TWU negotiations.........what?

[TWU informer]

CAL does do some OH in house as well. What is the cost disadvantage of doing OH in house? When UAL sent out their heavy OH their maint costs went up. Why should we consider doing OH in house as a reason for accepting less pay and benifits when we dont even know whether or not there's a cost disadvantage?

IIRC CAL has a DB similar to ours, their formula may be a little less but they dont lose the first year(which effectively lowers our formula), they earn more and everything is pensionable and they had a 401k match.

I'll see what I can find out about their Medical but ours has gone up 600% since 2003, I dont think that we have much of an advantage there anymore.

Going into this Cal had more Vacation, Sick time, IOD time and Holidays.

Bob, I would be greatful if you actually put together and honest comparison because the TWU sure ins't going to. Thanks in advance for the time and research this will take. I can assure you that in event we reach PEB or Binding Arbitration the company will have their version ready.

 

[787nightmare]

CAL does do some OH in house as well. What is the cost disadvantage of doing OH in house? When UAL sent out their heavy OH their maint costs went up. Why should we consider doing OH in house as a reason for accepting less pay and benifits when we dont even know whether or not there's a cost disadvantage?

IIRC CAL has a DB similar to ours, their formula may be a little less but they dont lose the first year(which effectively lowers our formula), they earn more and everything is pensionable and they had a 401k match.

I'll see what I can find out about their Medical but ours has gone up 600% since 2003, I dont think that we have much of an advantage there anymore.

Going into this Cal had more Vacation, Sick time, IOD time and Holidays.

"CAL does do some OH in house as well. What is the cost disadvantage of doing OH in house? When UAL sent out their heavy OH their maint costs went up. Why should we consider doing OH in house as a reason for accepting less pay and benifits when we dont even know whether or not there's a cost disadvantage?"

Bob, I'm not wanting to be confrontational here...but why in the world would an airline outsource heavys if it wouldn't provide a substantial positive impact on the balance sheet? It makes not sense to me. IMO...if it saves the carrier maintenance costs, they will attempt to outsource it.(contractually allowable of course). And I KNOW this is what AMR is eyeballing right now in these talks. There maintenance costs(heavys)are getting out of control(compared to the competitions)
Just trying to get a good understanding here of your position...(remember, AA/TULE is hopefully a final stop before retirement for me)

 

[Bob Owens]

"CAL does do some OH in house as well. What is the cost disadvantage of doing OH in house? When UAL sent out their heavy OH their maint costs went up. Why should we consider doing OH in house as a reason for accepting less pay and benifits when we dont even know whether or not there's a cost disadvantage?"

Bob, I'm not wanting to be confrontational here...but why in the world would an airline outsource heavys if it wouldn't provide a substantial positive impact on the balance sheet? It makes not sense to me. IMO...if it saves the carrier maintenance costs, they will attempt to outsource it.(contractually allowable of course). And I KNOW this is what AMR is eyeballing right now in these talks. There maintenance costs(heavys)are getting out of control(compared to the competitions)
Just trying to get a good understanding here of your position...(remember, AA/TULE is hopefully a final stop before retirement for me)

Well you have to go back to 1995 when we gave AA SRPs, other carriers didnt get that, they continued to staff their OH with fully paid mechanics, AA enjoyed a huge cost advantage but after Sept 11 2001 all the carriers wanted to exploit and cash in on the shock of the carnage and slash labor costs, but once AA got us to accept bigger cuts outside of BK than most who went BK initially got through BK they threw in the towel. Having already slashed wages it was unlikely that if they slashed wages to match our OSM levels that those workers would produce, so in an attempt to lessen the cost advantage and compete against AA they laid off thousands and outsourced OH. Now those carriers will push for their version of OSMs, and they will gradually bring more OH back in house but they will be staffing those facilites with their version of OSMs. UAL has a limited version and Delta does as well.

AA had the advantage of implimenting SRPs/OSMs during a period of growth (another example of our ragged trousered philanthropy), that option was not available to AAs competitors post 9-11. Some claim that we were able to save jobs through OSMs and other concessions, the way I see it we were instramental in the elimination of thousands of jobs across the industry at other carriers where the workers acted like like a union. We ruined the profession.

