Official: AMR Bankrupt

[MCI transplant]

All of that and yet your life has an empty spot that leads you to this bulletin board to defend the same type of ignorant leaders that lead to destruction of TWA.
Go live your life and stop destroying mine. Just because you were dealt a difficult hand doesn't mean that you must insure I have to deal with one also.

I am sorry you had leaders that took you off the cliff on more than one instance. If you are so F'ing happy with your outcome then why linger in this crap hole?

Yeah I will say it too

WOW

<_< ------ O.K. informer you win! I'll mind my own business! ------- I wish you well brother!----- As for lingering in this "crap hole", I could ask the same question of you!!?

 

[tech2101]

Disclaimer...I am an outside observer.

I am not so sure if a member of the bankruptcy committee should be blogging on all of the minutiae of the case. What good does it serve the membership to post on a blog?

Ther must be other (better) ways to communicate with the membership.

What do all think?

 

[700UW]

So, are you working under and imposed agreement or one that was voted in by the members at USAIR?

Also didn't you guys receive big raises prior to BK? We have not had any increases in three years and that's on top of a 25% cut.

No we did not get big raises, we took concessions in the first bankruptcy which was filed in 2002.

It was a final offer after our CBA was abrogated, the judge made us vote on it, under the threat it would be imposed anyhow, he didnt want a strike.

And its US Airways and has been since 1996.

We went with no increases from 1995-1999, and had cuts that started in 2002.

And two years ago, we got a new combined CBA and are in Section 6 negotiations now.

 

[Overspeed]

That's really the unions question, by the way UAL has a TA that they are voting on Dec 29, so the only ones left below us is USAIR and they have been in mediation since July.

Cherry picking facts as always. Pay rates for those in house without what is outsourced at lower overall cost is extremely relevant. US, UA, WN, CO, and DL all outsource at higher levels than AA does now. Once the BK proceedings start, AA will argue that they need to outsource like their relevant peers and you can argue that the line deserves higher pay as a result.

 

[BoeingBoy]

Try to remember that USAir's bankruptcy timeline was under the "take as much time as you need to come up with a restructuring plan" days.

While you're correct that US' two bankruptcies were under the previous bankruptcy law (almost non-existent) timeline, US was under pressure in both to exit rapidly - financial pressure.

In the first, it was the need for the ATSB backed loan money that had tentatively been approved prior to filing and was subject to being denied without a rapid exit with an acceptable POR. The finishing touches on the POR to pass ATSB muster is why the PIT facility leases and pilots' pension were dumped at 23:59:30 on the 24 hour BK clock.

In the second it was just running out of available cash to continue operations due to the ATSB backed loan covenants. The required "cash collateral" (the typical cash and short-term investments) had been renegotiated downward 3 times in BK II from $1 billion to $400 million and the reporting of the "cash collateral" had been shortened from quarterly to daily (the ATSB "lengthened the leash but tightened the collar"). US only had $403 million 27 days prior to exiting, compared to the approximately $800 million when it filed BK II plus a like amount raised during BK II.

So while US seemed to be in BK a long time, the individual bankruptcies only lasted about 6 months for the first and 12 months for the second.

In respect to AA's bankruptcy, I would hope that the 2003 concessions would soften the blow suffered by the employees in bankruptcy. AA's costs aren't nearly as far out of line as they would have been if the 2003 concessions had not occurred. Obviously, losing the DB pensions would be big blows - especially to higher paid employees like pilots who are late but not at the end of their career (for young employees a DC plan could end up being better since they have a lot of years to retirement). Canceling retiree health insurance would be a big ticket item but it would affect different retirees differently - some more and some less depending on health care needs. But those and productivity would be the big items I hope, since generally pay seems to be reasonably well in line judging by comments here.

