Pilots Agree To Negotiate

[BoeingBoy]

Reuters
US Airways pilots agree to negotiate on givebacks
Friday February 20, 5:07 pm ET

WASHINGTON, Feb 20 (Reuters) - Pilots at US Airways (NasdaqNM:UAIR - News) agreed on Friday to negotiations with management on a comprehensive package of new concessions, which could include more cuts in wages and benefits.

Article

 

[BoeingBoy]

USAir pilots agree to help reformulate airline

BY TED REED

Knight Ridder Newspapers

CHARLOTTE, N.C. - (KRT) - Leaders of US Airways' pilots' union voted Friday to begin negotiations over details of a new business plan, a key step in the airline's quest to cut costs as it battles low-fare competitors.

Article

 

[700UW]

Once again the MEC caves, must be nice to let Dave keep violating the very said agreements he negotiated with them and now ALPA trusts him to keep to the terms of a new one?

PT was right!

To the ALPA MEC, you might need one of these.

 

[BoeingBoy]

The ALPA MEC resolution. As you can see, it cuts off at the end - I don't know if that was a problem on my end or it wasn't completely loaded on the ALPA board.

Jim

SUBJECT:

MEC Acceptance of Invitation to Participate in the Creation of a Plan to Return the
Company to Profitability

SOURCE:

BACKGROUND:

RESOLUTION:

WHEREAS the MEC has been briefed by members of the Board and Management
regarding the current financial situation of the company, and

WHEREAS the members of the Board and Management have requested the
Association’s participation in finding solutions which will result in returning the
company to profitability, and

WHEREAS the Board members are committed to work with the Association if the
Association is willing to participate in the creation of such a plan,

THEREFORE BE IT RESOLVED that the US Airways MEC directs the Negotiating
Committee to accept the invitation of the Board members and Management to participate in the creation of a plan to return US Airways to profitability, and

BE IT FURTHER RESOLVED that the Negotiating Committee shall be authorized to
obtain and utilize all resources that may be necessary to craft such a plan including the employment of an operational expert or other outside professional(s) to assist the Committee, in addition to using the resources of our investment banker, ALPA EF&A, and other available in-house resources,

BE IT FURTHER RESOLVED that the MEC directs the Negotiating Committee to
begin participating in the creation of the above Plan, and

BE IT FINALLY RESOLVED that the Negotiating Committee shall report back to the
MEC on an expedited basis as the Plan is developed, providing the MEC with specific
details of the proposed plan prior to the completion of any

 

[BoeingBoy]

Here's one MEC member's perspective on Bronner's talk. The Bruce mention is Bronner's "right hand man" Bruce Lakefield who also sits on U's board.

Jim
------

Bronner made it clear that we are 1% of his portfolio and that is why we don’t command all of his attention. The value of RSA goes up or down a million dollars every time the stock market goes up or down a point. RSA is currently about 50% invested in the stock market. So while US Airways isn’t his focus, it is important to him because he made, what he admits might have been a bad decision, to invest here. Bronner just isn’t the kind of guy to walk away IF there is hope. In short, he is a long-term investor.

He gave examples of multi billion dollar holding companies, one that controls about 42 small newspapers and one that controls TV stations. Both started quite small and both are now worth respectively about $2.5 and 4.5 billion. He stayed with these investments because he wasn’t looking for a quick buck. He gave other examples I can’t remember, including a couple where he lost money by investing in “extremely safe†entities. So he knows that sometimes long shots pay off. As an aside, he wanted to take US Airways private, but that didn’t work out. The MEC couldn’t tell us that because it was confidential.

One reason he invested in US Airways is that he does not like TPG, which he puts in the quick buck category. Interestingly, at the Council 90 meeting where some of our more astute rocket scientists treated Duane Woerth with extreme rudeness, Duane told us TPG would have put US Airways into liquidation prior to emerging from Chapter 11. Well, we are extremely lucky Bronner doesn’t like them.

