TUL mechs

[iluvaa]

Reality STFU you bring nothing to the table

 

[Overspeed]

 So in reality it cost them nothing.
 
I recall back in the 90's when a UAL mechanic was working a contract carrier in the AA hangar I was assigned to work with him because they were in our Hangar. We were discussing the ESOP, which I never liked, not so much because of the employee ownership part but because the the restriction on selling the stock. This guy was telling me about how he was going to be a Millionaire when he retired. He loved the ESOP, I was skeptical, I told him to look at the historical trend of Airline stocks and without the ability to sell he really didn't own anything, that his ESOP was currently a liability not an Assett, it was something he was paying for every week but could not turn into cash unless he quit. Wonder how he feels about his wonderful ESOP now?

 
Wait, what? It cost them nothing? Who is "them"? He said the union gave back all kinds of concessions for stock they couldn't cash in. It sounds like it cost them (the members except for the FAs) something.

 

[ThirdSeatHero]

 
Wait, what? It cost them nothing? Who is "them"? He said the union gave back all kinds of concessions for stock they couldn't cash in. It sounds like it cost them (the members except for the FAs) something.

 
The reference "them" is to the company - UAL.
 
You began this little offshoot with the claim UAL had been suffering financially because of the ESOP, when in point of fact, it was the employees (except FAs) suffering due to wage & benefit concessions. 

 

[Rogallo]

Forgive him. He's very confused!

 

[ThirdSeatHero]

 So in reality it cost them nothing.
 
I recall back in the 90's when a UAL mechanic was working a contract carrier in the AA hangar I was assigned to work with him because they were in our Hangar. We were discussing the ESOP, which I never liked, not so much because of the employee ownership part but because the the restriction on selling the stock. This guy was telling me about how he was going to be a Millionaire when he retired. He loved the ESOP, I was skeptical, I told him to look at the historical trend of Airline stocks and without the ability to sell he really didn't own anything, that his ESOP was currently a liability not an Assett, it was something he was paying for every week but could not turn into cash unless he quit. Wonder how he feels about his wonderful ESOP now?

 
The "going to be millionaires" was part of IAM propaganda at the time trying to sell the ESOP to the membership.
 
Truth be told - at its high point the ESOP, while not making us millionaires did have decent returns. The stock split at least twice as I recall and many of us in the mechanics ranks had well over $120K in stock.
 
The devil in the details was what we all should've been looking at and that is the restrictions you mention. We could not sell the stock unless we quit, got fired, or retired. Further, that transaction wasn't immediate, it took about 30 days to complete in some cases.

 

[Overspeed]

The reference "them" is to the company - UAL.
 
You began this little offshoot with the claim UAL had been suffering financially because of the ESOP, when in point of fact, it was the employees (except FAs) suffering due to wage & benefit concessions.

You should read the research on the ESOP. Because the ownership mentality wasn't there and the stock could not be exercised the ESOP did set the stage fora company that was severely mismanaged and heavily leveraged. So badly that the ATSB wouldn't even give UA a loan without concessions from labor. The ESOP was poorly constructed and basically run by the pilots. They needed all the labor groups to buy in but only the FAs had the smarts to stay out of it. I stand by my initial claim, the ESOP did in United and made them the least financially healthy of all the majors.

If we really takes hard look the only successful labor action in the past 20 years was done by AA APFA. Maybe we should join them.

 

[Overspeed]

The "going to be millionaires" was part of IAM propaganda at the time trying to sell the ESOP to the membership.
 
Truth be told - at its high point the ESOP, while not making us millionaires did have decent returns. The stock split at least twice as I recall and many of us in the mechanics ranks had well over $120K in stock.
 
The devil in the details was what we all should've been looking at and that is the restrictions you mention. We could not sell the stock unless we quit, got fired, or retired. Further, that transaction wasn't immediate, it took about 30 days to complete in some cases.

Stock is worth nothing if you can't sell it. Damn that fine print.

