United Pilots Shelve Pay Cuts Vote
- Thread starter BillLumbergh
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UAL777flyer
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- Aug 20, 2002
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No surprise at all on this one. The proposal became moot once UA sent out that 30-day countdown press release last week. However, I continue to be encouraged by the tone/tenor of UA ALPA and their willingness to find ways to help the company, even though the eventual cuts will go deeper than the original ERP. Maybe the other unions will wake up and realize that they either negotiate voluntary concession agreements, or the company will seek deeper cuts in bankruptcy.
Oops, insp89, I just read a post by you on the U board, and it seems like you are a U employee, so I guess you HAVE been following the goings-on over there pretty closely!
Which only serves to amaze me even more, if you are one of those groups that did not agree to concessions before U declared Ch.11 (which by your postings on the U board it seems you are), that you are still talking so tough.
Good luck to you.
Which only serves to amaze me even more, if you are one of those groups that did not agree to concessions before U declared Ch.11 (which by your postings on the U board it seems you are), that you are still talking so tough.
Good luck to you.
insp89,
You haven't been following what has been going on recently at USAirways very closely, have you. Namely, those unions that agreed to concessions before bankruptcy (USAirways ALPA, AFA) likely will not be asked for more; those that did not agree before bankruptcy, USAirways management is now asking the judge to throw out many of their pay and work rules.
Since we are lagging behind USAirways by only a couple of months I would suggest all UAL employees keep an eye on that situation, learning what is working and what isn't, so when it is our turn to make those same decisions we are at least aware of the consequences.
767jetz
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Bear96,
On this we agree. I think all of us should look at USAir as an example. They are all taking it in the shorts. Some more than others for not playing ball before the CH11 filing. Hopefully everyone around here can stop thinking about WHO is right and start thinking abou WHAT is right. I Think if we all pull together, we can get through this without CH11, and live to fight another day.[:blackeye:]
On this we agree. I think all of us should look at USAir as an example. They are all taking it in the shorts. Some more than others for not playing ball before the CH11 filing. Hopefully everyone around here can stop thinking about WHO is right and start thinking abou WHAT is right. I Think if we all pull together, we can get through this without CH11, and live to fight another day.[:blackeye:]
UAL777flyer
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- Aug 20, 2002
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Insp89,
I've been through 2 airline bankruptcies before and have seen how the process works. If UA files for Chapter 11, the creditor's committee and the judge are going to gain complete control over the company and the decision-making. The company will be allotted time to petition the court for changes to the labor contracts that will enable the business plan to succeed when the airline emerges from Chapter 11. Labor will have very little, if any, say in the matter. If the unions at UA are willing to roll the dice and take their chances in that setting, I wish them luck. Because airline bankruptcies in the past have not been very kind to labor. You are much better off negotiating a deal outside of bankruptcy. Keep in mind that UA has the highest costs in the industry. How do you think a judge is going to rule with regards to pay/work rule cuts, given that? Is it a guarantee? No, but I'd be willing to bet the company at the very least would get what they're asking for outside of bankruptcy.
Also keep in mind that the primary objective of the bankruptcy court is acting in the best interests of the primary creditors and shareholders. Employees are often the last priority. So don't delude yourself into thinking the judge will act with your best interests at heart. You'll probably be in for quite a surprise. We should all do the wise thing and not let it get to that point. We can still control our destiny, provided all parties are willing, which to this point, hasn't been the case.
I've been through 2 airline bankruptcies before and have seen how the process works. If UA files for Chapter 11, the creditor's committee and the judge are going to gain complete control over the company and the decision-making. The company will be allotted time to petition the court for changes to the labor contracts that will enable the business plan to succeed when the airline emerges from Chapter 11. Labor will have very little, if any, say in the matter. If the unions at UA are willing to roll the dice and take their chances in that setting, I wish them luck. Because airline bankruptcies in the past have not been very kind to labor. You are much better off negotiating a deal outside of bankruptcy. Keep in mind that UA has the highest costs in the industry. How do you think a judge is going to rule with regards to pay/work rule cuts, given that? Is it a guarantee? No, but I'd be willing to bet the company at the very least would get what they're asking for outside of bankruptcy.
Also keep in mind that the primary objective of the bankruptcy court is acting in the best interests of the primary creditors and shareholders. Employees are often the last priority. So don't delude yourself into thinking the judge will act with your best interests at heart. You'll probably be in for quite a surprise. We should all do the wise thing and not let it get to that point. We can still control our destiny, provided all parties are willing, which to this point, hasn't been the case.
shipwrecked
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- Aug 20, 2002
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But, even if everyone did 'pull together' and volunteered the same concessions the BK judge would obviously impose, isn't there still that little problem of DEBT?
Shipwrecked is correct, which is another reason I think our situation will very closely mirror that of U: the unions (or most of them anyway) will agree to concessions with a Ch. 11 sideletter concerning management agreeing not to ask for even further cuts in a bankruptcy court; AND we will still have to file Ch. 11 to protect ourselves from the creditors who will be clamoring for all the debt payments that are due in the coming months.
Even if suddently-enlightened labor (due to suddenly-trustworthy management appearing on the scene) agrees to immediate and massive cuts, I truly don't see how we can reduce costs far enough and quickly enough to be able to make the nearly $1-billion dollars in debt payments due this winter, and still keep the approx. $1.25-billion cash-on-hand necessary to keep the company liquid enough for day-to-day ops. That is, without starting to sell off assets, and I would have to think a few months under Chapter 11 protection is a better strategy than starting to burn the furniture to keep the house warm for a few extra hours.
Even if suddently-enlightened labor (due to suddenly-trustworthy management appearing on the scene) agrees to immediate and massive cuts, I truly don't see how we can reduce costs far enough and quickly enough to be able to make the nearly $1-billion dollars in debt payments due this winter, and still keep the approx. $1.25-billion cash-on-hand necessary to keep the company liquid enough for day-to-day ops. That is, without starting to sell off assets, and I would have to think a few months under Chapter 11 protection is a better strategy than starting to burn the furniture to keep the house warm for a few extra hours.
UAL777flyer
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Debt can be re-financed. Even if it's at less than excellent rates now, the market will improve. And if UA obtains a lower cost structure, profit potential will increase, as will our credit rating. Then we can refinance the debt at more advantageous rates. The key to the whole puzzle is lower costs.
767jetz
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Yes, there still is the debt problem. What I think you're missing is that a large part of the concessions, is to win the ATSB guarantee, so we can borrow the money to refinance the debt. If that is done, CH11 will be avoided. If not, CH11 will be the only way to for the company to protect itself from that large debt payment.----------------
On 8/21/2002 512 PM
But, even if everyone did 'pull together' and volunteered the same concessions the BK judge would obviously impose, isn't there still that little problem of DEBT?
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In USAir's case, they simply ran out of time. The company was trying to negtiate concessions to get the loan BEFORE a CH11 filing was necessary. Some unions and vendors dragged their feet and, bingo! Management had to pull the trigger. Let's hope that doesn't happen at UAL.
Some people seem to think that CH11 is a forgone conclusion. There is still a small window of oportunity to avoid it. But the window is quickly closing
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