More Cuts Wanted

[chipmunn]

Hi Autofixer:

Autofixer said: Why do you say that the terrorist threat will deminish in the future? It will only get worse. I spent many years in the air force and dealt with terrorists over seas ...and they are still dealing with it over seas. There are a new set of rules out there and the airlines are not in a position to deal with them. People will not fly, just like they will not go to the store in the D.C. area. Why take the risk or deal with the security hassel? I agree that the economy may turn around and that oil prices will depress; however, I cannot see the terrorist risk going away...EVER.

Chip answers: Autofixer, I agree the terrorist riks will always be present. In fact, it has been present since the first day of the human race. I said that the effects of terrorism would subside not be eliminated. I believe democratic people will reduce the fear associated with terrorism, Al Qaieda will be virtually eliminated, and other groups will be silenced. However, you will always have crime and terrorism. This doesn't mean we will see the end of a critical industry.

Chip

 

[N513AU]

[blockquote]
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On 10/19/2002 11:49:28 AM autofixer wrote:

Chip, Why do you say that the terrorist threat will deminish in the future? It will only get worse. I spent many years in the air force and dealt with terrorists over seas ...and they are still dealing with it over seas. There are a new set of rules out there and the airlines are not in a position to deal with them. People will not fly, just like they will not go to the store in the D.C. area. Why take the risk or deal with the security hassel? I agree that the economy may turn around and that oil prices will depress; however, I cannot see the terrorist risk going away...EVER.
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[/blockquote]

The terrorist threat will go away when the middle east is a nuclear-desolated wasteland. This war on terrorism is trying to kill the colony ant at a time. We need bring in the Terminex man. As long as you arrest Al Queda types, there are thousand kids lining up to strap explosives to themselves.

Does anyone remember the little s---ts dancing around and celebrating after 9-11. That, IMHO, should have resulted in the annilahation of the middle east. The day my job goes, I will not be happy until we have laid waste to every town and village that has an Arabic name.

Even if we capture Saddam or kill bin Laden, there are people just waiting to take their place in the jihad against America. Even our friends the Saudis are only in it because of the oil money.

Since no politician wants to go down the road of entirely eliminating and eradicating fundamentalist Islam from the face of the earth, terrorist will continue to be a threat.

I'm sick of being profiled and searched at the gates, when I'm an American citizen. Then, one who works for an airline, holds a SIDA badge and has been background checked, fingerprinted, etc. At least profile the people who are most likely to be terrorists - Arabs and other muslims. Leave me alone!

 

[N628AU]

Yeah 513, but it may hurt someone's feelings!

 

[MCORORES]

What should of happened after 9/11 is that EVERYONE who is not a citizen of this country and who are one either student or work visas should of been given the choice of either becoming a US citizen or if they elected not to become a US citizen sent back to their respected homes. Yea I know very politically incorrect some might say, but heck we are at war.

 

[johnnyfleet]

[P]Its on the CWA website[/P]
[P] [/P]
[P][A href=http://cwalocal3641.com/news_flash.htm]http://cwalocal3641.com/news_flash.htm[/A][/P]
[P] [/P]
[P] [/P]
[P]
[BLOCKQUOTE][BR] [/BLOCKQUOTE]

 

[chipmunn]

Bob Owens:

The issue is costs are rising out of control and revenue is deteriorating. The entire industry is in a spiral and unfortunately airlines cannot afford to pay its employees current rates.

The issue is not what we would like or even what we believe we deserve. The issue is what can the industry or a specific airline afford to pay its employees.

As indicated by AMR's recent test of the public capital markets, financiers were only willing to provide the company with funding for 20 percent of its assets for $600 million, which will cover AA fourth quarter expenses. Not good.

So what should AA do? Go out of business or cut costs? For that matter, the question is the same for US, UA, DL, NW, & CO. The only carriers immune are those whose cost structures support its revenue structure, e.g. WN for example.

Nobody likes this situation, but costs must come down either through government aid or internal cuts; otherwise there will be no airline that does not adjust to today's economic reality.

Chip

 

[UAL777flyer]

So long as this industry continues to implement ineffective, window-dressing security procedures administered and overseen by generally incompetent personnel, the airlines will be prime targets for terrorism. Are we any safer today from a 9/11-type event? In some ways yes, but in many ways, no. And terrorists have shown an amazing ability to adapt and exploit weaknesses.

Therefore, I don't believe we can use history as a guide anymore, simply because 9/11 was a watershed act. Has there been terrorism on Americans before? Yes, but never within our own borders. And war with Iraq brings a whole host of unknowns. What type of instability could it cause in the Middle East? How long will it take us to achieve the objectives? What regime will we put into place and can it sustain itself independent of a US-led occupation? What will Israel do? The list goes on and on.

