JUSTICE DEPT SUES TO BLOCK US/AA MERGER

[Glenn Quagmire]

S&M is not needed when we already have WT.

 

[MCI transplant]

lest their be any doubt as to how damaging those now unearthed, previously secret communications have been to the plans to merge - and why it will be very difficult to find an effect remedy.

It might not have hurt to wait another quarter for record revenues....

I was just wondering, how those " previously secret communications" were "unearthed"?------- Could it be by means our Government claims it is not doing? Hacking their way into American Companies internal E-mails?---- Now they wouldn't do that, now would they?------ Or would they?

 

[FWAAA]

I was just wondering, how those " previously secret communications" were "unearthed"?------- Could it be by means our Government claims it is not doing? Hacking their way into American Companies internal E-mails?---- Now they wouldn't do that, now would they?------ Or would they?

The email discussion among US employees where Parker whined about DL's triple miles promo followed by Parker forwarding the entire email discussion to Richard Anderson was forwarded by Anderson to Delta's inside counsel. Perhaps DL then sent it to the government?

As to the others, DoJ probably served US with a subpeona which required US to turn over all intra-company communications about the merger. And US probably turned over some drives containing all of Parker's emails (except, of course, for the ones which US could claim were privileged).

 

[WorldTraveler]

S&M is not needed when we already have WT.

because living in a world detached from reality is preferable to some than to hear the truth and figure out how to live within that truth?

Bob,
I know what you are saying and don't disagree with you but let's not forget that AA has a broad range of powers in BK regarding its ability to alter its labor contracts. Whether one wants to believe the operational issues of almost a year ago were labor-related or not, the creditors believed they were better off going with Parker's plan in part because of the labor unrest that existed at AA up to that time and which Parker somehow has been able to keep under control at US - and which AA labor has not engaged in since the merger agreement was signed.
THe creditors are now faced with figuring out how to make sure they get their money so their first choice will be fight for the merger and hope they can cash out before the reality of Parker's plan and excessive promises become apparent. If it doesn't work to get the merger approved, the creditors will push a standalone plan and they will do what they can to make sure AA can be successful as a standalone based on the current market conditions, which now include 3 other large mergers much further completed than they were a year ago and a very different global economic climate, including a stronger dollar which affects travel to the US.

Nobody wants to see AA go back for yet another round of cuts but the idea that you have given at least twice before doesn't mean that the creditors will be satisfied they have enough cuts in order to make AA viable by the time it emerges from BK.

Tough reality but that is what it is.

 

[robbedagain]

According to our union rep and everyone I work with they seem to hink the govt has to prove the merger is bad

 

[ContUNITEus]

Based on the newamericanarriving.com website name, I wonder if these are available:

1. nonewamericanarrivinganymore.com
2. newamericanfallingapartbeforetakeoff.com
3. newamericancrashedbeforeitcouldleavethegate.com
4. newamericancrashing.com
5. newamericansquashed.com
6. newamericanalreadylate.com



I like the second one best....

 

[Zom JFK]

Yes things tend to work out for those who stand up for themselves and the time to do that was last year when we should have stood up to AA and that quack judge Lane and told them both to go pound sand with a NO vote and the second they abrogated the contracts walked off the job.

Until workers in this country follow this type of logic they will continue to be decimated at the bargaining table and in the courts.

 

[FWAAA]

According to our union rep and everyone I work with they seem to hink the govt has to prove the merger is bad

I'm curious: Any of those people you mention have a JD from an accredited law school and passed a state bar exam? Any of them conversant in federal antitrust law? Any of them ever charge corporate clients several hundred dollars an hour for antitrust advice or antitrust litigation?

Don't need to answer - it's a rhetorical question.

What the government needs to prove is clearly stated in the complaint; that the merger would substantially lessen competition.

Not only does the government have objective data that demonstrates a substantial lessening in competition, it has Doug Parker's own words that show his intent is to substantially lessen competition. Additionally, you can be certain that the DoJ has reams and reams of data not mentioned in the complaint.

 

[TWU informer]

I'm curious: Any of those people you mention have a JD from an accredited law school and passed a state bar exam? Any of them conversant in federal antitrust law? Any of them ever charge corporate clients several hundred dollars an hour for antitrust advice or antitrust litigation?

Don't need to answer - it's a rhetorical question.

What the government needs to prove is clearly stated in the complaint; that the merger would substantially lessen competition.

