Restructure With Or Without Labor?

[Tim Nelson]

I am unclear on management's statement as reported by USA320pilot in which he quoted management as saying they will restructure this airline with or without [labor]. Interesting indeed.

Such is a recipe for liquidation only. There can be no successful chapter 11 without labor.

For a serious discussion, if you honestly believe that management can side step labor in chapter 11 then I would like your response and factual argument.

regards,

 

[mweiss]

As I mentioned before, the only way I could see that sort of thing happening is a huge change in the company. Something like selling assets to Virgin USA in exchange for 51% ownership, for example, would permit this. The result would have UAIR be a shell company to keep Virgin USA legal.

But why go into Chapter 11 to accomplish this? Would terms in existing contracts preclude such a transaction otherwise?

And, lest anyone be otherwise confused by the contents of this post, I have no idea if this is really in the works or not. It just seems to make sense based on the current market conditions.

 

[robbedagain]

the only way i can think of is that the company tells the bankrupt judge that the unions are not being cooperative and may be the judge would side with the company. i dont know if this is true but this what i have heard in the past

 

[oldiebutgoody]

the only way i can think of is that the company tells the bankrupt judge that the unions are not being cooperative and may be the judge would side with the company. i dont know if this is true but this what i have heard in the past

But the bankruptcy judge would be hard pressed to allow UAIR to void labor contracts, which are presently VERY competitive in terms of industry standards. This would give the company a rather unfair competitive advantage, and would be challenged not only by UAIR's labor groups, but by other companies as well. The ONLY likely scenario I see for another bankruptcy, no matter what management is trying to say to confuse the issue, would be a chapter 7 liquidation. With the assets UAIR has on hand presently I don't even think that this is very likely. The scare tactics, I believe, are just another chapter of the same book that Siegel used the last couple of times the company tried to squeeze employees.

 

[Smartest Loser]

The Chapter 11 as Oldie put it is correct. The company would be hard pressed to use that s1113 letter. Also, who would put up the DIP money...?? Oh, I know..!!

The Chapter 7 doesn't make sense because of the assets the company owes.

The key word here folks is "restructure" -- to change the makeup, organization, or pattern of. The exchange of assets for ownership as Mweiss puts it could work.
Under that plan wonder what the labor agreements would allow or not allow...??

The whole industry is watching.

SL

 

[nycbusdriver]

The company's stance that they will restructure with or without labor is simply saying: "Give us what we want for nothing in return, or we will file Chapter 11 and take what we want with the judge's blessing."

There are a few flaws with that logic, and Bruce Leftfield should know better thatn to utter such stupid things.

One was pointed out previously: The judge may look at labor's current situation and see that labor costs are lower than, or at least in line with, current industry standards. He may look Leftfield in the eye and say put your own house in order first. This is all labor wants. Get those "Other" costs to industry standards first, and then we'll talk.

The second obstacle to taking what they want in Chpater 11 is that, if the judge actually does side with the company, all the unions will shortly thereafter be able to invoke their right to self-help, i.e. strike. IMHO, the IAM and CWA will strike if the judge imposes the draconian work rules that we think the company will request. (ALPA will fall all over themselves to give up everything for nothing in return, which is their standard method of operation.) Since a strike by either or both the IAM and CWA will shortly lead to Chapter 7, some ALPA members will actually honor the picket lines! About 1 out of 4, I suspect, inlight of the LOA 91 vote.

And USAirways will be history for a short time while the presidential campaign keeps the topic in the limelight. Shortly after election day, USAirways will be a dim memory along with Northeast, Braniff, PanAm, etc. No one will miss USAirways within 30 days of liquidation.

 

[delldude]

But the bankruptcy judge would be hard pressed to allow UAIR to void labor contracts, which are presently VERY competitive in terms of industry standards. This would give the company a rather unfair competitive advantage, and would be challenged not only by UAIR's labor groups, but by other companies as well. The ONLY likely scenario I see for another bankruptcy, no matter what management is trying to say to confuse the issue, would be a chapter 7 liquidation. With the assets UAIR has on hand presently I don't even think that this is very likely. The scare tactics, I believe, are just another chapter of the same book that Siegel used the last couple of times the company tried to squeeze employees.

its the career positions in ramp,fleet,utility and other positions such as gse,plant maint ,stores and the like....that they could outsource for a lower cost.
how would they convince a BK juge mech wages are too high when they're lower than industry standard....maybe they'll get a raise in BK?
from what i understand U wanted this in the last round and IAM held them off.it may not go this round though.

 

[MrAeroMan]

No one will miss USAirways within 30 days of liquidation.

A lot of the 28,000 employees will.

 

[delldude]

A lot of the 28,000 employees will.

i don't know.....this could be an excellent opportunity...

 

[MrAeroMan]

its the career positions in ramp,fleet,utility and other positions such as gse,plant maint ,stores and the like....that they could outsource for a lower cost.
how would they convince a BK juge mech wages are too high when they're lower than industry standard....maybe they'll get a raise in BK?
from what i understand U wanted this in the last round and IAM held them off.it may not go this round though.

Are you suggesting that the Mechanics might be willing to talk if the company made such a proposal?

 

[MrAeroMan]

i don't know.....this could be an excellent opportunity...

That's very true for some but for a great deal of others it would be catastrophic.

 

[delldude]

Are you suggesting that the Mechanics might be willing to talk if the company made such a proposal?

i'm saying these are issues they went after 2 years ago and i see them,as do others as big bargining points to be sought.
i said once before...which positions are you willing to sacrifice to keep your job?
sadly it looks as if it could come to that soon.

 

[nycbusdriver]

A lot of the 28,000 employees will.

Like all those EAL employees who long to return to Lorenzo's benevolent care?

 

[Smartest Loser]

Are you suggesting that the Mechanics might be willing to talk if the company made such a proposal?

I was told...The IAM will not talk until the Airbus suit is settled. (Mid-Aug)

 

[MrAeroMan]

i'm saying these are issues they went after 2 years ago and i see them,as do others as big bargining points to be sought.
i said once before...which positions are you willing to sacrifice to keep your job?
sadly it looks as if it could come to that soon.

Actually I'm shocked to hear that. With all the chest pounding and sign thumping of IAM members on here about brotherhood and being a brothers keeper I'm very surprised to hear there is a group that would throw their "brothers and sisters" under the bus to keep their jobs. Actually this sounds a lot like ALPA eating their young doesn't it? :unsure: