************************************
NWA Council 20 Update:
************************************
DETROIT MINI UPDATE
A letter from the NWA LEC officers to the pilots of
ALPA Council 20
TO: All Council 20 Pilots
FROM: LEC Chairman
DATE: March 10, 2006
RE: ALPA/NWA Restructuring Agreement (Tentative Agreement)
(TA);
Council 20 Chairman's Perspective:
I hope all NWA pilots take the time to educate
themselves on the March 3, 2006, TA. This agreement
may, without exaggeration, be the most important
contract ratification for pilots in the history of
Northwest Airlines. Our pilot membership will be
making the final decision. Although the MEC has
decided to send this TA to the membership for
ratification, the MEC has deferred a vote
recommendation until the upcoming MEC meeting.
This tentative agreement is controversial because it
will drastically degrade the value of our careers as Northwest pilots.
Negotiations were conducted under duress, during the 1113c process,
with the threat of imposed terms of employment. Our defined benefit
plan (DBP) has been frozen, and we were negotiating for a follow-on
contribution plan without knowing whether we will be able to prevent
termination of our DBP. (We are still waiting on pension relief
legislation.) Management demanded an additional
$358M/year in cost reductions, with the threat of
liquidation if we did not comply. Managements at
other legacy carriers recently in Chapter 11 (US
Airways and UAL) have been able to negotiate deep
cost reductions from their pilots, as well as other
labor groups. In all cases, the pilots have been
burdened with substantially disproportionate
concessions when compared to other labor groups and
management. Both US Airways and UAL pilots have had
their DBPs terminated.
The Northwest management plan of "last man standing"
failed. Management was unable to negotiate voluntary concessions from
all labor groups, fares remained depressed, and fuel costs increased
substantially. NWA filed for Chapter 11 and joined the ranks
(including DAL) of those no longer standing. As is too often the case,
those who are responsible for bad decisions are not held accountable.
Those with no influence on those decisions are expected to concede a
substantial portion of their career value to cover the incompetence
and bailout of a management team that is paid very well to make much
better decisions. Unfortunately, the justification for labor's making
(what would otherwise be very
foolish) concessions is to save the airline and save
our jobs. We are essentially placing a very high
value on a greatly devalued career.
The greatest travesty, in my opinion, is the time we
have invested in what has become a bad investment.
Time can never be recovered. Some of us have
invested more than others. Some will cut their
losses and find a better, more rewarding career.
(For those pilots who can, you owe it to yourself
and your family to do so.) The effect of this TA is
not just the six to eight years we will be exposed
to the terms, but it is career-altering for most
pilots who are not in their final years at NWA. You
will be better off finding something that pays more,
has better benefits (including retirement), and
affords your family a better quality of life. There
are MANY alternative careers that will likely be
more rewarding. Taxi drivers, bus drivers, teachers,
postal workers, and even some secretaries make more
than many airline pilots. Often pilots have advanced
degrees and experience in other more rewarding
professions. If a career in commercial aviation is
not going to provide a respectable standard of
living, acceptable work rules, and a retirement that
will support us after retirement, it is time to take
a stand, or move on to something better. This TA
seems to protect pilot jobs, but in the process we
seem to have simply traded good jobs for bad (and
even more so for the more junior pilots). While we
have provided alternative employment (with a
subsidiary or another carrier) for our most junior
pilots, we may have facilitated their furlough.
There are times when job security (and our scope)
can be a ball and chain. So the good news may be
that our furloughed pilots will have pilot jobs
available, but the bad news is the jobs will likely
not be worth having for many of those pilots.
