NWA vs AFA

[Bear96]

Self help does not mean that they did out without the authority of the government. The fact is that whether its through BK or the NMB its the same body, the government, that must authorize self help.

The court's response to that argument is that the RLA explicitly gives only the NMB, and not the courts, the right and responsibility to determine if and when a party can invoke self help. The court did not recognize the court's order at the end of the S 1113 process and subsequent imposition of the concessionary contract as NW invoking self help under the RLA.

 

[ThirdSeatHero]

Well, yes -- that is exactly the point of S 1113, to void collective bargaining agreements. The court responded to your argument by saying that Congress didn't pass a law with the intent that if someone actually dared to use the law it would be fatal to them, as a strike in BK probably would be to NW. In other words, the law is there for people to use when appropriate; it is appropriate to use S 1113 in BK; a company using the law when appropriate shouldn't bunished by having to endure grave consequences.

Yes, and there are others who disagree with that position....like the first judge who ruled he couldn't enjoin a strike, and I'm fairly confident hes not the only one. I'm quite sure there will be plenty of back and forth before this is "over".

The court emphasized that the RLA's main purpose is NOT to defend a union's right to engage in self-help, in contrast to the NLRA. Rather, the court said that the purpose of the RLA is to keep interstate travel and commerce flowing by purposefully stretching out the process and making it difficult for unions to engage in any activities that would disrupt interstate travel and commerce.

Yea, and the part you conveniently left out is the fact that when the RLA is doing all you listed above, the company is held in check by having to maintain the status quo. That's the glaring hole in all of this, that's the part that the latest judge fails in rectifying. Which is why, as I stated in my original post, "I suspect that's exactly where the appeal will attack his argument".

(To be clear, I am not supporting the court's line of thinking, but just trying to give an accurate description of the court's reasoning, right or wrong.)

Thank you, but I already have a firm grasp on the latest courts reasoning......and in my (and others)opinion its flawed. Something that I'm sure will be touched on when this ruling is overturned.

 

[ThirdSeatHero]

The court's response to that argument is that the RLA explicitly gives only the NMB, and not the courts, the right and responsibility to determine if and when a party can invoke self help.

Yes, that's what it said.........

The court did not recognize the court's order at the end of the S 1113 process and subsequent imposition of the concessionary contract as NW invoking self help under the RLA.

Whoa, didn't you just get through saying that.......

"only the NMB, and not the courts, the right and responsibility to determine if and when a party can invoke self help"


ARE WE STARTING TO SEE THE HOLES YET???

Uh-oh.....I'm printing in Bold font, and making liberal use of CAPS, I must be angry......no wait, I'm on a TIRADE!!!

 

[exnw]

Me neither, and everyone who's ever read my posts knows I'm no union fan either.

If it were up to me, there would be at least two kinds of contracts that could not be altered or voided by bankruptcy: Collective bargaining agreements and Defined benefit pension plans. Bankrupt companies unable to successfully reorganize without voiding these contracts should be liquidated immediately. The bankruptcy code should have never allowed those contracts to be abrogated/voided/terminated.

That's what should have happened with USAir and UAL. Had they been liquidated in 2002 or early 2003, the other legacies would have recovered much more quickly, IMO, obviating the need for all of them to seek huge concessions.

I agree 100 percent company must liquidate if it defaults
on its pension plan. Part of being in business is to
maintain "all" of your obligations. With the federal
government picking up the tab for bankrupt companies how
long will it take for the pension guarantee corporation
to default. Imagine if GM or Ford default on its pensions.
Talk about the taxpayers being screwed.


By the way, Mr Owens - you realize that most European countries have no counterpart to chapter 11, right? Bankruptcy generally means outta business and liquidation. I'll take the general strike threat that you advocate if you'll accept the typical European bankruptcy rules as well. B)

 

[eolesen]

It's funny how many airline employees are labor law and bankruptcy law experts...

NWA knew this would be the outcome? Please. This was the first time that S.1113 and Section 6 of the RLA actually crossed paths, a full 22+ years or so after S.1113 was enacted.

The fact is that nobody knew what the outcome would be, including the lawyers and judges.

