Time To Demand New Management

[tinpadro]

Its not Tilton who is the problem. Although the idea of having a BK proof pension and telling everyone else to cash in their's doesn't exactly score him any points.

The problem as I see it is the mgt in between. There are too many supervisors and managers who are covering their own ass rather than listening to their own subordinates. There is a serious drain on new blood in middle management. Ideas do not flow to decisionmakers unless you are a kiss ass.

Let me make this clear frontline folks do not get listened to but merely dictated to and told flat out work harder and be thankful you have a job or you can be outsourced. This is not the way to lead the empire. Pilots only get envy because like it or not your group does get listened to. I know you dont always get followed but I assure you a pilot does get at least a forum. Ask a frontliner and see what happens when they try to help improve the operation. If the empire wishes to be successful, they need everyone on the same page.

If you believe just giving your check and staying silent is the answer then feel free to work for minimum wage. All employees need rapid methods of idea delivery and solutions acted on regardless of what department you are in.

Southwest, Jetblue and even successful non aircarriers operate on the principle of fairness and treating people with respect. Companies have cutbacks and thats fine, its how your are treated during the cutbacks thats the issue and what happens after the cutbacks.

Just my 2 cents.

 

[casual rat]

I hear what you're saying...I'll get back to you on that...

 

[UAL_TECH]

Its not Tilton who is the problem. Although the idea of having a BK proof pension and telling everyone else to cash in their's doesn't exactly score him any points.

The problem as I see it is the mgt in between. There are too many supervisors and managers who are covering their own ass rather than listening to their own subordinates. There is a serious drain on new blood in middle management. Ideas do not flow to decisionmakers unless you are a kiss ass.

Let me make this clear frontline folks do not get listened to but merely dictated to and told flat out work harder and be thankful you have a job or you can be outsourced. This is not the way to lead the empire. Pilots only get envy because like it or not your group does get listened to. I know you dont always get followed but I assure you a pilot does get at least a forum. Ask a frontliner and see what happens when they try to help improve the operation. If the empire wishes to be successful, they need everyone on the same page.

If you believe just giving your check and staying silent is the answer then feel free to work for minimum wage. All employees need rapid methods of idea delivery and solutions acted on regardless of what department you are in.

Southwest, Jetblue and even successful non aircarriers operate on the principle of fairness and treating people with respect. Companies have cutbacks and thats fine, its how your are treated during the cutbacks thats the issue and what happens after the cutbacks.

Just my 2 cents.

[post="276073"][/post]​

UT

 

[markkus757]

As an outsider to UA but not to this industry, I find it hard to believe that you can give Tilton and his management team a pass on how things are being handled. As an outsider, I'm not privy to all of the information; but I see a company that has been in BK protection for about 3 years, has no real exit strategy, and has continued to go back to the employees to cut costs. I have yet to see any real action publicly to bring this company around and make it a survivor long-term. Don't even use oil as a basis for any excuse. They have the same problem as most of the other carriers they compete with. I would even go as far to say that unless new management is found, no new financing will be found at competitive rates due to what's happening at US/HP right now. It doesn't matter at this point because as an outsider, I see they have no reason to exit BK until the judge says so.

 

[Busdrvr]

As an outsider, I'm not privy to all of the information;

Correct

has no real exit strategy, and has continued to go back to the employees to cut costs.

wrong. they've formulated two diff plans. The first was the ATSB plan. They got the level of concessions they felt were appropriate for ATSB approval. when that was rejected (some say precisely because they weren't planing on dumping the pension), they had to go to plan B. They haven't 'continuously gone back to the employees', they've gone twice at two very distinct times. Now they have the complete exit plan ready to go. Expect it this summer.

I have yet to see any real action publicly to bring this company around and make it a survivor long-term.

Why would you? suffice it to say, the plans are there, the numbers work (and they aren't the ones WT thinks he has), and the money is waiting.

no new financing will be found at competitive rates due to what's happening at US/HP right now

What? please explain. What U has is a bunch of companies who themselves now face significant financial problems after being "shunned" by UAL, who are loaning U very unimpressive levels of cash in exchange for significant "strings" attached. UAL has the money lined up, and it's at decent rates from BANKS.

 

[Vikedog64]

Great post FLY. Thanks for forwarding it.

I was furloughed last year for about 9 months. When I came back on the property last November, we got a similar briefing from these guys including Tilton, McDonald, Forte, Krakowski, Winters, & Bathurst.

My first impression from all these guys was that they were sharp and talented. Tilton is without a doubt a straight shooter, and tells it like it is. I got the sense he sincerely cares, but also does not like to take any sh*t. Pull the power play Captain thing on him and he'll spar with ya anytime.

The briefings were long and informative. I won't reiterate what was said, as the points made in the above post were accurate and familiar. I will repeat a few specific points though that stood out to us, and are related to the starting post about the need to replace the managers.