 

[ThirdSeatHero]

You should read the research on the ESOP. Because the ownership mentality wasn't there and the stock could not be exercised the ESOP did set the stage fora company that was severely mismanaged and heavily leveraged. So badly that the ATSB wouldn't even give UA a loan without concessions from labor. The ESOP was poorly constructed and basically run by the pilots. They needed all the labor groups to buy in but only the FAs had the smarts to stay out of it. I stand by my initial claim, the ESOP did in United and made them the least financially healthy of all the majors.

If we really takes hard look the only successful labor action in the past 20 years was done by AA APFA. Maybe we should join them.

 
Of course you stand by your claim - your history on this board proves beyond a doubt that you lack the integrity to admit when you're wrong.
 
Anyone with 5 minutes and a good search engine can pull up expert financial reports and analysis on UALs bankruptcy filing and see for themselves just how often the ESOP isn't mentioned.

 

[ThirdSeatHero]

Stock is worth nothing if you can't sell it. Damn that fine print.

 
Exactly why I voted against it.

 

[Overspeed]

 
Of course you stand by your claim - your history on this board proves beyond a doubt that you lack the integrity to admit when you're wrong.
 
Anyone with 5 minutes and a good search engine can pull up expert financial reports and analysis on UALs bankruptcy filing and see for themselves just how often the ESOP isn't mentioned.

 
Written by UAL FA Michelle Quintus - you know FA's...smarter than AMFA propagandists
 
Take United Airlines, for example. In July 1994, the Air Line Pilots Association (ALPA), the International Association of Machinists (IAM), and non-union employees at United “purchased” 55 percent of the company in the largest ESOP in history. They gave the company concessions valued at $5 billion over six years, including wage cuts of 12 to 15 percent. The stock itself could not be sold, and workers who quit prior to retirement paid heavy penalties and taxes.
 
 
And what did United’s “employee-owners” receive for these concessions? In the late 1990s, some workers received a few dividend payouts, ranging from a few pennies to a few hundred dollars. But what’s worse, the workers did not gain a majority voice in the company decision-making for their so-called majority ownership from 1994 to 2000.
 
 
Two things happened that underscored the fallacy of the ESOP. First, United Airlines made $8 billion in net profit during the economic boom of the late 1990s while employees struggled to survive under concessions. And second, overcapacity in the airlines industry left workers carrying the burden when the industry collapsed. In fact, 20,000 jobs had been cut at United by the end of 2001.
 
 
On Feb. 1, United emerged from Chapter 11 bankruptcy protection, under which it had operated as a debtor in possession since Dec. 9, 2002. It was the largest and longest airline bankruptcy in history. In bankruptcy the legal ownership of the corporation is up for grabs. That’s what a debtor in possession means.
 
 
The workers’ legal right as principal creditors should entitle them to assert their rights to run the company.
 
 
This may strike some as a novel idea, but a number of flight attendants brought this to the attention of the UAL unions. It never received a hearing and by 2003 the company was using the bankruptcy courts to get as much as 23 percent more in wage concessions. Of course, the workers’ stock was worth nothing. The company also demanded work rule changes, including workdays of up to 14.5 hours, for less pay. It then terminated our defined benefit pension plan.
 
 
Even under threat of losing everything, it’s still a bad idea for workers to trade wages, healthcare or any other benefits for stock options. At United Airlines we learned the truth about ESOPs by losing billions.
 
 
It didn’t have to be that way. The lesson we learned at United is that class-conscious workers in positions of leadership have to be educated on the question of workers’ control. It’s an idea that is right for the current crisis.

 

[Overspeed]

 
Of course you stand by your claim - your history on this board proves beyond a doubt that you lack the integrity to admit when you're wrong.
 
Anyone with 5 minutes and a good search engine can pull up expert financial reports and analysis on UALs bankruptcy filing and see for themselves just how often the ESOP isn't mentioned.