Now, if someone is smart, they'll be lobbying to have amend S.1113 of the bankruptcy code to require the NMB's release before arbrogation can take place.

 

[eolesen]

If it were up to me, there would be at least two kinds of contracts that could not be altered or voided by bankruptcy: Collective bargaining agreements and Defined benefit pension plans.

I'll respectfully disagree. Both pensions and collective bargaining agreements have very specific steps (separate from other executory contracts, leases, and debt obligations) which have to be followed.

As I posted a few minutes ago, there's middle ground that could be reached with regard to S.1113: require that the NMB determine if there's an impasse as opposed to a judge. The NMB is much more familiar with the inner workings of labor contract negotiations than a bankruptcy judge would be. Plus, the NMB's standards for good faith bargaining appear to be a lot higher than what has transpired at the bench over the past five years.

Put similar restrictions in place with the PBGC or another agency with regard to retirement plans, and I don't think the companies would be given as much free rein as they've had.

 

[Bear96]

Yes, that's what it said.........
Whoa, didn't you just get through saying that.......

"only the NMB, and not the courts, the right and responsibility to determine if and when a party can invoke self help"
ARE WE STARTING TO SEE THE HOLES YET???

Uh-oh.....I'm printing in Bold font, and making liberal use of CAPS, I must be angry......no wait, I'm on a TIRADE!!!

I don't understand what you are trying to say here.

However, I wasn't clear when I said this:

The court did not recognize the court's order at the end of the S 1113 process and subsequent imposition of the concessionary contract as NW invoking self help under the RLA.

What I was trying to say was this: "Marrero did not recognize Gropper's order at the end of the S 1113 process process and subsequent imposition of the concessionary contract as NW invoking slef help under the RLA." There are two court decisions at issue here and I sloppily described them both as "the court's" decisions without distinguishing. Mea culpa.

Not sure if that addresses whatever it is you were trying to say or not.

Thank you, but I already have a firm grasp on the latest courts reasoning.

Oh. Okay, if you say so. But from your postings, it really isn't clear you have even read the opinion, much less understand the underlying reasoning or substantive legal points made by the court.

 

[finman]

I am normally no fan of unions, but I don't understand how Northwest is being allowed to impose terms (which could be considered self-help) while the union is barred from taking any sort of work action. That doesn't seem fair to me.

It's clear that NW doesn't have an army of replacements ready like they did with AMFA and nearly as strong of a hand. They also won't be needing such drastic cuts long term as they thought (thanks to oil's freefall). NW's hand isn't very strong right now. AFA has leverage and should use it.

Oil's Freefall? Oil is currently in the low 60's. When the reorganization started, oil was in the 50's. There has been a freefall over the last couple months; down from the high 70's, but the prices are still higher than in the original reorganization business plan.

 

[tech2101]

Oil's Freefall? Oil is currently in the low 60's. When the reorganization started, oil was in the 50's. There has been a freefall over the last couple months; down from the high 70's, but the prices are still higher than in the original reorganization business plan.

Righ on the mark finman. You can already see the mindset that the oil companies wanted. The media and most individuals are all so happy that the price of gas/oil has dropped so fast. People seem to forget the reference point. Look at these prices and compare with todays $60-$70/barrel price.

Sorry for the off topic comments all.

Year
Ave Nominal Price per barrel of oil
Ave Annual Inflation Adj. Price

1988
$14.87
$24.78

1989
$18.33
$29.09

1990
$23.19
$34.83

1991
$20.20
$29.19

1992
$19.25
$27.00

1993
$16.75
$22.83

1994
$15.66
$20.79

1995
$16.75
$21.64

1996
$20.46
$25.66

1997
$18.64
$22.86

1998
$11.91
$14.38

1999
$16.56
$19.52

2000
$27.39
$31.29

2001
$23.00
$25.57

2002
$22.81
$24.94

2003
$27.69
$29.63

2004
$37.66
$39.21

2005
$50.04
$50.38

Citation below:

http://www.financialsense.com/editorials/n.../2006/0409.html

 

[ThirdSeatHero]

It's funny how many airline employees are labor law and bankruptcy law experts...

