PILOTS FLEW AIRPLANES LIKE CARTY LEADS AA, THERE'D BE HUNDREDS OF BENT UP AIRPLANES AND SMOKING HOLES.
Carty buys TWA which was 7% of the nations air capacity at a time when it was obvious that the economy was tanking and the capacity wasn't needed.
Carty damages the morale of AA employees by forcing a TWA acquisition and creating animosity within the worker's ranks.
Carty wrings his hands when the economy tanked and did not react decisively by mitigating his fiasco with the TWA asset buy, and dumping TWA.
He also signs a no-furlough clause with the pilots in order to get their acquiecence. This restricts his ability to quickly react to market downturns, with the exception of a large majority of ex-TWAers . . . which capacity wasn't needed in the first place.
Ditto for 9/11.
For 2 years, Carty enjoys a 30% pilot compensation advantage over rival Delta but still manages squader the advantage.
Carty stonewalls the pilots on contract negotiations.
Carty and the special 45 awarded specially protected pension funds when it was obvious that AA was in danger of Chapter 11. Carty keeps it secret until it's out publically by the SEC. "Surprised" when public and press reaction is negative. Appalling lack of judgement concerning public/media relations.
______________________________________
AAObserver wrote:
"But because of the union, you will most likely sit around and whine about how poorly you are treated instead of doing your job well."
IF PILOTS FLEW AIRPLANES LIKE CARTY LEADS AA, THERE'D BE HUNDREDS OF BENT UP AIRPLANES AND SMOKING HOLES.
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On 4/20/2003 11:34:56 AM AAObserver wrote:
Fair enough. He hasn''t done these things, so you are free to either accept it or go to find another job that is more suitable for you.
But because of the union, you will most likely sit around and whine about how poorly you are treated instead of doing your job well.
----------------
"AAobserver- to quote you: "instead of doing your job well" (I will assume you directed this at union employees, if not then please correct me.) As an aircraft mechanic licensed by the Federal Government, I do not have a "choice" of "doing my job well". Everything I do is overlooked and scrutinized by the FAA. I always do my "job well". Who watches over your shoulder? Carty perhaps? I seriously doubt that though. Management has a way of taking care of their own, hiding management personnel by moving them from job duty to job duty. I am guessing that you work the midnight shift. Am I correct? I base this on the fact that you are on this forum an awful lot. Perhaps your AMR management position is company propagandist? Are you paid to defend Carty on this website? You think everything Carty has done is justified? Yes, you are just a "Yes-man". It is time for you to face reality; Saying yes to an incompetent CEO will lead you to the unemployment line. See you there!!!! By the way, if Carty asks you if he should cut capacity by 30-40%, do what you do best and say YES!On 4/20/2003 11:34:56 AM AAObserver wrote:
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On 4/20/2003 11:25:56 AM RV4 wrote:
I would have rather him not bought TWA.
I would have rather him not bought back AMR stock and depleted cash.
I would have rather him not left Canada.
I would rather see him resign on a volunteer basis before his destructive decisions are beyond repair.
Maybe there is a French Airline in need of a Dove that thinks running an airline only requires compassion instead of intelligence and integrity?
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On 4/20/2003 11:25:56 AM RV4 wrote:
----------------
On 4/20/2003 11
38 AM AAObserver wrote:
I would have rather him be honest.On 4/20/2003 11
38 AM AAObserver wrote:----------------
What would you rather he have done?
----------------
What would you rather he have done?
----------------
I would have rather him not bought TWA.
I would have rather him not bought back AMR stock and depleted cash.
I would have rather him not left Canada.
I would rather see him resign on a volunteer basis before his destructive decisions are beyond repair.
Maybe there is a French Airline in need of a Dove that thinks running an airline only requires compassion instead of intelligence and integrity?
----------------
Fair enough. He hasn''t done these things, so you are free to either accept it or go to find another job that is more suitable for you.
But because of the union, you will most likely sit around and whine about how poorly you are treated instead of doing your job well.
----------------
And dont forget the special Employee Computer Purchase through Dell Computer Corp., of which he is also heavily involved.
scoun•drel
Pronunciation: (skoun'drul),
—n.
an unprincipled, dishonorable person; villain.
—adj.
mean or base in nature; villainous; unprincipled; dishonorable.
scoun•drel
Pronunciation: (skoun'drul),
—n.
an unprincipled, dishonorable person; villain.
—adj.
mean or base in nature; villainous; unprincipled; dishonorable.
