NYer said:
One of the negotiations "tactics" was to believe that it was better for mechanics if the airline liquidated and that was a better outcome than a CBA within the BK process. In 2008, we needed to push back because it was "restore and more", vote no. In 2011, we needed to push back because they would never be allowed to file BK with $4B in cash, vote no. In 2012, we needed to push back because 6 years was unacceptable and it was better for the airline to liquidate because we'd do better by someone picking up the assets like Pan Am and Easter. (you didn't mention Northwest...hmmm). You thought it was a victory for the APA to vote no because they would never abrogate...well, abrogate they did. They came back with the same 17% cuts as before their abrogation. Today, the APFA needed to fight for less of a time line, even though we are still under the POR and the Creditors are still in charge.
The solution is to always say no. Doing that is what brings a better outcome.....That's not what recent history has shown us.
Now Mark you are certainly leaving a lot out. Such as the fact there is a process to increase pressure on both sides to move, waiting year after year after year, when you are already at the bottom only puts pressure on the members and serves the company's interests. The mechanics voted down their TA and for the first time I'm aware in any airline sect 6 negotiations of the union did not proceed to the next step, release, then self help or PEB, with the expectation that negotiations continue in the interum. Instead the International, with you as advisor, went backwards to mediation.
First off there was never any talk of AA liquidating, that came from Mark Richards and Jim Little as a scare tactic. One of many inaccurate statements Mark Richards made to the Negotiating Committee.
Mark Richards told the committee that if we didn’t agree to the concessions that the court would most certainly abrogate and when they did we would have no contract, we would be at will employees, no just cause, no check off, nothing and the company could do whatever they wanted and we could not strike.
That was a lie. Court decisions on Airline contracts were clear that the reason why airline workers could not strike is because they did still have a contract, upon abrogation, they impose the terms already proposed by management, that becomes the contract and those terms did not include getting rid of Just Cause or Checkoff and its unlikely the court would consider such demands necessary for the plan. The terms of the ask must meet the criteria that what they are asking for is necessary for the reorganization. The court admitted that if they were to wipe out the contract and have no contract, like everyone else in Bankruptcy, that we could strike.
My argument against agreeing to more concessions was that we were already at the bottom of the industry, that it didn’t make sense for us to agree to more concessions other than increased outsourcing and the pension because those were the only two things where we were not at the bottom of the industry. The law says that the debtor has to show that the terms were onerous to get the contract thrown out, granted the courts have taken this with a grain of salt but how could they say our contract was onerous when we were at the bottom in pay, vacation, holidays, shift pay, overtime pay, training pay, health benefits, uniforms, sick time, etc etc? Mark Richard said none of that matters that its not negotiable and that we had to meet the company’s number. (What Mark left out was it obviously was negotiable because the ask went from 20% to 17%) Once again that turned out to be a lie, because around the same time Mark was doing his best to bend us over for the company Pinnicle Airlines, whose pilots were also below industry standard refused to meet the company’s ask in their Bankruptcy case and the Pinnicle sought to have the contract abrogated, and what happened? The Judge refused to abrogate based upon the fact that the company could not prove that a contract that was already below industry standard was onerous and what they were asking for was necessary. He told Pinnicle they had to adjust their ask. Despite the fact we were in the same position as the pilots at Pinnicle we never even tried to make the argument.
Pilots, sure they gave 17% but 17% is a negotiable number. You keep saying these lies that this and that is not negotiable, that simply untrue, you said the 20% was not negotiable, then it became 17%. The pilots and company met the 17% by adjusting the values of the items that make up the ask. All the numbers are theoretical appoximations or assumptions to start with, one could argue that a concession is worth more or worth less (something else Mark Richards said we could not do but other groups did) For instance, Mark Richards right hand man, the Economist John Donnelley, (who is now management at SWA) who sat through not only the BK but also was the Economist in 2003 for the TWU and gave us a cost out in 2010 for sick time that was much much higher than the total value he vetted back in 2003 even though our hourly wage was lower and we had 35% fewer workers. In other words when we lost it, sick time was given a much lower total value than when we asked for the same thing back even though both the hourly wage and the number of members was much lower. IIRC getting back to twelve days of sick time would have cost us double to get back with 12000 workers at a lower hourly rate than we were given credit for in 2003 when we were at a higher rate and had over 16000 workers. How was this possible? It wasn’t, the assumptions were changed and that changed the figure, so to say they still got 17% may on the face of it seem factual, but by rejecting the deal the pilots did get improvements, they just didn’t rub it in everyone’s faces and the company buried the additional cost in the assumptions because even the assumptions are negotiable.
The pilots also went into BK well within industry standards, they were nowhere near the bottom like us.
The Creditors are now the shareholders and they are always in charge. So their status is no longer a creditor, they are owners. Owners of corporations do not determine each mangement decision on the day to day management of the company, not every contract is brought back to the shareholder/owners, they can fire managers for agreeing to bad contracts and poorly managing the company but they don't have the same decision making power in the business plan as a Creditors committee in Bankruptcy.
Where did I say that all you have to do is ask and you will get it? I will say that if you don’t ask that you probably wont get it, but according to you we shouldn’t even ask because they might get mad.
BTW AA isn’t in BK anymore. So any deal cut in BK can be renegotiated as long as both parties agree. You would think that would be obvious enough with the fact that you were out there saying how we could get new deals with the JCBA. In their NPA the language was silent as far as the term. The creditors committee agreed to the NPA and the NPA opened the door.
All I can say is if you want to pay a lawyer to entertain you and crack jokes, hire Mark Richard, if you want a lawyer who is going to help the company get whatever they want and give you bad information, hire Mark Richard, but if you want a lawyer who is going to fight to make sure you get the best deal possible and give you sound legal advice, DO NOT HIRE MARK RICHARD.