So my opinion is that it's extremely difficult to predict what the future will hold for this industry. The truisms of the past no longer hold (airline revenue growth tied to GDP growth, business fliers paying exhorbitant fares to subsidize leisure travelers, etc.). Major changes are needed. What those changes are is very hard to predict at the moment. But one thing is clear: things cannot go on as they are at the present time or you will see a conga line into bankruptcy court.

 

[Bob Owens]

N513AU;
It’s easy for Chipmunn to be so cheery. He doesn’t have to live on the wages of ordinary workers. Next he will be telling us how hard it is to go from $200k to $150K a year. (Imagine the indignity of having to trade in a Hummer for an Excursion, these sure are rough times honey). My heart bleeds.
If we all could get away with making six figures @ 85hrs a month then maybe we would have his attitude also. We don’t see him volunteering to live on $50K or less but he will sure tell you why you should – in order to save his six figure income.
As far as terrorism and radical Islamic sects go the main source of Wahibi (SIC?) Islam is Saudi Arabia. Not Palestine, not Iraq and not Afghanistan. Al Qaida was a joint venture between the US and Saudi Arabia to fight the Russians in Afghanistan.
Most people on this planet do not hate Americans as much as the press would have you believe. Most of them feel the same way about us as we do about the Swiss, (Yea, they exist, good Chocolate, nice clocks, so?). Just because they show a few hundred demonstrators burning American Flags that doesn’t mean that the majority of the population feels that way. What the press doesn’t show is how many of those same protestors went to McDonald's or Starbucks afterwards or used their cell phones to brag about how they were going to be on TV. If they all feel such contempt for the west then why do so many of them learn to speak English? Wear western style clothing? Why do they consume western products?
Right now we (the United States) have to deal with an ultra-right wing monster that we helped to create. We've paid a heavy price for this, and its not the first time either. In the 1930's US industrialist (along with others) supported the Fascists, which resulted in at least 40million dead. 295,000 Americans died. In the 50s, 60s & 70s we supported various fascist-like dictators across the globe. At one time we even supported Saddam. Another was Noriega, when he got out of hand we removed him, killing a few thousand innocent Panamanians in the process. Most of the world has no intent on coming here to harm us, they just don’t want us to go there and harm them-like blowing up a pharmaceutical factory in Africa, and then saying oops, we made a mistake afterwards. Do you think that when US embassies were attacked in Africa and local peoples were killed their relations supported these acts? Eliminating Al-Qaida will be a lengthy, time-consuming and delicate process. We helped create this complex monster and now we have to get rid of it. We certainly don’t want to do things that would encourage support for these radicals. Israel used the Sept 11 attacks to their advantage further complicating things and making the objective of the American people even more difficult. Now Bush wants to further broaden the conflict into Iraq, even though this would mean that we would lose the co-operation of the many Islamic states that are also opposing Radical Islamic Movements. Even Kuwait and Saudi Arabia say that we cant use their territories or airspace to launch attacks against Iraq.
Worldwide trade is and has been a fact of life for a long, long time. We have to learn to trade with other peoples and cultures without trying to subordinate them. Organizations like the WTO are trying to subordinate all peoples, including Americans, to moneyed interests, not democratic interests. When George Bush Sr and now Jr speak of a New World Order they are using the same term used by none other than Adolph Hitler. Bush Jr is trying to use the fear generated as a result of Sept 11 to change our values away from Freedom and tolerance towards Security and intolerance. Similar to Krystallnacht. Just as Hitler was very cooperative towards industrialists and hostile towards Unions Bush has shown the same positions repeatedly. Just as Hitler sought excuses to go to war against vastly inferior adversaries, the Cheks and the Poles, to solidify domestic support and thwart political opposition we see GW doing the same, trying to panic the nation because Saddam may have the bomb in 6 years (50 year old technology). North Korea not only has the bomb, but also the means to deliver it, then again so does China, all the former countries of the USSR and Israel, one of the few nations that have attacked American Warships as an ally. Are we prepared to attack all these countries too? If Iraq is violating the terms of its agreement with the UN then its up to the UN to authorize action against Iraq.Didnt Bush claim that we would no longer be the policeman of the world during his campain? Yea, I know Sept 11, well that means AlQaida. If Kuwait and Saudi Arabia dont want any part in dealing with Iraq then why should we? Oil? Everyday we find more, and the technology to get it. We should be developing alternate sources anyway, for the sake of our children who have to live on this planet.
Will another terrorist attack happen? I don’t know. I do recall that several terrorist attacks were thwarted after the first attack on the WTC. Thwarted terrorist attacks don’t shake up the population or create headlines and hysteria like ones that are carried out. Who benefited the most from Sept11?- George Bush. Throughout the nineties I can remember being put on high alert as an airport worker. Being told to be especially vigilant, report anything unusual and to challenge anyone you don’t know to see his or her ID. I recall that in the 90s a government study cited the lack of airport security, its recommendations were ignored. Basically the security that we are putting in place now is what the British have had all along. I don’t recall being put on any such alert from the time Bush was elected till Sept 11, even though press reports say that the FBI and CIA were aware something was up. But then again it’s the press and who knows if there is a real story or they are just creating headlines to sell soup and cars.
Our challenge is to not allow those in control to exploit the current conditions. We cant allow our compensation to be set back once again. Once the concessions start, it’s hard to stop. USAIR will probably come back for more, the more you give over time, the more you are put into a position where you have to give more to hopefully recover what you have lost. One thing that should be a good indicator of exactly how those in control feel about the real possibility for success is how they tie their personal financial futures to those of the company. If they continue to draw high salaries, any thing over six figures, and require bonuses in cash to stay on then you know how they really feel. After all if you are asked to live on a salary that can barely keep you out of poverty then surely these brilliant people should also be able to manage on lower incomes also.
The biggest threat to our freedom and financial health does not come from abroad. It doesn’t come from people who wear sheets and towels; it comes from those who wear suits and live right here.