Jim

 

[WorldTraveler]

Kind of makes you wonder whether total cooperation by the represented workforce could have averted this bankruptcy filing. What if, instead of starting out with the "restore and more" sloganeering, the represented employees had negotiated small wage increases in 2008, in exchange for the productivity/scope improvements the company wanted? The pilots started with a 50% demand, then lowered it to a 30% demand, which the company had no intention of ever agreeing to. Dunno what the APFA was demanding, since it won't even tell its membership what it was asking for. Arpey's biggest blunder may not have been the failure to file Ch 11 in 2003; his biggest mistake may have been in not filing in late 2008 or early 2009 once it became apparent that the unions' demands far exceeded anything he was willing to pay. I think there's plenty of blame on both sides. AA should have told the represented employees in 2008 that failure to agree to very modest wage increases plus productivity gains would equal an immediate Ch 11. Instead, they dragged out the negotiations endlessly, probably giving false hope to some employees that their ship would eventually come in (in the form of large raises and retro).

You've still got union leaders/negotiators who think that the current bankruptcy is a "ploy" and a "sham" and that AA is not in any financial trouble.

given that it is now very clear that Arpey was so opposed to BK that he would walk away from his job, the notion that AA would have taken another set of cuts from employees and then filed anyway was clearly a fatal mistake from a negotiating standpoint. Of course hindset is 20/20 but after 8 years of working w/ mgmt, labor leaders should have had a much better read on what AA mgmt was all about.
.
to your point, I'm not sure how firm AA mgmt was in setting expectations but when they said "cost neutral" contracts, I think they made it pretty clear they were in no position to agree to any cost increases..... and in reality cost neutral was probably being excessively generous unless it meant cost neutral this year with increasing amounts of savings coming in subsequent years.
.
Sadly, there is no way to turn the clock back and AA will have no choice but to take a big bite out of labor again - and whatever desires mgmt might have had to make contracts cost neutral before are now subject to the creditors demands to ensure AA is a viable enterprise going forward - until the creditor interests are satisfied. And as we all know, the ability to do that quickly comes easiest by cutting labor costs.
.
We can only hope that AA is already articulating a solid business plan coming out of BK - the aircraft orders depend on it - such that creditors don't demand the size of wages that otherwise might be necessary... and while there should be no expectation of pay raises anytime soon, hopefully it will be apparent that AA's pay rates will be so far below its peers that there will be increases in only 2-3 years instead of the 5-8 years which have marked cuts by some airline employees.
.
There will undoubtedly be business cases written about AA's 10 years of restructuring... and I can't help but one overarching theme will be "if only they could have worked together instead of fighting." The billion dollar question is whether AA employees and mgmt can change the labor-mgmt dynamic to a collaborative win-win environment in the future.

 

[Bob Owens]

Cherry picking facts as always. Pay rates for those in house without what is outsourced at lower overall cost is extremely relevant. US, UA, WN, CO, and DL all outsource at higher levels than AA does now. Once the BK proceedings start, AA will argue that they need to outsource like their relevant peers and you can argue that the line deserves higher pay as a result.

Cherry picking is how we have been sold contracts for decades. Funny how you dont complain about that.

None of our competitors had SRPs(OSMs) in their contracts, which lowers the average pay across the base considerably. If Tulsa pretty much gives the base to AA, and buys much of the Equipment, and subsidizes wages and AA pays OSMs less than AAR pays their workers how much of a savings could there be? Most of our competeitors kept a lot of the high value work in house and none of them had the low cost OSM structure in place, so its not all or nothing or an apples to apples comparasion with OH.

Under normal circumstances, such as in a maintenence or growth mode most SRPs would be at or near entry level pay,(they get 50 cent increases for 9 years then a $4.40 increase their tenth year,) A&P mechanics with little or no Experience looking to get their foot in the door and/or experience. After 8 years of contraction AA is likely to be hiring more people off the street, at the same time attrition will likely increase due to the demographics of our workforce. This alone will lower costs considerably, top paid mechanics leave, senior OSMs fill vacancies and people come in at entry level wages, a $9/hr worker will be added as a $32/hr worker leaves. $9/hr, thats less than what AAR pays. The lure of a high top out will usually allow an employer to attract workers at a lower entry level wage, but the top out has to be high enough and the entry cant be too low.

