Financial Analysis

[tug_slug]

[P class=MsoNormal style="MARGIN: 0in 0in 0pt"][SPAN style="FONT-SIZE: 10pt; FONT-FAMILY: Tahoma"][FONT color=#000000]Markmywords,[?xml:namespace prefix = o ns = "urn:schemas-microsoft-comfficeffice" /][o][/o][/FONT][/SPAN][/P]
[P class=MsoNormal style="MARGIN: 0in 0in 0pt"][SPAN style="FONT-SIZE: 10pt; FONT-FAMILY: Tahoma"][BR][FONT color=#000000]The differences the IAM and its members have arent whats creating the problem its the work rule concessions that the company is trying to jam down our throats thats creating the problem.[BR][BR]From what Im told some of ALPA's MEC are junior and that by voting these new "cost cutting measures" in they'll be voting themselves out of a job? You know why their willing to do this? Because they know that once the company becomes profitable again they'll be called back where as the mechanics wont have that luxury. If these new concessions are forced on us its more than likely I can kiss my 15 years with the company goodbye. [BR][BR]I voted yes on the first round of concessions and talked till I was blue in the face to convince my peers to see how voting no would cost us our jobs, but if U would have placed the same language in the first package that were currently facing I would have voted no.[/FONT][/SPAN][/P]

 

[chipmunn]

Biff:[BR][BR]If the IAM doesn't talk, you will likely lose your pension, see more dramatic layoffs, and possibly deal with the court. Either way the cuts will come and there are no options. BAsically, management has no options if the IAM does not participate in further concessions.[BR][BR]By the way, it will be interesting to see how the UAL IAM represented employees will now fair with the company and the unnion headed for an adversarial bankruptcy.[BR][BR]Chip [BR]

 

[chipmunn]

Biff:[BR][BR]If the IAM doesn't talk, you will likely lose your pension, see more dramatic layoffs, and possibly deal with the court. Either way the cuts will come and there are no options. BAsically, management has no options if the IAM does not participate in further concessions.[BR][BR]By the way, it will be interesting to see how the UAL IAM represented employees will now fair with the company and the unnion headed for an adversarial bankruptcy.[BR][BR]Chip [BR]

 

[Biffeman]

Chip, for one, your tactics do not scare me.[BR]Get your facts straight, one you do not lose your pension, you are vested if you have more then five years in the plan and yes it might be reduced amount because of the PBGCs level of gaurantee, but I believe it will be easier for a mechanic, stock clerk or utility person to reach a level closer to the full pension then a pilot would. Maximum is around $3,000 a month, not a million lump sum payment.[BR][BR]Second, I talked to our AGC who deals with our pension, and our pension is over 70% funded, so there is no criteria for a distress termination. Third if your pension is part of a collective bargaining agreement and the company terminates it they have to replace it because of the contract.[BR][BR]And Chip they can layoff all they want, if there are no mechanics to overhaul the planes, they will be parked and not flown, because our scope language protects our work and they cannot farm a plane out to be overhauled, if they did try to farm one out it would be classified as a major dispute and go right to federal court for an injuction to be issued. And if the planes sit, there will not be a need for pilots or anyone else because an airplane on the ground does not make money.[BR][BR]This company is not labor friendly, we gave them money and numerous other things,now they want the rest which would result in a virtual maintenance department with thousands of more employees laid off. There is a point where you have to draw the line in the sand and say enough. Ask the former TWA employees who are now all going to be laid off by AA, how it felt to give concessions four times and make less and end up with no job. Kinda of ironice that a 30 year TWA employee will be laid off and junior AA employees still employed.[BR][BR]And I believe if they mechanics at UA do not accept concessions it will be very ugly and it will hurt UA just as much because of the bad press and the employee problems it will cause.[BR][BR]Charilie Nardello who at the time was VP of Line Maintenance here at US even told us in captive audience meetings one of the main reasons for the second vote for mechanic and related was to aviod the bad press and labor strife as it would cause passengers to book away and cause a greater revenue loss.[BR][BR]Also there will be no dealing with the court for bankruptcy, no section 1113 and 1114 letters have ever been overturned. Here is the exact language that is in my contract:[BR][BR][EM][STRONG]1. Neither the Company nor any affiliate will file or support any motion pursuant to 11 U.S.C. Sections 1113, 1113 (e), 1114, 1114 (h) or any other provision of the Bankruptcy Code, seeking rejection or modification of, or relief or interim relief from, the 1995 Mechanic Agreement or the IAM Restructuring Agreement for hearing prior to August 30, 2002.[BR][/STRONG][/EM][BR]Chip I gave twice because I got downgraded, I cannot give anymore and most of my coworkers agree, if it is time to close the doors and shut the lights off then so be it, there is life beyond US Airways, I know this, and it seems you need to realize it also. [BR][BR]We all know what is at stake and many of us are tired of hearing the threats and scare tactics that the company uses and the tone of some of your postings.

