Lakefield Throws Down Gauntlet

[USA320Pilot]

Earlier this week US Airways president and chief executive officer Bruce Lakefield told employees in recorded message US Airways faces "significant losses" for the rest of the year and would file for Chapter 11 bankruptcy reorganization if employees did not ratify $800 million in wage and benefits concessions before September 30.

"Please stop dragging your feet or hoping that Chapter 11 will help you. It most certainly will not. ... If US Airways fails to have new labor contracts in place well before Sept. 30, it faces a series of consequences ... which could have a destabilizing impact on the company and a negative impact on employees," he said.

It is my understanding that John Luth of the Seabury Group investment boutique and FTI Consulting are currently working on bankruptcy financial issues and the law firm of Arnold and Porter are working on bankruptcy legal issues, including preparing S.1113/S.1114 motions, if necessary.

Moreover, the financiers have provided the company with RJ financing through September 30 and the company must meet certain financial benchmarks to not fall into loan guarantee default, such as cash flow, unrestricted cash balances, and EBITDAR. “Rather than risk those consequences,â€￾ Lakefield said, which could destabilize the airline’s finances and hurt employees, the company may have to make another trip to bankruptcy court, Aviation Daily reported.

And if we miss those ATSB covenants, and, even more significantly, miss them without a plan of how to remedy that miss and return to satisfying those covenants in the future, then the ATSB and our creditors have the ability to call their loans.

I believe you will see new labor accords with ALPA, the AFA, and the three TWU units. However, I am less certain about the CWA and IAM units, but in the end I believe the CWA will cut a deal. Nonetheless, as I understand it, the company has the liquidity to reorganize and will place any union directly in the "cross hairs" who does not have a new labor agreement by September 30. Moreover, in bankruptcy court isome observers believe the airline could seek to set aside current union contract and maybe reject key facility lease agreements, such as Winston-Salem Rez or the Charlotte Maintenance facilitie(s) and outsource all reservations sales and heavy maintenance funcitons.

Do I like this? No, of course not, but it's the reality of what we face.

Respectfully,

USA320Pilot

 

[USFlyer]

As an outsider looking in, the CWA will never agree to the terms the company proposed. Even if the union comes to a TA, the members will never vote yes for it. Especially with the outsourcing clause the company wants, that would give US the green light to contract with UA to handle almost all west coast stations (much like UA does for AC now).

And, the IAM will not do anything until the Airbus outsourcing issue is resolved (at a minimum). If Lakefield thinks otherwise, he's not as in touch with the company as I had once thought he was.

 

[USA320Pilot]

USFlyer:

I agree with your comments, but remember this: The CWA proposal was an opener and once the Board of Arbitration issues its Opinion & Award, watch the IAM change its position.

Respectfully,

USA320Pilot

 

[phlagent]

For the paycuts that he wants customer service to take...he can file ch 11 and let the judge decide....the cuts they want us to take is pure disgraceful and a slap in the face to all of the front line employees working there buts off
and hearing the bull crap from the customers on how inefficient this company is
and they want us to take a pay cut.....looks like only the front line employees

are doing all the work and they don't want to pay what we are worth.

I don't believe that Dr. Bronner would want this company to go to chp 11
because he gins to lose a lot of money...in which he would be the last one in line to be paid....and this company has no maney to pay out...everything is leased...

They should start to take all of the unions cost saving ideas and implement them...

Why haven't they considered it or even tried to implement them....because
they want us to show losses and have the employees that pay cuts....

have them go the chp 11.... and let the unions come before the judge and show
the cost saving ideas that we have....and how much we could save this company
and the profits this company could make......it would seem an open and shut case.

unless they have someone in their back pockets.................. :angry:

 

[phlagent]

okay they want to compare us to america west and jet blue.....

lets go wright down the line.....they have to trim all of our vp's and streamline
our top level of so called management.......ahhhhh I guess wn make more than
our front employees and they make a profit every time........I guess that did not work in the comapnys favor to compare us with wn.........and one final important issue why wn makes money thier management knows how to run an effiecient
company...................big difference.......amazing.................WAKE UP LAKEFIELD
and BONNER......................a no brainer!!!!! common sense issues here.................

 

[cavalier]

LET THE GAUNTLET FALL

Despair - neither here nor there
the loss of Hope
and the absence of prayer.