AAObserver
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IF PILOTS FLEW AIRPLANES LIKE CARTY LEADS AA, THERE'D BE HUNDREDS OF BENT UP AIRPLANES AND SMOKING HOLES.
----------------
IF PILOTS FLEW AIRPLANES LIKE CARTY LEADS AA, THERE'D BE HUNDREDS OF BENT UP AIRPLANES AND SMOKING HOLES.
----------------
And if he did his job as poorly as many of the FAs whose planes I've been on have done, AA would have been BK two years ago.
Still, those FAs didn't lose their job for poor performance.
Why should Carty be forced out for poor performance when unionized employees aren't?
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So your view of Unionism is based only on the performance of some flight attendants you have encountered?
Also you have stated that we as union employees are not in a position to judge Carty. So how can you judge a flight attendant? It is because of management like you that there are vast differences between labor and management.
Also you have stated that we as union employees are not in a position to judge Carty. So how can you judge a flight attendant? It is because of management like you that there are vast differences between labor and management.
As too not sound Emotional about all this let's look at the facts:
The pension plan was started in 1985,but the funding didn't start until October of 2002.This pension fund was created to offset the cost of it's top exectives,and make up the short fall on the company run retirement plan.But back in Oct/02 I remember Carty saying we had no plans for BK and had enough cash on hand(i still like reading the article).And even if this wasn't illegal He didn't mean to mislead the union when in January he starts thinking about asking for concession from all employees.
So he told everyone we needed to do this quickly and vote on it because"Time was running out".While also telling the SEC in March,the reason for delaying the filing was he was in"labor negotiations".He turns around gives us until March 31, to argree to a vote, we vote in less than 2 weeks.In most case voting without looking at what we are voting for.When 1 of the 3 unions(which is actually another story) has problems and votes NO he gives it more time,sends people out to try and influence the vote.Gets what he wants,Sticks it in our Face with that press confernce.Then saids oh by the way we did this!!!! yea your right maybe we shouldn't be angry.DID I leave anything out?-Please give me a truck(uncle Bob you are our only hope)
The pension plan was started in 1985,but the funding didn't start until October of 2002.This pension fund was created to offset the cost of it's top exectives,and make up the short fall on the company run retirement plan.But back in Oct/02 I remember Carty saying we had no plans for BK and had enough cash on hand(i still like reading the article).And even if this wasn't illegal He didn't mean to mislead the union when in January he starts thinking about asking for concession from all employees.
So he told everyone we needed to do this quickly and vote on it because"Time was running out".While also telling the SEC in March,the reason for delaying the filing was he was in"labor negotiations".He turns around gives us until March 31, to argree to a vote, we vote in less than 2 weeks.In most case voting without looking at what we are voting for.When 1 of the 3 unions(which is actually another story) has problems and votes NO he gives it more time,sends people out to try and influence the vote.Gets what he wants,Sticks it in our Face with that press confernce.Then saids oh by the way we did this!!!! yea your right maybe we shouldn't be angry.DID I leave anything out?-Please give me a truck(uncle Bob you are our only hope)
MrMarky
Advanced
Sorry double post.
MrMarky
Advanced
All this incessant crap about how all of these bonuses and pension protections are necessary as retention incentives are enough to make one puke.
Can you find me an airline looking for senior management?
They are just as unemployable as everyone else and the outrageous contention that they need retention incentives is enough to boil one's blood. They're just like an expensive airline seat -- a comodity for which there is no market demand.
Can you find me an airline looking for senior management?
They are just as unemployable as everyone else and the outrageous contention that they need retention incentives is enough to boil one's blood. They're just like an expensive airline seat -- a comodity for which there is no market demand.
AAOutsider
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Like AAObserver, I have been reading these boards for sometime. And, like AAObserver, I have come to the conclusion that some of you have lost all sense of reality or at least all sense of proportion.*
Case in point, why are you all mad at Don Carty? Ask yourselves:
Is it really because he failed to disclose the SERP and the Executive Pension trust?
Or, is it really because none of you wanted to take a pay cut, believing as you did that it’s all management’s fault that AA is losing millions of dollars a day?
That’s it, isn’t it? How convenient, then, for many of you to pretend that Carty’s apparent deception is the real reason when the real “real†reason is that instead of accepting your role in the solution you’d rather obfuscate what the problem is.
Do you actually believe that management has not done all that it could do in its own power to stop the company from losing millions a day?