 

[Biffeman]

Chip, for one, your tactics do not scare me.[BR]Get your facts straight, one you do not lose your pension, you are vested if you have more then five years in the plan and yes it might be reduced amount because of the PBGCs level of gaurantee, but I believe it will be easier for a mechanic, stock clerk or utility person to reach a level closer to the full pension then a pilot would. Maximum is around $3,000 a month, not a million lump sum payment.[BR][BR]Second, I talked to our AGC who deals with our pension, and our pension is over 70% funded, so there is no criteria for a distress termination. Third if your pension is part of a collective bargaining agreement and the company terminates it they have to replace it because of the contract.[BR][BR]And Chip they can layoff all they want, if there are no mechanics to overhaul the planes, they will be parked and not flown, because our scope language protects our work and they cannot farm a plane out to be overhauled, if they did try to farm one out it would be classified as a major dispute and go right to federal court for an injuction to be issued. And if the planes sit, there will not be a need for pilots or anyone else because an airplane on the ground does not make money.[BR][BR]This company is not labor friendly, we gave them money and numerous other things,now they want the rest which would result in a virtual maintenance department with thousands of more employees laid off. There is a point where you have to draw the line in the sand and say enough. Ask the former TWA employees who are now all going to be laid off by AA, how it felt to give concessions four times and make less and end up with no job. Kinda of ironice that a 30 year TWA employee will be laid off and junior AA employees still employed.[BR][BR]And I believe if they mechanics at UA do not accept concessions it will be very ugly and it will hurt UA just as much because of the bad press and the employee problems it will cause.[BR][BR]Charilie Nardello who at the time was VP of Line Maintenance here at US even told us in captive audience meetings one of the main reasons for the second vote for mechanic and related was to aviod the bad press and labor strife as it would cause passengers to book away and cause a greater revenue loss.[BR][BR]Also there will be no dealing with the court for bankruptcy, no section 1113 and 1114 letters have ever been overturned. Here is the exact language that is in my contract:[BR][BR][EM][STRONG]1. Neither the Company nor any affiliate will file or support any motion pursuant to 11 U.S.C. Sections 1113, 1113 (e), 1114, 1114 (h) or any other provision of the Bankruptcy Code, seeking rejection or modification of, or relief or interim relief from, the 1995 Mechanic Agreement or the IAM Restructuring Agreement for hearing prior to August 30, 2002.[BR][/STRONG][/EM][BR]Chip I gave twice because I got downgraded, I cannot give anymore and most of my coworkers agree, if it is time to close the doors and shut the lights off then so be it, there is life beyond US Airways, I know this, and it seems you need to realize it also. [BR][BR]We all know what is at stake and many of us are tired of hearing the threats and scare tactics that the company uses and the tone of some of your postings.

 

[tug_slug]

[FONT size=3]Biffeman... Excellent Post![/FONT]

 

[tug_slug]

[FONT size=3]Biffeman... Excellent Post![/FONT]

 

[Boomer]

Chip,
What happened to your statements when you were selling the second 141-M concession vote, "...no airline has ever requested the recission of a 1113 letter."

Read to the end of the Reuters clip below concerning the ATSB denial of UALs' loan: it was not the cost cutting that caused the denial, it was the revenue projections. It was Siegal who said that revenue "fell off a cliff." How has that changed? How are additional cuts from any UNION going to result in an increase in the U revenue picture?

As far as what ALPA knows and what Chip tells us they know:
"...US Airways may lose emergency funding from an Alabama pension fund due to weakening revenues and cash reserves.