I suppose a fair question is what are your
expectations of an airline career, and how has that
been altered by the Chapter 11 process? We all knew
we would be making substantial concessions, but what
is necessary, and how much is enough? Should we
expect a better TA? How much risk are we willing to
take to achieve our level of expectations? If we
reach our maximum level of risk tolerance, we simply
have to reduce our expectations to match that
tolerance. In my opinion, that is what will
determine how most pilots will vote on this TA. It
should be no surprise to anyone that the level of
risk pilots are willing to take may depend on the
magnitude of their investment. Those with the most
years invested, may be more inclined to limit their
risk and accept the TA as their new level of
expectation. Those with fewer years invested, may be
more inclined to risk more rather than accept a
lower level of expectation that will have a much
greater detriment to their career. Under the best of conditions, it
could easily take another 20-plus years to recover from this TA. I
don't think anyone expects to fully recover in one contract,
regardless of the state of the airline.
Although we were told that $358M was enough, it was
not. If we were to get credit for our
revenue-enhancing concessions, the total value of
this TA would exceed $500M. If given credit for the
soft money, or even a substantial part of it, we
would not have had to concede the deep pay cuts, we
would not have had to concede the deep degradation
of work rules, we could have had better benefits at
less cost, and we could have had a better retirement contribution. We
paid for our 5 percent retirement contribution during Chapter 11 by
permitting NWA to charge our DBP with any excess PBGC insurance
premiums. Our revenue-enhancing concessions supposedly paid for our
future pay increases, which do little to mitigate even basic cost of
living increases. So, as to the question of whether or not we paid too
much for an agreement, the answer is clearly?YES. As to whether of not
we should expect a better TA, one with fewer concessions, the answer
is again?YES. And so what are the risks of the membership voting down
this TA?
If the TA is rejected, the judge may allow NWA to
impose; he may specify the terms; he may advocate an extension (with
negotiations); and he may even reject the 1113c petition. Until the
judge rules, NWA could impose terms without or before the judge's
decision, but the judge does have to rule on their 1113c petition. In
any case, NWA management will most likely need a consensual agreement
from all labor groups before they can get exit financing. So what is
the better choice, taking the terms of the
(long-term) TA, or taking the risk of improving the
TA in an effort to better match (higher) career
expectations? I am sure you will hear about all of
the worst-case scenarios of imposed terms, and those
are calculated risks. If NWA needs a consensual
agreement to exit Chapter 11, imposed terms are a
short-term problem. We have reserved our right to
all legal self-help options, and NWA has indicated
they will seek an injunction to stop a strike. The
outcome of that challenge and counter-challenge
could take days, weeks, or months. It is in both our
and management's best interest to achieve a mutually
acceptable agreement. The pilot membership will have
to decide what is acceptable. I do not find this TA
to be acceptable.
Although there was enough votes to have stopped this
TA at the MEC, most on the MEC wanted the TA to go
to the membership for a final decision. The
compromise was to pass a resolution that ensured the
TA would go to the pilots, but the MEC would debate
and decide on a vote recommendation at the upcoming
MEC meeting. We made it clear that we expected full
contract language to be completed for our review and available to all
pilots before road shows and/or membership ratification.
Unfortunately, the MEC chairman published his vote recommendation
(yes) in Ziplines before the MEC position had been
determined. The MEC chairman is obligated to
represent the view, position, and (policy) of the
MEC. Contrary to the Ziplines, the differences among
the MEC on the TA are well known. In any case, the
MEC vote recommendation will be addressed (and
determined) by the MEC next week. We have conceded
too much and compromised the quality of our careers
at Northwest beyond what was necessary to ensure a
successful airline restructuring. My recommendation
to the Council 20 pilots and to the MEC is a "no"
vote.
The MEC Negotiating Committee has just distributed
the latest Across the Table (ATT). Please take the
time to review the ATT; it can be downloaded (in
three parts) from the www.nwaalpa.org website. The
level of concessions and cost to our career is
obvious.
We (ALPA) need to find a better (and much more
effective) way to protect pilots and our careers. It
should be apparent to all; we have, to a large
degree, failed miserably in that respect in the
Chapter 11 environment. It has been a perfect storm,
and we have been challenged by limited options and
limited leverage, but, in my opinion, we have
assumed that we have no other recourse; we have
assumed the role of victims. We can do better.
Fraternally,
A.Ray Miller Jr.
