Not all airlines use bankruptcy as tool to shed contracts

[FWAAA]

Here's a different take on things. A snippet:

American is the only one of the six "legacy" carriers (the others are United, Delta, Northwest, Continental, US Airways) that has never been in bankruptcy. Is it irresponsible for American not to use bankruptcy to lighten legacy costs — shredding labor contracts and reducing obligations to retired employees?

Gerard Arpey, American's CEO, replies with a laconic "no." He considers it unseemly and shortsighted — and unnecessary — to seize short-term competitive advantages by reneging on labor contracts freely consented to, and to escape commitments to investors who lent you money in good faith. Furthermore, the damage to employee relations makes bankruptcy more costly than some companies realize when they use it as a routine management tool.

While some of American's competitors use bankruptcy to end medical payments for retirees, Arpey says American continues to pay $250 million a year "for people who are not here." His reward has been helpfulness from American's unions.

JetBlue, a low-cost carrier, will outsource 80 percent of the maintenance of its aircraft to El Salvador and Canada. But because American's unions revised inefficient work rules ("I'm working on this plane in this hangar and when I finish I won't go to the next hangar"), American still does its maintenance in Tulsa, Kansas City and Fort Worth. Other airlines have used bankruptcy to bludgeon unions into financial givebacks; American's unions, says Arpey, "accepted pay cuts in 2003 and we have asked them to keep changing to drive more productivity — and they are answering the call." Still, Arpey says that if American, which has about 9,000 active pilots, had the work rules Continental has after two bankruptcies, "I could run American Airlines with 1,000 fewer pilots."

Rest of the article:
http://www.app.com/apps/pbcs.dll/article?A.../701300334/1030

So, should AMR have gone along with the crowd and filed for bankruptcy protection? Chapter 11 would have made it easier to close the three maintenance bases; would have enabled AMR to walk away from its pension and other retiree obligations; would have made it easier to cram more wage concessions down everyone's throat; would have made it easier to abandon more airplanes (leading to even more furloughs); would have enabled AMR to screw employees even more than it has thus far.

So did AMR do the right thing? Or should AMR have filed?

 

[Bear96]

Gee, it suddenly got awfully quiet in here.

 

[nbmcg01]

Gee, it suddenly got awfully quiet in here.

Ok I'll jump in....What AA did was just as heinous as bk abrogation. They undervalued the cost of contractual provisions and in the case of the f/as, refused to allow for the "savings" of the loss of 1/6th of the work force. If there had been honorable intentions, snap backs would have been offered, the original vote would have been allowed to stand, and real value would have been given each concession. Value is determined at the time an item is negotiated. The value can only go up. After a "successful" round of negotiations, the first press release from the Co is always re: the cost of the new agreement. How can an item the was given a cost value of $50 million, suddenly only be worth $5 million towards the requested amount. Many of the former TWA f/as (with union experience) were yelling and screaming about watching out for the SEC filings (we had been down that road before) and after our warnings were both ignored and the truth came out, the very board (APFA) where the discussions took place, were suddenly closed. In a BK setting, AA would not have had the ability to set the value of the contractual provisions. I have never understood why the APFA didn't drag out the negotiating notes, walk away from the table and say to AA, " Dudes, we are willing to help. We're even willing to "give" you the requested $340,000,000, BUT, we will agree on the value of a concession, we get to pick the concession, and until you are ready to be serious about this process, no deal!" And then, USE THE PRESS!!!!!! This is what happens when you have inexperienced negotiators, who are more interested in their fragile egos than in saving jobs and contracts that had previously been negotiated in "good faith".

 

[Bob Owens]

Here's a different take on things. A snippet:
Rest of the article:
http://www.app.com/apps/pbcs.dll/article?A.../701300334/1030

So, should AMR have gone along with the crowd and filed for bankruptcy protection? Chapter 11 would have made it easier to close the three maintenance bases; would have enabled AMR to walk away from its pension and other retiree obligations; would have made it easier to cram more wage concessions down everyone's throat; would have made it easier to abandon more airplanes (leading to even more furloughs); would have enabled AMR to screw employees even more than it has thus far.

So did AMR do the right thing? Or should AMR have filed?

BS BS BS

What else would you expect from that POS George Will?

Amr got more without going BK than its competitors got going BK. In fact AA got so much its bankrupt competitors had to go back to court for a second or third time to get what AMT got without even entering the ring.

The maintenance bases give AMR a competeitive edge, always have with SRPs,SMs etc. BK at other airlines put that edge at risk.

 

[TIME FOR CHANGE]

So did AMR do the right thing? Or should AMR have filed?

