Outsourcing at AA

[767 mechanic]

Bob how is (you need to lower your expectations) Gless doing? Is he back at his box? I hope he received a warm welcome ha ha. Now that his wages have been cut by 2/3 maybe he will raise his expectations like the rest of us. I was told that Fri was Videtich last day at the int and he would be going back to his box or into management whichever he chooses. Gordon Clark is back at DWH. Now is going to have to live under the conditions that he forced the other TWA guys from KC to live under. As far as hangar space AA has ask several companies to place bids on a new hangar at DFW. I'm sure the construction will start after the bankruptcy is complete.

 

[Bob Owens]

I've had no contact with Gless, unfortunately trying to get 591 settled has kept me very busy, I haven't been to the floor very much. Been sick over the weekend so the Honey-do's are deferred this weekend, but that left me some time to post.

 

[Bob Owens]

another thing to add, we were charged with reducing maintenance costs, operational maintenance costs, not just labor by 20%, no other group at AA was charged with making such a savings. they only had to go after labor costs.

So what they did with us was deduct the cost of outsourcing, at premium domestic rates, instead of the much cheaper foreign rates,even though the deal allows them to use foreign MROs, from any projected savings we gave from losing heads. this meant we had to give up more to meet the ask.

 

[700UW]

Bob in the last chapter 11 US did the same to mtc, we got gutted more than anyone.
 
We got "punished" over the Airbus Arbitration and refusing to talk concessions outside of Bankruptcy.
 
And US has maintenance in 17 Stations.  At one point before all the chapter 11s we were around 35 with some only being third shift only.
 
CLT (line, line hangar and base) PIT (line and base), PHL (all line with a line hangar also), TPA, MCO, LGA, DCA, BOS, ORD, SEA, PHX (Line and Base C-checks and drop-ins), LAX, SAN, SFO, DFW, ATL, FLL, LAS, and  ELP(GSE only).

 

[swamt]

Timco doesn't have the capacity at GSO or INT, they will still send them to HKG.

Ever heard of expanding?  Besides, it's easy to add, expand or exchange.  Don't kid yourself just because YOU think they have no capacity. 

 

[swamt]

Our "contract" allows AA's overseas mechanics to do anything they want them to do over there, A-checks, mods etc. There is no limit. AA could even open up their own OH facility in South America if they wanted to and send our work there. AA is allowed to send all there outsourced work overseas if they choose to. That's the language our boy Don Videtich crafted for the company. As you can imagine even if the 35% spend cap was real that would allow them to outsource a lot more than 50% of manhours. That's why we said go ahead and abrogate and lets continue to fight them, the pilots voted NO and had things in their contract changed. I believe they still have a better contract than US pilots. I'm sure Overspin will come and claim that the total for concessions did not change, but the fact is the numbers that make up the total can be changed because its all BS anyway, the company put understated values on some things and overstated values on others and simply makes the figure come out to what they want it to be for the press release.

Here's another kicker, we have already gone from 12500 to around 9300 for our contract group (Title I and II) . The company has started outsourcing the 767 and they are getting rid of MD-80s. and word is will reduce headcount in Tulsa by around 400 guys a year right up until the end of the contract. So by 2018 Tulsa most likely will only have around 1700 people left, 650 of them very low paid OSMs that earn less than TIMCO wages, that's less than the number of mechanics AA will employ in the Dallas Fort Worth area. So we will have at best less than 6000 mechanics by the time this contract becomes amendable. We will have less than 10 mechanics per airplane, count only A&P mechanics at A&P rates of pay and it drops to around 7. by the time this contract becomes amendable at best we will only have around 4200 A&Ps. WE DID NOT CAPTURE THE VALUE OF THESE JOB LOSSES JUST LIKE IN 2003 WHICH BROUGHT US FROM 18000 to 12500, THE COMPANY GOT ALL THe EXTRA HEADS FOR FREE. On top of that Don Videtich and his appointed posse went around promoting JLT and PLI, programs designed to maximize productivity with no return for our members, in fact it allowed the company to insource more work while still eliminating heads faster than the rate of fleet reduction. This was outside of the contract, but Don made sure to include language in this deal that made participation in these zero gain programs part of the contract. Between JLT and PLI we saved the company over $500 million and got NOTHING for it.