Short of wage reductions from union employees, it has done all it possibly could: Depeaking of the hubs, cutting down on distribution costs with the EveryFare program, simplification of the fleet, diverting ASM’s to leisure markets from business markets, automating some CS functions like web check-in, deferring pay raises for all management employees, etc.
(And, before some of you counter that Carty has done nothing to redefine AA’s business model, let me be the first to say that, as Michael Boyd has pointed out, there is nothing wrong with the hub and spoke system. As an airline with both national and international scope, AA cannot afford but to operate in this way. So the question of emulating Southwest is moot unless you are all willing to live with the consequences of AA selling off all of its international routes and closing its hubs. One of the major consequences of that would be that a large number of you would lose your jobs and the rest would now have to work more frequently, since without the international assignments you would have to work more trips to reach your monthly maximums.)
According to management’s estimates, they have cut $2 Billion in structural costs with all of the operational initiatives they have enacted so far. They didn’t ask you for a single penny while they did all of this. But, clearly all of those cuts were not enough. So, as a last resort, employees have now been asked to do what it is necessary to save the company.
If many of you got your wish, and Crandall were still the CEO of AA, then you would have had to make concessions the day after Sept. 11. (No questions about that. Some of you have very short memories, especially the FA’s whom Crandall once referred to as a bunch of housewives.) Therefore, I find it ironic that you are now crucifying a man who did everything in his power to keep from asking his employees for concessions until he was definitely sure that he had covered all the other bases.
As it stands, you were asked for only $1.8 billion in wage and work rule concessions, whereas the unions at United were asked for $2.6 billion. From all of these calls for a revote, it would seem that some of you would rather have the company declare bankruptcy so that more of you lose your jobs (like over at United) and more of you end up making much less. That is the reality that faces you, a reality that I hasten to add would (will) be much worse if you did (do) not have a compassionate leader like Carty at the helm.
However, some of you seem bent on destroying him and destroying yourself in the process. Haven’t you been paying attention? There is nothing to be gained in bankruptcy. If Carty can keep the company out of bankruptcy by getting AA’s bankers and vendors to renegotiate the terms of their agreements with AA, based on the promise that all of you have already contributed to saving the airline, then everyone saves $500 million dollars in related bankruptcy costs and fees. Carty seems capable of getting the banks and vendors to do just that as evidenced by the fact that, as news reports have indicated, the company has already arranged for a DIP Loan of potentially $1.75 billion (more than UAL obtained), with less stringent financial requirements than the one UAL obtained, and $750 million dollars of which is secured by the AA Credit Card alone (more than UAL obtained from Bank One for their credit card business).
I know Carty’s financial acumen will come as a surprise to some of you who think he has done nothing for AA since taking over for Crandall. However surprising as it may seem to you, just take a moment and think about what damage all your grousing and calls for his resignation are doing to his and AA’s credibility in the financial community, the one that trusted him to give AA $1.75 billion. If any of you have the wherewithal to arrange for similar financing, please step forward now. (I thought so.)
It is time to be pragmatic folks before you pass the point of no return. Do you really want to face bankruptcy or the future with a CEO that the financial community doesn’t trust, with a CEO that has no compassion for the employees or history with the company, with a CEO who can’t admit when he is wrong, with a CEO who thinks the future of the company rests in becoming an LCC?
It is really time to count your blessings and agree to work with each other for the good of yourselves, what you have built at American Airlines, and what you hope to accomplish in the future.
*Yes, the reference is to “Gulliver’s Travels†and is more in spirit with all of Swift’s writings than the one made somewhere else to a “Modest Proposal.†After all, it would seem by trying to get rid of the tall guy that some of you have failed to learn the lesson of Swift’s “Modest Proposal†and cast yourselves instead as Lilliputians. Swift was a pragmatist, who was skeptical of both materialists and those who abided by the letter of the law, be they spiritualists or Whigs.
Case in point, why are you all mad at Don Carty? Ask yourselves:
Is it really because he failed to disclose the SERP and the Executive Pension trust?
Or, is it really because none of you wanted to take a pay cut, believing as you did that it’s all management’s fault that AA is losing millions of dollars a day?
That’s it, isn’t it? How convenient, then, for many of you to pretend that Carty’s apparent deception is the real reason when the real “real†reason is that instead of accepting your role in the solution you’d rather obfuscate what the problem is.
Do you actually believe that management has not done all that it could do in its own power to stop the company from losing millions a day?
