TUL mechs

[ThirdSeatHero]

You just gotta LUV this stuff man...

 
Absolutely, the TWU mouthpiece obviously thinks lying repeatedly in the face of well documented fact, will go unnoticed.    

 

[Bob Owens]

Dishonest? Did the IAM vote down voluntary concessions? Yes. Did UA then file 1113e to bypass any further negotiations and impose immediate cuts? Yes. Then UA negotiated with the IAM in 1113c a new CBA.

All factual

Yes, then after they negotiated a 14% paycut leaving most of their workrules intact , within days in fact, we gave AA over 25% without even filing BK. Their creditors committee then rejected the TA. 

 

[Bob Owens]

Thank you for your "I can see Wall Street from my house" wisdom.

Their pension is worth way more than ours.

Yes and it made up most of the $310 million in concessions that got pilots nearly 15% of the equity, because our pensions were not worth as much we had to agree to even more concessions to get to the $320 million in concessions we gave for less than 5% of the equity. Cant spin your way out of this, a dollar is a dollar, and their dollar, most of which came from the far superior pension their union negotiated for them got them three times what our dollar got us. 

 

[Overspeed]

Yes and it made up most of the $310 million in concessions that got pilots nearly 15% of the equity, because our pensions were not worth as much we had to agree to even more concessions to get to the $320 million in concessions we gave for less than 5% of the equity. Cant spin your way out of this, a dollar is a dollar, and their dollar, most of which came from the far superior pension their union negotiated for them got them three times what our dollar got us.

No spin. It is what it is

 

[La Li Lu Le Lo]

No spin. It is what it is

The only word I saw was spin.

 

[Overspeed]

Yes, then after they negotiated a 14% paycut leaving most of their workrules intact , within days in fact, we gave AA over 25% without even filing BK. Their creditors committee then rejected the TA.

True that Wedoff took 14% but you do know the IAM voted down 13%. Then tacked on another 3.9%. The pension was also ended along with retiree medical and outsourcing far beyond what is even now in place at AA today.

So using UA as an example we could have voted down 17.5% and keeping retiree medical plus our pension and 10% outsourcing and got what UA got because it is so much better.

 

[texasreb]

I'm just waiting for my profit sharing check. The TWU didn't give that away did they without a vote?

 

[1AA]

I'm just waiting for my profit sharing check. The TWU didn't give that away did they without a vote?

Now that comment made me fall off my chair. LOL!!!!

 

[Overspeed]

Yes, then after they negotiated a 14% paycut leaving most of their workrules intact , within days in fact, we gave AA over 25% without even filing BK. Their creditors committee then rejected the TA. 

 
They didn't negotiate, Wedoff imposed at 14% paycut on them after they voted no on 13% in an 1113e hearing.
 
Quick question, I understand the 25% number and the cuts. I agree the combination of concessions comes to about 25%. How do you value the increased outsourcing at UA and how much that is valued in concessions? I look at it two ways, a union can mitigate job loss with some other types of givebacks or stand pat on wages and benefits and say outsource the work to get their cost target which is how UA did it for the most part. Pick your poison.

 

[Bob Owens]

. It is what it is

Correct a dollar is a dollar and our dollar of concessions, thanks to Little and Videtich, bought us what the pilots got for 30 cents. 

 

[Bob Owens]

True that Wedoff took 14% but you do know the IAM voted down 13%. Then tacked on another 3.9%. The pension was also ended along with retiree medical and outsourcing far beyond what is even now in place at AA today.

So using UA as an example we could have voted down 17.5% and keeping retiree medical plus our pension and 10% outsourcing and got what UA got because it is so much better.

You assume that capacity existed for AA to outsource that much. In negotiataions they admitted that Narrow Body capacity was tight, and that they would not achieve the savings they sought by outsourcing, just like 2003 they wanted the savings through more concessions under the threat of outsourcing, and you helped them get them.  If AA had also entered that market it would have exceeded the capacity, drove up prices and more than likely UA and others would have outsourced less. Besides AA never really wanted to outsource as much because they always had a cost advantage over their competitors because they built their OH in low cost Oklahoma and then we allowed them to staff 25% of the base with very low paid OSMs. People would accept a lower wage at AA than say TIMCO because they figured one day they could move up to full mechanics rates. UA didnt have that. 
 
