Star-Telegram: Delta'S Vote Against Unionizing Should Make American Airlines Stop And Think

[Duke787]

Thats their second bite at the apple, they put out a similar notice in the press a month ago. With 15 million unemployed you would think they would have no trouble scrounging up 200 mechanics. (The earlier article cited that they cant retain mechanics, a competitor, the US Government kept hiring people away.) After all some on this forum believe that if we struck the company could scrounge up 3000 mechanics in an instant to keep their line operation going and farm out all their OH to places like AAR that cant fill 200 spots.

This article also mentioned that UAL once employed 3000 people in the very same facility AAR now operates, well where did they all go? I guess they didnt sit around waiting for another Aviation job.

What does that have to do with the fact that AAR is hiring more mechs because Delta is farming out more work. If it was cheaper for Delta to do the work themselves, Delta would hire more mechs. It sounds like you're trying convince yourself that nobody with an A&P wants to work as a mechanic and that you are martyring yourself by working as an AMT.

I don't want your rhetoric to destroy our careers like Dell's rhetoric cost the careers of the NWA mechs. I know you're doing what you think is best for the mechs af AA, but so did the AMFA leaders of NWA.

 

[Hopeful]

What does that have to do with the fact that AAR is hiring more mechs because Delta is farming out more work. If it was cheaper for Delta to do the work themselves, Delta would hire more mechs. It sounds like you're trying convince yourself that nobody with an A&P wants to work as a mechanic and that you are martyring yourself by working as an AMT.

I don't want your rhetoric to destroy our careers like Dell's rhetoric cost the careers of the NWA mechs. I know you're doing what you think is best for the mechs af AA, but so did the AMFA leaders of NWA.

If you think Bob's rhetoric is destroying our careers, you need a history lesson. Out careers started down the destructive path following deregulation. I've been around prior to deregulation and I can tell you from experience that aircraft mechanics have lost more and more from that point.
Airlines, with the help of the FAA, have decimated us for the sake of profit over safety.

 

[Bob Owens]

What does that have to do with the fact that AAR is hiring more mechs because Delta is farming out more work. If it was cheaper for Delta to do the work themselves, Delta would hire more mechs. It sounds like you're trying convince yourself that nobody with an A&P wants to work as a mechanic and that you are martyring yourself by working as an AMT.

I don't want your rhetoric to destroy our careers like Dell's rhetoric cost the careers of the NWA mechs. I know you're doing what you think is best for the mechs af AA, but so did the AMFA leaders of NWA.

Where did you get that AAR is hiring to do Delta work? I havent heard of a Delta layoff of mechanics. In fact I havent heard of a UAL/CAL layoff either, even in the good times mergers usually mean some layoffs.

This isnt 2005. If you recall nobody was hiring and thousands of mechanics had recently been dumped to the streets. Still the overwhelming majority passed on the offer to become scabs. Of the NWA mechanics that come here I have yet to see one who says they should have taken the company deal. If you dont see NWA for what it was, a combined effort by the industry and the labor movement to squash a union that would not buy into concessions, in other words acted like a union, and want to use that as an excuse to continue to roll over then you are proving that NWA was a good investment for the industry.

With 15 million unemployed the industry is having a hard time finding mechanics. Like I said, what happened to the 3000 that were in Indianapolis? How come AAR has to use the media to try and get mechanics? What happened to the 300 on the recall list for NY1? They are gone, retired, moved on to other industries etc. When the economy rebounds, and its already started, otherwise AAR wouldnt be hiring right, more people will leave if the money doesnt improve. At JFK our headcount is down around 9% since the beginning of the year. A couple of terminations, several retirements, some resignations and transfers have led the company to start to solicit off the street.

 

[eolesen]

Well the pension comes out to $1100 per year, the company figures not mine.

Mathematically impossible to be that low, Bob. That's more than what your monthly draw will be.

 

[ThirdSeatHero]

Again, nearly all employees inthe airline industry except for pilots have retirement benefits that were below the maximum guaranteed by the PBGC - so there was no loss.

Speaking as a UAL employee(not a pilot), there most definitely WAS a loss in pension benefits.

Simply being below the PBGCs maximum payout limit does not mean you'll receive full value for your pension.

If for example, you had pension payout of $3k per month should you retire the day prior to the UAL default, it DOES NOT mean you'd get the full $3k from the PBGC simply because the total falls under the maximum payout limit.

PBGC

The section on "Phase in" limits hit the ground workers particularly hard.

 

[Duke787]

Where did you get that AAR is hiring to do Delta work?



It is hiring more workers because of new maintenance contracts from Delta Air Lines.

http://www.wthr.com/story/13532227/aar-looks-to-hire-200-aircraft-mechanics


It's right in the article................ <_<

 

[Bob Owens]

Ok, could be Delta is in the same position that AA is headed, more work than they can handle. Still havent heard of any Delta layoffs.

 

[Bob Owens]

Mathematically impossible to be that low, Bob. That's more than what your monthly draw will be.

Really? Show me how you determined that. Remember thats the companys number off my total value statement. They also include SSI and Health claims paid. (Doesnt appear that they subtract what I pay for the coverage though.

Maybe they bank on most of us dying early from exposure to toxic agents, working shifts, two jobs and being under constant financial distress.

 

[WorldTraveler]

We have yet to hear any confirmation that this is work DL is doing and that it is a new contract. If DL is simply switching contracts from one company to another, then there is no net increase in outsourcing activity. Until we know exaclty what is being outsourced and whether it is a new or replacement contract, it is premature to speculate on what has been lost.