If the goal was 20% savings and we are losing 50% of the heads then we had roughly 30% left over for raises, the restoration of Vacation, sick time, Holidays, Shift differentials etc. Ok I'm sure that Overspin will cite the fact that the savings wont actually materialize until 2018, so the actual savings would be less, but the fact is that's more due to the fact that AA doesn't have anyplace to send the MD-80s, than the language. If we give them the language for the savings and they are unable through no fault of ours to capitalize on it should we lose the value? Should we give guaranteed savings even though we have no control? Just like in 2003, we gave much more than the company was asking for, we got credit for 20% but in the end gave 50%. In 2003 we got credit for $320 million and gave several times that figure.

That headcount ratio per airplane is with multiple fleet types (including widebodies) and ETOPs operations, which as Overspin has admitted generates more headcount than say a Southwest Operation, which also generates lower RPMs per aircraft. So our numbers as far as productivity will be around the same as SWA but our pay will be much, much less, we will get a much, much smaller 401K match, we will have much, much less vacation, continue to work Holidays for no extra pay, or half pay extra at best, less sick time, less IOD time, no allowances for tools etc, no retiree medical, very expensive current medical, etc etc.

The fact is that Don Videtich along with the other people Jim Little hired, Sharon Levine, Mark Richard and even Tom Roth, crafted this horrible, horrible deal, and through fear and lies they managed to get most of the Title II guys, Tulsa and STL to support this deal and get it past the committee, every A&P on the committee except Charlie Meyers of STL voted against it, and then they worked with anti-labor forces in Tulsa to scare the Tulsa membership over the cliff. It is only now they realize what they did.

100% CORRECT!!!   I have been telling overspin this for months if not years. And he keeps responding that the TWU never agreed to these drastic contracts brought out and sold to the membership for yes votes.  Thx for chiming in, at least someone from the TWU can admit it, as well as get a lot deeper into the subject than I did before.  All this has been going on past 3 decades.  I still can not believe you guys are still TWU, it just does not make cense at all...

 

[swamt]

Bob how is (you need to lower your expectations) Gless doing? Is he back at his box? I hope he received a warm welcome ha ha. Now that his wages have been cut by 2/3 maybe he will raise his expectations like the rest of us. I was told that Fri was Videtich last day at the int and he would be going back to his box or into management whichever he chooses. Gordon Clark is back at DWH. Now is going to have to live under the conditions that he forced the other TWA guys from KC to live under. As far as hangar space AA has ask several companies to place bids on a new hangar at DFW. I'm sure the construction will start after the bankruptcy is complete.

Your last 2 sentences are a little scary.  Could it be they are considering to consolidate some maint from Tulsa or TAESEL?  Or maybe both??  If it would save money, why not put all these 3 into one location???   Or are they simply adding maint in DFW for a newly added check lines?  Anyone know how big of hangars?  What they might hold?  That is very interesting that they are taking bids for new hangar space knowing they are gutting Tulsa over the next 6 years...

 

[FWAAA]

Ever heard of expanding?  Besides, it's easy to add, expand or exchange.  Don't kid yourself just because YOU think they have no capacity. 

Sure, Timco could expand domestically, but who will do the work?   I agree with Bob Owens that the domestic pool of low-wage MRO employees has probably dried up.   HAECO's purchase of Timco doesn't mean that work will move from HKG to the USA.   It just means that Timco will now be owned by one of the largest MROs worldwide.   Instead of being owned by an investment group (as it has been), Timco will be owned by HAECO.   Wages will probably have to rise to attract more A&Ps to work for Timco and other domestic chop-shops.   
 
Royal Dutch Shell has a lot of operations here but that doesn't mean it moved work to the US from The Netherlands.    Same with British Petroleum.   Same with most multi-national companies.   
 
HAECO has a large, well-trained workforce in HKG and in mainland China, and those employees will likely continue to maintain the widebodies of UA, DL and AA, as well as dozens of other worldwide airlines.   
 
If anyplace is going to expand, my prediction is that it will be Aeroman, which has grown tremendously over the past dozen years, building several new hangars at SAL.    As AA's new Airbus and many of the new 738s won't need a heavy check for 5-6 years, that gives Aeroman plenty of time to build several more hangars and hire a few hundred low-wage helpers plus a few dozen more trained mechanics in preparation for the overhauls that AA will probably begin sending starting in 2018 or 2019.   

 

[700UW]

Timco is using US' old hangars in GSO and INT, there isn't much room for expansion.