Sure we got ten years added to our pension, ten years at a very low wage with zero credit for OT. On the flip side we lost ten years of a 401K match on all earnings on top of the largest pay cut in the industry that also reduced the pension we were supposedly saving. So while we may have been able to recapture some of the wage loss and survive by working as much OT as was available none of those OT earnings went towards our reduced pensions, which we now lost, along with the retiree medical we will never see either. Nearly $200,000 in lost compensation to add ten years to the pension. 
 
.001667 x $65k x 10 =$10, 835.50 per year if we are able to retire at 65. So in order to break even without including the 401K and match we would have to live to 85.
 
Now lets add the 401k at 5.5% on all earnings had we given up the pension but kept the wage and Holidays.  
$76960, plus the Holidays =$81000 plus 250 hours of OT ($13875) = roughly $95,000 x.055= $5225/year x 10 years = $52,250 plus earnings of at least $10,000 = $62,000 in contributions from the company over the 10 years, so when we turn 91 years of age that extra $10,835  we would get if we are able to retire at 65 will come close to what we paid to keep it, not including opportunity cost for the roughly $260k it cost us and what we will lose going forward. 
 
In 2001 we made more than SWA and just as much as UPS. Now we are over $15/hr less than UPS and $10/hr less than SWA. Neither of them lowered their mechanic to aircraft ratio, we did though, in other words they didn't change their business plan to outsourcing in exchange for higher wages, their compensation has merely followed inflation. 

 

[Bob Owens]

 
They didn't negotiate, Wedoff imposed at 14% paycut on them after they voted no on 13% in an 1113e hearing.
 
Quick question, I understand the 25% number and the cuts. I agree the combination of concessions comes to about 25%. How do you value the increased outsourcing at UA and how much that is valued in concessions? I look at it two ways, a union can mitigate job loss with some other types of givebacks or stand pat on wages and benefits and say outsource the work to get their cost target which is how UA did it for the most part. Pick your poison.

Yes under 1113E the court imposed a 14% cut. Then they negotiated a deal just prior to our rolling over and giving AA 25% outside of BK that lowered the wage cut. Their creditors committee, no doubt after seeing that we gave 25%,  subsequently rejected the deal. That's when all hell broke loose at UAL, thanks to us. had we rejected the deal and AA opted into BK it likely would have led to government intervention, because having 80% of your transportation system in BK would mean a failure of the system. Instead we bailed out the airlines, and the government by giving everything away, in a sense validating the carriers claims that we were being paid too much and were willing to work for much less. 

 

[Overspeed]

You assume that capacity existed for AA to outsource that much. In negotiataions they admitted that Narrow Body capacity was tight, and that they would not achieve the savings they sought by outsourcing, just like 2003 they wanted the savings through more concessions under the threat of outsourcing, and you helped them get them.  If AA had also entered that market it would have exceeded the capacity, drove up prices and more than likely UA and others would have outsourced less. Besides AA never really wanted to outsource as much because they always had a cost advantage over their competitors because they built their OH in low cost Oklahoma and then we allowed them to staff 25% of the base with very low paid OSMs. People would accept a lower wage at AA than say TIMCO because they figured one day they could move up to full mechanics rates. UA didnt have that. 
 
Sure we got ten years added to our pension, ten years at a very low wage with zero credit for OT. On the flip side we lost ten years of a 401K match on all earnings on top of the largest pay cut in the industry that also reduced the pension we were supposedly saving. So while we may have been able to recapture some of the wage loss and survive by working as much OT as was available none of those OT earnings went towards our reduced pensions, which we now lost, along with the retiree medical we will never see either. Nearly $200,000 in lost compensation to add ten years to the pension. 
 
.001667 x $65k x 10 =$10, 835.50 per year if we are able to retire at 65. So in order to break even without including the 401K and match we would have to live to 85.
 
Now lets add the 401k at 5.5% on all earnings had we given up the pension but kept the wage and Holidays.  
$76960, plus the Holidays =$81000 plus 250 hours of OT ($13875) = roughly $95,000 x.055= $5225/year x 10 years = $52,250 plus earnings of at least $10,000 = $62,000 in contributions from the company over the 10 years, so when we turn 91 years of age that extra $10,835  we would get if we are able to retire at 65 will come close to what we paid to keep it, not including opportunity cost for the roughly $260k it cost us and what we will lose going forward. 
 
In 2001 we made more than SWA and just as much as UPS. Now we are over $15/hr less than UPS and $10/hr less than SWA. Neither of them lowered their mechanic to aircraft ratio, we did though, in other words they didn't change their business plan to outsourcing in exchange for higher wages, their compensation has merely followed inflation. 