Not only does the government have objective data that demonstrates a substantial lessening in competition, it has Doug Parker's own words that show his intent is to substantially lessen competition. Additionally, you can be certain that the DoJ has reams and reams of data not mentioned in the complaint.

Reducing competition is the mian reason behind the industry consolidation. Every merger and/or acquisition reduces competition. So why pick this one to challenge after all the other unchallenged mergers/acquisitions and such that have already reduced the competition? Is it like reduced competition is one of those things that is normal and logical fact, but no coporate leader should ever express the truth?

 

[FWAAA]

Reducing competition is the mian reason behind the industry consolidation. Every merger and/or acquisition reduces competition. So why pick this one to challenge after all the other unchallenged mergers/acquisitions and such that have already reduced the competition? Is it like reduced competition is one of those things that is normal and logical fact, but no coporate leader should ever express the truth?

Excellent post - and I agree.

One justification for ignoring the previous mergers and picking on this one is that the first merger didn't result in as highly concentrated a market as the last one. As the government discusses in their compliaint, when there were nine majors, the first merger they discuss (US and HP) left the country with eight majors. And each successive merger reduced the number of remaining competitors by one. Now there are just five (four legacy network airlines plus WN) and this merger would result in the remaining four having 90% of the domestic travel market. Academic eggheads (to paraphrase Crandall) have long believed that such a highly concentrated market makes it too easy for a cartel to form and succeed.

If Horton and Parker had already told employees that this merger would result in immediate huge job losses and further wage concessions, there wouldn't be a single outraged employee of either airline trying to organize a mass protest at the DoJ headquarters in DC (there's a post along those lines in the US Airways forum). Most employees would be supporting the government's suit.

But instead, since Horton and Parker have convinced everyone that there won't be immediate huge job losses and since Parker negotiated MOUs with both airlines' unions that give some improvements in compensation to most AA employees and much larger raises to certain US groups (like their pilots), employees are angry that the government would have the audacity to push back to protect consumers. Employee self-interest rules the day. Just like all politics are local.

And you're right - reduced competition and higher prices are the natural, logical result from industry consolidation thru mergers. People of the Democratic persuasion usually are easier to convince of that fact than the capitalist pig-dog Republicans, but even Republicans know the truth. The smart ones don't go around saying it over and over again in public, like Doug Parker did. But then again, smart CEOs don't whine endlessly in emails about how "stupid" Delta's promotions are, tell the US Airways employees to tell industry analysts how stupid Delta is acting (in hopes that Delta will change its behaviour) and then forward the entire email discussion to Richard Anderson at Delta.

 

[TWU informer]

Who is the competition for AMTRAK in passenger rail service? How many markets does AMTRAK serve without a single competitor? And who really owns AMTRAK?

What a bunch of double standard baffoons!

Maybe the Government should just take over all the domestic airlines and run it like they do AMTRAK. If they want to control the industry, then by God buy them all, and control the industry.

 

[Jacobin777]

Yea, fight the government to help make sure Horton gets his $20 million, you are funny.

FYI, Horton didn't want the merger in the first place. It's quite obvious from the time AA filed for BK until this whole b.s. Parker-led merger.

You don't think Parker won't be the first to screw you guys/gals over if he has to? Judging from his comments it seems he has no qualms about it.

Many here conveniently forget that "we gave up our 30% to save AA and got nothing in return", filing for BK in 2003 would have yielded the same results probably and then some. At least AA was putting money into pensions, etc. for an additional 8 years!

Yea with record breaking profits he is going to get more concessions. Company man Little will be gone by the end of September, along with Gless and Videtich right behind him, a new team with no ties to AA management and real Union roots and beliefs will be at the helm of the TWU (Lombardo was involved in Strikes in PHL and Samuelson's Local 100 called the MTAs bluff in the old concessions or jobs game, they said NO to concessions, the company laid off hundreds, and hired them all back within a year) Go ahead and dump the pensions into the PBGC, either way we end up with around the same and the PBGC will own AA, then we can get raises, benefits and workrules that bring us up to UA and DL in a PEB. Yep, I'm all for opening up the contract again without Little, Videtich or Gless in the picture. The margin that provided the YES vote left with EO's and layoffs.

Well if the merger doesn't go through, Horton probably isn't going anywhere. I think he deserves a chance to run AA.

Don't forget, Horton saved AA BILLIONS $$$$ in costs with the blockbuster deals he got with Boeing/Airbus. From some multiple sources, the cost of the Airbus planes are not far from cost and very, very favorable financing.