 

[UAL777flyer]

Siegel has given US Airways and its employees hope for a future. It was either that or fold the tent and liquidate (which is still a possibility). The man has a plan. However, the worsening of the industry revenue picture forces everyone, including US Airways, to re-vamp their plan to deal with the problem. If all the cost cuts are earmarked to achieve a specific cost savings target relative to the future revenue stream US Airways projected in order to show a 7% profit margin and qualify for an ATSB loan guarantee, what happens when the revenue environment continues to worsen and forces you to lower your projected future revenue? You must re-work the numbers to arrive at the lowered result.

The only other alternative is probably liquidation/fragmentation and the permanent end of US Airways. So to say that Siegel has done nothing but lower the standard of living of employees isn't fair. He's done what's necessary to keep your airline breathing. Only time will tell if it proves to be enough.

 

[chipmunn]

Bob Owens:

As an AA employee how come you only participate on the US message board when concessions are discussed after 20 years in the industry?

Chip

 

[20+years]

Chip...........why is this time going to be different? What leads you to believe that this next concession will be the cure? Dave has done nothing to change our major problems. He has only lowered employees standard of living and laid of thousands of employees. The cost savings of pay and benefit cuts is being wasted as the new plan is only Wolf/Gangwal plan B dusted off. The fare structure has yet to be changed for the business traveler who is never going to come back. The weaknesses of contracts that still have pilots and flight attendants paid for staying home has not changed. Mechanics still pushback AC and and many other productivity changes necessary are still not being looked into.

In the Hubs we now work LESS banks of flights than before. How is that possible that using aircraft LESS will lower costs?

We have attempted to lower costs, but still have no advantage over the competition. The Airline industry does not sit still. AMR, DAL, CAL etc are only going to lower their costs more, and it will take away ANY advantage that we may have briefly had.

Our Managements demand that we continue to be linked to the only US airline that is run more poorly than US,(UAL) will be our ultimate downfall in my opinion.

Dave is showing his inexperience. It is not 1992 and this is not Continental Airlines!

 

[Busdrvr]

[blockquote]
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On 10/21/2002 1:00:00 PM chipmunn wrote:


As indicated by AMR's recent test of the public capital markets, financiers were only willing to provide the company with funding for 20 percent of its assets for $600 million, which will cover AA fourth quarter expenses. Not good.


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[/blockquote]

Hmmmm, so I wasn't the only one who noticed that and scratched his head when Carty made the remark about AMR still having access to capital markets in the 3rd Q press release.