Representatives of US Airways' pilots' union reportedly claimed yesterday (3 December) that the bankrupt carrier is not meeting the terms of its debtor-in-possession financing, and could therefore lose the USD500m in financing offered by the Retirement Systems of Alabama.

According to a bulletin released by the Airline Pilots Association, the airline is falling short of performance targets centring on its revenue and cash balance, which are conditions of the financing."

Now the RSA wants to renegotiate the whole deal. Why give more?
__________________________________________________________

Reuters
United denial not final, but all cuts considered
Wednesday December 4, 7:02 pm ET


NEW YORK, Dec 4 (Reuters) - A federal board's denial of United Airlines' application for $1.8 billion in loan guarantees is not final, because the airline is still allowed to submit changes to its business plan and ask for reconsideration, a federal official said on Wednesday.


If United chooses to file for Chapter 11 bankruptcy protection, the Air Transportation Stabilization Board would also consider giving the airline exit financing upon its emergence, Daniel Montgomery, executive director of the board, said in a conference call with reporters.

"The action today is not a final denial of the board," he said. "It would be open for United airlines to request that the board consider a new business plan, whether developed under court supervision or otherwise."

But Montgomery said the federal board members had considered all proposed cuts by United's labor unions in its assessment of the company's business plan, including a $700 million package by mechanics up for vote on Thursday.

After a meeting several hours long, the board denied the application from United, a unit of UAL Corp. (NYSE:UAL - News), in part because its revenue projections did not match up with its high cost structure, Montgomery said.

 

[Boomer]

Chip,
What happened to your statements when you were selling the second 141-M concession vote, "...no airline has ever requested the recission of a 1113 letter."

Read to the end of the Reuters clip below concerning the ATSB denial of UALs' loan: it was not the cost cutting that caused the denial, it was the revenue projections. It was Siegal who said that revenue "fell off a cliff." How has that changed? How are additional cuts from any UNION going to result in an increase in the U revenue picture?

As far as what ALPA knows and what Chip tells us they know:
"...US Airways may lose emergency funding from an Alabama pension fund due to weakening revenues and cash reserves.

Representatives of US Airways' pilots' union reportedly claimed yesterday (3 December) that the bankrupt carrier is not meeting the terms of its debtor-in-possession financing, and could therefore lose the USD500m in financing offered by the Retirement Systems of Alabama.

According to a bulletin released by the Airline Pilots Association, the airline is falling short of performance targets centring on its revenue and cash balance, which are conditions of the financing."

Now the RSA wants to renegotiate the whole deal. Why give more?
__________________________________________________________

Reuters
United denial not final, but all cuts considered
Wednesday December 4, 7:02 pm ET


NEW YORK, Dec 4 (Reuters) - A federal board's denial of United Airlines' application for $1.8 billion in loan guarantees is not final, because the airline is still allowed to submit changes to its business plan and ask for reconsideration, a federal official said on Wednesday.


If United chooses to file for Chapter 11 bankruptcy protection, the Air Transportation Stabilization Board would also consider giving the airline exit financing upon its emergence, Daniel Montgomery, executive director of the board, said in a conference call with reporters.

"The action today is not a final denial of the board," he said. "It would be open for United airlines to request that the board consider a new business plan, whether developed under court supervision or otherwise."

But Montgomery said the federal board members had considered all proposed cuts by United's labor unions in its assessment of the company's business plan, including a $700 million package by mechanics up for vote on Thursday.

After a meeting several hours long, the board denied the application from United, a unit of UAL Corp. (NYSE:UAL - News), in part because its revenue projections did not match up with its high cost structure, Montgomery said.

 

[willnotworkforfree]

"And Chip they can layoff all they want, if there are no mechanics to overhaul the planes, they will be parked and not flown, because our scope language protects our work and they cannot farm a plane out to be overhauled, if they did try to farm one out it would be classified as a major dispute and go right to federal court for an injuction to be issued. And if the planes sit, there will not be a need for pilots or anyone else because an airplane on the ground does not make money."

Boof...go dump that biffy.

