Doug Parker decries profit sharing....

[eolesen]

Gain sharing isn't necessarily the same as profit sharing.

For a workgroup like maintenance, GS should be tied to productivity & other relevant performance metrics FOR THAT WORKGROUP, and specifically not tied to the overall financials for the company.

In theory, you could see payouts for Gain Sharing in a year where the company loses money but the workgroup achieves its productivity goals.

Likewise, you could see no Gain Sharing payouts in a year where the company makes billions, but the workgroup falls short of its productivity goals.

 

[Crash Pad DCA]

Four questions for the next CEO of Delta Air Lines
Q: Are increased labor costs a problem?
A: Our people need to share in the success of the airline. We're paying out bonuses equal to 21.4% of annual salaries, across the board. But we've got to stay disciplined. When we look back at our fourth-quarter results, we retained about two-thirds of the fuel savings to the bottom line. Some of it went, as it should, to improved employee profit-sharing and compensation, some of it went to lower fares, which were down 5% on average.
http://www.usatoday.com/story/travel/flights/todayinthesky/2016/02/09/four-questions-next-ceo-delta-air-lines/80048054/

 

[WeAAsles]

Maybe Doug and the BOD need to read this and do a rethink?

http://finance.yahoo.com/news/companies-lose-billions-buying-back-181218493.html

 

[AA-MRO.COM]

They hate you and want you to work for free.
It's obvious. 13 years and counting......

 

[topDawg]

What you are saying is just plain common sense.
 
What I am trying to point out is that when the last contract was established, an "Industry Comparable Pay Adjustment" for Title 1 AMT's was contractually agreed to, as seen in the TWU Title 1 contract book under Article 4 Compensation page 35, whereby on a given date a Wage Adjustment would be applied to replace the standard 3% increase with a formulated method for compensation. My point is the Airlines selected to participate, which were United, Delta and USAir.  
 
Why would the TWU allow for a non union airline to be used within this formula. Why are we as unionized mechanic's being averaged with a non union airline?
 
While the wages might be a possible reason, Delta's 50% outsourcing is a throat cutting factor that is probably being discussed in Association negotiation at this very moment. 
 
I believe Doug Parker has said that to obtain the wages that the work rules would have to change.
 
My query has nothing to do with the MRO's but only this Formula within the TWU contract book.
 
I understand that in a larger picture that MRO's are a major factor.
 
I also understand that the mechanic membership does not decide, under the TWU they never have.
 
As for the Market, this Local membership does believe that if the economy falls, the opportunity for a substantial wage and benefit increase will fade.    

Who told you that lie? We don't outsource 50%. Not anywhere close to 50%. Should be at about 35% outsourcing this year. ~38% last year but the 330 checks, 320 APU, 757 mods and so other component work (mostly Airbus) should drive it down to or below 35%.
 
US outsourcing 55% and UA outsourcing about 45% are the ones cutting our throats. 
 
oh and FWIW Delta is one of the world's largest MROs also. This idea that MROs must pay pennies on the dollar is crap. Most put out there by people like Parker and unions seem to take the bait hook line and sinker, every time. Productivity will off-set the higher costs of higher wadges.   
 

Once again , for all the (knuckleheads) the market dictates wages and benefits. The more non-union MRO's are popping up the more wages will be suppress and work contracted out. Members do not decide the market does.

that isn't really true. For the last 3-4 years while we have seen growth of existing MROs, we haven't seen many new MROs pop up. 
 
matter of fact the industry has been on a consolidation cycle because it is getting harder and harder for airlines like DL and AA to find MROs that can do the work cheaper than in-house. I know at DL they have been expanding in-house for this very reason (and to grow the MRO side also)
 
The reason people like Parker want to outsource maintenance as much as possible are simply to take the labor risk off the table and to keep from having to put capex into facility upgrades and use that money for more stock buy-backs.    
 

Your misconstruing what's being said in the article.... Profit-sharing for Delta pilots is absolutely no different than it is for in-flight, ACS, or maintenance.... It can, and has been modified the exact same amount for everyone else.... Hopefully we can have a Delta pilot chime in to verify what I've said though.

FWIW as 700 pointed out its part of the CBA. 
having said that generally the company tries to roll out the same plan company wide. IMO the end game of the profit sharing changes this go around will be whatever the pilots agree too. I pretty much expect it to end up being 10% no matter what. 

 

[jimntx]

As an onlooker in this issue, what TopDawg (hey, guy note the spelling) says makes a lot of sense.  For that matter, didn't AA used to do work for other airlines?   Do we still?  If not, why not?  Paid work is paid work, and if it keeps the lines running and people on the payroll and profits on the books, why aren't we getting our share of it?  Not judging, just asking.

 

[Buck]

I do not recall where I heard the 50% outsourcing remark, however it does not matter because they are non union.
 
The Association will probably look at what work percentages at Delta are to ensure they understand where American could go.
 
Top Dog you seem in the know thank you fore the correction.

 

[topDawg]

As an onlooker in this issue, what TopDawg (hey, guy note the spelling) says makes a lot of sense.  For that matter, didn't AA used to do work for other airlines?   Do we still?  If not, why not?  Paid work is paid work, and if it keeps the lines running and people on the payroll and profits on the books, why aren't we getting our share of it?  Not judging, just asking.