 

[Bob Owens]

The only question is who will make the sacrifices to be in position to benefit when the market does turn around?
Is that the only question? How about Who will make the sacrifices and WHO will benifit from those sacrifices?
After being in this industry for over 20 years I cant say that the sacrifices have been worth it. I like what I'm doing but financially its been a losing proposition. My family has had to do without because of my career choice. They have had to do without materially and socially as I worked weekends, holidays and shifts. Financially my wages have not kept up with my peers with similar skills.The skills I posess could easily have been transferred into other occupations that pay better. Electricians, plumbers, technician for any type of control system, elevator installation and repair, utilities, phone companies,they all frequently recruit people right out of A&P schools. Until very recently the pay for aircraft mechanics lagged all these professions by a wide margin, 20% or more. Even higher when you figure in shift, holiday and weekend work. So if I had gone into those careers instead of Aviation I would have earned considerably more and done so during normal working hours.
A pilot is basically an operator. He operates a complex machine that requires great skill and knowledge. Screwups are disasterous and can result in not only the operators death but the death of hundreds of passengers as well. Similar to a train operator. Train operators are not however on the high end of operators like pilots or those in the Operating engineers union. Operating engineers on heavy equipement such as cranes, bulldozers etc typically earn up to $100K, and work five days a week, or 172hrs a month. Pilots earn up to $300k and work 85 hours a month. So for pilots, the sacrifices made were worth it. They can end up earning up to triple than they could expect to earn in comparable jobs outside of aviation and do so in half the hours.So even with the cuts they are still doing better off than if the left the industry. They would have to take a 60% cut before it could be said that they were really sacrificing, and they would have to double their hours. Now dont get me wrong. I think that pilots are worth every penny they get, but when I see pilots, who are paid very well, tell other employees that make a fraction of what they make that they should make real sacrifices it really irks me. A pilot going from $200K to $150K when on the outside he would be looking at best at $100k is not really a sacrifice. He is still getting at least $50K more than he could expect to get on the outside. The same is not true for a mechanic.We might have to work harder but financially, transfering into one of those other careers does not present the same type of financial change that a pilot would experience if he had to start over again. The fact is that pilots have the most to lose if an airline goes belly up, they should not expect those who do not have as much to lose or gain to make real sacrifices in order to save their buts. Pilot compensation is typically the biggest part of labor expenses. Even if they are only a third of the workforce then can make up over half the expense.They earn a salary that is far above what comparable workers make in other industries, mechanics do not.If they want to save their incomes they should not expect workers who are making average or below average incomes to carry the load. When I enterred this industry a pilot earned about double that of a mechanic, now its more than quadruple, who has benifited and who has not?

 

[Bob Owens]

Chip;
For the same reason that you post on the AA page.

 

[chipmunn]

20+Years:

UAL777flyers response was well said and in my opinion accurate. Especially his comment about falling revenues and the required 7 percent profit margin to obtain the loan guarantee. To get the loan, if revenues fall for whatever reason, then costs must be cut to balance the financial equation. Unfortunately, there are no other options.

A restructuring of the magnitude underway at US takes time. For example:

The company is moving forward with the UA code share to generate more incremental revenue, but in the case of NW-CO last week Jeff Misner, CO CFO, said it took four years to obtain the full benefit.

The UA alliance will take time to integrate a complex program, but in about one-year US will join the Star alliance and realize about another $100 million in additional revenue.

MDA is progressing and over the weekend Dave Siegel indicated in his weekly address we should have significant RJ news, which will help as well.

The company has made significant progress is re-negotiating aircraft leases, ticket counter lease expenses, as well as other facilities such as the remaining CTOs.

Rome wasn't built in a day and US won't be re-built in a day. But, to say Dave has done nothing to change our major problems may not be accurate.

Specifically, the airline has been successful in implementing its three-part restructuring plan by:

Improving Liquidity:

Management has obtained agreements for $500 million in DIP financing, is the only airline to obtain unanimous conditional loan guarantee approval, and has an Equity Plan Sponsor in RSA willing to invest $240 million in the company, which may be exceeded shortly.

Improving Revenue Opportunities:

RJs - Management has negotiated the ability to fly 465 RJs, has begun to process to start what Wall Street believes will be an intimidating Express operation with MDA and its likely EMB-170/175s. The company has created two J4J programs with agreements at Midway & Mesa. Dave Siegel also indicated on Friday that there would be other significant RJ deals announced shortly.

Alliances - Management has obtained pilot and regulatory approval for the UA domestic alliance. The company has been approved to enter into the prestigious Star alliance, but will not enter into this complex program until the UA alliance is well underway.

Establishing a Competitive Cost Structure (based on pre-September 2002 revenues):

Management has obtained $841 million in union and $30 million in management labor expense reductions; however, it will take time to fully implement the savings.

Management has negotiated more than its $200 to $300 million cost saving target from other stakeholders.

20+years, in my opinion management has done an enormous amount of work to turn US around in a very short time. However, it took many years to get into this positions and it's going to take a few years to get out of this situation.

Chip