If 20% of OH is SRPs, OSMs or SMAs, and another 5% even lower paid parts washers and cleaners that has a huge downward effect on the average wage in OH. Due to turnover the Average wage is almost always lower than the topped out or advertised wage. Even if all the AMTs are at top pay and all the osms are at top pay the average pay would be around $30/hr, however if just half the OSMs are new hires the average drops down to $28/hr. The more people who are on steps the lower the average cost. If half the osms are new hires and half the AMTs are new hires or first step the average wage drops down to less than $24. While thats extreme it illustrates how average costs at AA, more so than any competitor,can be very different than the top wage when you have such dispatities in pay built into the contract. I dont know of any competitor who has lower starting wages or longer progressions than AA, these low starting wages and longer progressions save AA huge amounts of money and are not refelected in the graphs and figures that AA releases (a big cherry thats some would hope gets unnoticed). I believe the company says it current average is around $27 in its own staffing reports that we are CC'd in. Granted AA often can not find anyone in a Nation with nearly $15 million unemployed willing to work for those first step wages in some parts of the country but its a sad statement when a unionized group of workers accept contracts where the company has to raise wages, instead of the contract, in order to get people. These are some of the Cherries that Overspeed likes to leave out.

AA is able to lure in people despite the extreme difference between entry and top out wages ($9/hr vs $32/hr) for the reasons stated above, however if the top wage isnt that good then their ability to lure people in will be diminished. AAR and other chop shops were able to get mechanics by virtue of the fact that mechanics see them as a place to get experience and move on, or they get the ones who cant get security clearence to work on the airports. I doubt that many kids in A&P school went there with the intention of laying out all that money to sit at a bench making $25/hr for AAR. So sure AA can say how those places pay less, but those places get much less out of their inexperienced workforce.

I have no doubt that recruiters for A&P schools are out there quoting the topped out UPS wage and not the AAR or AA wage rates in order to fill seats, in my day we had no way of finding out the truth but we didnt have Google or Blogs either. Its in our best interests that these kids find out what the industry and our government really think of them.

 

[Bob Owens]

No we did not get big raises, we took concessions in the first bankruptcy which was filed in 2002.

You may want to double check that. In 2001 we went from around $27 to $35, as did most other mechanics in the industry around that time. Our wages had fallen way behind and these increases nearly brought us up to where we should have been. Maybe your guys never fell as far behind.

It was a final offer after our CBA was abrogated, the judge made us vote on it, under the threat it would be imposed anyhow, he didnt want a strike.

In other words you guys ratified it rather than challenge him, but the end result is you ratified it.

Doesnt the RLA say that if a contract is abrogated you can strike?

Doesnt C-11 say that contracts covered under the RLA can not be abrogated in BK? (1167)

Wasnt there an exclusion for the airlines even though we are under the RLA that our contracts would be handled as if we were under the NLRA? Did you guys even question the reasoning behind being excluded?

Under the NLRA cant workers strike if their contract is abrogated and new terms imposed?

So if both the RLA and the NLRA say that we can strike if our contract is abrogated and new terms are imposed shouldnt you guys have challeneged the court? Thats been the law and practice for over 75 years. Didnt you guys even challenge the fact that by him abrogating the contract and imposing new terms that you have not been afforded the same protections under the law as other workers under the laws as written? What did your legal team say?

So if the Judge did not want a strike he should have denied the companys request to abrogate, because under the RLA we cant strike as long as our agreement remains in place.

You guys folded, (so did we under much less pressure but we never sold ourselves as The Fighting Machinists) and setup the AFA to eventually take the fall in a decision that reeks like "Plessy vs Ferguson". The segregation of workers who have already been segregated where the protections that justified the segregation have been stripped away, its almost a form of Double Jepardy. The RLA is clear, change our rates of pay or anything else that qualifies as a major dispute and we can protect our interests. The hooples in the AFA vs NWA decision simply made up new rules because they knew that labor was too timid to challenege them, you guys set the tone.

How can a law be considered "fair and just" if it applies to some workers one way but other workers a different way?

And two years ago, we got a new combined CBA and are in Section 6 negotiations now.

According to your contract you should be in Mediation as of July.

 

[Overspeed]

Cherry picking is how we have been sold contracts for decades. Funny how you dont complain about that.

None of our competitors had SRPs(OSMs) in their contracts, which lowers the average pay across the base considerably. If Tulsa pretty much gives the base to AA, and buys much of the Equipment, and subsidizes wages and AA pays OSMs less than AAR pays their workers how much of a savings could there be? Most of our competeitors kept a lot of the high value work in house and none of them had the low cost OSM structure in place, so its not all or nothing or an apples to apples comparasion with OH.