So the carriers didnt save much, or anything by outsourcing but by sending it out and waiting till the recall period has expired they can hire OSMs if they are able to get them in the new agreements, thats why AA is so desperate to get SMAs, to maintain their competative advantage , plus it helps them deal with the impending shortage of A&Ps by pushing A&Ps out of OH. So outsourcing the work wasnt a direct path to savings, its a way getting rid of the high paid workers so they can win the ability to replace them with low paid mechanics like AA has.

We keep hearing that we need to work for less to keep OH in house but we have never been given any information to support this claim, in fact not once have I heard the company say that doing OH in house costs us more, if it did why did AA expand their insoucing when they had 1200 mechanics without system protection? According to to some of the breakdowns I have seen our average wage is $27.00 per hour and vendors charge a minimum of $55/hr. So they pay half what the vendors charge by doing the work in house.

 

[Chuck Schalk]

what I don't understand is how our overhaul is not competitive?
the average base salary of maintenance at the overhaul base is probably around $ 27 dollars an hour. I was told back in 2003 that benefits per employee is 12% above our base pay. So lets do the math:

27.00
+ 12% 3.24
-----------
$ 30.24
+ 5.00 license pay (for some employees, but will include for all as an excersize)
---------------
$ 35.24 all inclusive

Timeco charges $48 to 55$ dollars per hour, How is that a cost dsadvantage?

AA gets the Tulsa base for $1 dollar a year and the extention of the hangar was a gift from the tax payers of Tulsa

How is that a cost disadvantage?

Maybe I just don't know or maybe things don't seem as they appear!

 

[787nightmare]

Well you have to go back to 1995 when we gave AA SRPs, other carriers didnt get that, they continued to staff their OH with fully paid mechanics, AA enjoyed a huge cost advantage but after Sept 11 2001 all the carriers wanted to exploit and cash in on the shock of the carnage and slash labor costs, but once AA got us to accept bigger cuts outside of BK than most who went BK initially got through BK they threw in the towel. Having already slashed wages it was unlikely that if they slashed wages to match our OSM levels that those workers would produce, so in an attempt to lessen the cost advantage and compete against AA they laid off thousands and outsourced OH. Now those carriers will push for their version of OSMs, and they will gradually bring more OH back in house but they will be staffing those facilites with their version of OSMs. UAL has a limited version and Delta does as well.

AA had the advantage of implimenting SRPs/OSMs during a period of growth (another example of our ragged trousered philanthropy), that option was not available to AAs competitors post 9-11. Some claim that we were able to save jobs through OSMs and other concessions, the way I see it we were instramental in the elimination of thousands of jobs across the industry at other carriers where the workers acted like like a union. We ruined the profession.

So the carriers didnt save much, or anything by outsourcing but by sending it out and waiting till the recall period has expired they can hire OSMs if they are able to get them in the new agreements, thats why AA is so desperate to get SMAs, to maintain their competative advantage , plus it helps them deal with the impending shortage of A&Ps by pushing A&Ps out of OH. So outsourcing the work wasnt a direct path to savings, its a way getting rid of the high paid workers so they can win the ability to replace them with low paid mechanics like AA has.

We keep hearing that we need to work for less to keep OH in house but we have never been given any information to support this claim, in fact not once have I heard the company say that doing OH in house costs us more, if it did why did AA expand their insoucing when they had 1200 mechanics without system protection? According to to some of the breakdowns I have seen our average wage is $27.00 per hour and vendors charge a minimum of $55/hr. So they pay half what the vendors charge by doing the work in house.

Sort of like what Crandall achieved with the "B scale" deal. ?
I've noticed dropping in on the DL career postings, they are always posting ASM(avia supp mech). Which tends to back up your theory.
Noticed nothing at UAL.
Also...the figure of 55/hr charged by vendors...I figure that's about 19-20/hr for wage, plus any healthcare benes/401k offered(paltry plans-but they do gen offer them for direct hires)...which honestly doens't leave much for profitability for the MRO. I'd have to say that 55/hr would be for the 12-14/hr chumps out of A/P school. You'd have to charge more than 55/hr for your MRO top scale A/Ps to perf that heavy around 20-25/hr + benes.