 

United’s ESOP fable

Did employee stock ownership drive the airline into bankruptcy?
http://www.salon.com/2002/12/12/esop/
 
In November, when it still looked possible for United to avoid bankruptcy, the company asked its employees to take deep wage cuts in order to save the firm. Most of the workers complied, but the company’s 13,000 mechanics balked at their proposed share of the pay cuts — about $700 million over five years. The mechanics said that they couldn’t agree to the wage cuts because they were concerned
with what they called “work-life” issues at the company — for example, they were upset about United’s refusal to let them choose which vacation days they were required to take unpaid.
 
Some mechanics seemed untroubled by the idea that United might end up bankrupt. “The general feeling among mechanics is, ‘If we can’t have it, then greedy executives can’t have it either,’” wrote Jennifer Salazar Biddle, a United mechanic, in an Op-Ed on the Socialist Worker’s Web site. “Everyone I know is saying, ‘Full Pay to the Last Day!’”
 
Considering that a typical mechanic had paid about $80,000 in wages to buy a slice of United, the mechanics — who eventually backed down, though not in time to save the company — could be accused of acting irrationally. Their desire to stick it to “greedy executives” was so consuming that they seemed to forget that, in pushing for bankruptcy, they were also sticking it to themselves.
 
That sort of irrationality has been a hallmark of United’s ESOP, and it hasn’t always been confined to the employee side of the bargaining table, experts say. United’s management has continually blamed workers for the airline’s high cost-structure, and its dealings with workers have always been frosty. “Folks who are more toward the left like to point the finger at management and say they screwed up,” says J. Michael Keeling, president of the ESOP Association. “Then people whose values are more to the right, they blame labor and they blame the unions and what the pilots did with that stupid flight slowdown in the summer of 2000.

 

[Overspeed]

 
Of course you stand by your claim - your history on this board proves beyond a doubt that you lack the integrity to admit when you're wrong.
 
Anyone with 5 minutes and a good search engine can pull up expert financial reports and analysis on UALs bankruptcy filing and see for themselves just how often the ESOP isn't mentioned.

 
http://www.nceo.org/observations-employee-ownership/c/united-airlines-esops-employee-ownership

The ESOP Did Not Cause United to Fail, But It Failed to Help United Succeed
While the ESOP did not cause United to fail, the ESOP has abjectly failed to help the company the way most ESOPs do. The overall ESOP track record, both in public and private companies, is impressive. Major academic studies show that companies with ESOPs grow in sales, employment, and productivity by 2% to 3% per year faster than would have been predicted without an ESOP. In public companies, ESOPs are also associated with higher returns on assets and stock prices (these variables cannot be studied in private companies because the data are not available). But for ESOPs to succeed, companies need to combine broad ownership with an "ownership culture" that gives employees more influence in day-to-day decisions and shares corporate performance data with employees in a detailed and regular manner. United's unions pursued the ESOP not because they wanted to be owners so much as because they wanted to use ownership to prevent United from breaking up into regional carriers, diversifying out of the airline business, and outsourcing work performed by union members. They succeeded in that goal. Management also was not enthused about the ESOP per se, seeing it primarily as a way to get wage concessions. They succeeded in their goal as well. Both sides, having done that, had only limited interest in making the ESOP a permanent part of United.

Perhaps because of this indifference toward making the ESOP part of United's culture, United's plan was fatally flawed from the outset:

• Flight attendants, the face of the company to customers, never were in the ESOP. They didn't want to make concessions, and the company and other unions were not willing to include them unless they did.
• The ESOP was set up so that in five years no further contributions would be made. New employees would not be owners, and existing employees would get no more stock. So everyone knew from the outset that the ESOP could be put in the "this too will pass" category.
• Employees took substantial concessions for the ESOP, and bitterness over these givebacks never faded. Only 1% of all ESOPs require concessions. In fact, employees in ESOP companies generally are paid more than comparable employees in non-ESOP companies.
• Neither labor nor management was ever fully committed to creating an "ownership culture" in which employees could participate actively in day-to-day work-level decisions. Both sides tried out this approach in the first year, with the remarkable results noted above. But at the end of that "experiment" everyone reverted to the old ways of doing things. United's key management did not like the idea of the ESOP or employee involvement, and labor leaders had, at best, mixed feelings. Both sides had built long histories of bashing one another, and those habits were hard to change.