Under normal circumstances, such as in a maintenence or growth mode most SRPs would be at or near entry level pay,(they get 50 cent increases for 9 years then a $4.40 increase their tenth year,) A&P mechanics with little or no Experience looking to get their foot in the door and/or experience. After 8 years of contraction AA is likely to be hiring more people off the street, at the same time attrition will likely increase due to the demographics of our workforce. This alone will lower costs considerably, top paid mechanics leave, senior OSMs fill vacancies and people come in at entry level wages, a $9/hr worker will be added as a $32/hr worker leaves. $9/hr, thats less than what AAR pays. The lure of a high top out will usually allow an employer to attract workers at a lower entry level wage, but the top out has to be high enough and the entry cant be too low.

If 20% of OH is SRPs, OSMs or SMAs, and another 5% even lower paid parts washers and cleaners that has a huge downward effect on the average wage in OH. Due to turnover the Average wage is almost always lower than the topped out or advertised wage. Even if all the AMTs are at top pay and all the osms are at top pay the average pay would be around $30/hr, however if just half the OSMs are new hires the average drops down to $28/hr. The more people who are on steps the lower the average cost. If half the osms are new hires and half the AMTs are new hires or first step the average wage drops down to less than $24. While thats extreme it illustrates how average costs at AA, more so than any competitor,can be very different than the top wage when you have such dispatities in pay built into the contract. I dont know of any competitor who has lower starting wages or longer progressions than AA, these low starting wages and longer progressions save AA huge amounts of money and are not refelected in the graphs and figures that AA releases (a big cherry thats some would hope gets unnoticed). I believe the company says it current average is around $27 in its own staffing reports that we are CC'd in. Granted AA often can not find anyone in a Nation with nearly $15 million unemployed willing to work for those first step wages in some parts of the country but its a sad statement when a unionized group of workers accept contracts where the company has to raise wages, instead of the contract, in order to get people. These are some of the Cherries that Overspeed likes to leave out.

AA is able to lure in people despite the extreme difference between entry and top out wages ($9/hr vs $32/hr) for the reasons stated above, however if the top wage isnt that good then their ability to lure people in will be diminished. AAR and other chop shops were able to get mechanics by virtue of the fact that mechanics see them as a place to get experience and move on, or they get the ones who cant get security clearence to work on the airports. I doubt that many kids in A&P school went there with the intention of laying out all that money to sit at a bench making $25/hr for AAR. So sure AA can say how those places pay less, but those places get much less out of their inexperienced workforce.

I have no doubt that recruiters for A&P schools are out there quoting the topped out UPS wage and not the AAR or AA wage rates in order to fill seats, in my day we had no way of finding out the truth but we didnt have Google or Blogs either. Its in our best interests that these kids find out what the industry and our government really think of them.

1) Right none of the other guys has OSM or SRP classifications because those jobs have long been outsourced. AAR and other companies have at least 50% of their staff hired from AMT mercenary companies like Plane Techs. Hourly wage plus per diem is good money but you work one job for three months and move on. That's how AAR and companies like them have such small staffs, the use temporary workers like mad. 2) Your assumptions are based off a company that's growing and has sizable turnover, when is the last time AA hired SRPs or OSMs on the line, never. OSMs and SRPs again were to combat outsourcing of jobs but you would obviously like to outsource before accepting a lower wage scale that enables a person to build seniority in the union. 3) So using a pay scale that has fewer people making higher wages is good based on your cherry picking scenario. That's good if you are the one making the money. In the Southwest and UPS scenario that's great for them because they never had overhaul mechanics or very few, so how do you transition to that system at AA? Oh you already took care of that I see, you go to BK, outsource overhaul and you get to negotiate higher wages for the line. Now that's a big cherry for you Bob. 4) I am really excited to see all this factual data in BK court that will show how the "chop shops" deliver inferior work and get less productivity out of their workers. I can't wait! 5) The BLS has factual information on wages http://www.bls.gov/oes/current/oes493011.htm and the mean wage is $25 and hour. Only the top 10% make $34 or higher.

