How much is AA really asking from Maintenance?

[Bob Owens]

Bob,

I'm only saying that if the TWU Attorneys were wrong by stating that the LBO would not be allowed in court during the Section 1113 hearings; what else could they be wrong about?

You have to remember that Lawyers give legal opinions. They also argue on behalf of who hired them. The TWU International hired them, and IMO they wanted this to pass. The lawyers did object when the company introduced it, the Judge said he wanted it anyway. Their opinion had a sound basis as thats what came out of the 2nd District before.

IMHO: Is it more likely that the compAAny and the TWU thought they had a, "lock," on the overhaul bases; but, fundamentally MIS-understood the degree to which the union leader has separated themselves from their membership to the extent that the TWU M&R Leadership are giving the same bad information to Little that Crandall got when the APFA went out on strike?

Well the company felt they really had nothing to lose. they said flat out that all they needed was 50% +1. They screwed us over in 95 and we still made them very profitable. They kept saying, "You agreed to this", and we kept getting their airplanes out, if it worked before why not try it again? Thats how I thinkthey feel, but I agree with you, they fail to see that they are sitting on a powderkeg and this place is ready to blow. Black powder seems harmless enough when there are no sparks.

 

[Bob Owens]

You have to remember that Lawyers give legal opinions. They also argue on behalf of who hired them. The TWU International hired them, and IMO they wanted this to pass. The lawyers did object when the company introduced it, the Judge said he wanted it anyway. Their opinion had a sound basis as thats what came out of the 2nd District before.




Well the company felt they really had nothing to lose. they said flat out that all they needed was 50% +1. They screwed us over in 95 and we still made them very profitable. They kept saying, "You agreed to this", and we kept getting their airplanes out, if it worked before why not try it again? Thats how I thinkthey feel, but I agree with you, they fail to see that they are sitting on a powderkeg and this place is ready to blow. Black powder seems harmless enough when there are no sparks.

We really do not know that the DBP for TWU Representatives includes their AA salary and their TWU Pay; we also do not know that the company did not agree to the hard freeze for the TWU as a means of paying off grossly overinflated TWU Union officers’ a DBP that included their Union Pay.

No we dont. The language in JetNet has been changed but ERISA says that once a benefit has been accrued it cant be taken away, so changing the language after its been frozen changes nothing.

Given that the M&R and Stores Negotiations have now resulted in the TWU International stating that any decrease in the ask from AA must be equally matched for the other 5 groups that ratified their own rape: we have to improve the terms of any agreement that stay within the ask but result in quantifiable gains in the hours of work, wages and working conditions for those represented by the TWU M&R and Stores. We are still being raped, we just negotiated a, "little," upside after the deed was done.

We do know that a satisfactory automatic contribution and a dollar-for-dollar match that equaled that differential between the DBP funding requirements under a Hard Freeze and the 401(k) match in a DBP termination would not trigger the, "Me-Too," clause.

Let the company match 7% of gross pay and 5% dollar for dollar on the 401(k), and terminate the DBP given that both the ask and the LBO contain language that is HARD FREEZE which means that you will not accumulate additional benefits; and, is only a percentage below what the company has already offered another union group on the property.

My position is very simple: Push anything the company promises into the check the worker receives every payday. Remove empty TWU Promises that always end up as: “We’ll Get’em Next Time !”

My opinion is AA wants to "compete", so lets provide them a level playing field, USAIRWAYs is irrelevant because they are in Mediation and are much smaller. So UAL is next. Give us UALs language, pay, benefits, term and we can start moving. AAs insistance that we have to accept the worst of everything, and do so for another six years, so they can make over 17% profits is just plain nuts. I would rather see them Liquidate than accept that. If they liquidate, due to the very tight capacity that exists the assetts would be quickly redistributed and the majority of our guys would be back at top of scale by 2017 making a hell of a lot more than AA is offering.

 

[Boomer]

No we dont. The language in JetNet has been changed but ERISA says that once a benefit has been accrued it cant be taken away, so changing the language after its been frozen changes nothing. My opinion is AA wants to "compete", so lets provide them a level playing field, USAIRWAYs is irrelevant because they are in Mediation and are much smaller. So UAL is next. Give us UALs language, pay, benefits, term and we can start moving. AAs insistance that we have to accept the worst of everything, and do so for another six years, so they can make over 17% profits is just plain nuts. I would rather see them Liquidate than accept that. If they liquidate, due to the very tight capacity that exists the assetts would be quickly redistributed and the majority of our guys would be back at top of scale by 2017 making a hell of a lot more than AA is offering.

I agree in total with your position, as stated but the point of my post is to begin searching for ways that the M&R and Stores TWU represented employees can gain something of value outside the TWU, "Me-Too," clause the International wants to enforce.

I would only like to state, for the record, AA claimed in their Legal Filings that there was an inherent cost in choosing a hard-freeze of the DBP over a termination.

