UA/UA merger?

[cavalier]

argentomaranello

CAV:

The sad reality is that all of the majors are grossly overstaffed (in constrast to the LUV model) and even teh current round of bankruptcy filings isn't likely to change that very much.

EXACTLY! Grossly overstaffed describes it perfectly. Knowing this and knowing that holding onto our contract with it's scope of work clause is exactly why I cannot even fathom a no vote. A no vote makes it possible for that scope clause to disappear. When it disappears so does the overstaffing problem. People think Dave has NO compassion, that he was just scared to go to court on the 10th and abrogate our contract. I think knowing exactly what’s in store for the work force, he choose to let labor rethink its position, least risk serious peril. He spells that out in the letter he sent to every mechanic’s home. I guess I see things differently because I have been around and have not worked my entire career in the airline industry. I know what is out there and what is not. Even with all our give backs one cannot do better especially in these economic times. Of course if you have an very good education then that is not true, but if that sheep skin is in hand, why am I hearing foul being called when things are better next door. Things are changing and people don’t like change, but change it will, no matter what resistance is applied and no matter how much people cry foul play, it will happen. With what it costs to fly today versus 25 years ago it’s a wonder any of the old airlines are still flying at all. The way I see it, a no vote is very short sighted. If this is voted down and U goes away, others will follow, but they will have been given a little more time. Luv and Blue have set the new course for the airline industry in this country.

 

[cavalier]

Hey, you like Charles Dickens and I like Dean Koontz, what can I say.

 

[Oliver Twist]

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On 9/14/2002 715 PM cavalier wrote:

Luv and Blue have set the new course for the airline industry in this country.

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If that is true, then Walmart is the only place to shop now, Not target, Not Kmart, Not JCPennys or the rest. While I like Walmart, I'd hate to have that as my only source of products. I think the same goes for LUV and Blue, great in their areas, but to think every member of the public wants that service only is foolhardy.

 

[magsau]

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On 9/14/2002 1208 PM argentomaranello wrote:

Glenn Tilton appears to have neither the brains nor the airline experience to facilitate any of this (and his recent bouquets to labor may be sending exactly the wrong signals -- merely fortifying UAL labor's militancy). ----------------
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What has Glenn Tilton done to make you think he is not smart enough to work in this industry? We had two industry insiders, self appointed genuises (Dutta and Studdert)that left on 9/2 and last I have seen not one airline has jumped in to acquire their services. I am a UAL employee and I am giving him an opportunity to make this work. As for labor militancy perhaps if you actually were on the inside of UAL and could see how the employees are banding together to make you would have a different opinion. Sure there are a few loud mouths that like to blow their horns but for the most part everyone at UAL is aware of the problems and want to get this recovery effort underway. We are tired of the black cloud that the media likes to hang over our head. We are flying higher load factors, at the highest on-time rate with the increased strains of enhanced security and all anyone but UAL employees can do is talk about how bad things are. Sure we have problems but they are not isolated to UAL. If you take a peak at AMR the stock is headed downward at an alarming rate. The banter of AA/TWA injustices are starting to get louder as the cuts start and you guys really think UAL would desire to hurt the moral by forcing a merger?

 

[chipmunn]

Argento:

I believe the biggest problem for UAL is the ESOP that Wall Street believes is a “nooseâ€￾ around the management’s neck. Employee owners will not make the hard decisions necessary to restructure and union agendas can be counter productive to profitability.

In fact, I believe when the UAL unions elected to not even discuss concessions during the ATSB 30-day timeframe to submit a revised loan guarantee application by September 16, the unions may have just nailed the bankruptcy coffin shut.

Could the ATSB decide that the only way to restructure UAL is to get rid of the ESOP, eliminate employee Board members, and eliminate the governance problem? Another words, could the ATSB make the loan guarantee approval contingent on a voluntary Chapter 11 filing because with the ESOP, the hard decisions will never be made to successfully restructure UAL?

In regard to UAL's new leadership, reports indicate four leading airline executives refused to interview for the job: CAL CEO Gordon Bethune, NWAC CEO Richard Anderson, former CAP President Greg Brenneman, and DAL President Fred Reid. Does this make a statement?