 

[willnotworkforfree]

"And Chip they can layoff all they want, if there are no mechanics to overhaul the planes, they will be parked and not flown, because our scope language protects our work and they cannot farm a plane out to be overhauled, if they did try to farm one out it would be classified as a major dispute and go right to federal court for an injuction to be issued. And if the planes sit, there will not be a need for pilots or anyone else because an airplane on the ground does not make money."

Boof...go dump that biffy.

 

[tug_slug]

Bob if we would agree to the latest demands placed on us by management [FONT color=#ff0033][FONT color=#000000]our time would be up. Then what? [/FONT] [/FONT]

 

[tug_slug]

Bob if we would agree to the latest demands placed on us by management [FONT color=#ff0033][FONT color=#000000]our time would be up. Then what? [/FONT] [/FONT]

 

[diogenes]

[blockquote]
----------------
On 12/4/2002 1:22:11 PM chipmunn wrote:

Biffeman:

US Airways is at a "crossroads" and there was dramatic new information presented to the unions yesterday.

I believe ALPA will protect itself and either the other unions join in the process or management will be forced to terminate non-pilot pensions and seek deeper cuts through the court.

Here's why: The ALPA MEC resolution says, "the participation of the US Airways pilots shall be contingent on participation of all labor groups and management in the comprehensive program of cost reductions.

Therefore, if all labor groups do not participate one way or another, either with the termination of their pension plans (which would save the airline $135 million per year), the compamy petitioning the court for further cuts regardless of the S.1113 letter, or more layoffs, the airline will like fragment/liquidate through the Chapter 7 process.

Management and ALPA will work to prevent this from happening and the pilots will do their part, but about 50 percent of the cuts must come one way or another from other than pilots.

Separately, in regard to the other labor groups:

1. AFA is caught between a rock and a hard place and will see cuts. 810 positions are being eliminated by the company staffing the aircraft at FAA minimum. In addition, the AFA has "me too" clauses in their contracts that dependent on the pilot changes will automatically occur without AFA negotiation.

2. In regard to the IAM-M, the closure of the TPA maintenance facility and maintenance consolidation in PIT & CLT, will have a ripple effect with more senior mechanics bumping others and with additional economies of scale created, we will likely see a further reduction in the mechanic ranks.

3. The IAM-FSA and CWA airport personnel are being outsourced to RJ operations, which will occur faster when ALPA reaches a Freedom Air and Mainline EMB-170/175 RJ, which is expected to be announced by mid-month.

4. CWA Rez personnel will see the same affect as the IAM-M with the MCO reservation facility closed.

Yesterday the ALPA code-a-phone said the company, which is grappling with slow revenue growth while trying to emerge from bankruptcy, is not meeting terms of its debtor-in-possession (DIP) financing. In addition, Rueters reported "I would think that there are some problems right now to be addressed," David Bronner, chief executive officer of the Retirement Systems of Alabama, which provided the financing, said in an interview. "Let's just say we're meeting with them tomorrow. We'll see what happens," Bronner said. He added he was "not sure" whether the issues putting US Airways' financing in jeopardy would be addressed.

Biff, the cuts are coming one way or another and management has the tools in their possession to do what is necessary. In fact, the ALPA MEC resolution requires management action or the airline will be forced to fragment/liquidate.

Nobody likes this situation, but the information above is fact. In fact, one MEC member told me, "There are forces at work, that our not our friends. As much as I would like to blame the company for the new time line, I can’t, we have a real time line imposed by others that must be addressed.

Biff, it's not management's fault, it's the demands being placed on the company by RSA, the PBGC, the creditors committee, and the bankruptcy court.

Chip
----------------
[/blockquote]
-----------------------------------------------------------

It's deja veue all over again.

1. I don't have a G.D. pension, and haven't had for 12 years. You're welcome to it. I have a better idea - quit expecting agents to take the bullet for you, as we did in the 90's, and convert to a DCRP, like we had to. That sole act WILL save the company.

2. Exactly how is the company going to court to take more - I have a shiny new 1113 letter YOU were so proud of a few months ago. The company can go to 245 a/c with concurrent staffing adjustments, and that, outside of liquidation, is about the limit of their manuevering. We will loose far more jobs IF we agree to outsourcing.

