Profit sharing

[WorldTraveler]

given that labor itself threw its loyalty behind Parker at the expense of nAAtive mgmt. and with the expectation that Parker could do a better job of keeping the nAAtives happy, it absolutely is significant that his position and statements about profit sharing do not sit well with many AA people - who are speaking out in one chat forum after another - and the press and competitors are also talking about it.

No, it is precisely because AA people aren't going to leave that the only real outcome is that AA employees will be underpaid compared to their competitors.

as much as we would ALL like fat increases in compensation with no risk, profit sharing increases compensation with a certain amount of risk - and effort required to get behind the company.

AA employees will not have the same motivation to help make the company succeed as other airlines' employees will because AA employees simply do not have skin in the game to anywhere near the same degree.

Given AA and US' problematic labor relations and the likelihood that other carriers will be able to pay significant amounts of profit sharing for the foreseeable future, it absolutely is within the realm of possibility that all the positive things that Parker has done or could have done is negated by an unhappy labor force who realizes they were lied to while their peers at other airlines earn substantially more than AA employees.

 

[jcw]

Please come back in a couple of years when DL is hemoraging money in an Econ of downturn and let us know how big those profit sharing checks are

 

[WorldTraveler]

you may be waiting a long time.

Why didn't you say that to WN years ago?

once again, you don't want to accept that DL has chosen to operate like WN - and AS as well - to be profitable on a sustained basis. That means managing macroeconomic events to ensure the company's profitability.

WN has done it for years. High fuel prices, disease, and war DO NOT have to result in huge losses that last for years.

Airlines have lived with that mindset and it simply is not the way it needs to be.

 

[bob@las-AA]

 

Thank you for you thoughtful insight in that private message.
 
But I still love to bring attention to those who where so harmed, they cry and stomp their feet and chant "ITS NOT FAIR-----ITS NOT FAR" 

 

[jcw]

you may be waiting a long time.

Why didn't you say that to WN years ago?

once again, you don't want to accept that DL has chosen to operate like WN - and AS as well - to be profitable on a sustained basis. That means managing macroeconomic events to ensure the company's profitability.

WN has done it for years. High fuel prices, disease, and war DO NOT have to result in huge losses that last for years.

Airlines have lived with that mindset and it simply is not the way it needs to be.

 
There was no need to do that since WN fan club was not on here every day beating the profit sharing diatribe
 
So you are now saying during the next economic crisis, SARS, etc - DL will be pumping profits out - they will just be printing money - you might want to let wall street know about this - this DL stock should be work a $1,000 a share - I would give up profit sharing right now and take stock options

 

[NYer]

I agree with the bolded portion. The "cost" to get significant profit sharing now would be very expensive. The time to get profit sharing is when profits are low or nonexistent, like in February, 2012, when management offered every employee group a first-dollar profit sharing plan equal to 15% of profits. Since AA had just filed for bankruptcy protection, employee concessions were a given, because that's why AA filed a Ch 11 petition.

Since concessions were going to happen (they always happen in bankruptcy), AA's employees should have demanded 25% and perhaps settled for 20% first dollar profit sharing. But instead, the pilots sold off 2/3 of the profit sharing for a small percentage increase, and the me-too provisions forced everyone else to do the same.

Result: Management "bought" back the profit sharing on the cheap. Very cheap.

 
What's not cheap to you?
 
What was your hourly wage in September 2012?

 

[CMH_GSE]

What's not cheap to you?
 




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I believe we got a 4% raise, that was, in hindsight, cheap.
15% would have been more In Line and would have basically brought us up to DL pay.

The thing that sticks in most people's craws is
Nobody got to vote on it, Little played God.

 

[FWAAA]

I believe we got a 4% raise, that was, in hindsight, cheap.
15% would have been more In Line and would have basically brought us up to DL pay.

The thing that sticks in most people's craws is
Nobody got to vote on it, Little played God.

A union would have negotiated for at least a 4% raise without giving away profit sharing. In early 2012, it looked like you had 15% first dollar profit-sharing and now that profits are rolling in, you have zero profit-sharing. Massive missed opportunity.

 

[NYer]

What's not cheap to you?
 




--------------------


I believe we got a 4% raise, that was, in hindsight, cheap.
15% would have been more In Line and would have basically brought us up to DL pay.

The thing that sticks in most people's craws is
Nobody got to vote on it, Little played God.

 
We didn't get 4.3% in exchange for the 15%, it was only for the final 5%.

 

[NYer]

A union would have negotiated for at least a 4% raise without giving away profit sharing. In early 2012, it looked like you had 15% first dollar profit-sharing and now that profits are rolling in, you have zero profit-sharing. Massive missed opportunity.

