More Wage And Benefit Cuts?

[FA Mikey]

Better get my hip boots out. Someone is piling it on thick. Do you really belief this stuff?

Nah just post it for the laughs. DC should have been looking for solutions other than leveraging the entire fleet hoping for a short term rise in fares and passengers. JW sold should have been ready to negotiate with AA, he chose the easy sell out of the membership. I knew what a low class sellout he was from his days in Dallas, now everyone knows. Its not thick its the truth.

 

[The Drunken Duck]

Nah just post it for the laughs. DC should have been looking for solutions other than leveraging the entire fleet hoping for a short term rise in fares and passengers. JW sold should have been ready to negotiate with AA, he chose the easy sell out of the membership. I knew what a low class sellout he was from his days in Dallas, now everyone knows. Its not thick its the truth.

The venerable shouldya, couldya, wouldya explanation. The unions would have never of have negotiated until AA was on the brink. What shocked me was that they didn't ride the turkey into Ch 11 like UAL. I thought for sure they would. All they way down claiming waste and mismanagement was the problem. The idea that the unions would have negotiated earlier is as niave as it is laughable. You show me a union leader that likes its management and I'll show you a union leader about to be kicked out.

 

[FA Mikey]

The venerable shouldya, couldya, wouldya explanation. The unions would have never of have negotiated until AA was on the brink. What shocked me was that they didn't ride the turkey into Ch 11 like UAL. I thought for sure they would. All they way down claiming waste and mismanagement was the problem. The idea that the unions would have negotiated earlier is as niave as it is laughable. You show me a union leader that likes its management and I'll show you a union leader about to be kicked out.

No shouldya, wouldya couldya, It was a poor, and stupid business decision to wait till the doors are about to close, then try to extort money and work rules from the employees, while of course protecting the management. The unions never would have talked to management? Says you. Had it been handled properly. Had the company come to us and treated us justly and fairly, you would be surprised how workable our people are. Problem is you don't go to the employees until you have exhausted all other measures. DC came with the extortion letters on near our last breath, stepped on the oxygen tube and said sign here or die.

Waste and management is the lingering problem. Poor utilization of assets is a testament to poor decision making on there part.

Every union leader should have had in the works a cost analysis of there CBA. They should have had solutions to problem in anticipation of the day management finally came knocking. Our boob JW still doesn't understand what happened and is still making 100% pay plus his add on.

No union leader has to like management, on the same line, no manager has to like a union leader. Both must though work together for the betterment of the company and its employees. One side or the other fails in that and it brings down the company and hurts its work groups.

 

[FWAAA]

I'm no big fan of Carty, but his behavior prior to April, 2003 can hardly be faulted. He (like our very own Bob Owens) and other legacy airline executives thought the pain would be short-lived and that the high-yield business traffic might return within a year or so following September 11.

He (and all the others) were, of course, wrong. UAL filed for Ch 11 in December 2002, and Carty realized that UAL would gut its labor costs. In early 2003 Carty was thus forced to go to the employees and beg for cost reductions.

Of course he waited until the well was nearly dry - no airline union (or union member) would ever give back unless bankruptcy was imminent, and Carty knew that.

Would everyone have preferred that Carty demand labor concessions in October, 2001? March 2002? Which month was the right month??

Granted, delaying the filing of the 10-K to try to hide the executive pension and incentive payments (securities fraud, in my opinion) was unforgivable and he rightly lost his job for such behavior. But blaming Carty for the timing of the concession demands just doesn't wash.

 

[FA Mikey]

I agree to some point. There was no right month, but there was a wrong time. That being the last minutes. Much more talking should have been happening out in the open. I understand you are walking a tight rope in want to make changes and cuts, while not scaring off investors, wall street and the lenders. It was not as though they all could not see the obvious. I am mad that they didn't work double time to reduce waste and make cost saving changes in the operation prior to coming to the employees to subsidize lower fares and continued waste.

I am sure APA and TWU would have at least listened and as it turns out were far more prepared for the cuts, and what did happen than the idiot APFA has as a chief negotiator.

 

[WingNaPrayer]

The ugliest part of all this was that AA was going to need labor's help, and they knew it well in advance. When you sign a contract, it comes with all the obligations that go with it. Had the Don started bringing labor into the fold as soon as they knew they were going to need it's help, and opened the lines of communication with union leaders right away, there would not have been as much animosity over the entire ordeal and, most likely, he would still have his job today.
(Not that I'm sorry to see him gone)

 

[Winglet]

The APA was talking to Carty long before the "emergency" concession contract . . . over 9 months earlier and the answer was don't need to talk now. A lot of this was a setup. Could the strategy been to take the company to the brink, give the unions the bum's rush, then ram a really onerous long-term contract down their throat?