 

[swamt]

Sure, Timco could expand domestically, but who will do the work?   I agree with Bob Owens that the domestic pool of low-wage MRO employees has probably dried up.   HAECO's purchase of Timco doesn't mean that work will move from HKG to the USA.   It just means that Timco will now be owned by one of the largest MROs worldwide.   Instead of being owned by an investment group (as it has been), Timco will be owned by HAECO.   Wages will probably have to rise to attract more A&Ps to work for Timco and other domestic chop-shops.   
 
Royal Dutch Shell has a lot of operations here but that doesn't mean it moved work to the US from The Netherlands.    Same with British Petroleum.   Same with most multi-national companies.   
 
HAECO has a large, well-trained workforce in HKG and in mainland China, and those employees will likely continue to maintain the widebodies of UA, DL and AA, as well as dozens of other worldwide airlines.   
 
If anyplace is going to expand, my prediction is that it will be Aeroman, which has grown tremendously over the past dozen years, building several new hangars at SAL.    As AA's new Airbus and many of the new 738s won't need a heavy check for 5-6 years, that gives Aeroman plenty of time to build several more hangars and hire a few hundred low-wage helpers plus a few dozen more trained mechanics in preparation for the overhauls that AA will probably begin sending starting in 2018 or 2019.   

Your domestic pool of low wage MRO employees is not dried up.  There are schools full of A&P mechanics.  At least down here in Tx there are.  Not to mention the county colleges that military pays in full for vets, which I have been told is also pretty full.  The AIM school local here is and has been full for many years now.  This exact same scenario played out last time there was lay-offs and rifs within the industry, schools started to get filled up during the slow times, as well as this long recession and more people looking for different careers.   But I can only speak of the schools and colleges around here in Tx,  but they seem to be plentiful.
 
I never said work would move from HGK to USA.  Matter fact I know they won't.  It's just that future work for the HAECO group can now fly to Greensboro instead of overseas.  And trust me, they already know if they need to expand or not, and if they do need to, and there was no room at current facility to grow and expand, they wouldn't have made the purchase. 
 
Your assumption that wages will increase in order to attract the talent is laughable.  Apparently you never worked at an MRO during a purchase or buy-out.  99.9% of the time the wages are cut drastically, some times they might stay status quo, but the majority of the time they are reduced, and never have I ever seen them increase the wages to attract better talent.  And before you ask, YES, I have lived thru it 4 times while working in MRO's. 
 
Your right about Aeroman. They can grow, and quickly too.  I am also sure that the other airlines will follow what SWA does and inquire with Aeroman for their maint.
 
I also think HAECO buying Timco is a move to increase the narrow body maint without the customers having to fly overseas.  JMO...
 
 

Timco is using US' old hangars in GSO and INT, there isn't much room for expansion.

There's room, there's always room when you really need it.  They have said the same for Love field here in Dallas and look how many hangars we have added, and there's room for more.  If a company needs the room they will find it.  If a newly purchased company doesn't have the room to expand then why buy them?  Why buy a co and no plan to grow or expand??

 

[eolesen]

If/when the deal closes, I'd expect HAECO to improve oversight from what it is today... HAECO has a somewhat decent reputation, and if the quality provided by TIMCO isn't up to their standards, I suspect it will be shortly.
 
Something else a purchase does in TIMCO/HAECO's favor is open the door to more attractive package pricing, e.g. doing widebodies in HKG where they have the expertise and tooling, and doing narrowbodies on the US mainland.  Having "one throat to choke" can be appealing from the buyer's perspective.
 
Buy a company and then expand?  Yep, that's one possibility.  The other possibility is they're eliminating a bottom feeder and its impact on everyone else's margins (sound familiar anyone?...).

 

[Bob Owens]

Your domestic pool of low wage MRO employees is not dried up.  There are schools full of A&P mechanics.  At least down here in Tx there are.  Not to mention the county colleges that military pays in full for vets, which I have been told is also pretty full.  The AIM school local here is and has been full for many years now.  This exact same scenario played out last time there was lay-offs and rifs within the industry, schools started to get filled up during the slow times, as well as this long recession and more people looking for different careers.   But I can only speak of the schools and colleges around here in Tx,  but they seem to be plentiful.
 