It's simple Bob, you can say UPS makes $41 hourly but that is for what 1,000 people but what about the 6,000 that would have jobs making $33 under the TWU CBA if it were in place at UPS? You tell people about the 10% but don't say anything about the other 90%. And you want to wrap yourself in the Occupy Wall Street movement when you use the logic of a 1%er.

Mmmmm...those cherries must taste good Bob. You like to pick'em

 

[Bob Owens]

1) Right none of the other guys has OSM or SRP classifications because those jobs have long been outsourced.

In 1995? If all those jobs had long been outsourced then what were all those mechanics who were let go after the BK filings doing? IIRC we had no cap on outsourcing and had the highest rates of outsourcing among the legacies prior to 9-11. The point is that with these low costs in place there was not the same benefit to outsouce and since AA was at the time the largest carrier there was no way others could compete, there was no way they could match our in house costs, I suspect its still that way.

It's simple Bob, you can say UPS makes $41 hourly but that is for what 1,000 people but what about the 6,000 that would have jobs making $33 under the TWU CBA if it were in place at UPS?

Mmmmm...those cherries must taste good Bob. You like to pick'em

UPS has never had the facilities for OH, they only have 200 planes and they are getting $51, not $41. $41 is closer to what Jet Blue gets.I only brought up UPS in that schools would use that figure to sell seats, you want to spin the debate away from AA's real average costs and how they spin the numbers. As I explained already, and you should know that we dont have 6000 more making $33, if you want to take the whole number for OH then you have to take the average wage, and according to the company its around $27/hr, and thats due to OSMs, Parts Washers, and Cleaners who make nowhere near $33 (in fact only Inspectors and CCs make over $33, everyone else makes less) and those who are on our long steps to the top. Do you really think AAR can get people for less than AA's starting wage? The latest NPR article says they cant.

If the TWU contract was in place at UPS they would still have just 1000 or so mechanics, only thing is they would be making $32 instead of $51, they would have less vacation, fewer paid Holidays and the few they did have would be at half pay if worked, their sick time and IOD time would be less and they would lose the allowances they get. UPS never had that work in house so the TWU contract would not force the company to do it in house. Arent there a couple of 757s in line to get Overhauled at Timco as we speak?

 

[Hopeful]

It's simple Bob, you can say UPS makes $41 hourly but that is for what 1,000 people but what about the 6,000 that would have jobs making $33 under the TWU CBA if it were in place at UPS? You tell people about the 10% but don't say anything about the other 90%. And you want to wrap yourself in the Occupy Wall Street movement when you use the logic of a 1%er.

Mmmmm...those cherries must taste good Bob. You like to pick'em

Tell us Overspeed...How do you feel when the top 400 managers at AA share a few hundred million, but deny a few hundred million to tens of thousands of union members?

How do you feel about AA's 1%?

 

[ebwgs]

For those who haven't seen it, this intereview is interesting only in what this attorney doesn't say.

http://www.bloomberg.com/video/82751854/

 

[Buck]

Does UPS Mechanics negotiate their contract with the rest of the unionized workforce or are there seperate negotiations?

 

[Duke787]

None of our competitors had SRPs(OSMs) in their contracts, which lowers the average pay across the base considerably.

Now none of our competitors have OH on the scale that we do, stop attacking the TWU for past actions you don't agree with and concentrate on the present/future.

The way I see it the TWU thought long term i.e.....we have AMTs on the seniority list with 11-28-11 date at TUL and at UAL you need to have 2000 seniority just to be still working at ORD where they have a 1000 mechs.

Not one airline has as many mechs as AA.

 

[Buck]

Now none of our competitors have OH on the scale that we do, stop attacking the TWU for past actions you don't agree with and concentrate on the present/future.

The way I see it the TWU thought long term i.e.....we have AMTs on the seniority list with 11-28-11 date at TUL and at UAL you need to have 2000 seniority just to be still working at ORD where they have a 1000 mechs.

Not one airline has as many mechs as AA.

TWU's structure and history have got us where we are today. While we have AMT's with 11-28-11, the next question is for how long. The way I see it, the company will cut labor somewhere, will it be at the top or at the bottom?

12/09/11