NWA Council 20 Update:
************************************
DETROIT MINI UPDATE
A letter from the NWA LEC officers to the pilots of
ALPA Council 20
TO: All Council 20 Pilots
FROM: LEC Chairman
DATE: March 10, 2006
RE: ALPA/NWA Restructuring Agreement (Tentative Agreement)
(TA);
Council 20 Chairman's Perspective:
I hope all NWA pilots take the time to educate
themselves on the March 3, 2006, TA. This agreement
may, without exaggeration, be the most important
contract ratification for pilots in the history of
Northwest Airlines. Our pilot membership will be
making the final decision. Although the MEC has
decided to send this TA to the membership for
ratification, the MEC has deferred a vote
recommendation until the upcoming MEC meeting.
This tentative agreement is controversial because it
will drastically degrade the value of our careers as Northwest pilots.
Negotiations were conducted under duress, during the 1113c process,
with the threat of imposed terms of employment. Our defined benefit
plan (DBP) has been frozen, and we were negotiating for a follow-on
contribution plan without knowing whether we will be able to prevent
termination of our DBP. (We are still waiting on pension relief
legislation.) Management demanded an additional
$358M/year in cost reductions, with the threat of
liquidation if we did not comply. Managements at
other legacy carriers recently in Chapter 11 (US
Airways and UAL) have been able to negotiate deep
cost reductions from their pilots, as well as other
labor groups. In all cases, the pilots have been
burdened with substantially disproportionate
concessions when compared to other labor groups and
management. Both US Airways and UAL pilots have had
their DBPs terminated.
The Northwest management plan of "last man standing"
failed. Management was unable to negotiate voluntary concessions from
all labor groups, fares remained depressed, and fuel costs increased
substantially. NWA filed for Chapter 11 and joined the ranks
(including DAL) of those no longer standing. As is too often the case,
those who are responsible for bad decisions are not held accountable.
Those with no influence on those decisions are expected to concede a
substantial portion of their career value to cover the incompetence
and bailout of a management team that is paid very well to make much
better decisions. Unfortunately, the justification for labor's making
(what would otherwise be very
foolish) concessions is to save the airline and save
our jobs. We are essentially placing a very high
value on a greatly devalued career.
The greatest travesty, in my opinion, is the time we
have invested in what has become a bad investment.
Time can never be recovered. Some of us have
invested more than others. Some will cut their
losses and find a better, more rewarding career.
(For those pilots who can, you owe it to yourself
and your family to do so.) The effect of this TA is
not just the six to eight years we will be exposed
to the terms, but it is career-altering for most
pilots who are not in their final years at NWA. You
will be better off finding something that pays more,
has better benefits (including retirement), and
affords your family a better quality of life. There
are MANY alternative careers that will likely be
more rewarding. Taxi drivers, bus drivers, teachers,
postal workers, and even some secretaries make more
than many airline pilots. Often pilots have advanced
degrees and experience in other more rewarding
professions. If a career in commercial aviation is
not going to provide a respectable standard of
living, acceptable work rules, and a retirement that
will support us after retirement, it is time to take
a stand, or move on to something better. This TA
seems to protect pilot jobs, but in the process we
seem to have simply traded good jobs for bad (and
even more so for the more junior pilots). While we
have provided alternative employment (with a
subsidiary or another carrier) for our most junior
pilots, we may have facilitated their furlough.
There are times when job security (and our scope)
can be a ball and chain. So the good news may be
that our furloughed pilots will have pilot jobs
available, but the bad news is the jobs will likely
not be worth having for many of those pilots.