I've had this discussion about the impending shortage of A/Ps with various guys here at the lazy B. Some dont' believe it. Claiming there will always be A/Ps out there to do the wk. That's partially true.
I say when the senior guys finally get enough of the BS-all they can stand-they're bailing. There will ALWAYS be A/Ps out there. But the QUALIFIED, heavy comml A/P pool...is drying up. These palnes aren't getting any simpler. The 787 is a bit like the 777, but it IS a different animal. It's got some pretty wild systems. Lets face it, most kids today can't get hoods up on there cars. And if it involves geting there hands dirty, forget it. And any kid with a good head on his shoulder, will side step this GOd forsaken industry. And I for one...look forward to the day where the carriers flat ass can't find mechs to work onthese planes. We've been bi**h slapped for so long, they've got it coming. The supply and demand factor should play well in our hands then.
We had this industry where we wanted them back in about 99-2000. Then 9/11 happened. But over the last 10 yrs, those guys have been slowly plucked by the mftrs, carriers that slowly been adding to repl retiring mechs. And some just moved on to something else.
(can't blame them)

If this ind had there way....all OH wk would be outsourced and they'd be happy to hire/staff for the line to keep the planes moving.
But like I said before, thanks to the fricken Trashco scab ass outfit, they're trying to make inroads on providing carrriers with low rent line mechs.(Thanks alot for doing all you can to help the carriers keep our wages at the bottom of the barrel(more for F/As and fly-boys)
you goofballs.)
But you're right. AA has been the trendsetter for lowering wages for the ind-when one looks back over the years!
Thanks.

 

[FWAAA]

what I don't understand is how our overhaul is not competitive?

Perhaps it's currently competitive at the current wage rate; at WN's or UPS' rates, it would likely not be competitive.

the average base salary of maintenance at the overhaul base is probably around $ 27 dollars an hour. I was told back in 2003 that benefits per employee is 12% above our base pay. So lets do the math:

27.00
+ 12% 3.24
-----------
$ 30.24
+ 5.00 license pay (for some employees, but will include for all as an excersize)
---------------
$ 35.24 all inclusive

Timeco charges $48 to 55$ dollars per hour, How is that a cost dsadvantage?

Whomever told you that benefits total $3.24/hr was misinformed. Think about it: $3.24/hr is just $6,740/year. Social Security and Medicare taxes on AA for a mechanic would be more than $5,000 by themselves. Add in AA's costs for medical, dental, visiion and EAP. Plus the costs of unemployment taxes. Add in the costs of the pension. There's a vast difference between your W-2 wages and the costs to AA for each employee. The typical mechanic probably costs AA somewhere around $90k (of which you get gross pay of about $70k).

Your comparison to Timco leaves out the costs of management. For the $48 or $55 (or whatever they charge for outsourced maintenance), that includes the costs of managing the workforce. To compare inhouse v outsourced maintanence costs, you have to add in the costs of managing the maintenance operation. Timco probably doesn't spend as much as AA for management, but management costs are included in the hourly figure charged by the MROs. To the $43 hourly cost for an AA mechanic ($90k cost/2080 hrs), you have to add whatever AA spends on its bloated maintenance management structure. My guess is that the total cost of AA maintenance per hour (including all the expenses, including management) exceeds whatever the MROs charge. If all 9,000+ AA mechanics get a $10/hr or $12/hr raise then it's obvious that AA maintenance costs would be more expensive than outsourcing.

AA gets the Tulsa base for $1 dollar a year and the extention of the hangar was a gift from the tax payers of Tulsa

How is that a cost disadvantage?

Maybe I just don't know or maybe things don't seem as they appear!

Does AA pay for utilities for the Tulsa operation? How much are those? What about property taxes (real and personal property)? What about other OK state taxes?