 
The capacity existed for WB and only DL and NW did a wholesale outsource of all their airframe overhaul. Your right in that NB was not a prioirity, it was WB of which there was plenty of capacity then. Now its different AAR and ATS are opening new facilities for NB in the US and LHT is adding a base in SJU soon. The NB capacity is there.
 
Bottom line is that to UA it had a big value to outsourcing almost all airframe overhaul. UA members retained more benefits and better work rules but did give more in wages and much more in jobs.
 
As has been said before, UPS and SW are and never were big in-house overhaul people. It is less costly to raise the wages when your AMT to Aircraft ratio is hovering around 4 to 1 then when your ratio is around 20 to 1 which is what it was in 2003. The gap in HC that you are pointing out is important because that is significant indication of the value SW has over AA through greater outsourcing.
 
The question is the strategy to outsource 16 to 1 jobs (probably 10 to 1 now) to get pay rates and work rules to what SW and UPS have?

 

[Bob Owens]

 
The capacity existed for WB and only DL and NW did a wholesale outsource of all their airframe overhaul. Your right in that NB was not a prioirity, it was WB of which there was plenty of capacity then. Now its different AAR and ATS are opening new facilities for NB in the US and LHT is adding a base in SJU soon. The NB capacity is there.
 
 

It wasn't then when it mattered. sure we gave them time and the ability to do it as it became available, and lowest compensation in the industry by far on top of that.
 

Bottom line is that to UA it had a big value to outsourcing almost all airframe overhaul. UA members retained more benefits and better work rules but did give more in wages and much more in jobs.
 

 
Bottom line is UAL didnt have much choice if it wanted to comptete with AA which had chopped compensation of its top paid mechanics by 25% in addition to the 25% OSMs it had even prior to the cut. 
 
 
 
 

As has been said before, UPS and SW are and never were big in-house overhaul people. It is less costly to raise the wages when your AMT to Aircraft ratio is hovering around 4 to 1 then when your ratio is around 20 to 1 which is what it was in 2003. The gap in HC that you are pointing out is important because that is significant indication of the value SW has over AA through greater outsourcing.
 

Exactly so your claim that they raised wages by outsourcing jobs is false. Not only did our pay not go up, it went, and remians to this day below what we were making 11 years ago. 
 

The question is the strategy to outsource 16 to 1 jobs (probably 10 to 1 now) to get pay rates and work rules to what SW and UPS have?
 

You make it sound like Unions have zero leverage, that they have to meet whatever figure and accept whatever tradeoff the company puts before them. I disagree, unions can stand together and fight. So tell us, what did we gain from the 6/1 jobs that were lost? Did we get higher pay and better benefits than we had back when we had 16/1? No,  our pay today is still below what it was when we had 16/1 and we have no pension, no retiree medical, no Holidays etc etc. So what did we get for the 6 jobs per airplane that we lost?  

 

[Overspeed]

It wasn't then when it mattered. sure we gave them time and the ability to do it as it became available, and lowest compensation in the industry by far on top of that.
 
 
Bottom line is UAL didnt have much choice if it wanted to comptete with AA which had chopped compensation of its top paid mechanics by 25% in addition to the 25% OSMs it had even prior to the cut. 
 
 
 
 
Exactly so your claim that they raised wages by outsourcing jobs is false. Not only did our pay not go up, it went, and remians to this day below what we were making 11 years ago. 
 
You make it sound like Unions have zero leverage, that they have to meet whatever figure and accept whatever tradeoff the company puts before them. I disagree, unions can stand together and fight. So tell us, what did we gain from the 6/1 jobs that were lost? Did we get higher pay and better benefits than we had back when we had 16/1? No,  our pay today is still below what it was when we had 16/1 and we have no pension, no retiree medical, no Holidays etc etc. So what did we get for the 6 jobs per airplane that we lost?  

 
UAL was in terrible shape financially because of the ESOP. The company was heavily leveraged and was nearly out of cash when they filed BK. Outsourcing and all the other cuts were because they couldn't even get a loan from the ATSB without concessions. It had nothing to do with AA's measily 1,000 OSMs.
 
Unions have leverage when they are lead by people who communicate the facts to their members so they can make good decisions.
 
The point about SW and UPS is that giving raises to small group is less expensive then giving it to a group almost twice the size with the same airline. The higher wages internally are funded by the lower total cost of the outsourcing high MH work to lower labor cost companies.