MEC CODE-A-PHONE UPDATE
January 29, 2003
This is Roy Freundlich with a US Airways MEC update for Wednesday, January 29, with three new items:
Item 1. The MEC reconvened its special meeting today in Herndon to continue reviewing pension issues and unanimously passed the following resolution:
WHEREAS the US Airways MEC has given full consideration to the Company''s proposals, which do not even attempt to protect the benefits already earned, and
WHEREAS the MEC finds management’s proposed solution to the pension issue to be fundamentally flawed, completely inadequate, and unworthy of consideration due to the inequities that are embodied within it, and
WHEREAS management has indicated to the Association on January 23, 2003, of their intent to file in bankruptcy court for a distress termination of the pilots pension plan, and
WHEREAS management has also indicated that only the pilot pension plan will be terminated,
THEREFORE BE IT RESOLVED that the US Airways MEC opposes the termination of the pilots’ defined benefit plan and is taking all necessary steps, including activating all appropriate ALPA resources and committees, to protect the pension benefits earned by the US Airways pilots, and
BE IT FURTHER RESOLVED that all efforts will continue in earnest to seek a legislative solution to the pilot restoration funding proposal before the PBGC, and
BE IT FINALLY RESOLVED that should the Company file to terminate the pilot pension plan, the MEC will take appropriate legal action to object to the termination and will explore all other appropriate avenues in response to the Company’s action.
The MEC also directed that an outside actuarial firm be hired immediately to replicate and verify as closely as possible the computation that Towers Perrin conducted for the Company, including the conclusions they produced to justify the termination of the plan. Towers Perrin’s conclusions are unable to be 100 percent verified by ALPA’s limited computer modeling resources. The results of this project will be communicated to the MEC as soon as practical.
The MEC special meeting adjourned at 8:00 p.m.
Item 2. US Airways President and CEO David Siegel issued a letter to all pilots dated January 28 advising that you will receive a notice of the Company’s intent to terminate the pension plan on March 31, 2003. This notice is required by law to be sent at least 60 days before a plan termination.
After reviewing Mr. Siegel’s letter and attached questions and answers on the pension issue your MEC representatives were amazed, to say the least, at the inaccurate and misleading statements made by Mr. Siegel to our pilots. The letter, combined with Mr, Siegel’s corporate announcements and personal emails to pilots, are desperately misrepresenting the MEC’s December 13 position on this issue and the retirement benefits being offered by the Company. We will be providing additional information on these issues shortly.
Mr. Siegel is also misleading employees in his letter by saying that ALPA took the position that the Company should go after the pensions of others. In fact, however, it was and remains ALPA’s position that our pilots should not be paying for the full benefits of the other employee pensions, including managements, through our concessions, through our pension funding cuts, and through the sacrifice of our benefits. In addition, we are still waiting for management’s compensation package to be revealed in bankruptcy court in mid-February so that we can assess how much of our pension funding costs are being directly diverted to management’s personal compensation.
You should note Mr. Seigel is no longer saying in his January 28 letter that he is going to try to make pilots whole as he testified at the senate hearing only two weeks ago. Now it is about what the Company says is can afford to pay us in retirement benefits.
Make no mistake, the Company is trying to take away retirement benefits you have earned.
The MEC considers management’s actions to be inexcusable including the blatant attempt at using external parties to place more pressure on the pilots to accept inequitable treatment. This is futile strategy since it does not matter to us, the pilots, if others think we should lose pension benefits or pay for someone else’s pension benefits. What matters most is what you, the US Airways pilots, think about losing the pensions you have earned. And that is something that Mr. Siegel and other parties have so far failed to understand are going to have to recognize very quickly to resolve this issue.
ALPA has in no way agreed to the termination of the pension plan and is actively reviewing many alternatives to preserve our benefits. The MEC will be collectively sending a communication to all pilots in the very near future that will explain the issues we are facing, how your retirement, if management has its way, would be based on extreme financial assumptions with you bearing all the risk, and will explain the MEC ongoing efforts to preserve our pension benefits.
Your MEC recognizes this is going to be a difficult issue and is counting on your support and professionalism. Accordingly, please do not allow this issue to affect in any way your duties as flight crewmembers or the operation of the airline. It is imperative to our success that our airline’s operations remain reliable and stable. Any job actions are illegal and expose all of us to significant liabilities and to the failure of our efforts to preserve our jobs and our pensions. This is of the utmost importance and must be taken seriously and sincerely by all crewmembers. Please continue to participate in our legislative affairs program that is available on the pilots only section of the US Airways MEC website.
Item 3. US Airways today asked the bankruptcy court to extend the exclusivity period for filing a Plan of Reorganization by two months. This is the second time the Company has asked for an extension of the exclusivity period. It is common in large bankruptcy cases for the debtor to file a motion requesting an extension to allow them time to solicit plan votes from their creditors.
Item 4. Please note the following clarification to yesterday’s announcement: The Company’ proposed plan provides actual funding to the qualified contribution limited to 50 percent of pay or 40,000 dollars, but might require more. The notional accounts to be maintained instead of direct payout are in regard to the excess contribution requirements.
Please remember we have 1,748 pilots on furlough, with 79 pilot furloughs scheduled for February 4.