I never said work would move from HGK to USA.  Matter fact I know they won't.  It's just that future work for the HAECO group can now fly to Greensboro instead of overseas.  And trust me, they already know if they need to expand or not, and if they do need to, and there was no room at current facility to grow and expand, they wouldn't have made the purchase. 
 
Your assumption that wages will increase in order to attract the talent is laughable.  Apparently you never worked at an MRO during a purchase or buy-out.  99.9% of the time the wages are cut drastically, some times they might stay status quo, but the majority of the time they are reduced, and never have I ever seen them increase the wages to attract better talent.  And before you ask, YES, I have lived thru it 4 times while working in MRO's. 
 
Your right about Aeroman. They can grow, and quickly too.  I am also sure that the other airlines will follow what SWA does and inquire with Aeroman for their maint.
 
I also think HAECO buying Timco is a move to increase the narrow body maint without the customers having to fly overseas.  JMO...
 
 
There's room, there's always room when you really need it.  They have said the same for Love field here in Dallas and look how many hangars we have added, and there's room for more.  If a company needs the room they will find it.  If a newly purchased company doesn't have the room to expand then why buy them?  Why buy a co and no plan to grow or expand??

No they are pretty much dried up. SWA may not see it because they can pick who they want from competitors but the places where these mechanics are coming from see it already. Nearly every mechanics AA hired in NY was out of Eagle, not off the street, they aren't out there. The mechanics that were on the street found jobs in other industries and they aint coming back-EVER.Other industries that can use the same skillsets are hiring away what little comes out of A&P schools. On top of that over the past five years I've seen several of my 20plus year peers leave the industry to go work for Con Edison, the MTA and other industries, yes just up and quit and walked away from a career where they invested up to 30 years, they were not laid off and had good seniority, just had enough of the BS. More than half the schools out there that once trained A&Ps have closed up. Check the schools that are open, see how many of the students are Americans, probably less than half, most will go back to their own countries. Historically only 10% of the kids that sign up for A&P school actually ever obtain an A&P. So you have half the scools gone, a large percentage foreign nationals that wont stay, and 90% who don't end up with an A&P. The military does not produce like they used to either and the FAA is issueing fewer liscnces than before (many of those would be given to foreign nationals who take them home to their country). The fact is the industry shot themselves in the foot, they lowered the wages so much that people with the skillsets needed go to better paying more stable industries. Aviation High School in NY now focuses on traing their students for other industries. The school I went to is gone. MRO's used to benefit from the high wages that airlines paid because mechanics would be willing to work for their low wages as a means to an end, to gain experience so they could get to a major carrier, that's not the case anymore, by driving the wages down the Unions in the airlines not only hurt the airline workers but it hurt the MROs ability to get skilled but cheap labor.
I know what you experienced in the past, but that was when the airlines paid well(isnt that where you ended up? ) Without the dream of ending up with a good paying job at an airline there is no incentive to accept what the MROs offer since the experience they offer is of no value, with wages that suck on top of that workers will go elsewhere.
Sometimes companies buy companies to eliminate a competitor, decrease capacity and increase the price. I suspect that's why HAECO bought Timco.

 

[Bob Owens]

If anyplace is going to expand, my prediction is that it will be Aeroman, which has grown tremendously over the past dozen years, building several new hangars at SAL.    As AA's new Airbus and many of the new 738s won't need a heavy check for 5-6 years, that gives Aeroman plenty of time to build several more hangars and hire a few hundred low-wage helpers plus a few dozen more trained mechanics in preparation for the overhauls that AA will probably begin sending starting in 2018 or 2019.

And because of the bad experience Line mechanics have had under a Tulsa dominated contract Line Maint will probably be more than willing to continue to allow that in exchange to industry leading rates. By 2018 Line Maint and TEASL will be the majority and there is no way they would vote in or fight for language that would put them at the mercy of Tulsa ever again.

 

[TWU informer]

And because of the bad experience Line mechanics have had under a Tulsa dominated contract Line Maint will probably be more than willing to continue to allow that in exchange to industry leading rates. By 2018 Line Maint and TEASL will be the majority and there is no way they would vote in or fight for language that would put them at the mercy of Tulsa ever again.

So you guys, will do to Tulsa, what Tulsa has been doing to you for years? I know you speak the truth. But the only difference is you become the self serving instead of Tulsa. Nice Unionism, and the basis of the TWU anti-AMFA fear campaign all along.

 

[iluvaa]

So true Dave, so it looks like the TWU was right about that one.