The Plan

[DFWCC]

Ok, here's "THE PLAN".... With $3.500,000,000 in cash reserve and with 80,000
employees worried about theur future... AA gives each employee a $43,750 bonus
to retire or take a layoff. AA also will insure rehiring those not retiring. AA will then declare BK. throw out most of its debt. Recall all layoffs under a restructured AA. :down:
The way I see it if DL UA NW US and soon CO throw out or have thrown out their contracts and pensions, AA will have to follow.
I expect they'll come after give-backs sometime soon. Everyone will hem and haw and AA will get what they want. I'll be working for less so why not get a little upfront bonus money then I have the option to retire or go find another job.

 

[FWAAA]

Excellent plan. Except management will get 90% of the money, leaving only 10% for APA, APFA and TWU members to split up.

Those bonuses you mentioned would likely be preference payments in BK and would be recoverable. So you wouldn't get to keep the money anyway.

 

[Bob Owens]

Ok, here's "THE PLAN".... With $3.500,000,000 in cash reserve and with 80,000
employees worried about theur future... AA gives each employee a $43,750 bonus
to retire or take a layoff. AA also will insure rehiring those not retiring. AA will then declare BK. throw out most of its debt. Recall all layoffs under a restructured AA. :down:
The way I see it if DL UA NW US and soon CO throw out or have thrown out their contracts and pensions, AA will have to follow.
I expect they'll come after give-backs sometime soon. Everyone will hem and haw and AA will get what they want. I'll be working for less so why not get a little upfront bonus money then I have the option to retire or go find another job.

[post="304173"][/post]​

Now why would they do that?

Instead they will do like last time and bury that money and get us to give them all the savings they could expect in bankruptcy without actually ever going there.

They could prepay leases again.

Start building more new billion dollar terminals.

Buy a few thousand extra cargo containers and leave them all over every airport across the country.

Spend money on things like landscaping in front of the hangar. (In 20 years I never saw hangars landscaped as nicely as they are now when we are losing so much money).

Pay back loans ahead of time and catch up on the underfunded part of the pension.

Dont worry, by 2006 all that $3.5 billion will be gone.

 

[PRINCESS KIDAGAKASH]

The $3.5 billion is already gone. In fact,it does not exist as long as AMR owes 25 billion in debt. All that $3.5 billion is "feel good" money to lure dummies into buying worthless AMR stock or luring banks to loan AMR more money to spend on new seats and terminals

 

[Bagbelt]

They have a revenue stream annually that almost matches that. It would be as if you're making $50,000 and borrowed $60,000 over 20-30 years. Not saying it's desirable, but industry assumptions keep missing the mark. I think they are going to shoot their wad on some asia expansion. At this point I'm pretty much resigned to the probability that organised labor will have its hat in hand for at least another 10 years. It would be nice if individual locals could negotiate their own compensation rate as local conditions permit. The prices for a dump around here are about $450,000 to start, I'm working two jobs and overtime to pay for a license in another trade. And then I will leave if I have to, and I will take the train if I need to go somewhere.

 

[B.O.B.]

Ok, here's "THE PLAN".... With $3.500,000,000 in cash reserve and with 80,000
employees worried about theur future... AA gives each employee a $43,750 bonus
to retire or take a layoff.

[post="304173"][/post]​

Arpey out...DFWCC in!

 

[Bob Owens]

The $3.5 billion is already gone. In fact,it does not exist as long as AMR owes 25 billion in debt. All that $3.5 billion is "feel good" money to lure dummies into buying worthless AMR stock or luring banks to loan AMR more money to spend on new seats and terminals

[post="304244"][/post]​

How much do you owe on your house? Is it more than you have in your savings account? For most people the answer is yes.

When you took the loan was it more than you annual earnings? For most people the answer is Yes.

So AMR owes $25 billion and they have an annual revenue of around the same. Big deal.

One thing you have to remember is that unlike people, companies are immortal. They dont have to pay off their debts in order to retire. So they can and usually do say in debt forever. Thats how banks make their money. If the airlines did not borrow money banks would lose a big source of revenue.

Banks love when companies borrow money, it makes them a limited risk partner, skimming off the profits, even when there arent any.

So oweing out more than you have in cash is not such a bad thing for a corporation, in fact it might ward off a hostile take over. As long as you have the revenue to service the debt you are OK. With over $20 bill in revenue/year oweing out $20 bill over the next several years is not in itself that bad.

The banks were behind our screwing. Along with the airlines they put in unrealistic covenants such as the one AMR had where they had to maintain $1billion in cash. Have you ever heard of anything like that? Thats like the mortagage company saying that you have to maintain $100,000 in cash or they will call back your mortagage. They would not do it because then nobody would take mortgages and what would the banks do with all that money? You have to remember that the banks are paying interest on the money they have so sitting on it does them no good, it costs them.

I think the company deliberatey sought those terms so they could claim that they were about to go BK even though they had over $1billion in cash. It sounded good, nobody questioned it, and they got away with it! The banks had nothing to lose by putting in those covenents. In the meantime we lowered the bar so low it not only kept UAL and USAIR in BK but pushed Delta and NWA in too.

What that covenent did was allow AMR to hide $1billion in plain sight. Combined with the "We lost $3.5 billion", "We owe over $20 billion" , and threatening to cut union officers off company payroll it allowed AMR to drastically cut wages to the point where other carriers , even in BK have still not caught up to AMR.

It put AAs labor costs per worker lower than SWA and if we were to compare AAs costs by the number of years with the company even lower than Jet Blue.

 

[FWAAA]

Excellent post, Mr Owens.

I agree with you.

In other news, Hell has indeed frozen over.

 

[eolesen]

It put AAs labor costs per worker lower than SWA and if we were to compare AAs costs by the number of years with the company even lower than Jet Blue.

[post="304320"][/post]​

Labor costs per worker is a useless comparator, Bob. On a neutral basis, WN and JetBleu have fewer employees, regardless if you look at it by ee's per departure, per passengers boarded, available seat miles, or revenue seat miles.

Personally, I'd love to be staffed at WN's contract levels and see people earning WN wages. Unfortunately, the existing workrules at AA don't permit that.

 

[Bob Owens]

Former ModerAAtor,Sep 23 2005, 06:12 PM]
Labor costs per worker is a useless comparator, Bob.

Now it is since ours are so low, it doesnt help your arguements anymore.

On a neutral basis, WN and JetBleu have fewer employees, regardless if you look at it by ee's per departure, per passengers boarded, available seat miles, or revenue seat miles.

Personally, I'd love to be staffed at WN's contract levels and see people earning WN wages. Unfortunately, the existing workrules at AA don't permit that.

Such as?

 

[DFWCC]

AA may have more emp per aircraft, but we also handle more fr & ml per employee. The problem is we're top heavy in mgnt.

 

[AMFAMAN]

Personally, I'd love to be staffed at WN's contract levels and see people earning WN wages. Unfortunately, the existing workrules at AA don't permit that.

[post="304443"][/post]​

What are these so-called workrules, certainly not on the maintenance side of the operation.

 

[DFWCC]

What are these so-called workrules, certainly not on the maintenance side of the operation.

[post="304542"][/post]​

Certainly not on the ramp side of the operation. Must be on the mgnt side.
How do I count the mgnt per aircraft as compared to WN?????

 

[Oneflyer]

AA may have more emp per aircraft, but we also handle more fr & ml per employee. The problem is we're top heavy in mgnt.

Mgmt is less than 10% of the total workforce. Even if you eliminate half of them, it doesn't solve the problem. Most mgmt. employees actually make LESS than the unionized workforce. There are maybe 700 level 5s and above making roughly $100k on average, thats only $70 million a year, its a drop in the damn bucket.

While I do agree that AA can due with less mgmt, it does not solve the problem.

AA's unionized labor force has to become more productive to compete with WN, it is an undisputable fact that AA is less productive than WN. That being said, it is managements responsibility to improve the productivity, either by scheduling and staffing differently or by working with the unions to eliminate counter productive work rules.

 

[Skymess]

AA's unionized labor force has to become more productive to compete with WN, it is an undisputable fact that AA is less productive than WN. That being said, it is managements responsibility to improve the productivity, either by scheduling and staffing differently or by working with the unions to eliminate counter productive work rules.

[post="304795"][/post]​

Where are you getting your information? How do you figure we're indisputably less productive? Facts and figures please.