Thank you for listening.
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January 29, 2003
This is Roy Freundlich with a US Airways MEC update for Wednesday, January 29, with three new items:
Item 1. The MEC reconvened its special meeting today in Herndon to continue reviewing pension issues and unanimously passed the following resolution:
WHEREAS the US Airways MEC has given full consideration to the Company''s proposals, which do not even attempt to protect the benefits already earned, and
WHEREAS the MEC finds management’s proposed solution to the pension issue to be fundamentally flawed, completely inadequate, and unworthy of consideration due to the inequities that are embodied within it, and
WHEREAS management has indicated to the Association on January 23, 2003, of their intent to file in bankruptcy court for a distress termination of the pilots pension plan, and
WHEREAS management has also indicated that only the pilot pension plan will be terminated,
THEREFORE BE IT RESOLVED that the US Airways MEC opposes the termination of the pilots’ defined benefit plan and is taking all necessary steps, including activating all appropriate ALPA resources and committees, to protect the pension benefits earned by the US Airways pilots, and
BE IT FURTHER RESOLVED that all efforts will continue in earnest to seek a legislative solution to the pilot restoration funding proposal before the PBGC, and
BE IT FINALLY RESOLVED that should the Company file to terminate the pilot pension plan, the MEC will take appropriate legal action to object to the termination and will explore all other appropriate avenues in response to the Company’s action.
The MEC also directed that an outside actuarial firm be hired immediately to replicate and verify as closely as possible the computation that Towers Perrin conducted for the Company, including the conclusions they produced to justify the termination of the plan. Towers Perrin’s conclusions are unable to be 100 percent verified by ALPA’s limited computer modeling resources. The results of this project will be communicated to the MEC as soon as practical.
The MEC special meeting adjourned at 8:00 p.m.
Item 2. US Airways President and CEO David Siegel issued a letter to all pilots dated January 28 advising that you will receive a notice of the Company’s intent to terminate the pension plan on March 31, 2003. This notice is required by law to be sent at least 60 days before a plan termination.
After reviewing Mr. Siegel’s letter and attached questions and answers on the pension issue your MEC representatives were amazed, to say the least, at the inaccurate and misleading statements made by Mr. Siegel to our pilots. The letter, combined with Mr, Siegel’s corporate announcements and personal emails to pilots, are desperately misrepresenting the MEC’s December 13 position on this issue and the retirement benefits being offered by the Company. We will be providing additional information on these issues shortly.
Mr. Siegel is also misleading employees in his letter by saying that ALPA took the position that the Company should go after the pensions of others. In fact, however, it was and remains ALPA’s position that our pilots should not be paying for the full benefits of the other employee pensions, including managements, through our concessions, through our pension funding cuts, and through the sacrifice of our benefits. In addition, we are still waiting for management’s compensation package to be revealed in bankruptcy court in mid-February so that we can assess how much of our pension funding costs are being directly diverted to management’s personal compensation.
You should note Mr. Seigel is no longer saying in his January 28 letter that he is going to try to make pilots whole as he testified at the senate hearing only two weeks ago. Now it is about what the Company says is can afford to pay us in retirement benefits.
Make no mistake, the Company is trying to take away retirement benefits you have earned.
The MEC considers management’s actions to be inexcusable including the blatant attempt at using external parties to place more pressure on the pilots to accept inequitable treatment. This is futile strategy since it does not matter to us, the pilots, if others think we should lose pension benefits or pay for someone else’s pension benefits. What matters most is what you, the US Airways pilots, think about losing the pensions you have earned. And that is something that Mr. Siegel and other parties have so far failed to understand are going to have to recognize very quickly to resolve this issue.
ALPA has in no way agreed to the termination of the pension plan and is actively reviewing many alternatives to preserve our benefits. The MEC will be collectively sending a communication to all pilots in the very near future that will explain the issues we are facing, how your retirement, if management has its way, would be based on extreme financial assumptions with you bearing all the risk, and will explain the MEC ongoing efforts to preserve our pension benefits.
Your MEC recognizes this is going to be a difficult issue and is counting on your support and professionalism. Accordingly, please do not allow this issue to affect in any way your duties as flight crewmembers or the operation of the airline. It is imperative to our success that our airline’s operations remain reliable and stable. Any job actions are illegal and expose all of us to significant liabilities and to the failure of our efforts to preserve our jobs and our pensions. This is of the utmost importance and must be taken seriously and sincerely by all crewmembers. Please continue to participate in our legislative affairs program that is available on the pilots only section of the US Airways MEC website.
Item 3. US Airways today asked the bankruptcy court to extend the exclusivity period for filing a Plan of Reorganization by two months. This is the second time the Company has asked for an extension of the exclusivity period. It is common in large bankruptcy cases for the debtor to file a motion requesting an extension to allow them time to solicit plan votes from their creditors.
Item 4. Please note the following clarification to yesterday’s announcement: The Company’ proposed plan provides actual funding to the qualified contribution limited to 50 percent of pay or 40,000 dollars, but might require more. The notional accounts to be maintained instead of direct payout are in regard to the excess contribution requirements.
Please remember we have 1,748 pilots on furlough, with 79 pilot furloughs scheduled for February 4.
Thank you for listening.
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