35% of direct labor, material, and OSS spend. I did read the language which is very close to actual spend. Have you looked at the percentage of OSS spend lately? Through three quarters even under the new CBA the TWU keeps more maintenance spend in-house (work) than any other airline.
In negotiations the company admitted that they didn't want to go the outsourcing route any more than they have so far. The company admitted they did not believe they would realize savings farming out narrow body work because in their words they would have to pay a "premium" in order to get places to do the work on MD-80s etc because as we know those places are already having problems keeping staffed to handle the work they already have. Yes I know they don't have to hire A&Ps, but they are having problems recruiting any body with mechanical skills. The compan even shared information with the Union that cited that narrowbody OH was in tight supply, widebody was plentiful. A large influx of narrow body work from AA would simply drive prices up for everyone, and AA would be especially hard hit because they would be the last ones in the door, that means they would pay more and would have to schedule their overhauls at the vendors convienence, in other words they would either have their overhauls done too early, wasting money, or have them sitting on the ground somewhere-wasting money, waiting to be squeezed into somebodys dock plan. In other words AA had no place to send any more than they already have, maybe that's why more than a year later they are still close to 10% under the imaginary cap you so often cite. If the cap was really effective at restricting the amount that AA outsources then why aren't they bumping against it? The fact is that AA is outsourcing as much as they want to, they are going to cut heads as they see fit anyway. AA got exactly what they wanted and then some, thanks to Videtich, Hewitt and several weak minded members of the committee that Videtich was able to scare over the cliff. I'm tired of you reading about how much maintenance SWA outsources, the fact is they
always outsourced most of their maintenance, they did that before they had a union, they did that with the IBT and they still do that with AMFA, but have they increased the percentage outsourced and reduced headcount as a result? NO. So why bother even discussing SWA? They outsourced more than we did when they made less than us, the only thing that has changed is that now we make much much much less than they do. When I worked at Capitol and other small carriers we were told that they could not pay the wages that the "majors" paid because we didn't have the volume of work to do all OH in house and had to share whatever profits we made with vendors, in house OH was not considered a liability, control of work, the ability to tailor the scheduling of work to maximize the amount of revenue the aircraft could generate between Overhauls and economies of scale all gave the majors an
overall cost advantage. Sure if you singled out one item such as total wages paid you would not see that, but when looking at the whole operation, not just maintenance but the operation that maintenance supports the savings did materialize. When UAL outsourced their total costs per unit for maintenance increased. They have been trying to bring work back in house, their language, unlike ours limits narrowbody outsourcing to domestic MROS, may not be an issue with the MD_80s, but AA AIRBUS and Boeings can fly to Aeroman just as easily as SWA and US ones do. So tell me back when we made more than SWA did were they outsourcing to get top of the industry wages? NO, they didn't have the economies of scale and their management didn't have any desire to bring that work in house. Sure they have the scale now but now their wages are much higher than all their competitors, they have built their business model around outsourcing, AA did not. With all your talk about how the guys at SWA threw OH under the bus the fact it they never had it and despite your assertions that they did so to put a few extra dollars (Around $30,000 more than AA mechanics get-more than a few) all their wages did was keep up with inflation, while our compensation has plummeted dramatically, by at least 50%. SWA didn't soar past us, we plummeted past them. This happened prior Bankruptcy, and ten years later we are still plummeting, it happened with "the threat" of bankruptcy in 2003. 2001-2005 wasn't the first time this industry saw massive layoffs, I recall working with guys at Capital Air in the early 80s who had as much as 25 years seniority from United, American and other large carriers. They got called back. Even if AA had declared BK in 2003 we would probably be much better off today than we are now. Would there have been more layoffs in 2003? Well assuming that AA actually did go BK then yes, but wages across the industry , including MROS would have remained higher if we didn't for over record breaking concessions of at least (cautiously using Donnelley math) 25% when at the time UA had settled on just 14% of a wage that was higher than ours. When we agreed to 25% without even going BK UAs creditors rejected the TA and USAIR later went back into BK to try and secure concessions similar to what AA was able to get without even going BK, concessions such as OSMs, employee paid retiree medical, employee paid LTD, losing the first year on the pension, less vacation accrual, less sick time accrual, straight time pay for training, Fleet service doing Receive and Dispatch and those are just some of the concessions that AA had prior to the massive cuts that we gave them under the "threat" of BK. The fact is that we have always provided AA a cost advantage when it comes to Aircraft Maintenance Labor. Prior to 2001 who was the leader among the legacy carriers in outsourcing? AA was, we even allowed other carriers that used our ramp to bring in contract maintenance, something most other union carriers would not be able to do, we were doing since the 80s. AA wasn't about to give that up that cost advantage by dumping just as much of its maintenance into a saturated, short staffed MRO market where they would be at a huge disadvantage as far as pricing and scheduling. Having planes sit on the ground when they should be flying burns a lot of cash really fast, when you consider that without even factoring in such costs that the savings would be minimal, keeping the MD-80 work in house, for however short it lasts was no great feat. As the MD-80s go away so will the jobs, but all the concessions remain. AA will continue to lead the Industry with the lowest cost Aircraft maintenance labor per unit in the industry, when the MD-80s go away they will no longer be able to hide that fact under total maint costs(which are driven up because of old aircraft which you and Videtich also hide) only now its not in pennies per hour, its in dollars. I have to wonder, Videtich so warmly embraces all those programs, PLI, JLT, etc that allowed the company to cut even more heads and squeeze even more productivity out of the people who were making drastically reduced wages (still have never heard from either you or Videtich how cutting Vacation weeks saves jobs when its a known fact that it allows the company to cut even more jobs) with the claim that we were going to use those savings to "negotiate " back some of the stuff we gave up. In other words give them the concession of increased productivity that they never even negotiated for and hope that many years later they will give us something for it. Well of course they didn't, when Videtich did finally ask what value they were getting for the hundreds of millions of "productivity improvements we gave the company for nothing the company flatly said "nothing", they used whatever we saved them to pay the oil companies. Another thing that both you, Overspin, and Videtich leave out is how management went out to the line and told them to vote for this contract because it would allow them to get rid of Tulsa. Ironically the Line voted in a way that would save Tulsa, but you, Videtich, Gless and Little were able to convince Tulsa that voting YES would save them. Little is gone, Gless is pretty much gone, Tulsa is shrinking by the day, each time an MD-80 leaves its doing so for the last time, but sadly Videtich remains, and some of Tulsa still sees him as their champion!