Short of wage reductions from union employees, it has done all it possibly could: Depeaking of the hubs, cutting down on distribution costs with the EveryFare program, simplification of the fleet, diverting ASM’s to leisure markets from business markets, automating some CS functions like web check-in, deferring pay raises for all management employees, etc.
(And, before some of you counter that Carty has done nothing to redefine AA’s business model, let me be the first to say that, as Michael Boyd has pointed out, there is nothing wrong with the hub and spoke system. As an airline with both national and international scope, AA cannot afford but to operate in this way. So the question of emulating Southwest is moot unless you are all willing to live with the consequences of AA selling off all of its international routes and closing its hubs. One of the major consequences of that would be that a large number of you would lose your jobs and the rest would now have to work more frequently, since without the international assignments you would have to work more trips to reach your monthly maximums.)
According to management’s estimates, they have cut $2 Billion in structural costs with all of the operational initiatives they have enacted so far. They didn’t ask you for a single penny while they did all of this. But, clearly all of those cuts were not enough. So, as a last resort, employees have now been asked to do what it is necessary to save the company.
If many of you got your wish, and Crandall were still the CEO of AA, then you would have had to make concessions the day after Sept. 11. (No questions about that. Some of you have very short memories, especially the FA’s whom Crandall once referred to as a bunch of housewives.) Therefore, I find it ironic that you are now crucifying a man who did everything in his power to keep from asking his employees for concessions until he was definitely sure that he had covered all the other bases.
As it stands, you were asked for only $1.8 billion in wage and work rule concessions, whereas the unions at United were asked for $2.6 billion. From all of these calls for a revote, it would seem that some of you would rather have the company declare bankruptcy so that more of you lose your jobs (like over at United) and more of you end up making much less. That is the reality that faces you, a reality that I hasten to add would (will) be much worse if you did (do) not have a compassionate leader like Carty at the helm.
However, some of you seem bent on destroying him and destroying yourself in the process. Haven’t you been paying attention? There is nothing to be gained in bankruptcy. If Carty can keep the company out of bankruptcy by getting AA’s bankers and vendors to renegotiate the terms of their agreements with AA, based on the promise that all of you have already contributed to saving the airline, then everyone saves $500 million dollars in related bankruptcy costs and fees. Carty seems capable of getting the banks and vendors to do just that as evidenced by the fact that, as news reports have indicated, the company has already arranged for a DIP Loan of potentially $1.75 billion (more than UAL obtained), with less stringent financial requirements than the one UAL obtained, and $750 million dollars of which is secured by the AA Credit Card alone (more than UAL obtained from Bank One for their credit card business).
I know Carty’s financial acumen will come as a surprise to some of you who think he has done nothing for AA since taking over for Crandall. However surprising as it may seem to you, just take a moment and think about what damage all your grousing and calls for his resignation are doing to his and AA’s credibility in the financial community, the one that trusted him to give AA $1.75 billion. If any of you have the wherewithal to arrange for similar financing, please step forward now. (I thought so.)
It is time to be pragmatic folks before you pass the point of no return. Do you really want to face bankruptcy or the future with a CEO that the financial community doesn’t trust, with a CEO that has no compassion for the employees or history with the company, with a CEO who can’t admit when he is wrong, with a CEO who thinks the future of the company rests in becoming an LCC?
It is really time to count your blessings and agree to work with each other for the good of yourselves, what you have built at American Airlines, and what you hope to accomplish in the future.
*Yes, the reference is to “Gulliver’s Travels†and is more in spirit with all of Swift’s writings than the one made somewhere else to a “Modest Proposal.†After all, it would seem by trying to get rid of the tall guy that some of you have failed to learn the lesson of Swift’s “Modest Proposal†and cast yourselves instead as Lilliputians. Swift was a pragmatist, who was skeptical of both materialists and those who abided by the letter of the law, be they spiritualists or Whigs.
This might be the most brilliant post on these boards in a long time. I can''t wait to hear labor''s spin on this very logical post. I find it amazing that everyone is blaming Carty for the weak airline industry and economy.
As AA observer has said, "If you don''t like your job, go elswhere"On 4/21/2003 1:51:15 AM AAOutsider wrote:
Like AAObserver, I have been reading these boards for sometime. And, like AAObserver, I have come to the conclusion that some of you have lost all sense of reality or at least all sense of proportion.*
Case in point, why are you all mad at Don Carty? Ask yourselves:
Is it really because he failed to disclose the SERP and the Executive Pension trust?
Or, is it really because none of you wanted to take a pay cut, believing as you did that it’s all management’s fault that AA is losing millions of dollars a day?