 Yes AA use to be a pretty big MRO when you added in TAESL. Not much smaller than TechOps IIRC (~500-600M a year in revenue TechOps is 100-200M higher than that now at best) 
 
Why isn't Parker doing it? Few reasons
1) stupidity. Simply put Parker is the type that AA is an airline, not an MRO, not a flight kitchen, not a cargo airline, not a ground handling service etc. Its a dumb way to run a business where, for example, with MRO business you can capitalize on economics of scale. Its a very traditional way of thinking in this industry, problem is tradition is losing money and a business cycle all over the place. 
 
2) 1960s way of thinking for union members. Again, Delta is able to do what it does because it offsets the costs of higher pay with better productivity. We are a very flexible work force and generally union shops don't allow that kind of flexibility. Also the IAM seems to have zero interest in doing more work than they have. As I have said before, for whatever dumb reason the IAM is going into negotiations wanting to improve the US scope and only mentioned airframe, line and component. Not a word about engines. (and why they are starting with the worth scope in the industry vs the best scope (AA, TWU scope) shows how little interest they have in doing work in-house  
 
3) AA like DL is doing, is going to have to make a big investment in it s engine shop to run next gen engines like the GEnX and GE90. Also as Delta learned you have to invest in a marketing, sales and support staff for a MRO. This would take a big capital investment upfront and, with AAs high capex as it, it going to be harder to justify to wall street (who also thinks doing maintenance is stupid)
 
4) If AA starts to become a big MRO, adding its own work and other work then they add employees. Well the Line guys don't want that because they want Tulsa to be shut down(or at least a few around here, you know who you are) and the company doesn't want that because it increases the labor risk. At American it is very clear Parker is going to keep the us vs them attitude and if that is what you are going to do with the company than labor is a much bigger risk than at a company like Delta. Delta knows we aren't going union so they choose to work WITH the mechanics vs against them.  
 
Some wont like what I said but that is what I see. Fact is there are huge markets in the US alone that DL hasn't touched and probably wont touch. For example DL/UA/AA alone have 100+ GE90 engines in the combined fleets but those big expensive engines must go to Asia or Europe for overhaul. GEnX is another example. AA and UA have a ton on order but will be shipping them over seas for overhaul. In the narrow body market there are enough V2500s and CFM56s in the US alone for AA and DL to share the market (and currently DL sends the V2500s out, but rumors have it that it might be coming in-house once the new shop opens). On the next gen engines like the PW GTF and LEAP-X, again the market will be large enough for two MROs. Same things for components(smaller stuff like LRUs and big ticket like APUs and landing gear)
 
and before anyone brings up TAESL, RR wanted out. They are overhauling the Trent TotalCare network and it made zero sense to add next gen engines to TAESL when AA has so few on order and very little potential to order more vs DL. AA is clearly moving to a CFM/GE airline while DL looks to be going to CFM/RR airline. The day AA went GE on the 787 is the day TAESL closed. It might have taken longer to shut the doors officially but that is really the final nail. (it also didn't help that AA shut down AFW, having an engine shop at a maintenance base half way shut down wasn't really logical)
 
 

I do not recall where I heard the 50% outsourcing remark, however it does not matter because they are non union.

sure it matters. you want Delta pay but your company is telling you that they want 50-60% outsourcing when DL is doing 35% (and its in the low 20s if you count all the MRO work) 
Why in the hell is that logical to anyone? 
 
 

The Association will probably look at what work percentages at Delta are to ensure they understand where American could go.
 
Top Dog you seem in the know thank you fore the correction.

You are welcome but it looks like the ass is trying to ship as much work out as they can, pretty sad when your own union is working against you. 
 
and then they blame Delta? laughable. 

 

[WeAAsles]

Dawg how do you know what they're negotiating for or what their position is in the room? Are you sure that you're not just falling into a trap of making an assumption based on what you read from posters on here and their "personal" speculations?

I haven't heard of anyone hitting SCOPE yet in the context of bargaining?

 

[topDawg]

Dawg how do you know what they're negotiating for or what their position is in the room? Are you sure that you're not just falling into a trap of making an assumption based on what you read from posters on here and their "personal" speculations?

I mean the ass put out its opener(or what i assume was its opener). It was posted on here. 

 

[700UW]

Scope and money havent even been discussed in negotiations, and the IAM and TWU's position is to bring more work in-house.

 

[WeAAsles]

I mean the ass put out its opener(or what i assume was its opener). It was posted on here.

I thought those openers were more of a scetch outline rather than an entire position?

 

[topDawg]

I thought those openers were more of a scetch outline rather than an entire position?

maybe it was but the outline said absolutely nothing about engines and that they were starting with US scope. Either way, outline or not seems like a stupid starting point.

 

[WeAAsles]

maybe it was but the outline said absolutely nothing about engines and that they were starting with US scope. Either way, outline or not seems like a stupid starting point.

Lol. Yea I guess publicly it's like just seeing the frosting on a cake and no one wants to tell you what kind of cake it is?

 

[topDawg]

Lol. Yea I guess publicly it's like just seeing the frosting on a cake and no one wants to tell you what kind of cake it is?

Right now it looks like a cake made from s**t covered in frosting.

And fwiw I'm wanting more for the fleet side too, 3 flights a day minimum.

  

Scope and money havent even been discussed in negotiations, and the IAM and TWU's position is to bring more work in-house.

More work starting from the US model

Realistically AA should be at pre-bk base and 100% line at a minimum, IMO.


If we (labor) can't make significant gains in scope, pay and benefits NOW, then we simply never will again.
5-6 billion in yearly profit, billions in stock buy backs, huge capex in new airplanes and chasing market share
Employees should get theirs too!