I dont remember saying that. I've said it exists to make other industries profits, like the municipalities that charge $4000 to let an aircraft land or charge millions of dollars for terminal space plus collect a sizable percentage on sales that are conducted in those spaces, the companies that sell toilet seats at $1000 a pop, the shippers and freight forwarders and of course the banks that lend money at usury rates and lease aircraft to the airlines. The good paying jobs are history for most of us but the party is still on for everyone else.
TWU negotiations.........what?
- Thread starter Chuck Schalk
- Start date
I dont remember saying that. I've said it exists to make other industries profits, like the municipalities that charge $4000 to let an aircraft land or charge millions of dollars for terminal space plus collect a sizable percentage on sales that are conducted in those spaces, the companies that sell toilet seats at $1000 a pop, the shippers and freight forwarders and of course the banks that lend money at usury rates and lease aircraft to the airlines. The good paying jobs are history for most of us but the party is still on for everyone else.
FrequentFlierCA
Veteran
- Feb 25, 2008
- 591
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FWAAA: that's a thoughtful response and analysis. I agree with much of it, and you're right that airlines are a boom-and-bust industry. If variable comp was based on profits, however, it might encourage people to think longer-term about their career at AA and make management decisions accordingly. A large part of the economic mess we're in right now can be traced back to people and institutions that didn't have a medium or long-term stake in the decisions they were making. If an employee knows that variable compensation depends on a long-term outlook (i.e. working at the company through several cycles, not just a few years) it might encourage better management.
Hopeful
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- Dec 21, 2002
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Why not? For years when AA had profit sharing for all employees it was profit based AND it was capped.
I guess what's good enuf for employees is not good enuf for the execs.
You defend executive compensation as a way to attract and keep the "best" individuals. No problem there, so why would they not agree to handsome payouts if the company makes a profit?
I'll tell you why....Because even if a company loses money, stock price can still increase.
Hypothetically, if Wall St. analysts predict AMR were to lose $2.00 per share but the results come out and AMR only lost $.75 a share...WOW THEY BEAT WALL ST. ESTIMATES.....YIPPEE STOCKS GOES UP.
Your support for the current executive compensation plan is merely insurance that the execs get their money regardless of profits.
Executives at AA as in any other company have made monumental mistakes and not one executive had ever paid the price.
Remember MORE ROOM THROUGH OUT COACH? Millions were spent reconfiguring seat pitch only to be short lived as an "OOOOOPS, THE MARKET CHANGED, SORRY!"
Remember spending millions upon millions building hubs at RDU and BNA? "OOOOPS, MARKET CHANGED, SORRY!" I don't think any irreplaceable executive lost his or her job over that major blunder..
The arrogance is clear, we have had VP's of line maintenance tell of us if we don't like it, quit.
But when an exec threatens to quit, because he or she is soooooo valuable, he or she gets that increase in compensation.
So please spare me the "we need to retain the best individuals"
Can you not the see the greed being exposed in the current economic situation the country is in? Companies getting millions and billions in bail out money and execs are still getting theirs..
Yes, we need to keep the best individuals indeed!
Why not? For the same reason that I don't think the rank and file should have to wait for elusive profits before sharing in variable compensation for good performance. Good performance doesn't require profits. Losing a lot less than everyone else (or NOT filing bankruptcy like almost everyone else) is a positive result and deserves gain-sharing. Good operational numbers (delays, lost bags, etc) are positives and should be rewarded.
My memory is fuzzy with age, but didn't AA's profit sharing in the late nineties pay out about $300 million a year on average ('97-'00 or so)? Those were nice payouts, but they're similar in total value to the $1.26 billion the non-management stock options were worth (in the aggregate) in January, 2007, when the stock hit $41/sh and the options had $36/sh intrinsic worth.
When I wrote "realistic and meaningful gain sharing," I meant a combination of both cash profit sharing and executive-style PSP-type variable comp. The 2003 profit sharing program was unrealistic and not very meaningful. It provided a payout of 15% of the net over $500 million for American Airlines, Inc. (not consolidated) and didn't even pay off in the one good profitable year (2007) because AA's mainline profit was less than $500 million.
In your zeal to hate me because I don't constantly post invectives about anal rape at the hands of management, you again miss the point: Your problem isn't that Arpey and the other chosen few get their PSP payouts. Your problem is that your paychecks are not big enough. Focus on making yours larger and devote less energy to paycheck envy of the 850-some odd executives.
Have some of what they're having. If the stock outperforms the industry, get some money. Or stock. Or both. You guys need "me-too" gain sharing, so that when the greedy execs get variable comp, SO DO YOU.