Media reports indicate Glenn Tilton was first contracted by UAL's search firm three-weeks prior to his appointment, which indicates he may not have been a front runner, although he is an experienced executive.

Also noteworthy, Jack Creighton said he would not preside over a bankruptcy and although he tried to pamper the unions, Rono Dutta and Andy Studdert might have felt the same way when they all resigned.

So where is UAL?

The have a CEO with no airline experience, no airline operations executive bench, the unions just told the ATSB we will not meet the agreed upon new application timeline, and the union’s believe they can quickly develop a plan that is better than the Boards $2.5 billion cost reduction requirements.

I wonder how the unions thoughts will affect the ATSB thought process?

In addition, UAL has not announced any employee or lessor concession discussions or a restructuring business plan. How will the ATSB view this issue, with UAL facing significant debt payments in the near future?

After personally experiencing the tortuous ATSB and voluntary bankruptcy process for the past six months at US, it appears UA has a long way to go to restructure and the unions could be accelerating the process for a unique corporate transaction.

Chip

 

[ONTHESTREET]

 

[GGpillow]

Chip, this stuff is a stretch, even for you. UA/US may someday happen, if you think it's going to happen within the next 3 years, you are grasping at straws. You may certainly know your way around U, but your rumors about UA are based, by the looks of things, on typical flightdeck gossip mongering, and the Yahoo board. No offense, I do like reading your stuff on U, but this is a reach.

 

[t-man]

Chip,
I have to agree with you on this subject.
The way this restucturing plan seems.
It looks like U's main line will be pretty much history and the rj fleet will become the feeders for UA's main line fleet.
I still think Wolf is still working on pushing this merger through.
It makes sense shrink or liquidate U's main line and then present the merger plan to the proper authorities in the government.
The merger will probably go through at our expence.

 

[bigJ]

After reading Chip's posts for awhile it appears he is gunning for the UAL 400.

 

[batman]

For those that think this unique corporate transaction/merger has any merit:

-ALPA sits on the UAL BOD.

-ALPA approved the code-share.

-ALPA has access to all SEC confidential material.

-USair is increasingly becoming a regional airline.

-United has no intention of merging with any regional when they can code-share.

-The United/Usair code-share docket is being kept closed to public to decrease the competitive response from Delta and others to the extend possible as it includes future route/frequency and code-share plans.

-ALPAs inclusion of merger language was specifically put in to address the possible fragmentation of Usair in Bankruptcy and jobs that go with it.(ex. shuttle)

-Even in the case of CH 11 (unlikely) United Unions will maintain their seats on the BOD. (just think, Usair pilots get a seat on the BOD in CH11, so why would UAL pilots lose theirs, in light of the fact that a pre-package will certainly be done. Not only that, their is a possibility for an additional seat for any significant concessions)

Anyways, give it a rest.

ps. best of luck to all since failure of either United or Usair to restructure in these difficult times, will have a detrimental effect on everyone.

 

[fatburger]

That is quite an insecure comment bigJ. It is just creative thinking/debate going on here. Try to keep it civil and not Yahooesque!

 

[Bear96]

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On 9/15/2002 9:29:01 AM fatburger wrote:

That is quite an insecure comment bigJ. It is just creative thinking/debate going on here. Try to keep it civil and not Yahooesque!
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Chip's thinking is hardly creative. He has been on the same one-track line of thinking for 2-1/2 years now, making largely unfounded conjectures (from mysterious reports and sources) that support his fantasy of a UA/US merger, and ignoring those facts that don't support his preconceived worldview.

I think bigJ got it exactly right.

 

[argentomaranello]

For what its worth:

Use of the term merger to describe one of the potential scenarios involving UAL and USAir is inherently deceptive. Should events move in that direction, neither CHIP nor I have written about a merger between the two carriers. Rather, the thinking is that much of UAL's domestic route network will be engrafted upon USAir's existing system. The USAir corporate structure, and its labor agreements, would remain intact (which is absolutely essential, because its USAir's new, much reduced cost structure that drives this whole idea).