The employees got screwed without bankruptcy

We should have filed and gutted the place.

No stock options for a bankrupt carrier

 

[MCI transplant]

Gee, it suddenly got awfully quiet in here.

<_< Quiet! ---- HELL! Is this rhetoric a smoke screen to divert attention away from the fact that the fat cats at the top are going to receive $$$ Millions in Bonus Dollars premised on the value of our sacrifice!!??? I do believe so!!!! :angry:

 

[Redbone]

We all got screwed...AA, NWA, UAL, DAL, US (employees).

This has been the ultimate mother load dream for airline management. They have been dreaming of this and slowly working towards this crescendo for decades now.

 

[eolesen]

You people have no f'n clue how bad it could have been. The other employees got gang raped, while all you got was a pat on the ass.

The sad part is that you're so wrapped up in self-pity that you don't realise just how much you actually held onto.

Perhaps you'll think about it when you're getting your full pension checks at age 60, while guys who lost their pensions to bankruptcy will still be working into their 70's because they simply can't afford to retire on what little they'll be getting from the PBGC.

 

[FWAAA]

The employees got screwed without bankruptcy

Fair enough. Nobody is disputing that you took painful paycuts.

We should have filed and gutted the place.

Which would have accomplished what, exactly? You'd all be rolling in piles of money today as a result?

No stock options for a bankrupt carrier

You couldn't be more incorrect on this point.

Perhaps you don't remember the $480 million in new UAL stock handed to the UAL executives upon UAL's emergence from bankruptcy? The top 400 managers were given 8% of the stock, worth about $480 million. They wanted 15% of the stock, worth $900 million, but ended up getting a little more than half that amount.

Here's some articles detailing the management greed and theft at UAL:

http://www.rockymountainnews.com/drmn/airl...4431769,00.html

http://www.nytimes.com/2006/01/29/business...and&emc=rss

AMR's executives would have likely been given twice that much. Think you're pissed off? Have a chat with some UAL mechanics (if you can find any).

On top of that, UAL blew through over $660 million in bankruptcy lawyers, accountants, investment bankers and other advisors during their bankruptcy. Easiest place to get that money is from the employees' pockets.

 

[nbmcg01]

You people have no f'n clue how bad it could have been. The other employees got gang raped, while all you got was a pat on the ass.

The sad part is that you're so wrapped up in self-pity that you don't realise just how much you actually held onto.

Perhaps you'll think about it when you're getting your full pension checks at age 60, while guys who lost their pensions to bankruptcy will still be working into their 70's because they simply can't afford to retire on what little they'll be getting from the PBGC.

Thanks for reminding us of the pension savings.. My $99 a month will go far.

 

[Chuck Schalk]

Note to all........

The TWU gave the company the bankruptcy plan without going to court. Thye gutted our contract and continued with work improvements with the help of the committees and overzealous employees for hot dogs, hamburgers, and being told that we were lucky to have a job and that bankruptcy was averted. If anyone would look at the bankruptcy plan in 2003 you would see that we gave them just about all of the bankruptcy plan. So if you give them the bankruptcy plan voluntarily it means it did not happen. Our families thank you for short sightedness!
What ever happened to the employees getting concessions back one for one of equal value through continued improvements? Another lie and in my mind that is violating our original agreement thus making it now null and void!

 

[upsilon]

You people have no f'n clue how bad it could have been. The other employees got gang raped, while all you got was a pat on the ass.
The sad part is that you're so wrapped up in self-pity that you don't realise just how much you actually held onto.

FM, in my many years on this AA board of USAv, I have come to realize that (thankfully) the disgruntled posters here are a very constant group. It would require only the fingers of both hands to number and list them. The fact that their numbers are so low and constant gives me the sense that they are not typical of AA employees in their groups: A&P mechanics, FA, CSA or Pilot.

I continue to monitor this board because of the many AA employee posters who do not grind their axes here but post useful information and opinions on AA operations that are not warped by hate for their union or employer. Fortunately these poster far outnumber their counterparts - and are far more readable.

I'm an AA-loyal (multi-MM PLT) pax and a FI (Former Investor) who doubled-down at a low single-figure price - which was a real cheap crap-shoot. But I took Buffet's advice and bailed - after I was whole plus interest and a little something for the pain and suffering. I too am now AeroAnon; but I continue my PB sub (where we first encountered at least one of the posters cited above) - because of my love of aviation

 

[Boomer]

We need a Nelson Mandela type TRUTH COMMISSION to examine the B$ issued by Airline Industry Executives: if they admit the truth, they walk; if they continue to lie, they are imprisoned or shot.