That’s it, isn’t it? How convenient, then, for many of you to pretend that Carty’s apparent deception is the real reason when the real “real” reason is that instead of accepting your role in the solution you’d rather obfuscate what the problem is.
Do you actually believe that management has not done all that it could do in its own power to stop the company from losing millions a day?
Short of wage reductions from union employees, it has done all it possibly could: Depeaking of the hubs, cutting down on distribution costs with the EveryFare program, simplification of the fleet, diverting ASM’s to leisure markets from business markets, automating some CS functions like web check-in, deferring pay raises for all management employees, etc.
(And, before some of you counter that Carty has done nothing to redefine AA’s business model, let me be the first to say that, as Michael Boyd has pointed out, there is nothing wrong with the hub and spoke system. As an airline with both national and international scope, AA cannot afford but to operate in this way. So the question of emulating Southwest is moot unless you are all willing to live with the consequences of AA selling off all of its international routes and closing its hubs. One of the major consequences of that would be that a large number of you would lose your jobs and the rest would now have to work more frequently, since without the international assignments you would have to work more trips to reach your monthly maximums.)
According to management’s estimates, they have cut $2 Billion in structural costs with all of the operational initiatives they have enacted so far. They didn’t ask you for a single penny while they did all of this. But, clearly all of those cuts were not enough. So, as a last resort, employees have now been asked to do what it is necessary to save the company.
If many of you got your wish, and Crandall were still the CEO of AA, then you would have had to make concessions the day after Sept. 11. (No questions about that. Some of you have very short memories, especially the FA’s whom Crandall once referred to as a bunch of housewives.) Therefore, I find it ironic that you are now crucifying a man who did everything in his power to keep from asking his employees for concessions until he was definitely sure that he had covered all the other bases.
As it stands, you were asked for only $1.8 billion in wage and work rule concessions, whereas the unions at United were asked for $2.6 billion. From all of these calls for a revote, it would seem that some of you would rather have the company declare bankruptcy so that more of you lose your jobs (like over at United) and more of you end up making much less. That is the reality that faces you, a reality that I hasten to add would (will) be much worse if you did (do) not have a compassionate leader like Carty at the helm.
However, some of you seem bent on destroying him and destroying yourself in the process. Haven’t you been paying attention? There is nothing to be gained in bankruptcy. If Carty can keep the company out of bankruptcy by getting AA’s bankers and vendors to renegotiate the terms of their agreements with AA, based on the promise that all of you have already contributed to saving the airline, then everyone saves $500 million dollars in related bankruptcy costs and fees. Carty seems capable of getting the banks and vendors to do just that as evidenced by the fact that, as news reports have indicated, the company has already arranged for a DIP Loan of potentially $1.75 billion (more than UAL obtained), with less stringent financial requirements than the one UAL obtained, and $750 million dollars of which is secured by the AA Credit Card alone (more than UAL obtained from Bank One for their credit card business).
I know Carty’s financial acumen will come as a surprise to some of you who think he has done nothing for AA since taking over for Crandall. However surprising as it may seem to you, just take a moment and think about what damage all your grousing and calls for his resignation are doing to his and AA’s credibility in the financial community, the one that trusted him to give AA $1.75 billion. If any of you have the wherewithal to arrange for similar financing, please step forward now. (I thought so.)
It is time to be pragmatic folks before you pass the point of no return. Do you really want to face bankruptcy or the future with a CEO that the financial community doesn’t trust, with a CEO that has no compassion for the employees or history with the company, with a CEO who can’t admit when he is wrong, with a CEO who thinks the future of the company rests in becoming an LCC?
It is really time to count your blessings and agree to work with each other for the good of yourselves, what you have built at American Airlines, and what you hope to accomplish in the future.
*Yes, the reference is to “Gulliver’s Travels” and is more in spirit with all of Swift’s writings than the one made somewhere else to a “Modest Proposal.” After all, it would seem by trying to get rid of the tall guy that some of you have failed to learn the lesson of Swift’s “Modest Proposal” and cast yourselves instead as Lilliputians. Swift was a pragmatist, who was skeptical of both materialists and those who abided by the letter of the law, be they spiritualists or Whigs.
----------------
As AA observer has said, "If you don''t like your job, go elswhere"On 4/21/2003 1:51:15 AM AAOutsider wrote:
Like AAObserver, I have been reading these boards for sometime. And, like AAObserver, I have come to the conclusion that some of you have lost all sense of reality or at least all sense of proportion.*
Case in point, why are you all mad at Don Carty? Ask yourselves:
Is it really because he failed to disclose the SERP and the Executive Pension trust?
