Merger Relief for American Airlines: April 24, 2012

[Kev3188]

Except that there have not been a couple thousand PMNW employees who were thrown under the bus - talk about whipping up a frenzy.

^Revisionist history at it's best.^

There is no shortage of collateral damage amongst the PMNW ranks.

 

[WorldTraveler]

^Revisionist history at it's best.^

There is no shortage of collateral damage amongst the PMNW ranks.

can you tell me how many PMNW employees have been laid off?
Can you tell me how many were offered positions elsewhere within DL?
Can you tell me how many PMNW people were stapled to the bottom of the DL seniority lists?

Most of the centralization moves (the MSP warehouse etc) are the products of consolidating two airlines. They would have happened regardless of with whom NW merged.
And the question still remains whether NW could have been viable on a revenue basis as a separate airline, without a twin engine aircraft that could have reached the eastern US from all of marketable Asia. The 787 could have been that aircraft and could have given NW the ability to compete at least as a niche network player to/from Asia and Europe, but NW was outclassed by larger network carriers, with whom NW's board and stockholders believed that a merger with DL would increase the return for NW stakeholders.

I know your positions regarding employee compensation issues but I would dare say that few airline mergers have resulted in as little financial or job disruption as the DL-NW merger produced. It was built on two strong airlines, and the vast majority of both has been retained.

 

[Kev3188]

can you tell me how many PMNW employees have been laid off?

Too many.

 

[eolesen]

Nobody has ever tried to argue that layoffs wouldn't occur in a merger, be it an acquisition like AA/QQ or AA/TW, or a merger of equals like UA/CO and DL/NW.

Where you run afoul of common sense is your constant cry that DL has caused less pain. It is unadulterated bovine fecal matter, and everyone here can see that.

 

[WorldTraveler]

Post the numbers then and will see if it is true or not. If you are certain that thousands of PMNW people have been laid off, then it shouldn't be too hard to find that documentation.

You see it comes down to accountability. If AA or DL or US or anyone else laid off people, it should be apparent to see.

And if you want to make a statement those companies did or did not do something, that should be easy to show.

Help me out - but I am not aware of any NW employees that have been LAID OFF. DL has closed the MSP HDQ and offered jobs to those whose performance merited a transfer (they had merit jobs to begin with) but DL laid off some of its own HDQ personnel based on merit.

DL closed the MSP stores, a res office... but all of those people were given the opportunity to stay at the company.

Compare that with the number of people who were laid off from TW and in other mergers.

 

[eolesen]

You claim to know the truth, so why don't you whip out a couple of stone tablets, tell us the numbers, and remove all doubt?

Being thrown under the bus doesn't just mean those who are off payroll. It also includes all those on-payroll and bearing more than their fair share of the merger "benefits", e.g.:

• Hourly workers downgraded from full-time to part-time
• Hourly workers who have seen a reduction in their part-time schedules
• Salaried workers who were placed into lower rated positions
• Employees forced to bear the added expense of commuting to ATL (see the next section as for why)
• Employees missing out/not there for their kids because they're now only home ~2 days a week
• Employees separated from their spouses/partners due to commuting
• Families torn apart due to all three of the issues above

And please be sure to include all of those constructively laid off, i.e. those for whom the offer of a job in ATL was essentially meaningless for any of all of the following reasons:

• Inability to sell a house in what appears to be the worst housing market since records have been kept
• Unrealistic expectation for a spouse or partner to be able to find another job in the worst job market ever
• Uprooting kids
• The cost of moving a household exceeding what the company would cover (if they even covered anything at all)

So, feel good in the half-truth that very few hourly or salaried workers were ever just fired outright with the downsizing of pm-NW facilities.

Everyone watching and impacted correctly expected that NW employees would bear the brunt of the downsizing, so why you continue to minimize and try and spin this one as inconsequential is beyond me.

Oh, and before you even try to divert, of course those factors happen in every merger of a scale like we see in the airline industry. Only a fool would try to think that they're able to defy gravity.

 

[Duke787]

http://www.businessweek.com/articles/2012-05-09/american-airlines-is-on-the-wrong-flight-path


finally an article from a financial magazine that doesn't blame labor.

 

[eolesen]

finally an article from a financial magazine that doesn't blame labor.

No, but it's a little thin on facts...

The idea that American is going to cut its way to profitability is ridiculous. A survey by the International Air Transport Assn. (the industry’s trade group) shows that people are trying to avoid flying because the experience is so poor and many of the airlines’ best customers have gone, when they can, to flying privately. The problem with American Airlines, as with the U.S. industry—and in fact many businesses—is not that its costs are too high but that its revenues are too low. Making the flying experience worse by fighting with the people who deliver that service doesn’t seem like a sensible prescription for success.

1. AA hasn't claimed to be cutting its way to profitability. They plan to add 20% more ASMs, and add planes. That's actually one of the problems a lot of the investors have with the 20% plan -- growth flies in the face of logic
2. People avoid flying because of the airport experience as much as anything else, and that drop is largely attributable to the efforts of agencies like the TSA and CBP (trying to enter the US as a foreign national is just about as difficult now as it was for someone from a NATO country to enter the Soviet Union or East Berlin in 1984)
3. One thing I will agree with the author on is that revenues are too low. Airfares haven't kept up with inflation, and thanks to conditioning customers to believe it only costs $300 RT to go anywhere, customer expectations are seriously out of whack with what they're paying today in terms of real dollars.