To CHIP -- perhaps you are right and the present UAL governance structure is in the crosshairs at ATSB, but a bankruptcy filing won't, ipso facto, change that (or eliminate the union stranglehold on UAL BOD policy making). Only a full restructure, proposed as part of a Plan of Reorganization, ADOPTED and IMPLEMENTED on EXIT from bankruptcy will actually accomplish the governance changes at UAL. The problem is that much (if not all) of what UAL must do inside of bankrutptcy will be heavily influenced, if not controlled, by the present governance arrangement. Assuming that a union-controlled debtor-in-possession at UAL will remain as reluctant to make the deep labor cost cuts after entering bankruptcy as it seems at the moment, there is no reason to believe that UAL will rush into the fragmentation scenario. (It will be pushed, IMHO, maybe by the ATSB).

Finally, to the apologists for Glenn Tilton -- this is a guy who had spent virtually his entire career brown-nosing his way to the top of the arteriosclerotic Texaco, Inc. (The same big oil firm that bumbled and stumbled its own way into Ch. 11 due to its heavy-handed tactics in stealing Getty Oil away from Pennzoil in 1987 -- probably furnishing a younger Tilton with some prior experience with bankruptcy). Once there, he had succeded in distinguishing himself by so mis-managing a some employment civil rights litigation as to set his company up for the inevitable takeover by a competitor (Chevron in this case). Whatever management experience this guy has gained revolves around a massively well-financed natural resources extraction, processing and marketing business where challenges and opportunities are almost the inverse of those at the labor intensive, capital-starved and profitless airline. At the highest levels, it can accurately be said that his career had hit the wall and he needed an exit strategy. (In this way, his recruitment by UAL is reminiscent of that of Gerry Greenwald, an equally talentless corporate politico whose chief credential was that he had carried Lee Iacocca's briefcase -- and whose legacy of leadership at UAL was its virtual abandonment to the whims and wealth-grasping avarice of organized labor). In all truth and honesty, a bright, decently well-informed industry kibitzer like Chip Munn would have been a more appropriate choice to lead UAL in these times.

 

[magsau]

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On 9/15/2002 12:28:51 AM chipmunn wrote:

In regard to UAL's new leadership, reports indicate four leading airline executives refused to interview for the job: CAL CEO Gordon Bethune, NWAC CEO Richard Anderson, former CAP President Greg Brenneman, and DAL President Fred Reid. Does this make a statement?

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Chip,

Could you provide your insiders link the the reports you have on the above? It was widely reported that Bethune wanted more money than Alex Rodriguez and as far as I can tell Bethune would have trouble making the 6-4-3 double play at UAL.

 

[ohcaptainron]

Argento:

Please, give us all a break, it is clear you are nothing more than a would be talking head with an axe to grind against UAL and its employees, a shrill if you will,with a very obvious agenda. Promoting US Airways.It would not surprise me if you and chipper were one in the same or at least very familar with each other. Chip for CEO, Hello.

Your characterizations of the new CEO are shall we say are one sided. UAL does not need an industry insider as a CEO, what UAL needs is a leader and some one who can communicate a vision. Someone who can restore trust and confidence( something that is missing in most of corporate america) with employees, the street and all stakeholders. Will he have success time will tell, but not giving anyone the benifit of the doubt speaks volumes of your character. Frankly who are you to judge? Let's get this right you are an investor a lawyer/ juris doctor? Yea, you and 3000000 people that attend law school every year can make that claim. Do you use Quick and Rielly or E-Trade?.I am quessing third tier law school in your case. Many of us that are actually in the industry can make similar claims. Been there done that.

Problem is your failed logic, your bias, your ever condesending comments and lack of facts. Your agruments are unfounded, your conclusions are incomplete. By virtue of your alleged years of experiance you make claims that sound like they have been handed down from the mountain, put another way you are a pompas ass.

You and the chip have exposed your motivations for all to see and they are not honorable. It's a good thing no one is paying for your advice,a lack of ethics = dis-barment. But being an officer of the court you know that right?
I doubt it.
Good riddens.