3rd seat... if you can show me the number or percentage of non-pilot employees who actually lost benefits at UA and US, I would like to know... UA and US as well as the PBGC were quite adamant that the vast majority of employees would not be negatively affected in terms of total benefits, although the PBGC does have later periods when benefits can begin. As with anything as complex as individual situations, there are bound to be exceptions but unless you can provide specific data or examples of who "lost" it is still more likely than not to believe that non-pilot employees did not significantly lose pension benefits.

Pilots are a whole different story and no one is pretending that it worked out for them as it did for other employees.

 

[700UW]

I was going to get $2,000 a month before the termination now I will get $700 a month, so I am negatively affected, just like the rest of the US employees.

 

[Hopeful]

Mathematically impossible to be that low, Bob. That's more than what your monthly draw will be.

I think he meant that the company contributes $1100 a year towards out pension. That is the number in the Total Value Statement. That's the figue in mine!

 

[FWAAA]

I think he meant that the company contributes $1100 a year towards out pension. That is the number in the Total Value Statement. That's the figue in mine!

Yes, that's what Bob previously posted was his 2008 total value statement amount shown for his pension contribution. In 2008, AA's pension contributions were small. In 2009, no contribution was made, and this year, AA contributed $460 million to the pension funds and expects to contribute about $520 million next year. This year, AA has about 66,000 mainline employees. The 2010 contribution equals about $7,000 on average per full-time mainline employee. If AA contributes $520 million next year, that will equal an average of about $8,000 per full-time AA mainline employee.

 

[eolesen]

Really? Show me how you determined that. Remember thats the companys number off my total value statement. They also include SSI and Health claims paid.

It's called compound interest... $1100 per year drawing 5% over 30 years results in a total of $81,523. You'd a 14% rate of return *consistently* over 30 years to be able to support a $580,000 payout, and I just don't think that's realistic. Maybe for one or two years, but the last five years have been nowhere near that.

Rates of return for public employee pensions have been averaging between 7.5% and 8%, and those staying at 8% are getting a lot of flack for it.

And your $33,000 in seed money at $1100 per year would only net $149,500 over 30 years...

That's why I say the number is mathematically impossible. Maybe for one year out of the 30 that was the company's contribution, but I highly suspect it's averaging out to a lot more than that, especially with lifespans increasing and rates of return being lower over the past couple years.

When we were given the option of converting to the 401K in either 1999 or 2000, I was told that the company's pension contribution worked out to between 9% and 11%, which is why they were going with only the 401K for non-union new hires. Plugging in an 11% contribution with 7% rate of return comes back with a whole lot more realistic end result ($4800 per year grows to just shy of $530,000).

So, you can choose to take your total value statement as the end-all financial document, or you can go look for an online compound interest calculator and run a few scenarios on your own.

 

[ThirdSeatHero]

3rd seat... if you can show me the number or percentage of non-pilot employees who actually lost benefits at UA and US, I would like to know... UA and US as well as the PBGC were quite adamant that the vast majority of employees would not be negatively affected in terms of total benefits, although the PBGC does have later periods when benefits can begin. As with anything as complex as individual situations, there are bound to be exceptions but unless you can provide specific data or examples of who "lost" it is still more likely than not to believe that non-pilot employees did not significantly lose pension benefits.

The Mechanics at UAL had ratified a new CBA in 2002 which contained substantial increases in pension benefits. When UAL defaulted and the PBGC took over, those pesnion improvements were not 5 years old which made them subject to the PBGCs Phase In limits.

Taken from the link in my previous post:

""...PBGC will fully cover benefit improvements made more than five years prior to the date of the plan’s
termination. It will not cover any benefit increase implemented through a plan
amendment that was made within one year of the date of the plan termination. For
benefit improvements that became effective (or that the sponsor adopted, if later)
more than one year but less than five years prior to the plan’s termination, PBGC
will guarantee the larger of 20 percent of the benefit increase or $20 per month of
the increase for each full year the increase was in effect...""

Any of the other bargaining groups on UAL would have been affected by this as well.

Regardless of UALs statements at the time to the contrary, all employees took a pension benefit loss

 

[WorldTraveler]

3rdseat,
The mechanics lost a lot of FUTURE retirement benefits when UA filed for BK and abrogated the contracts but there was very little actual loss because even one year under a new contract did not significantly increase ACCRUED retirement benefits. As you note, the PBGC does give partial credit for the benefit increases.

But also keep in mind that all airline employee groups became creditors in one form or the other of their companies duing bankruptcy - and most employees received stock in the reorgnized company as it emerged from BK. A significant reason for those lump sum payments and stock payouts was to compensate for the losses those employees suffered.
But most airline employees spent the money from the lump sum payouts and sold the stock, never putting it in their retirement accounts (401Ks). There are some who did and for them, the BKs probably resulted in increased retirement benefits than if those companies had not filed for BK - and they also reduced their taxes during the period when the lump sum or stocks were distributed.

But again, the real point of this discussion is not to prove whether employees of the 4 previously BK carriers suffered loss or not but to show what MIGHT happen to AMR employees if AA were to file.

Based on everything that has happened to network airline employees so far, they have recovered much of their current earnings (the average salaries per full-time equivalent employee at AA is almost identical to those at every other network carrier except for CO which still makes about 10% less than other carriers - the continued legacy of CO's bankruptcies.
Further, employees of the 4 carriers rec'd stock to compensate for their losses and in the case of DL and NW, only the DL pilots had their pension plans terminated - so the rest of the employees did not suffer the same kinds of losses that UA and US employees suffered. IN a sense, BK became somewhat more employee friendly for DL and NW employees than it was for UA and US.

And finally other network carrier employees (besides AA) are receiving profit sharing that is increasing their salary levels to at or above what they made before bankruptcy.

What the previously 4 BK carriers did accomplish in BK was to significant reduce their workforces and increase productivity - which is precisely what AA has been unable to do outside of BK.