Let us begin with the mAAnagement AApologists:
----------------------------------------------------------

Rest of the article:

Arpey as Pontius Pilot

American is the only one of the six "legacy" carriers (the others are United, Delta, Northwest, Continental, US Airways) that has never been in bankruptcy. Is it irresponsible for American not to use bankruptcy to lighten legacy costs — shredding labor contracts and reducing obligations to retired employees?

Gerard Arpey, American's CEO, replies with a laconic "no." He considers it unseemly and shortsighted — and unnecessary — to seize short-term competitive advantages by reneging on labor contracts freely consented to, and to escape commitments to investors who lent you money in good faith. Furthermore, the damage to employee relations makes bankruptcy more costly than some companies realize when they use it as a routine management tool.

"...American's unions, says Arpey, "accepted pay cuts in 2003 and we have asked them to keep changing to drive more productivity — and they are answering the call." Still, Arpey says that if American, which has about 9,000 active pilots, had the work rules Continental has after two bankruptcies, "I could run American Airlines with 1,000 fewer pilots."

He adds, "Our results don't look that different than United's, which was three years in bankruptcy." This, even though post-bankruptcy United has a $1 billion annual labor cost advantage.

George F. Will's nationally syndicated column appears regularly.
-----------------------------------------------------------
The selective edit by FWAAA is nothing more than propAAganda by someone that has admitedly left AA for greener pastures but continues to chime in on the pAArty line.

George Will contradicts himself by citing the abrogation of Union contracts as an evil while citing the same conduct by Arpey, outside of bankruptcy,(and through the threat and manuever policy adopted from his mentor Bob Crandall), as some type of virtue.

It is no wonder that the Republicans and the Neo-Free Traders got washed up on the beach during the last election cycle. Hypocracy, like pornography, is hard to define; but we all know it when we see it.

 

[jersey777]

I voted to reject the concessionary contract in 2003. Now I realize that I was wrong. I have a friend at United and I have seen what they have gone through. The same for Northwest and USAir. We are so much better off then those flight attendants. I wouldn't trade our concessionary contract for their bankruptsy contact. With that said...I still feel ripped of by the company because of the Excecutive Bonus plan and the next round of negotiations I hope the APFA fights for everything back!

 

[Hopeful]

We need a Nelson Mandela type TRUTH COMMISSION to examine the B$ issued by Airline Industry Executives: if they admit the truth, they walk; if they continue to lie, they are imprisoned or shot.

Let us begin with the mAAnagement AApologists:
----------------------------------------------------------

Rest of the article:

Arpey as Pontius Pilot

American is the only one of the six "legacy" carriers (the others are United, Delta, Northwest, Continental, US Airways) that has never been in bankruptcy. Is it irresponsible for American not to use bankruptcy to lighten legacy costs — shredding labor contracts and reducing obligations to retired employees?

Gerard Arpey, American's CEO, replies with a laconic "no." He considers it unseemly and shortsighted — and unnecessary — to seize short-term competitive advantages by reneging on labor contracts freely consented to, and to escape commitments to investors who lent you money in good faith. Furthermore, the damage to employee relations makes bankruptcy more costly than some companies realize when they use it as a routine management tool.

"...American's unions, says Arpey, "accepted pay cuts in 2003 and we have asked them to keep changing to drive more productivity — and they are answering the call." Still, Arpey says that if American, which has about 9,000 active pilots, had the work rules Continental has after two bankruptcies, "I could run American Airlines with 1,000 fewer pilots."

He adds, "Our results don't look that different than United's, which was three years in bankruptcy." This, even though post-bankruptcy United has a $1 billion annual labor cost advantage.

George F. Will's nationally syndicated column appears regularly.
-----------------------------------------------------------
The selective edit by FWAAA is nothing more than propAAganda by someone that has admitedly left AA for greener pastures but continues to chime in on the pAArty line.

George Will contradicts himself by citing the abrogation of Union contracts as an evil while citing the same conduct by Arpey, outside of bankruptcy,(and through the threat and manuever policy adopted from his mentor Bob Crandall), as some type of virtue.

It is no wonder that the Republicans and the Neo-Free Traders got washed up on the beach during the last election cycle. Hypocracy, like pornography, is hard to define; but we all know it when we see it.

OH BOY!!!!!!!!! DOES THIS MEAN THE DEMOCRATS ARE GOING TO GET OUR CONCESSIONS BACK?????????

OH BOY, THE DEMOCRATS ARE GOING TO GET EVERYTHING BACK FOR US!!!!!!!!!!! OH WHAT A GLORIOUS DAY!