Despair - to never win
or begin again
or to have an ending that is fair.

Despair - a feeling of gloom
for impending doom
that hovers in the air.

Despair - to have a heavy heart
that has broken apart
and no longer seems to care.

Despair - the comrade of Fate
that says it's too late
and fills one's heart with fear.

Despair - the feelings of sadness
that bring out the badness
and crush out all feelings of cheer.

Hope - a noble belief
that cancels out grief,
to know how to cope;
that, is Hope.

 

[savyinvestor]

From what I've read the IAM and CWA have NOTHING to lose by not opening their contracts. The offer to the CWA is not even close to a starting point. Savy :down:

 

[oldiebutgoody]

As an outsider looking in, the CWA will never agree to the terms the company proposed. Even if the union comes to a TA, the members will never vote yes for it. Especially with the outsourcing clause the company wants, that would give US the green light to contract with UA to handle almost all west coast stations (much like UA does for AC now).

And, the IAM will not do anything until the Airbus outsourcing issue is resolved (at a minimum). If Lakefield thinks otherwise, he's not as in touch with the company as I had once thought he was.

This is a really good point. If they REALLY want an agreement, they have to give EVERY group something that will get them to vote for it. I don't doubt that the company is in serious financial difficulty, but I've got to wonder what the reason for all the negativity is. Given the lack of real negotiating by the company I doubt that they would fare very well in court. I personally would NOT vote for anything that doesn't provide for appropriate returns in the event of a turnaround (that is, if I were an employee and got a vote).

 

[mweiss]

...they don't want to pay what we are worth.

Not to be contrarian here, but...

How much are you worth, and why? I'm looking for a dollar amount, along with a quantitative justification for it.

 

[PITbull]

USA320pilot,

Don't make these weird assumptions that we as AFA think on the same line as pilots. so far, its not going to good with AFA. Mangement just made an offer for sick that divides the group down the middle.


THEY BETTER FIX THIS NOW! or, WE WILL BE CALLING A SPECIAL MEETING AND PULLING OUR AZZETS OUT OF THERE.

 

[mweiss]

You realize, of course, that if they divide just shy of the middle, they win. :huh:

 

[cavalier]

Not to be contrarian here, but...

How much are you worth, and why? I'm looking for a dollar amount, along with a quantitative justification for it.

This requires an arbitrary answer.

It depends on what the market will allow and more so what the company you are employed at can justify and still maintain a profit margin.

We can be worth $100 an hour in the right set of circumstances and $25 an hour in less than desirable circumstances.

Each individual needs to know what they can personally can offer the working world and what their particular compensation range window is.

We live in a world where working 40 to 50 years at one place is no longer a reality and where the individual needs to depend on their own personal assets to make it. Unfortunately unions make up a small portion of the total work force and no longer have the power they once had, market forces are now stronger than unions which is evident everywhere you look.

I know what I am personally worth. I also know when enough is enough and why U is no longer part of my future.

I salute all the U employees, each and every one, for having the grit to live through what we all have been and are going through.


God Speed to Everyone.

 

[OldGuyinPA]

I believe CWA will not make a deal. These folks are fooling themselves. Last time cut's were passes by 5 votes. The company has no idea about how bad morale really is.



Let's talk to the Judge...Who has more to lose. RSA...BYCU

 

[Hawk]

Mangement just made an offer for sick that divides the group down the middle.

The company will purge the (SLV) and five-hour penalty for an interim period. This is a starting point to build a bridge to eliminate any cultural skepticism and extending the olive branch.

 

[USA320Pilot]

GECAS/Bombardier/Embraer, the ATSB, and RSA are turning up the heat on labor. I firmly believe the company's proposal was an opener and the airline does not want to enter bankruptcy, but the company is prepared to do so, if necessary.

US Airways has loan guarantee and RJ financing that must be met by September 30 or a plan that the creditors will support, e.g. labor participation in the Transformation Plan.

Both sides of the negotiations are now using normal rhetoric, but in the end, I believe the chances of all unions obtaining acceptable deals is greater than 50-50.

If not, the company will certainly enter bankruptcy and seek cuts deeper than America West, who offers its employees pay and benefits more than the new upstart LCCs like JetBlue.

Regardless, it will be interesting watching this play out during the next couple of months.

Respectfully,

USA320Pilot