 

[The Drunken Duck]

The ugliest part of all this was that AA was going to need labor's help, and they knew it well in advance. When you sign a contract, it comes with all the obligations that go with it. Had the Don started bringing labor into the fold as soon as they knew they were going to need it's help, and opened the lines of communication with union leaders right away, there would not have been as much animosity over the entire ordeal and, most likely, he would still have his job today.
(Not that I'm sorry to see him gone)

What a load. It amazes me that someone actually believes this. Do you believe in the Yenti and Loch Ness Monster? Is the moon made of cheese?

 

[LaBradford22]

The ugliest part of all this was that AA was going to need labor's help, and they knew it well in advance. When you sign a contract, it comes with all the obligations that go with it. Had the Don started bringing labor into the fold as soon as they knew they were going to need it's help, and opened the lines of communication with union leaders right away, there would not have been as much animosity over the entire ordeal and, most likely, he would still have his job today.
(Not that I'm sorry to see him gone)

Wing - there's no way in hell labor would have given in without real and actual threat of bankruptcy. They might have made a few concessions here and there, but nothing close to the $1.8B that AA got, which their financial models told them they would need to be competitive in the new LCC world (as it turns out, $1.8B may not have been enough - remains to be seen).

 

[goingboeing]

Wing - there's no way in hell labor would have given in without real and actual threat of bankruptcy. They might have made a few concessions here and there, but nothing close to the $1.8B that AA got, which their financial models told them they would need to be competitive in the new LCC world (as it turns out, $1.8B may not have been enough - remains to be seen).

Yeah,1.8 billion may have not been enough to compensate for bad management!Maybe we could all make more concessions and AA could pay all employee groups $10.00 /hr.with no benefits.

All AA unionized employees which have a defined benefit pension plan had better hang on to your wallet as AA will soon be looking for it.

Has the people running this airline ever thought of raising ticket prices $10.00/ticket to make a profit? Flying with full airplanes just for fun is not going to cut it for long term survival.

If AA management does not make major changes and make them fast we will still be headed for Chapter 11.

 

[Oneflyer]

If you raise ticket prices, people don't buy tickets, is that hard to understand? Go to Orbitz.com and run a search, it spits out the cheapest ticket prices, $10 or $100 if you aren't the cheapest people don't buy your tickets. By the way, AA still gets a 30% revenue premium over SWA and other discount carriers.

You don't seem to get it, its not up to AA management or the unions to decide whether the pensions get taken away. Pure economics will decide either you'll give them away or AA will eventually go into Bankruptcy and they'll get taken away.

What do you think new management is going to do? Are they going to give you your old salary back, NO. They're going to say the same thing everyone with common sense would say, salaries are 45% of costs, we can't raise prices, so we have to cut costs. Its pretty damn simple.

 

[goingboeing]

If you raise ticket prices, people don't buy tickets, is that hard to understand? Go to Orbitz.com and run a search, it spits out the cheapest ticket prices, $10 or $100 if you aren't the cheapest people don't buy your tickets. By the way, AA still gets a 30% revenue premium over SWA and other discount carriers.

You don't seem to get it, its not up to AA management or the unions to decide whether the pensions get taken away. Pure economics will decide either you'll give them away or AA will eventually go into Bankruptcy and they'll get taken away.

What do you think new management is going to do? Are they going to give you your old salary back, NO. They're going to say the same thing everyone with common sense would say, salaries are 45% of costs, we can't raise prices, so we have to cut costs. Its pretty damn simple.

The last time I checked SWA WAS IN THE AIRLINE BUSINESS.How is it then that SWA pays their employees more than AA does and they still make a profit?They are selling tickets on Boeing airplanes as AA does and they are making money and we are losing money.Explain that one away.

SWA has some type of pension plan and benefits for their employees as does AA.How does SWA management make profits and AA's management lose money?

Other than an International route system we are in exactly the same business as SWA. SWA is a major carrier now and last year they flew more people than any other single airline.
It is foolish to price your product the same as your competetors if you are losing money.[online booking services]
With this mindset we might as well give away all tickets and carry the most passengers again. I'm going to the bank tomorrow and trade my dollar bills for dimes.[This is exactly what AA management is doing]

WAGE CUTS CANNOT COMPENSATE FOR INCOMPENTENT MANAGEMENT.

 

[Oneflyer]

Actually, SWA does not have a pension plan at all. Given the fact that AA contributed almost $200 million to its pension in the first quarter and lost $160 million or so, AA would have been profitable without pension abligations. SWA made around $25 million if I remember correctly. Maybe AA's not so dumb.

 

[Wretched Wrench]

Actually, SWA does not have a pension plan at all.

Actually, SWA Employees get a dollar for dollar match in their 401K - up to 7.3% of their investment

 

[Oneflyer]

Excuse me, SWA does not get a DEFINED BENEFIT PLAN like AA UNION members. They get a far less expensive 401k just like AA MANAGEMENT.