I'm certain you'll disagree. Like I said before, I don't have the years of wisdom and experience that accompany a lifetime of making less money than I'm worth (unlike the TWU members who have labored under concessionary contracts for a quarter century, according to Bob Owens). Client doesn't want to pay my rate? I don't take the engagement.
Yep, AA has made many mistakes. Some were obvious at the front end and others became obvious mistakes via hindsight. And you only scratched the surface - there's lots more mistakes made by AA over the years.
Removing the seats to create MRTC cost AA about $72 million, mostly in overtime for mechanics. I'd think you'd applaud that. Money for you and your brothers. Re-installing the seats cost less than removing them, because there wasn't the same hurry factor, so probably less overtime.
As I've posted before, MRTC was an ok idea, but not perfect. Would have been better to copy UA's Economy Plus, as UA's mainline yield has now overtaken AA's yield. Obviously, UA is attracting a better mix of higher yielding passengers over the last few quarters, as it still has E+ to help attract business travelers. Removing MRTC was the bigger mistake in my opinion.
Many people mistakenly say that MRTC was a mistake because "nobody would pay higher fares for the extra legroom." AA never tried to charge more (which would have been futile). What MRTC had the potential to attract was an extra last-minute full fare or two per flight, as business travelers would tend to choose AA over competitors, knowing that if their upgrade didn't clear, there'd still be a roomy coach seat (assuming exit rows filled).
The various hubs? Don't forget the multiple hub attempts at SJC as well. Tons of money lost. Running a company often entails taking risks, sometimes costly risks. And some of those gambles won't pay off.
Yep, there's greed. And corruption. And Arrogance. Always has been, always will be. Do you want to reform the entire US capitalist corporate system or do you want more money for your efforts at work? If I were you, I'd choose the latter. But you may be correct.
Hopeful
Veteran
- Dec 21, 2002
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I am going to repeat this for the umpteenth time.
Prior to the concession package of 2003, I never cared about what an executive received in salary and bonus compensation. Never!
Only after we were force fed this contract thanks to joint threats from both our union and the company, did executive compensation become an issue for me.
Yea, Yea, every employee at every level of American Airlines took a pay cut. But the upper echelon of AA cemented their PUPS regardless of profits, just stock performance. So whatever salary cuts they took, were quickly restored and are still continuing.
I am not, nor have I ever been interested in company stock. A Decent living wage and a pension is what I want. You could say I am old school.
I received 449 shares of AA stock optioned at $5. Even if I kept it at the near $40 it hit, It would have just about equaled one year's paycut for me.
Maybe when they give me 4000 shares of stock, I might change my mind.
By the way, I have a lot of sympathy for all the white collar people losing their jobs on Wall Street. Anyone who does not wear the "executive" badge is hurting and they themselves are witnessing corporate greed at its best.
Prior to the concession package of 2003, I never cared about what an executive received in salary and bonus compensation. Never!
Only after we were force fed this contract thanks to joint threats from both our union and the company, did executive compensation become an issue for me.
Yea, Yea, every employee at every level of American Airlines took a pay cut. But the upper echelon of AA cemented their PUPS regardless of profits, just stock performance. So whatever salary cuts they took, were quickly restored and are still continuing.
I am not, nor have I ever been interested in company stock. A Decent living wage and a pension is what I want. You could say I am old school.
I received 449 shares of AA stock optioned at $5. Even if I kept it at the near $40 it hit, It would have just about equaled one year's paycut for me.
Maybe when they give me 4000 shares of stock, I might change my mind.
By the way, I have a lot of sympathy for all the white collar people losing their jobs on Wall Street. Anyone who does not wear the "executive" badge is hurting and they themselves are witnessing corporate greed at its best.
It's sad to say, Hopeful, but pensions are becoming increasingly "old school". So many companies are freezing their plans for new employees. Some are even freezing things like 401K matching. "It ain't what it used to be."
I take a lot of flak on this board for my approach to the negotiations, but I maintain that it's better to take the best deal we can get right now and make sure it's a short term thing. We will get back what we gave up in 2003, and I support that goal 100%. What I don't see is that happening in 2009.
I take a lot of flak on this board for my approach to the negotiations, but I maintain that it's better to take the best deal we can get right now and make sure it's a short term thing. We will get back what we gave up in 2003, and I support that goal 100%. What I don't see is that happening in 2009.
Hopeful
Veteran
- Dec 21, 2002
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Until that day comes, AA will have to continue to deal with morale issue that the longer they take to restore, the worse and more irreaparable the damge will be.
T
The Goose
Guest
In 2003, Horton and a few others wanted to file for bankruptcy - we pissed 'em off when "we" took the concessions.
