Ual Mec Endorses Tentative Agreement

[ZMAN777]

Just received a call about an hour ago that the UAL MEC has endorsed the tentative agreement with the Company. Details will be forthcoming but in the meantime this is what I've been told:

A. 14.7% reduction in wages
B. 6% contribution to the "A" Fund (loss of DBP)
(I assume 9% still going to the "B" Fund)
C. Loss of night/Int'l pay
D. $550 Million Bond payable to UAL ALPA (no details on this)

I just checked the MEC website but there were no details posted yet.

Cheers,
Z B)

 

[Cosmo]

ZMAN777:

I hope you'll share your opinion of the TA (good, bad or indifferent) once you get all of the details.

 

[ZMAN777]

Cosmo,

I'll be glad to share my thoughts on this when we have an opportunity to view the agreement. Later.

Cheers,
Z B)

 

[Dizel8]

If the new payscale I have seen is an indication, then the UAL pilots are certainly doing their share to make UAL profitable.

 

[WorldTraveler]

This is good news for UAL but I'm not sure the other labor groups will get a deal anywhere as generous - perhaps they shouldn't given their ability to work longer to recoup some of their pension benefits - but then again the real issue is really what is being given up with what can be recovered as secondary. Further, I doubt seriously the PGBC will like this arrangement at all; UAL is basically saying "let's negotiate new pension obligations with labor but saddle the PBGC with an unnegotiated liability for all other accrued pension liabilities.

Pilots Won't Fight UAL on Pensions

Union to Get $550 Million
In Convertible Notes in 2005,
Setting Precedent for Others
By SUSAN CAREY
Staff Reporter of THE WALL STREET JOURNAL
December 17, 2004; Page A3

CHICAGO -- A concessionary labor contract approved yesterday by the leadership of the pilots union at United Airlines contains an unusual giveback: the Air Line Pilots Association agrees that it won't oppose United parent UAL Corp.'s efforts to terminate the group's generous defined-benefit pension plan.

The rest of the article is available by subscription from the WSJ.

 

[mrfish3726]

Union to Get $550 Million In Convertible Notes in 2005!!!

I guess no one learned ANYTHING from EFLOP!!

 

[local 12 proud]

Union to Get $550 Million In Convertible Notes in 2005!!!

I guess no one learned ANYTHING from EFLOP!!

[post="229567"][/post]​

can you say "DUMB AND DUMBER"

 

[767jetz]

Union to Get $550 Million In Convertible Notes in 2005!!!

I guess no one learned ANYTHING from EFLOP!!

[post="229567"][/post]​

Whatever. :down:

You are just showing your ignorance again. This is not ESOP. They are convertible bonds that we can sell at any time. We are not forced to hold them until retirement. If ESOP participants were allowed to access their stock in the late 90's, most would have done pretty darn well.

By the way, there will be some stock issued to empoyees based on their concessions as a return on the investment we are all making. Will it be worth anything? Who knows. But a few dollars in my pocket is still better than a stick in the a$$. B)

 

[767jetz]

If the new payscale I have seen is an indication, then the UAL pilots are certainly doing their share to make UAL profitable.

[post="229546"][/post]​

Good to hear a positive comment from someone for a change. Thanks.

Not including any work rule, retirement, medical, quality of life, or other concessions, it will be about a 41%-42% straight pay cut since entering BK. If I were to bump to the Airbus as many of my peers have, it would be 50%!!!!!!!! HALF OF MY PAY.

We are definitely doing more than our share. Of course some will still come out and spin it into some conspiracy where we are actually getting a raise or something just as absurd.

 

[FWAAA]

Whatever. :down:

You are just showing your ignorance again. This is not ESOP. They are convertible bonds that we can sell at any time. We are not forced to hold them until retirement. If ESOP participants were allowed to access their stock in the late 90's, most would have done pretty darn well.

By the way, there will be some stock issued to empoyees based on their concessions as a return on the investment we are all making. Will it be worth anything? Who knows. But a few dollars in my pocket is still better than a stick in the a$$. B)

[post="229628"][/post]​

Exactly!

The only two choices are:

1. Huge paycuts and no equity participation;

or

2. Huge paycuts and some equity participation thru the convertibles.

Only a fool would choose door number 1.

And you are correct about the ESOP: It failed, in part, because the pilots and mechanics couldn't alter their investment. They were stuck in UAL until retirement or separation. No way to sell it when it was selling for more than $90.

 

[767jetz]

ZMAN777:

I hope you'll share your opinion of the TA (good, bad or indifferent) once you get all of the details.

[post="229468"][/post]​

A couple of good things I can say is that the removal of the "movabale RDO" will be a huge quality of life improvement for reserves. Also ALPA rejected most of the "manpower negative" parts of the term sheet, like IRP's, contracting TK instructors, changes in vacation acrual, reduction of RDO's for widebodies, and increase in flying cap for widebodies. These would all have been potential reductions in manpower and could have resulted in furloughs.

 

[WorldTraveler]

I'm not sure if the creditors were aware of UA's agreement but there are certainly creditors who might take exception to UAL issuing debt to its employees while some creditors will end up with nothing. For the employees, this is hopeful but I wouldn't take it to the bank until a complete Plan of Reorganization has been approved by all parties and UAL has emerged from bankruptcy.

Not trying to be pessimistic...just realistic. I do commend ALPA for coming up w/ creative methods. I'd still like to hear what other labor groups think.

 

[767jetz]

I do commend ALPA for coming up w/ creative methods. I'd still like to hear what other labor groups think.

[post="229685"][/post]​

I hope other groups will see that there are creative methods that could minimize the impact of concessions and still meet their target cuts, in order to avoid having something less palitable imposed by the judge.

Of course in the end it will be up to each employee and their respective union to decide how they want to procede. I wish everyone luck. IMO the ALPA T/A will pass by a small but decisive margin. (Maybe 60/40).

 

[WorldTraveler]

As expected...

US concerned about UAL/pilots deal on pension plan
Fri Dec 17, 2004 05:48 PM ET
WASHINGTON, Dec 17 (Reuters) - The concession deal between United Airlines (UALAQ.OB: Quote, Profile, Research) and its pilots may set a dangerous precedent, according to the U.S. agency that insures corporate pensions.
"The company is making generous new pension promises even as it is refusing to honor its old pension promises," said Bradley Belt, executive director of the Pension Benefit Guaranty Corp.

The pilots have agreed to not fight United's bid to terminate their retirement plan to save money. In return, the pilots will receive $550 million in convertible notes that can be sold later to make up some of the pension shortfall, according to a concession deal negotiated this week.


Somehow I doubt that the PBGC's response will remain as "tame" as the concern expressed today.

 

[FWAAA]

I suspect that the PBGC will demand some participation in the new UAL to help make up both the actuarial shortfall and the unpaid 2004 contributions of some $500 million.

After all, with UAL trying to stiff the PBGC for billions of underfunded pensions (exact amount depending on whom you ask), giving the pilots half a billion of convertible debt is probably gonna require similar benefit for the PBGC.

I agree with you - the PBGC will probably express its disagreement a little more forcefully before this is over.