Or, is it really because none of you wanted to take a pay cut, believing as you did that it’s all management’s fault that AA is losing millions of dollars a day?
That’s it, isn’t it? How convenient, then, for many of you to pretend that Carty’s apparent deception is the real reason when the real “real” reason is that instead of accepting your role in the solution you’d rather obfuscate what the problem is.
Do you actually believe that management has not done all that it could do in its own power to stop the company from losing millions a day?
Short of wage reductions from union employees, it has done all it possibly could: Depeaking of the hubs, cutting down on distribution costs with the EveryFare program, simplification of the fleet, diverting ASM’s to leisure markets from business markets, automating some CS functions like web check-in, deferring pay raises for all management employees, etc.
(And, before some of you counter that Carty has done nothing to redefine AA’s business model, let me be the first to say that, as Michael Boyd has pointed out, there is nothing wrong with the hub and spoke system. As an airline with both national and international scope, AA cannot afford but to operate in this way. So the question of emulating Southwest is moot unless you are all willing to live with the consequences of AA selling off all of its international routes and closing its hubs. One of the major consequences of that would be that a large number of you would lose your jobs and the rest would now have to work more frequently, since without the international assignments you would have to work more trips to reach your monthly maximums.)
According to management’s estimates, they have cut $2 Billion in structural costs with all of the operational initiatives they have enacted so far. They didn’t ask you for a single penny while they did all of this. But, clearly all of those cuts were not enough. So, as a last resort, employees have now been asked to do what it is necessary to save the company.
If many of you got your wish, and Crandall were still the CEO of AA, then you would have had to make concessions the day after Sept. 11. (No questions about that. Some of you have very short memories, especially the FA’s whom Crandall once referred to as a bunch of housewives.) Therefore, I find it ironic that you are now crucifying a man who did everything in his power to keep from asking his employees for concessions until he was definitely sure that he had covered all the other bases.
As it stands, you were asked for only $1.8 billion in wage and work rule concessions, whereas the unions at United were asked for $2.6 billion. From all of these calls for a revote, it would seem that some of you would rather have the company declare bankruptcy so that more of you lose your jobs (like over at United) and more of you end up making much less. That is the reality that faces you, a reality that I hasten to add would (will) be much worse if you did (do) not have a compassionate leader like Carty at the helm.
However, some of you seem bent on destroying him and destroying yourself in the process. Haven’t you been paying attention? There is nothing to be gained in bankruptcy. If Carty can keep the company out of bankruptcy by getting AA’s bankers and vendors to renegotiate the terms of their agreements with AA, based on the promise that all of you have already contributed to saving the airline, then everyone saves $500 million dollars in related bankruptcy costs and fees. Carty seems capable of getting the banks and vendors to do just that as evidenced by the fact that, as news reports have indicated, the company has already arranged for a DIP Loan of potentially $1.75 billion (more than UAL obtained), with less stringent financial requirements than the one UAL obtained, and $750 million dollars of which is secured by the AA Credit Card alone (more than UAL obtained from Bank One for their credit card business).
I know Carty’s financial acumen will come as a surprise to some of you who think he has done nothing for AA since taking over for Crandall. However surprising as it may seem to you, just take a moment and think about what damage all your grousing and calls for his resignation are doing to his and AA’s credibility in the financial community, the one that trusted him to give AA $1.75 billion. If any of you have the wherewithal to arrange for similar financing, please step forward now. (I thought so.)
It is time to be pragmatic folks before you pass the point of no return. Do you really want to face bankruptcy or the future with a CEO that the financial community doesn’t trust, with a CEO that has no compassion for the employees or history with the company, with a CEO who can’t admit when he is wrong, with a CEO who thinks the future of the company rests in becoming an LCC?
It is really time to count your blessings and agree to work with each other for the good of yourselves, what you have built at American Airlines, and what you hope to accomplish in the future.
*Yes, the reference is to “Gulliver’s Travels” and is more in spirit with all of Swift’s writings than the one made somewhere else to a “Modest Proposal.” After all, it would seem by trying to get rid of the tall guy that some of you have failed to learn the lesson of Swift’s “Modest Proposal” and cast yourselves instead as Lilliputians. Swift was a pragmatist, who was skeptical of both materialists and those who abided by the letter of the law, be they spiritualists or Whigs.
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