You have to love ALPA - not only will they throw their own overboard; they'll throw us too. Chip's point 3 proves my case - ALPA guys flying RJ's, non union guys off the street working them, and former mainline employees sidelined. Chip, your arguement for getting seats with seniority at the W/O's RJ's was those RJ's were operating on former mainline routes. Sauce for the goose; why are you willing to stand by while non union guys work RJ's in stations that were formerly mainline? Same principle.

 

[diogenes]

[blockquote]
----------------
On 12/4/2002 1:22:11 PM chipmunn wrote:

Biffeman:

US Airways is at a "crossroads" and there was dramatic new information presented to the unions yesterday.

I believe ALPA will protect itself and either the other unions join in the process or management will be forced to terminate non-pilot pensions and seek deeper cuts through the court.

Here's why: The ALPA MEC resolution says, "the participation of the US Airways pilots shall be contingent on participation of all labor groups and management in the comprehensive program of cost reductions.

Therefore, if all labor groups do not participate one way or another, either with the termination of their pension plans (which would save the airline $135 million per year), the compamy petitioning the court for further cuts regardless of the S.1113 letter, or more layoffs, the airline will like fragment/liquidate through the Chapter 7 process.

Management and ALPA will work to prevent this from happening and the pilots will do their part, but about 50 percent of the cuts must come one way or another from other than pilots.

Separately, in regard to the other labor groups:

1. AFA is caught between a rock and a hard place and will see cuts. 810 positions are being eliminated by the company staffing the aircraft at FAA minimum. In addition, the AFA has "me too" clauses in their contracts that dependent on the pilot changes will automatically occur without AFA negotiation.

2. In regard to the IAM-M, the closure of the TPA maintenance facility and maintenance consolidation in PIT & CLT, will have a ripple effect with more senior mechanics bumping others and with additional economies of scale created, we will likely see a further reduction in the mechanic ranks.

3. The IAM-FSA and CWA airport personnel are being outsourced to RJ operations, which will occur faster when ALPA reaches a Freedom Air and Mainline EMB-170/175 RJ, which is expected to be announced by mid-month.

4. CWA Rez personnel will see the same affect as the IAM-M with the MCO reservation facility closed.

Yesterday the ALPA code-a-phone said the company, which is grappling with slow revenue growth while trying to emerge from bankruptcy, is not meeting terms of its debtor-in-possession (DIP) financing. In addition, Rueters reported "I would think that there are some problems right now to be addressed," David Bronner, chief executive officer of the Retirement Systems of Alabama, which provided the financing, said in an interview. "Let's just say we're meeting with them tomorrow. We'll see what happens," Bronner said. He added he was "not sure" whether the issues putting US Airways' financing in jeopardy would be addressed.

Biff, the cuts are coming one way or another and management has the tools in their possession to do what is necessary. In fact, the ALPA MEC resolution requires management action or the airline will be forced to fragment/liquidate.

Nobody likes this situation, but the information above is fact. In fact, one MEC member told me, "There are forces at work, that our not our friends. As much as I would like to blame the company for the new time line, I can’t, we have a real time line imposed by others that must be addressed.

Biff, it's not management's fault, it's the demands being placed on the company by RSA, the PBGC, the creditors committee, and the bankruptcy court.

Chip
----------------
[/blockquote]
-----------------------------------------------------------

It's deja veue all over again.

1. I don't have a G.D. pension, and haven't had for 12 years. You're welcome to it. I have a better idea - quit expecting agents to take the bullet for you, as we did in the 90's, and convert to a DCRP, like we had to. That sole act WILL save the company.

2. Exactly how is the company going to court to take more - I have a shiny new 1113 letter YOU were so proud of a few months ago. The company can go to 245 a/c with concurrent staffing adjustments, and that, outside of liquidation, is about the limit of their manuevering. We will loose far more jobs IF we agree to outsourcing.

You have to love ALPA - not only will they throw their own overboard; they'll throw us too. Chip's point 3 proves my case - ALPA guys flying RJ's, non union guys off the street working them, and former mainline employees sidelined. Chip, your arguement for getting seats with seniority at the W/O's RJ's was those RJ's were operating on former mainline routes. Sauce for the goose; why are you willing to stand by while non union guys work RJ's in stations that were formerly mainline? Same principle.