 
During the negotiations from 2003 to 2012 we had profit sharing and the complaint was that the AA was hiding their money, they weren't really losing billions. They did that to avoid giving contracts and profit sharing. The proposal for profit sharing was turned into value in two separate instances.

 

[FWAAA]

We didn't get 4.3% in exchange for the 15%, it was only for the final 5%.

How much did the TWU membership get for relinquishing the first 10% (2/3 of the 15% offered by management)?

 

[NYer]

How much did the TWU membership get for relinquishing the first 10% (2/3 of the 15% offered by management)?

 
That value depended on the Title Group and the Negotiating Committee use that value along with the added value of the 20% becoming 17%. Most title groups put those gains directly into wages others enhanced language with the 401K match including all hours worked and things like that.
 
You'd have to ask a Negotiating Committee member to explain how they were used in their particular title group.
 
This is how it was reported for the other title groups, M&R was still in negotiations while the other groups had ratified their agreements.
 
"Since we reduced the cost savings target from 20 to 17 percent in our negotiations and tentative agreement with the APA, we met with these TWU groups to make similar adjustments,” American spokesman Bruce Hicks said."
 
“We’re pleased we were able to work with the TWU to identify and agree upon items to adjust in each of these five contracts,” Hicks said.
 
"The TWU spelled out how the revised contracts different from the original ones:"
 
–  “The agreements call for the elimination of a two percent pay cut for fleet employees and generally provided pay raises over the life of the contracts.”
 
– "The union accepted lower profit-sharing payments in exchange for guaranteed pay raises."
 
– "The company’s 5.5 percent match for the 401(k) plan will include overtime pay and additional pay, not just base pay."
 
– "The increase in employee-paid premiums, deductibles, maximums and prescription costs were moderated."
 
– "The six-year contract includes a provision to open talks after the fourth year."
 
We received larger pay raises for the first 10%, then a 4.3% raise for the next 5%. (There was a chart in one of the fleet local websites that said Fleet received a total of 9.3%). Maintenance was in negotiations so we don't know what the difference was, but a negotiating committee should know since they dealt with it.

 

[scorpion 2]

 
That value depended on the Title Group and the Negotiating Committee use that value along with the added value of the 20% becoming 17%. Most title groups put those gains directly into wages others enhanced language with the 401K match including all hours worked and things like that.
 
You'd have to ask a Negotiating Committee member to explain how they were used in their particular title group.
 
This is how it was reported for the other title groups, M&R was still in negotiations while the other groups had ratified their agreements.
 
"Since we reduced the cost savings target from 20 to 17 percent in our negotiations and tentative agreement with the APA, we met with these TWU groups to make similar adjustments,” American spokesman Bruce Hicks said."
 
“We’re pleased we were able to work with the TWU to identify and agree upon items to adjust in each of these five contracts,” Hicks said.
 
"The TWU spelled out how the revised contracts different from the original ones:"
 
–  “The agreements call for the elimination of a two percent pay cut for fleet employees and generally provided pay raises over the life of the contracts.”
 
– "The union accepted lower profit-sharing payments in exchange for guaranteed pay raises."
 
– "The company’s 5.5 percent match for the 401(k) plan will include overtime pay and additional pay, not just base pay."
 
– "The increase in employee-paid premiums, deductibles, maximums and prescription costs were moderated."
 
– "The six-year contract includes a provision to open talks after the fourth year."
 
We received larger pay raises for the first 10%, then a 4.3% raise for the next 5%. (There was a chart in one of the fleet local websites that said Fleet received a total of 9.3%). Maintenance was in negotiations so we don't know what the difference was, but a negotiating committee should know since they dealt with it.part of the 

So what your saying is we bought our own 3% reduction and the me too didnt have anything to do with it. Sweet. According to some twu kool-aid drinkers the me-too equity was also part of the 3% reduction deal. Bottom line is we got fu@@ and the twu helped! Why would a 3% reduction for the me-too have give backs ie. 10% of our profit sharing going away. All we got was a massive shell game. When the company deals with the twu they automatically know that a built in salesman (twu international) comes with the deal thats helps fearsale the contract.

 

[NYer]

So what your saying is we bought our own 3% reduction and the me too didnt have anything to do with it. Sweet. According to some twu kool-aid drinkers the me-too equity was also part of the 3% reduction deal. Bottom line is we got fu@@ and the twu helped! Why would a 3% reduction for the me-too have give backs ie. 10% of our profit sharing going away. All we got was a massive shell game. When the company deals with the twu they automatically know that a built in salesman (twu international) comes with the deal thats helps fearsale the contract.

 
Not saying that at all. There was a reduction, as you state, from the 20% going to 17% AND a reduction for the monetizing of the profit sharing.
 
I guess the APA and APFA have the same "salesman" since they agreed to the same deals.

 

[bob@las-AA]

Would anyone have a link to the Fleet contract before 2003?