 
By contrast, Southwest, which is about 10% owned through employee benefit plans and gives options widely on top of that, says it puts "employees first, customers second, and shareholders third." Employees work in teams to make decisions, full information on corporate and work unit performance is shared, and employees are urged to use their judgment to make whatever decisions are necessary to please customers. Southwest continues to make a profit and has a market capitalization greater than the major airlines combined. Employee ownership can and does work in the airline industry. It just failed at United.

 

[ThirdSeatHero]

None of your lengthy posts support your initial statement ...
 

 
UAL was in terrible shape financially because of the ESOP

 
Here is just one example from CNN/Money that finds a host of reasons but none of them the ESOP.
 
http://money.cnn.com/2002/12/09/news/companies/ual_bankruptcy/
 

 
The airline was once the world's largest and most successful. But it was hit with a series of problems starting in 2000 that led it down the road to the bankruptcy filing. The carrier has not reported a quarterly profit since the second quarter of 2000. It lost $1.7 billion, or $30.96 a share, in the first three quarters of this year alone. (Click here for a timeline of United's path to bankruptcy)
First, management proposed a merger with US Airways Group, a deal that was eventually blocked by federal antitrust regulators. But the more than one-year effort to complete the merger distracted management and led them to negotiate an expensive contract with the pilots union in an attempt to win their support for the deal. The deal left United with the highest labor costs in the industry.
In 2000, pilots and mechanics at the airline also engaged in a series of job actions to put pressure on management for new contracts, actions that led to flight cancellations and helped chase away some business travelers.
When the country's economy slowed, it led to a sharp drop in business travel and business fares, hurting the company's finances. It also faced greater competition than other major airlines from the growing low-cost, low-fare carriers such as Southwest or Jet Blue that do not operate the extensive network of flights of United or American Airlines (AMR: Research, Estimates) or Delta Air Lines (DAL: Research, Estimates).
Then came the Sept. 11 terrorist attack, which also sharply curtailed demand for air travel and fares. United was also unfortunate enough to have major debt payments come due before there was any meaningful recovery in the industry.

 
As i said before, I lived this for 6 years. I know what happened at UAL and why, you want to keep exposing your own ignorance on the subject then as SWAMT says "keep posting", because I've got more UAL Bankruptcy info/analysis than I know what to do with.

 

[ThirdSeatHero]

You know while I enjoy our little exchanges, I really get a good laugh when you contradict your own posts while trying to defend them.
 
Such as .....
 

 
I stand by my initial claim, the ESOP did in United and made them the least financially healthy of all the majors.

 
Then you post/link an article that begins with this...
 

 
The ESOP Did Not Cause United to Fail, But It Failed to Help United Succeed

 
Thats just too good

 

[Overspeed]

You know while I enjoy our little exchanges, I really get a good laugh when you contradict your own posts while trying to defend them.
 
Such as .....
 
 
Then you post/link an article that begins with this...
 
 
Thats just too good

 
Exactly my point. The ESOP did not make the company fail, it put it in a position to fail when times got tough. Read the article and the analysis and not just the headline. Then again, that is why you voted for AMFA, based on their catchy propaganda lines like they are a union for professionals. Wake up and educate yourself. The ESOP was poorly constructed and provided an environment in which the company became heavily leveraged at a time when they needed capital with very little to borrow against.
 
But hey, you were the ones who bought in to the ESOP with the pay cuts. You lived it remember. Then you got slapped again in BK with emergency court imposed pay cuts, pension freeze, and jobs outsourced. Then you got hit again with more pay cuts and more jobs outsourced. The ESOP left the company in a very vulnerable position so your wage cut funded shows that you and your United M&R seem to be prone to making bad decisions. First the crappy ESOP, then AMFA, and now you want us to follow your lead.
 
The TWU was offered the ESOP path, and the TWU said no way.
 
Keep posting smiley faces...oh wait, I forgot. All professional mechanics use them when they communicate.