As I pointed out above, it's obvious that at the current wages, AA's inhouse overhaul is either cheaper than outsourcing or isn't substantially more expensive. Bump up the wage rates to $45/hr or $47/hr and I doubt that still holds true. One solution (as I've posted before) is to figure out how to pay the line $45/hr while keeping the overhaul bases at their current wages (or at the current wages plus a token increase). Line maintenance and scheduled overhaul are two different services. One can be done in SAL or HKG or PVG or anywhere else on the planet; the other must be done at JFK, BOS, MIA, LAX, DFW, etc. Paying JFK-style wages for work done in Tulsa would be lunacy. Stupid as AA management can be, they aren't that brain-dead.

 

[Bob Owens]

Perhaps it's currently competitive at the current wage rate; at WN's or UPS' rates, it would likely not be competitive.

Perhaps but the company has never produced any figures.

Whomever told you that benefits total $3.24/hr was misinformed. Think about it: $3.24/hr is just $6,740/year. Social Security and Medicare taxes on AA for a mechanic would be more than $5,000 by themselves. Add in AA's costs for medical, dental, visiion and EAP. Plus the costs of unemployment taxes. Add in the costs of the pension. There's a vast difference between your W-2 wages and the costs to AA for each employee. The typical mechanic probably costs AA somewhere around $90k (of which you get gross pay of about $70k).

AA does the work for us, they have a link they call the "Total Value Statement", it inclludes all SS payments, medical , insurance etc. They stopped updating it, the last figures they have are from 2008. Take out the the non-negotiable SS (every employer pays it) and that 3.24 is about right.

Your comparison to Timco leaves out the costs of management. For the $48 or $55 (or whatever they charge for outsourced maintenance), that includes the costs of managing the workforce. To compare inhouse v outsourced maintanence costs, you have to add in the costs of managing the maintenance operation. Timco probably doesn't spend as much as AA for management, but management costs are included in the hourly figure charged by the MROs. To the $43 hourly cost for an AA mechanic ($90k cost/2080 hrs), you have to add whatever AA spends on its bloated maintenance management structure. My guess is that the total cost of AA maintenance per hour (including all the expenses, including management) exceeds whatever the MROs charge. If all 9,000+ AA mechanics get a $10/hr or $12/hr raise then it's obvious that AA maintenance costs would be more expensive than outsourcing.

We dont have Timco's numbers, the $55/hr was for recips in a small shop in the Midwest. If they paid us $43 they could get rid of most of management and the operation would run better. If our costs were higher then why did AA bring more work back in house? They have around 1200 without system protection.

 

[Chuck Schalk]

FWAA;

"Timco probably doesn't spend as much as AA for management"



So what you are saying is that AA needs to trim management costs to be more competitive. We are overmanaged.
what are the actual costs for these taxes you are speaking of for the base? Who actually pays for them? Are you sure that local government and AA do not have any arrangements for this?
fixed costs of an MRO apply to all so that does not favor your position other than management costs are too high.

 

[Hopeful]

Whomever told you that benefits total $3.24/hr was misinformed. Think about it: $3.24/hr is just $6,740/year. Social Security and Medicare taxes on AA for a mechanic would be more than $5,000 by themselves. Add in AA's costs for medical, dental, visiion and EAP. Plus the costs of unemployment taxes. Add in the costs of the pension. There's a vast difference between your W-2 wages and the costs to AA for each employee. The typical mechanic probably costs AA somewhere around $90k (of which you get gross pay of about $70k).

Your comparison to Timco leaves out the costs of management. For the $48 or $55 (or whatever they charge for outsourced maintenance), that includes the costs of managing the workforce. To compare inhouse v outsourced maintanence costs, you have to add in the costs of managing the maintenance operation. Timco probably doesn't spend as much as AA for management, but management costs are included in the hourly figure charged by the MROs. To the $43 hourly cost for an AA mechanic ($90k cost/2080 hrs), you have to add whatever AA spends on its bloated maintenance management structure. My guess is that the total cost of AA maintenance per hour (including all the expenses, including management) exceeds whatever the MROs charge. If all 9,000+ AA mechanics get a $10/hr or $12/hr raise then it's obvious that AA maintenance costs would be more expensive than outsourcing.