1 Tilton blamed much of the soft pricing last year on Northwest's failure to match price increases. 90% of the time, they were the spoilers and did so for the specific reason of killing United Airlines to better control the Pacific. Tilton specifically said he is looking forward to "returning the favors" to Northwest upon our exit.

2 Tilton said the only way this indusrty will survive in a healthy manner is through consolidation and liquidations. It is imperative we survive this onslaught to fight the fight another day. After BK is over, we will be in a position to be the "preditor and not the prey." He also mentioned Bethune approached him during the first year of BK and wanted to join the airlines. United declined the offer, but my own personal opinion...CAL is the likely "consolidation" candidate for United in the coming years improving on our weakness in South America, strengthening our New York presence, and establishing a central/southern Texas hub rounding out our structure.

3 Tilton also agreed DAL cannot avoid BK. I think his number given was that DAL paid 757 million dollars to service their debt last year alone. That is crushing debt that cannot be managed outside of BK unless 80% of their debt is forgiven outright by their creditors. That ain't gonna happen without court protection.

4 Independence Air was offered a 7% gauranteed profit margin from UAL but declined that offer. He is convinced they do not have a bright future and says he was very surprised their "stupid ass business plan" got financed. There is no love lost between those two CEOs.

5 And one last point, as I could write for hours about all the stuff these guys said. Tilton admitted that UAL has been one of the most poorly managed companies he has ever seen. I think the number he mentioned was 7 CEOs in 15 years. When he was specifically asked if he would be with us for the long haul, he did the tap dance for quite sometime and with half smiles would never claim he will be staying too long after the BK exit. We all got the feeling that Tilton is the "turn-around guy" and was specifically challenged to navigate UAL through the BK. He mentioned he does not have specific plans yet after BK is done, but he also "does not yet have a succession plan in place." He mentioned that several times. So...for those of you who want Tilton gone, you will likely get your wish in the next 1-2 years. Not soon enough for you? I wouldn't worry. In my opinion, Tilton is not the problem, and has done a hell of a job with what he had to work with. And this is coming from a pilot who has been furloughed, transferred to another domicile without any other option upon my return, and of course has taken over a 50%+ paycut, and had my quality of work life decimated. If I can have a positive outlook on Tilton, that says a lot.

Did they do some things wrong? Yes. Could they have done some things better? Absolutely. Are all the naysayers doing the Monday Morning Quarterback thing? Yup.

United is still fighting and according to Tilton, we aren't going anywhere. We will be a competitor. All the other airlines who's business plan for success was UAL's liquidation better be very careful.

[post="275400"][/post]​

First off, I wouldn't listen to a thing Tilton says. It is real easy to speculate on others demise, but will someone tell me what UAL's plan is post BK? I read last week in the Wall Street Journal that operational cost has only dropped 240-250 million since 9/11. UAL's plan seems to be about slashing labor and thats all. Does UAL have a plan...really???

 

[ualdriver]

I read last week in the Wall Street Journal that operational cost has only dropped 240-250 million since 9/11. UAL's plan seems to be about slashing labor and thats all. Does UAL have a plan...really???

[post="276812"][/post]​

You read or they wrote wrong. Try saying that rapidly 3 times.

 

[Vikedog64]

You read or they wrote wrong. Try saying that rapidly 3 times.

[post="276823"][/post]​

I work for DAL so don't get so defensive. It is what I read. Maybe it was wrong, but what is the plan post BK?

 

[ualdriver]

I'm not getting defensive! They either wrote it wrong or you read it wrong. It's a tongue twister, get it? If you read it correctly, then they wrote it wrong!

Neither you nor I will ever be privy to UAL's internal plans and/or dealings. I wish Tilton would call me and let me know what's going on in the up and coming 6 months, but he still won't return my phone calls. Anyway, just because UAL hasn't posted their plans for their future for all the world (and their competitors!) to see, doesn't mean such a plan does not exist. I also would imagine that this "plan" is very much a work in progress, satisfying the whims of the people with the deep pockets and the dark suits.

 

[gatemech]

busdrvr,

You seem to be in the know. What is the plan? I havent heard anything. I have seen plenty.

Wages cut
Pentions gone
TED

Is that it? If so we are in deep s**t. So now you have a pissed off work force. And then TED. I have tried to buy tickets on TED. Way too expensive. Sometimes by $200. AWA or SWA are always cheeper to the destinations I need to get to. So we have freshly painted aircraft with no first class. Granted they are full. They would be full without the fancy paint and a first class cabin.

Once again. WHAT IS THE PLAN ? ? ? ? ?

 

[UnitedChicago]

What's the plan? Get TPG in here stat.