NWA knew this would be the outcome? Please. This was the first time that S.1113 and Section 6 of the RLA actually crossed paths, a full 22+ years or so after S.1113 was enacted.

The fact is that nobody knew what the outcome would be, including the lawyers and judges.

Now, if someone is smart, they'll be lobbying to have amend S.1113 of the bankruptcy code to require the NMB's release before arbrogation can take place.

A rather pathetic attempt to spin my words. "Please".

Here's the portion of my original post you seem to have a problem understanding....

"NWA made a decision to file an 1113© knowing full well the desired outcome would void the contracts if not ratified by the particular unions."

So if the unions don't ratify the proposals of the company during an 1113©,while it is possible, and in other recent cases has been shown that judges DO deny 1113©s, the companys desired outcome IS voiding the contract.

You don't have to be a labor law or bankruptcy law expert to figure this out.

 

[ThirdSeatHero]

Oh. Okay, if you say so. But from your postings, it really isn't clear you have even read the opinion, much less understand the underlying reasoning or substantive legal points made by the court.

"It really isn't clear"??? And why is that? Because I happen to disagree with the ruling?

Allow me to enlighten you.

One can fully understand anothers reasoning, and still disagree with that reasoning.

There. Now you have something new to think about.

 

[Kev3188]

Oil's Freefall? Oil is currently in the low 60's. When the reorganization started, oil was in the 50's. There has been a freefall over the last couple months; down from the high 70's, but the prices are still higher than in the original reorganization business plan.

What price per bbl. did NW use in the reorginazation plan?

Also, how much are now hedged, and at what price? I seem to remember reading the numbers, but can't recall them....

 

[finman]

What price per bbl. did NW use in the reorginazation plan?

Also, how much are now hedged, and at what price? I seem to remember reading the numbers, but can't recall them....

I don't know the exact numbers, but our business plan was based on roughly $50-$60/barrel oil. We are hedged on 25% of our fuel through the end of the year, via a collar option that guarantees we pay between $65-$75/barrel. Thus, we are currently losing money on these hedges with oil in the low $60's.

 

[eolesen]

A rather pathetic attempt to spin my words. "Please".

Here's the portion of my original post you seem to have a problem understanding....

"NWA made a decision to file an 1113© knowing full well the desired outcome would void the contracts if not ratified by the particular unions."

OK, Mr. Rocket Scientist. How 'bout putting the whole post for context, instead of just the first sentence?...

Here's the remainder:

I seriously doubt this will be allowed to stand "as is" simply because all unionized corporations under the RLA would use it as a tool to strip unions down unchecked. Just every few years take a quick trip to BK just to drop wages and benefits and start all over. The RLA essentially becomes useless.

Thats the balance the RLA is supposed to defend. Yes, preserve the nations transit systems free of disruption, BUT ALSO keep managements in check as to how they can alter contracts with unions, prior to both parties being free to engage in self-help.

In concert, your comments appear to be making the assumption that NWA knew in advance that they could proceed with S.1113 and that there'd be no ramifications, i.e. self help actions on the part of the union.

There's never been any doubt that NWA was going to go thru a S.1113 proceeding. Few carriers have avoided it.

What's been in doubt (and still is until all the appeals are exhausted) is whether or not the union is able to engage in self-help.

If you can't understand that, then you'd better stick to the sideways seat for a few more years.

 

[ThirdSeatHero]

OK, Mr. Rocket Scientist. How 'bout putting the whole post for context, instead of just the first sentence?...

Here's the remainder:
In concert, your comments appear to be making the assumption that NWA knew in advance that they could proceed with S.1113 and that there'd be no ramifications, i.e. self help actions on the part of the union.

There's never been any doubt that NWA was going to go thru a S.1113 proceeding. Few carriers have avoided it.

What's been in doubt (and still is until all the appeals are exhausted) is whether or not the union is able to engage in self-help.

If you can't understand that, then you'd better stick to the sideways seat for a few more years.

"In concert, your comments appear to be making the assumption that NWA knew in advance that...."

No, that is your assumption, it is also incorrect and will have to remain your problem.

Oh, and your presumption I'm an FE......also incorrect.

Have a nice day!