Bronner stated that Wall Street has shut off money to the legacy carriers but opened the spigots to the LCC’s. So they have not only an operating advantage but also a very large financial advantage. Imagine for a moment that US Airways could sell a billion dollars worth of stock………. Or borrow all the money we needed at good rates……… SWA can do that, we can’t.

He stated two things without equivocation and in very plain English:

1. He will pay back the ATSB loan, period, no choice, take it to the bank, end of story.
2. He will not allow US Airways to bleed to death.

He stated these two things in the context of black numbers are good and lead to good things. Red numbers are bad and, over time, will kill you.

Bronner is not a quitter and gave us an example of a building in NYC where he met with all the creditors. They would not bail out the building, so he bought them out for 29 cents on the dollar and made a huge profit. He saw value where the others wanted to bail.

He said growth solves most problems and that we need to get into the black very quickly. While some people have a vested interest in our success, primarily suppliers, there are lots of people who have a vested interest in our failure. He opined that failure is not a crime, but aiming low is.

He said that we have four immediate problems, any of which could cause the other “dominoes†to fall.

· ATSB loan covenants
· Standard & Poors Credit rating
· GE Capital
· Upcoming auditors report (are we a going concern?)

We have to become profitable very soon or we will be in violation of the ATSB loan covenants, and they can then call the loan. If S&P lowers our credit rating again (we are on a credit watch) we will lose GE financing for our EMB170’s. GE can also withdraw their financing now as well as other assets if they choose and they can shop around leases to other carriers. If our Auditor deems us something less than a going concern in March, that may trigger the other dominoes.

When asked why we didn’t hedge more fuel, Bronner was clearly annoyed. He said that hedging requires us to put money up front in escrow and we don’t have it. It’s that simple. SWA can hedge all day long with no escrow because of their strong financial position.

When asked about putting more information out to employees he responded that this is difficult in a public company. That point was driven home later when the Corporate Counsel, who was monitoring everything he said, made five corrections to his statements and pleaded with us not to talk to the press after the meeting.

He and Bruce stated that they would serve as arbitrators if we reach a stonewall in negotiations with management.

Bruce, in explaining the revenue shortfall, said that management kept trying to “manage around the edges†to make up for the shortfall, but, in the end, all of our revenue projections proved to be wrong.

Bruce also stated that, in getting started on restructuring the airline, we are late getting started but he hopes we are not too late.

My impression is that these guys are on board for the long haul. However, if things don’t change quickly, they will lose control. The $1 billion ATSB loan is bound by strict covenants and we are either going to stop bleeding very soon or there will be no choice other than pulling the plug.

Bronner spoke for about 35 minutes then he and Bruce answered questions for another hour. I wish the entire pilot group could have been there.

 

[zonecontroller]

700uw
I hope you don't mind the modification.

 

[BoeingBoy]

And another MEC member's recollections...

Jim

-----

RSA has $75million invested in USAir that is being paid as part of the ATSB loan. they have another $240million invested in USAIR that is in jeopardy if the airline folds.

He said that the market place has changed. when he first got involved with USAIR the low cost carriers were just like "gnats" i.e., a nuisance. but now they are a real threat. the stock market believes in them, and is offering them unlimited credit. the legacy carriers have found the credit for them has been turned off.

Managements failure during bankruptcy was that they were being "too nice". they should have been even more conservative in their projections and asked for more.

As long as we are in the red, there will be no growth, and an eventual demise.

Let there be no mistake, we will pay back the ATSB loan. we have 1.8 billion dollars in cash, but remember one billion of that is commited to the ATSB. We cannot violate the ATSB covenants or they will shut us down. I will not allow this airline to bleed to death. There are four dominoes. if any one of them falls it could affect our very survival. those dominoes are 1)GE financing 2)Standard & Poor downgrading us 3)upcoming audit in March 4)the ATSB loan covenants.