 

[WorldTraveler]

Vikedog,
You don't need access to confidential UA documents to know that what the WSJ reported is true. US airlines report more data to the gov't than any other industry. Included in that data is the information necessary for analysts to accurately determine that UAL has NOT significantly reduced costs other than labor costs despite being in bankruptcy for 2 1/2 years. part of the reason is that UA has shrunk their operation; domestic operations are being shrunk and outsourced faster than int'l operations are growing.
The only plausible outcome for UA is to sell it to an investment company who would then combine it with another airline. UA simply has not done what it takes to be a viable standalone airline.
An acquisition led by Bethune could very likely set UA up for a merger w/ CO - not a bad outcome after all.
No matter how you slice it, there will not be six legacy airlines left in 10 years. Given that they all have trashed their balance sheets, the winners will be those that have the lowest costs and can generate the most revenue. It's a basic business principle. There are two reasons why consolidation hasn't happened yet is because the legacy carriers have had business plans which have been too much alike; that is quickly changing. Secondly, because we are at the peak of a business cycle, there is enough traffic to go around for all of the airlines but that will change within a couple years. Never in the history of commercial aviation have such huge losses been sustained without consolidation occurring. The artificial barriers that are preventing corporate failures will soon fall. At that point, winners will be picked and the losers will be swallowed up or fall aside.

 

[ualdriver]

World-

World Says "...........UAL has NOT significantly reduced costs other than labor costs despite being in bankruptcy for 2 1/2 years"

From UAL 10Q filings from March '01 (the glory high cost years) compared to UAL 10Q filings March '05 (the crying on the inside years)

Salaries and Related Costs: Down 55% (and this is huge as an airline's highest expense)
Purchased Services: Down 21%
Aircraft Rent: Down 43%
Commissions: Down 67%

World, I'm sorry because I'll guess you'll have to explain the above costs to me as I thought you said UAL has NOT significantly reduced any costs other than labor? And surely you can agree that despite your inference that if one doesn't make as big as cuts elsewhere in a company as it might be able to undertake in labor, that it WILL NOT have as large an effect on the bottom line as labor and fuel do, as fuel and labor account for over 40% of a legacy carrier's total costs?

Delta non-fuel CASM: 7.72 (1st Qtr '05)
UAL non-fuel CASM: 7.77 (1st Qtr '05)

(excluding fuel or large one time charges-both of which UAL and DAL have-can "hide" cost cutting or large one time charges that may sway CASM one way or the other)

We still have some cost cutting taking place, so does Delta. I guess since we're within .7% of your much vaunted Delta, we must be doing quite well, especially since UAL enjoys a proportional higher unit revenue (8.81 vs. 9.74) to cover those ever so slightly higher unit costs?

World says: "UA simply has not done what it takes to be a viable standalone airline. ......No matter how you slice it, there will not be six legacy airlines left in 10 years. Given that they all have trashed their balance sheets, the winners will be those that have the lowest costs and can generate the most revenue.

I agree world. I think there will not be six legacy carriers left in 10 years. Will DAL go to the great hangar in the sky? I don't know but here's what's in DAL's 10Q (signed by DAL's CEO). Further, if DAL was unfortunately enough to see a bankruptcy filing in 2006 (I hope they don't), Delta management made another interesting statement below.....

“Accordingly, we believe that we will record a substantial net loss for the nine months ending December 31, 2005, and that our cash flows from operations will not be sufficient to meet all of our liquidity needs for that period.â€￾ (1st qtr 2005- 10Q)

http://www.marketwatch.com/news/story.asp?...rden=&minisite=

“In a most ominous statement, Delta warned that restructuring under Chapter 11 would be 'particularly difficult' because it lacks sufficient unencumbered assets for a meaningful DIP loan," wrote King. "That introduces the specter of liquidation over credit."

While statements like that are made by Delta, UAL made a statement that they actually might post an operating profit for the 2nd Quarter. I'll believe it when/if I see it, but who would have "thunk it?"

 

[WorldTraveler]

ualdriver,
you fail to mention how much revenue UA has lost. costs had to come down not only to match the reduced revenue UA has coming in but also because they were way out of line w/ the rest of the industry as of 9/11. I have every confidence in Washington to make sure DL doesn't end up on the scrap heap that UA is on.

congratulations, UA has reduced costs ALMOST to DL's levels. Funny thing is that DL JUST began it's restructuring process and is expected to eliminate $2.5B of costs in the rest of 2005 while GROWING their airline. WOW! what a concept.

DL is still very fragile because of their pension issues but they are shooting for the high road and I commend them for doing their dead level best to honor their commitments to their employees and retirees. As for profits from either UA or DL, we know (at least I hope you do) that those can come and go based on the objective of management.

UA may very well find a suitor since they still have plenty of very valuable assets but they still will not be a viable airline without figuring out how to be profitable in the domestic market (where every US airline gets at least 60% of its revenue). As long as UA records the highest per unit losses in the domestic marketplace among all US airlines as they have done and will continue to do as long as they continue to shrink the domestic operations, there is no future for UA as an independent airline.

sorry to be the bearer of bad news but you can say you read it here first.

 

[Fly]

Are you really that dense? Can you say UNIONS??? Obviously Delta can bring costs down quicker, they only have one union who can fight....everyone else takes what is offered or leaves, period.