In the LBOs' proffered by AA to the TWU, APFA and APA: only the TWU term sheets in the LBO stated that the DBP was a, "Hard-Freeze."

Choosing to hard freeze or terminate the DBP is the same decision that families' make when deciding whether to contribute to their own 401(k) or pay that amount in taxes to the Federal Government.

As AA, TWU, M&R and Stores, represented employees: we are promised a Defined Benefit Pension plan that promises a certain level of compensation based on years of service and pesionable wages.

We were notifed recently that the AA, TWU M&R pension plan was only funded to the 81.09% level of accrued benefits.

In that same notification, AA notified us that the calculations supporting the 81.09% funding of the DBP were based on assumed rates of return allowed by the US Government: AA further notified us that they would continue to use those terms in future years.

It is highly likely that the underfunded status of the DBP for the TWU M&R and Stores is greater than claimed by the use of assumed rates of return legally claimed by AA.

IMHO: AA fully intends that their forced membership in the PBGC, as a DBP sponsor, is, in actuality, an insurance policy they intend to cash in to raise their future earnings when they terminate their obligations to the DBP for all union groups at some future point.

The US Government is now severly underfunded, as is the PBGC.

Reliance on a future payment from an insurance carrier now in distress is a failure of an agent with respect to their client.

Termination of the DBP now, and the, "cash in," of the PBGC insurance policy, limits the downside to the M&R and Stores represented TWU members at AA while moving us to a paycheck based system that allows neither the TWU or AA the opportuniy to misrepresent the benefits.

It also limits the downside to the US Taxpayer during a period in history that will require significant concessions to cash in the check we've collectively written.

 

[Bob Owens]

I agree in total with your position, as stated but the point of my post is to begin searching for ways that the M&R and Stores TWU represented employees can gain something of value outside the TWU, "Me-Too," clause the International wants to enforce.

I would only like to state, for the record, AA claimed in their Legal Filings that there was an inherent cost in choosing a hard-freeze of the DBP over a termination.

In the LBOs' proffered by AA to the TWU, APFA and APA: only the TWU term sheets in the LBO stated that the DBP was a, "Hard-Freeze."

Choosing to hard freeze or terminate the DBP is the same decision that families' make when deciding whether to contribute to their own 401(k) or pay that amount in taxes to the Federal Government.

As AA, TWU, M&R and Stores, represented employees: we are promised a Defined Benefit Pension plan that promises a certain level of compensation based on years of service and pesionable wages.

We were notifed recently that the AA, TWU M&R pension plan was only funded to the 81.09% level of accrued benefits.

In that same notification, AA notified us that the calculations supporting the 81.09% funding of the DBP were based on assumed rates of return allowed by the US Government: AA further notified us that they would continue to use those terms in future years.

It is highly likely that the underfunded status of the DBP for the TWU M&R and Stores is greater than claimed by the use of assumed rates of return legally claimed by AA.

IMHO: AA fully intends that their forced membership in the PBGC, as a DBP sponsor, is, in actuality, an insurance policy they intend to cash in to raise their future earnings when they terminate their obligations to the DBP for all union groups at some future point.

The US Government is now severly underfunded, as is the PBGC.

Reliance on a future payment from an insurance carrier now in distress is a failure of an agent with respect to their client.

Termination of the DBP now, and the, "cash in," of the PBGC insurance policy, limits the downside to the M&R and Stores represented TWU members at AA while moving us to a paycheck based system that allows neither the TWU or AA the opportuniy to misrepresent the benefits.

It also limits the downside to the US Taxpayer during a period in history that will require significant concessions to cash in the check we've collectively written.

The decision not to terminate the plan was driven by the UCC, not the Unions, You have to remember that Bobby Gless is the TWU rep on the committee, therefore he would more likely be impacted by termination than we would. That decision was made without the committees input or consent. We were informed back in December that the International owns this, we were "Invited to participate". We were not given access to their Business plan for obvious reasons, if we had known that AA was asking us for concessions not because they needed them to survive but because they needed them to achieve an EBITAR in excess of 17%, higher than any other carrier, including the LCCs, the vote would have been 90% NO for all groups. Thats probably why the Pilots and FAs did not bring it back, they saw things they could not tell their members.The "Lead negotiators" knew this but used the Confidentiality agreement as an excuse not to tell us. Thats like agreeing that you wont talk to someone and not telling them a train is approaching as they stand between the rails. The PBGC clearly did not want the debt and the other stakeholders did not want their equity diluted by having to share it with the PBGC. Thats why the Pension was frozen, and the PBGC testified as to their concerns that the language in the LBO clearly ststes that the company could come back at a later time and terminate the plan. As far as capturing that value (if they did it at a later time) they never added it in anyway, thats a whole other discussion. The companys attitude was "We dont have to justify anything, we are in BK, we can take anything we want, we are taking it all and if you dont agree we will get the court to give us even more" their exact words "Thats our proposal"