I don't bail out of my investments early, i only bail out if there is no future. if you (USAIR) get into the black you get to become a long term player.

Airline Managements salaries are ridiculous, they should be linked to profitability not just survivability.

i've cut and run on some of my investments, but if we go into the black i would consider growing.

let's work with the pilots and design something that shares the upside after a reasonable return for the shareholder.

If an employee is making $45,000 a year he is having enough trouble making financial ends meet. i will not ask them for money but i will ask for productivity. However, we have to be realistic, and outsource the same things that the other carriers outsource.

I want you to consider me the arbitrator of last resort between the employees and management.

Can't hedge more than 33% of our fuel because we need to conserve cash, and it takes cash to hedge.

Either we wake up here at USAIRWays and bring our work rules into the 21st century or we'll go the way of the steel industry.

How much time do we have? could be 30 days, 60 days or tommorow. we are not in control the financial entities are (ATSB, GE, Auditor)

THE END OF Dr. Bronner's COMMENTS.

 

[700UW]

Let them shut it down all ready, outsourcing? there goes maintenance, and I know myself and my coworkers won't line Bronner's wallet with our blood.

In December of 2002 when Bronner threanten labor and we gave them the work rules they wanted, now they want more, SCREW THEM.

NO AIRLINE HAS EVER BEEN SAVED FROM THE HYDES OF THE EMPLOYEES!


Outsourcing will kill this country mark my words.

 

[wts54]

WEASELS

 

[cavalier]

Outsourcing will kill this country mark my words.

I disagree, but it will indeed put undue pressure on the uneducated individuals and workers who have no skills.

Kids out of college are starting out at what we make and going from there while we of course go backwards. This is occurring even while the lower class worker watches his jobs disappear overseas and that nonunion enterprise grab his union job.

Unless and until this airline turns around and real soon, all the tantrums on these boards will go away and Kyle and Kevin will have to make U’s forum into another public chat room, or make it go away along with U completely.

Harsh reality is: For this airline to survive, there will be further pain like it or not, and whether or not one throws a fit of rage or not, because what will be will be. I don’t agree with it and I won’t support it, but I do accept the reality of it, to do otherwise is acting even more stupid than we accuse Dave and gang being.

Pray for the best and prepare for the worst.

 

[pitguy]

With so many lies in the past from this management group who can believe what they say now or what they promise for the future. The company will be shut down before they get away with outsourcing maintenance. If they have to have that then shut it down.

 

[RedOne]

I disagree, but it will indeed put undue pressure on the uneducated individuals and workers who have no skills.

Exactly whom are you talking about? :angry:

 

[etops1]

Outsourcing will kill this country mark my words.

I disagree, but it will indeed put undue pressure on the uneducated individuals and workers who have no skills.

Kids out of college are starting out at what we make and going from there while we of course go backwards. This is occurring even while the lower class worker watches his jobs disappear overseas and that nonunion enterprise grab his union job.

Unless and until this airline turns around and real soon, all the tantrums on these boards will go away and Kyle and Kevin will have to make U’s forum into another public chat room, or make it go away along with U completely.

Harsh reality is: For this airline to survive, there will be further pain like it or not, and whether or not one throws a fit of rage or not, because what will be will be. I don’t agree with it and I won’t support it, but I do accept the reality of it, to do otherwise is acting even more stupid than we accuse Dave and gang being.

Pray for the best and prepare for the worst.

i can't agree with u more cav. i don't agree with it niether. but we have to be realistic. bronner has spoken the truth. we have to wake up here at u. we have been spoiled for a long time. times are changing and our company must to. starting from the top to the very last employee. everyone and i mean everyone in this company has to do there part. we do not have enough time. for those of you who do not care any more do us the favor and go somewhere else

 

[PITbull]

And those of you who want to give everything there is up...DO US A FAVOR AND LEAVE.

 

[passed_over]

It would be nice if mainline ALPA does not sell the WO's down the road once again and give everything away to MESA