Also, for the record, it's a blog piece, not a magazine article. Fuzzy line between the two, yes, but arguably a different level of accountability...

 

[Kev3188]

You see it comes down to accountability.

Accountable to who?

You? Spectator?

Please see below. E beat me to it, but puts it much more succinctly than I would've.

P.S. It's 2 res centers.

You claim to know the truth, so why don't you whip out a couple of stone tablets, tell us the numbers, and remove all doubt?

Being thrown under the bus doesn't just mean those who are off payroll. It also includes all those on-payroll and bearing more than their fair share of the merger "benefits", e.g.:

• Hourly workers downgraded from full-time to part-time
• Hourly workers who have seen a reduction in their part-time schedules
• Salaried workers who were placed into lower rated positions
• Employees forced to bear the added expense of commuting to ATL (see the next section as for why)
• Employees missing out/not there for their kids because they're now only home ~2 days a week
• Employees separated from their spouses/partners due to commuting
• Families torn apart due to all three of the issues above

And please be sure to include all of those constructively laid off, i.e. those for whom the offer of a job in ATL was essentially meaningless for any of all of the following reasons:

• Inability to sell a house in what appears to be the worst housing market since records have been kept
• Unrealistic expectation for a spouse or partner to be able to find another job in the worst job market ever
• Uprooting kids
• The cost of moving a household exceeding what the company would cover (if they even covered anything at all)

So, feel good in the half-truth that very few hourly or salaried workers were ever just fired outright with the downsizing of pm-NW facilities.

Everyone watching and impacted correctly expected that NW employees would bear the brunt of the downsizing, so why you continue to minimize and try and spin this one as inconsequential is beyond me.

Oh, and before you even try to divert, of course those factors happen in every merger of a scale like we see in the airline industry. Only a fool would try to think that they're able to defy gravity.

Quite right. The list only grows from there.

Don't forget the nonstop dose of "culture" that at times makes the living envy the dead.

 

[700UW]

You fail to grasp the concept that there are airlines that have managed to close hubs yet maintain the local market -and didn't throw their employees under the bus either.

How did that work out for DL in DFW, MCO and CVG?

 

[mistified]

It is incomprehensible to think that ANYONE could believe 6 months after AMR's BK filing that I have supported anything other than that AA would emerge as a standalone entity - the position I had on day ONE.

Of course, I used the word IF to say that IF US tried to pursue a merger with AA, they would set off a bidding process in which the chances are very high that they would never win.
That's why DL and BA said they would be interested in bidding - to make it clear that they will outbid US - IF THEY NEED TO.

But since some people who can participate in an online forum can't understand the use of the conditional IF, I will reduce my statement to the emphatic:



I have every expectation that AA will emerge from BK as an independent company.

Where anyone could believe that statement has anything to do with Delta is beyond comprehension.


Signals,
It is truly breathtaking to read that someone who professes to be an airline industry analyst no longer has anything to contribute to the discussion but instead is reduced to tracking MINUTE BY MINUTE movement in ratings.

E,
you used to have something of value to add to this forum but you apparently have decided to give up contributing anything of value and instead reduce your participation to managing a popularity contest.


I have the utmost pity for you. I truly do.

And I'm not alone.

I would say that you were way off on this one and underestimated the significance of labors influence.

 

[mistified]

amen...and in the process some people can't seem to comprehend that what you actually post, not your ability to sway the masses, is what matters.

Buck,
conventional wisdom regarding AA's future continues to suggest a merger yet no one has yet to explain how the weakest carrier in the industry is going to swallow up one that is much larger given that creditors really are interested in what is best for their own finances - and the chances that US can compete with a restructured AA, let alone with other airlines should it get to that process.
Given that everyone still believes that labor will control the process, I'm not convinced.

I've got one person who is willing to put his reputation - and money on the line. That's not a whole lot of people for a transaction of this size.

Some classic quotable quotes.
And so many more.

 

[wings396]

Keep 'Em coming.....

 

[mistified]

Ok here you go:
More quotable quotes

But what he can't change is that no one believes the combined AA-US can deliver all he says it will - less job cuts, pay raises for virtually everyone compared to the current US and AA's standalone plan, and revenue growth which is far larger than what either AA or US have generated as standalones - and it is obvious why the non-labor creditors are not onboard.

Parker's plan now will fail on the basis of the underlying financials even if he has corrected several very grave parts of previous merger attempts. What doesn't change is that the creditors still control AA's outcome now and for months into the future and that they are not convinced that a plan has been proposed that can top the return they will receive - backed up by believable financials.
If Parker did that, I have no doubt the creditors would act - just as they would have with DL-US.

 

[WorldTraveler]

since you are enjoying digging around in the archives, let me remind you that the merger has not even been approved, let alone implemented or tested to the same standards of the other megamergers that went before.

Perhaps it would be fair to assess AA-US 4-5 years after it actually occurs to see how accurate what was said now actually relates to what occurred, don't you think?