So if AA's $43 hourly cost is $90k a year....Then paying a 3P contract $55 an hour is $114,400.00 a year.
Do you think the $24400 difference includes the costs of management and "managing" the workforce?

Gee, all we hear is how much cheaper it is to outsource mechanics jobs, why not explore outsourcing management jobs and decrease some of the babysitting fucntions of lower management for starters.

 

[Chuck Schalk]

FWAA;

"Whomever told you that benefits total (12%) $3.24/hr was misinformed"

we were told that by the ATD officials in the 2003 negotiations so take it up with them if you disagree

 

[Bob Owens]

So if AA's $43 hourly cost is $90k a year....Then paying a 3P contract $55 an hour is $114,400.00 a year.
Do you think the $24400 difference includes the costs of management and "managing" the workforce?

Gee, all we hear is how much cheaper it is to outsource mechanics jobs, why not explore outsourcing management jobs and decrease some of the babysitting fucntions of lower management for starters.

In a way they have, think about all the consulting firms they hire, basically they are outsourcing management but keeping the managers! That could be one of the reasons why their Total labor costs do not reflect the savings they got from us.

I've never heard the company claim that it would be cheaper to outsource maintenance, they simply state that we keep the work in house and keep more members employed at AA. No doubt its implied and they hope that who ever is listening fills in the blanks with that conclusion but I've never heard them say it.

When the company says " We do all our maintenance in house" or "Timco only pays their mechanics $25/hr" we automatically say to ourselves "they mean it costs them more so we better not risk asking for more'. They dont tell us what it would cost them to send the work to Timco or if Timco could even take on the extra work.

The biggest challenge we face is that mechanics are trained worriers. Our training basically is an indoctrination into the ideology of Murphys Law, whatever can go wrong will go wrong. As a result we are timid negotiators by nature, evidenced by the posts of Frontline and others in our ranks. Our training conditions us to avoid risk, great for the passengers but bad for the economic health of our families. We need to have a seperate mindset during negotiations.

 

[Chuck Schalk]

I recall local 514 president Randy McDonald bragging how he got the utility companies to reduce their rates for AA in Tulsa.

 

[FWAAA]

FWAA;

"Whomever told you that benefits total (12%) $3.24/hr was misinformed"

we were told that by the ATD officials in the 2003 negotiations so take it up with them if you disagree

So an elected local official of the TWU relies on misleading info provided by the TWU International? And tells an outside observer who points out the absurdity of the info to "take it up with them" if one points out the absurdity?

And you guys wonder why your pay is so low? The Worthless Union International gives you information that on its face makes no sense and your local elected officials defend the International's outlandish positions. Good luck - you're going to need it.

 

[Chuck Schalk]

So an elected local official of the TWU relies on misleading info provided by the TWU International? And tells an outside observer who points out the absurdity of the info to "take it up with them" if one points out the absurdity?

And you guys wonder why your pay is so low? The Worthless Union International gives you information that on its face makes no sense and your local elected officials defend the International's outlandish positions. Good luck - you're going to need it.

we both are in agreement that the numbers seem to be misleading, i believe our in house work is more competitive than we are being told. As far as relying on misleading information I don't, but I also can't speak for them either because history has proven, I am not always in agreement with the information.

 

[Bob Owens]

So an elected local official of the TWU relies on misleading info provided by the TWU International? And tells an outside observer who points out the absurdity of the info to "take it up with them" if one points out the absurdity?

And you guys wonder why your pay is so low? The Worthless Union International gives you information that on its face makes no sense and your local elected officials defend the International's outlandish positions. Good luck - you're going to need it.

No doubt they got that figure directly from the company, not to say that it wouldnt be misleading then either.

We are basing our figures on what the company gives to the union, admittedly there's risk in doing so, but what are you basing your assertions on?

Like I said earlier the only figures that I've heard are between $55 and $85, I dont know what they charge, I suspect its at least $100/hr, plus parts , materials and other fees. Thats why other carriers are willing to pay AA around $100/hr to work on their planes.There are other advantages to doing work in house as well besides the labor costs. Thats why not only AA but other carriers continue to bring more work back in house, more than they are contractually obligated to.