AA continues to pay bills with cash and burn cash - at a point, they will file this time and not ask for more from us, I believe, other than what they've returned within their vision of new contracts for the workers.
That's my opinion - I'm sure there are others out there.
eolesen
Veteran
- Jul 23, 2003
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Sure, there were people who thought bankruptcy would have been a better option, but I don't think Horton wasn't too concerned about what was happening on Amon Carter Boulevard...
Especially considering that he was CFO of AT&T at the time...
If you're going to name drop, at least pick someone who was there at the time...
heckle and jyde
Member
- Apr 18, 2008
- 31
- 1
Not sure if this plays into the companys thinking but this is my thought on the pension. I believe that the company has a pretty good idea on how much we contribute to our 401k plans, I doubt that J.P Morgan shares this info but AA does have this info at there disposal just by looking at out payroll deductions. I think that there bean counters have done the math and say that why should AA give us a pension since when we do retire we will be taking home more money a month than the pension would pay us, so they think that if twenty years ago they could live off AA's pension why cant they live off there 401k since it will probably be more than the pension. I think they look at it as we dont need there pension. Im not sure im right with this thought, but it does make me suspicios. does anyone have any thoughts on this issue? Does antonr think that having a 401k run by AA hurts us??
IMO, the defined benefit pension is the one item that Arpey will continue until the employees negotiate it away. As in actively caampaign for its termination. Compared to executives at almost every other company, he's been obsessed with preserving the pension promises made to the employees.
Since 2002, AA has contributed over $2 billion in cash to the pensions, and unless markets recover substantially in 2009, AA will be contributing a large amount in 2010. No legally required contributions this year. Ya don't shovel money into a pension plan you probably could have terminated in bankruptcy unless you intend to keep it.
About Ch 11: AA didn't file in the wake of September 11 and didn't file even when oil hit $147/bbl. Doubt it's being seriously considered in response to a mere rescession.
T
The Goose
Guest
Sure, there were people who thought bankruptcy would have been a better option, but I don't think Horton wasn't too concerned about what was happening on Amon Carter Boulevard...
Especially considering that he was CFO of AT&T at the time...
If you're going to name drop, at least pick someone who was there at the time...
If I erred on that one, my apologies - I honestly thought the SOB was there but you're right - he returned later.
Another example, perhaps, of airline "management" not doing well in other industries?
T
The Goose
Guest
Just an opinion, but it seems as though "the pension" is kept in place more as a ready source of ammunition to throw in our faces or to use as PR fodder. Its cost/maintenance is relatively cheap and much more effective tool-wise as compared to the cost/amount of advertising it would take for the "management" to say "we care about our own" to a public that may occasionally wonder how a group of pissed off employees might be detrimental to their travel plans.
For this reason alone, as you point out, if this pension were to go away, it would have to be the workers that negotiate it away - the company would then be relieved of all negative connotation and would continue on its merry way pointing to what the "union" had done to itself and its workers.
By that logic, it's a crying shame the company doesn't feel an investment in its own employees would carry a return large enough to be considered but instead is willing only to invest in the cultivation of external opinion as that seems the only thing to which a value can be assigned.
Hopeful
Veteran
- Dec 21, 2002
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What do expect froma company where a former VP tells mechanics, if you' don;t like it at American, quit."
How do you argue with that logic?
The company only feels the need to continually INVEST in the executives because they can not afford to have them jump ship.
eolesen
Veteran
- Jul 23, 2003
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Quite the opposite, actually... I suspect he made more the four years he was gone than he had in the previous ten years at AMR...
After SBC bought AT&T (keeping the AT&T name even though SBC was the acquirer), Tom was really in a position where he didn't have to go back to work. Gerard asked him to come back, and he did.
The two CFO's (Beer and Campbell) who served between his departure and return also left for far greener pastures, and seem to be doing quite well for themselves.
Personally, I find the notion that AMR "invests in its executives" to be a myth more than anything. There are plenty of people willing to move up, and there's no point in even trying to match what outside companies offer when they tap AA managers on the shoulder and offer them a job.
I left, and I know of a bunch of people at all levels who also left AMR, and more or less doubled their money within a year or two. It is possible to leave the golden handcuffs of seniority when you've had your fill. It might mean leaving a career you love, but you've got to look out for your family's well being first and foremost.
Now, that's not to say leaving isn't also without risks... A few managers from ORD who left a few years back for Waste Management just got in the way of the swinging axe... and one I knew from DFW who thought it was a good idea to go work for Airserv found out the hard way what accountability was. Overall, most of the people I know who left are satisfied with their decision...