AA in a few years is going to have the youngest fleet amongst the legacies. That will help with cost as well as fleet flexibility.

Best article I have seen about this yet, and one of the many damaging things it mentions.....

http://www.washingto...airways-merger/

"Among the more embarrassing documents unearthed by the government was a string of e-mails among US Airways executives from 2010 complaining about a new “triple miles” promotion launched by Delta as it sought to move into new markets and bring some mothballed planes back into service. US Airways chief executive Douglas Parker complains that the aggressive move would hurt the profits not just at Delta but at all the other airlines that would be forced to match it. Then he suggests bringing pressure on Delta by contacting industry analysts to have them criticize the move. To reinforce the point, Parker even sent the e-mail string to Delta’s chief executive, who quickly remonstrated Parker for his ham-handed attempt at price fixing and forwarded the whole thing to his general counsel."

I would never want Parker and his team to run AA. Being a loyal AA suppoter (in other words, an AA koolaider), I was going to bregudingly fly AA until I hit LT Platinum then probably stop flying AA. If its not Horton, I will most probably stick with AA and not move to "Plan-B".

Based on the newamericanarriving.com website name, I wonder if these are available:

1. nonewamericanarrivinganymore.com
2. newamericanfallingapartbeforetakeoff.com
3. newamericancrashedbeforeitcouldleavethegate.com
4. newamericancrashing.com
5. newamericansquashed.com
6. newamericanalreadylate.com



I like the second one best....

How about- www.strike3parkeryourout.com

 

[Show me the money]

FYI, Horton didn't want the merger in the first place. It's quite obvious from the time AA filed for BK until this whole b.s. Parker-led merger.

You don't think Parker won't be the first to screw you guys/gals over if he has to? Judging from his comments it seems he has no qualms about it.

Many here conveniently forget that "we gave up our 30% to save AA and got nothing in return", filing for BK in 2003 would have yielded the same results probably and then some. At least AA was putting money into pensions, etc. for an additional 8 years!



Well if the merger doesn't go through, Horton probably isn't going anywhere. I think he deserves a chance to run AA.

Don't forget, Horton saved AA BILLIONS $$$$ in costs with the blockbuster deals he got with Boeing/Airbus. From some multiple sources, the cost of the Airbus planes are not far from cost and very, very favorable financing.

AA in a few years is going to have the youngest fleet amongst the legacies. That will help with cost as well as fleet flexibility.



I would never want Parker and his team to run AA. Being a loyal AA suppoter (in other words, an AA koolaider), I was going to bregudingly fly AA until I hit LT Platinum then probably stop flying AA. If its not Horton, I will most probably stick with AA and not move to "Plan-B".



How about- www.strike3parkeryourout.com

ARE YOU KIDDING!!! even wall street has said if this Management team ( Led by Horton) is left to run this company it will be back in bankruptcy in two years. American Airlines was voted one of the worst companies in America to work for. This current management team is interested milking every last dime out of this company they can at the employees expense and then move on. Parker may not be much better but is a thousand times better than the so far out of touch management we have now. The plan without the merger is to retain as few employees as possible with with max profit return and customer sevice an after thought.

 

[Jacobin777]

ARE YOU KIDDING!!! even wall street has said if this Management team ( Led by Horton) is left to run this company it will be back in bankruptcy in two years. American Airlines was voted one of the worst companies in America to work for. This current management team is interested milking every last dime out of this company they can at the employees expense and then move on. Parker may not be much better but is a thousand times better than the so far out of touch management we have now. The plan without the merger is to retain as few employees as possible with with max profit return and customer sevice an after thought.

If Horton is so bad, how come he improved AA's bottom line into record earnings? I can't recall "record earnings leads to bk"?

Are you also talking about the analysts who FWAAA proved to be completely incorrect about AA and its earnings/revenues and market share?

Where do you get this "current management team is interested milking every last dime out of this company"?

Do you have ANY proof of this?

 

[WorldTraveler]

uh... AA's overall market share has not changed in BK and it has decreased significantly in a number of key markets over the past several years.

Yes, AA is showing profits but that is what has to happen to emerge from BK. The record profits also came in the 2nd quarter which is typically strong for airlines.

I'm not taking anything away from what AA has accomplished but it might take a little more time to declare victory - if that is even possible given that ongoing businesses don't really have a "finish line."

Also, as excited as you get about what AA has accomplished, most of the improvement has come because of labor cost cuts. You should expect labor - the majority of this board - to be able to see that.