About the $5 billion in cash, as eolesen pointed out, there's more than just concessions behind the current cash balance: Don't forget to add the $1.5 billion or so raised in new stock sales since the concessions - $900 million in the past 9 months in two separate offerings. And don't forget to add more than a billion of new debt borrowed in 2003-04 after the concessions.
You left out the fact that they paid off a couple of billion in debt and their total debt is several billion less.
Break even doesn't pay down the $3 billion of new debt borrowed between September,,,,. Break even doesn't pay down the $2 billion of pension plan underfunding. Break even doesn't pay for new fuel efficient airplanes,,,.
Well break even is a lot better off than what the company is expecting its employees to do. I'd be content with break even,what they are paying doesnt pay off the mortgage, cover utilties, property taxes,fuel, insurance and groceries never mind the fact that we cant afford to buy new fuel efficient cars, you speak as if we are insulated from increased energy costs. We pay more too,but on top of that we earn less, a double whammy.
What bankruptcy avoidance did was take the total market cap of AMR from $225 million in March, 2003 and expand it by 3,400% to the present level of more than $7.6 billion.
Like I've said all along, all we did was save the stockholders from taking a loss.
One reason that airline execs compare themselves to execs in other industries is that their skills (whatever those may be) transfer fairly readily. A chief financial officer for an airline who is good at what they do can work for any major corporation - it doesn't have to be an airline. Same for most other MBA-holding executives, be it Marketing, Finance, Accounting, etc.
BS. The fact is they chose this industry just like mechanics(whose skills are also easily transferrable).This is just another example of their doubletalk.They want to compare themselves to profitable industries and balk when we compare ourselves to UPS and SWA, nevermind other industries that hire A&Ps.
About your bolded quote: Kinda hard to justfify paying anyone more money than you make based on that reasoning.
Thats your reasoning, not mine.Demmings? had a figure, I believe it was 10 to 1 from top to bottom.
After all, you work hard, in the elements, and risk death at work. So far, that philosophy hasn't gained much traction in the USA. For that I'm glad.
Not suprised that you would favor outrageous pay for those who actually produce nothing while sitting in a safe enviornment while those who actually work and face real risk get less and less. But the fact is that most of these executives are not entrepreneurs who came up with a brilliant new product or concept, they are hired hands and their salaries are determined by other hired hands who have a vested interest in inflating the going rate for their peers. The system is out of balance.
You're right - you could work to rule and placard that broken First Class suite. If it really meant that AA didn't sell it to Shanghai (rather than prevent a J -> F upgrade) then your work action cost AA about $13k at list price (round trip, full F). AA sells F to China but usually at some corporate discount - maybe $10k net of that discount. But why would you do that? Don't you want to work for a profitable company? Do you really think someone at AA is gonna say "we can't have all these broken F seats anymore - it's costing us too much revenue. So let's give in to Bob Owens' demands and restore the mechanics' pay according to his CPI chart."
Well the point wasnt meant for you. Those for whom it was meant understand it and how it works. But the fact is that as MELs add up, sooner or later they result in some big loss of revenue or at the very least some OT for the mechanics to make up for their paycuts. But remember this, if mechanics are working OT it means that a plane is not out there making money.
Maybe that would happen.
More likely is that someone at AA is gonna say "let's hire another couple mechanics at LHR and other foreign stations so we can have them fix what those lazy guys at JFK refuse to do. And while we're at it, let's pull a NW and lock these guys out and replace them."
Fine, Lets go, do it. NW scraped the bottom of the barrel. Over 70% of the NWA mechanics opted to sever all ties with the company because they had moved on. AA, despite the very few recalls its had is seeing a high rate of refusals. The military cant get them, the schools cant recruit them. Where are they going to get all these mechanics? Hire more in LHR, fine, they cost more than we do, so where is the savings? This is all about money. Would it be cheaper to pay us a little more and get a lot more out of us, especially when it counts, or go to extremes to make a point? We dont want to destroy the company but we cant let these executives destroy us in order to "Save" it. The fact is they are way ahead even if they gave us everything we wanted. But if we give them more after they took away so much then their greed will simple drive them to take even more, we need to throw a little mud in their face just to let them know that they have gone too far and we want it back, or its going to cost them.If they insist on seeeing how little they can pay us before we quit then our best recourse is to see how little we can work before they fire us, fair is fair, they chose this not us. The fact is that AA is not NWA nor is the market for A&Ps as "flush" as it was a year ago. Foreign repair? Fine, fly all them MD-80s and 737s over there and they will squeeze them into their schedules, after they take care of their own fleet, which is the fastest growing part of the market.