I suppose a fair question is what are your
expectations of an airline career, and how has that
been altered by the Chapter 11 process? We all knew
we would be making substantial concessions, but what
is necessary, and how much is enough? Should we
expect a better TA? How much risk are we willing to
take to achieve our level of expectations? If we
reach our maximum level of risk tolerance, we simply
have to reduce our expectations to match that
tolerance. In my opinion, that is what will
determine how most pilots will vote on this TA. It
should be no surprise to anyone that the level of
risk pilots are willing to take may depend on the
magnitude of their investment. Those with the most
years invested, may be more inclined to limit their
risk and accept the TA as their new level of
expectation. Those with fewer years invested, may be
more inclined to risk more rather than accept a
lower level of expectation that will have a much
greater detriment to their career. Under the best of conditions, it
could easily take another 20-plus years to recover from this TA. I
don't think anyone expects to fully recover in one contract,
regardless of the state of the airline.
Although we were told that $358M was enough, it was
not. If we were to get credit for our
revenue-enhancing concessions, the total value of
this TA would exceed $500M. If given credit for the
soft money, or even a substantial part of it, we
would not have had to concede the deep pay cuts, we
would not have had to concede the deep degradation
of work rules, we could have had better benefits at
less cost, and we could have had a better retirement contribution. We
paid for our 5 percent retirement contribution during Chapter 11 by
permitting NWA to charge our DBP with any excess PBGC insurance
premiums. Our revenue-enhancing concessions supposedly paid for our
future pay increases, which do little to mitigate even basic cost of
living increases. So, as to the question of whether or not we paid too
much for an agreement, the answer is clearly?YES. As to whether of not
we should expect a better TA, one with fewer concessions, the answer
is again?YES. And so what are the risks of the membership voting down
this TA?
If the TA is rejected, the judge may allow NWA to
impose; he may specify the terms; he may advocate an extension (with
negotiations); and he may even reject the 1113c petition. Until the
judge rules, NWA could impose terms without or before the judge's
decision, but the judge does have to rule on their 1113c petition. In
any case, NWA management will most likely need a consensual agreement
from all labor groups before they can get exit financing. So what is
the better choice, taking the terms of the
(long-term) TA, or taking the risk of improving the
TA in an effort to better match (higher) career
expectations? I am sure you will hear about all of
the worst-case scenarios of imposed terms, and those
are calculated risks. If NWA needs a consensual
agreement to exit Chapter 11, imposed terms are a
short-term problem. We have reserved our right to
all legal self-help options, and NWA has indicated
they will seek an injunction to stop a strike. The
outcome of that challenge and counter-challenge
could take days, weeks, or months. It is in both our
and management's best interest to achieve a mutually
acceptable agreement. The pilot membership will have
to decide what is acceptable. I do not find this TA
to be acceptable.
Although there was enough votes to have stopped this
TA at the MEC, most on the MEC wanted the TA to go
to the membership for a final decision. The
compromise was to pass a resolution that ensured the
TA would go to the pilots, but the MEC would debate
and decide on a vote recommendation at the upcoming
MEC meeting. We made it clear that we expected full
contract language to be completed for our review and available to all
pilots before road shows and/or membership ratification.
Unfortunately, the MEC chairman published his vote recommendation
(yes) in Ziplines before the MEC position had been
determined. The MEC chairman is obligated to
represent the view, position, and (policy) of the
MEC. Contrary to the Ziplines, the differences among
the MEC on the TA are well known. In any case, the
MEC vote recommendation will be addressed (and
determined) by the MEC next week. We have conceded
too much and compromised the quality of our careers
at Northwest beyond what was necessary to ensure a
successful airline restructuring. My recommendation
to the Council 20 pilots and to the MEC is a "no"
vote.
The MEC Negotiating Committee has just distributed
the latest Across the Table (ATT). Please take the
time to review the ATT; it can be downloaded (in
three parts) from the www.nwaalpa.org website. The
level of concessions and cost to our career is
obvious.
We (ALPA) need to find a better (and much more
effective) way to protect pilots and our careers. It
should be apparent to all; we have, to a large
degree, failed miserably in that respect in the
Chapter 11 environment. It has been a perfect storm,
and we have been challenged by limited options and
limited leverage, but, in my opinion, we have
assumed that we have no other recourse; we have
assumed the role of victims. We can do better.
Fraternally,
A.Ray Miller Jr.
