Of course they should have! My position has always been that bonuses/payouts/extra comp should be tied to absolute profit performance, not just performance relative to peers. CO's execs demonstrated great leadership on this. Unfortunately AA's execs did not. It's something we should be thinking about as we negotiate new contracts. I'm a realist and okay accepting less than "restore and more" but they need to meet us halfway on some of this stuff.
Unrestricted cash expected to be down to $3.1 billion at year end
- Thread starter FWAAA
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Of course they should have! My position has always been that bonuses/payouts/extra comp should be tied to absolute profit performance, not just performance relative to peers. CO's execs demonstrated great leadership on this. Unfortunately AA's execs did not. It's something we should be thinking about as we negotiate new contracts. I'm a realist and okay accepting less than "restore and more" but they need to meet us halfway on some of this stuff.
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- #17
AMR wasn't bleeding cash in April 2006, April 2007 or April 2008 when the distributions of stock were made to the PUP/PSP execs. Cash bleed didn't begin until after this year's stock distribution.
But why let facts get in the way of an uniformed rant?
Hopeful
Veteran
- Dec 21, 2002
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SO YOU MEAN OUR 2003 CONCESSION PACKAGE WASN'T REALLY NECESSARY?????????
Thanks, FWAAA, now we can sue AMR for lying to us!
AA is no better than what Madoff did with his Ponzi scheme...He took new investor money to pay off old investors.
The only difference is here is AMR took from the workers.
planemedic
Newbie
Im not the smartest guy when it comes to how the bonuses are given but wouldn't the price of the stock go up in April when AMR purchases stock to give to management. Or at least the price will rise in anticipation of this. Then the price usually goes when management exercises those options
T
The Goose
Guest
You are among many that have that impression. While you're correct in what you said re: stock purchases upping the price, you're dead wrong about how this is done.
AMR does not purchase stock to give to their (mis)management for their bonuses; rather they print up/issue new stock to the devils, and through the magic of share dilution, actually lower the stock price.
It's really similar to the Federal Reserve's funny money program except on a much smaller scale.
Example - a company has 1 million shares. If it prints and issues another one million shares, it's done nothing to change the company's value but has effectively cut the previous share value in half. The execs, therefore, are taking their bonuses straight from the shareholders stock value and not from any company funds.
By that logic, the workers could benefit also since the corporation has no money involved (excepting the original SEC form S3 filing fees, about $300,000 some years ago) and could just as easily print some crumbs for the workers but they've no intention of creating even a slight bit of peace in the management/employee relations. To cause additional dilution in the stock price by giving a reasonable amount to the employees would wreak havoc on the executive's game of greed. That would be a form of competition the execs would not tolerate.
Evidently, it just feels good to some to think these awards are costing the corporation money that could be given to the workers, as most ignore the facts of the executive payoffs and continue to spread misinformation.
T
The Goose
Guest
Yes, AMR took from the workers - with the assistance of the TWU.
The lie - come look at our books and verify we can file for Chapter 11.
The truth is there were no qualifying circumstances (in 2003) and still aren't any qualifiers to file for Chapter 11 protection. The way the law read, even a healthy corporation could file but it was in the interests of both the company and TWU to get us to believe otherwise. I told people that at that time and was told I was wrong and the union was right. What a friggin' laugh!!
Even though the drama queens said the union reps looked over many documents, all that was really necessary to see was the default of financing terms should unrestricted cash fall below a given amount - loans would then be called and AMR would have no choice but to file. I still think the non-disclosures that were signed had more to do with hiding the truth rather than disclosing what little of interest was supposedly seen in the books.
No, the concession package wasn't necessary. It was, however, the quickest way the stop the cash bleed and not fall into a situation where creditors would whine about the financial reserve American was supposed to carry in order not to trigger a default. The TWU, fearing loss of dues income, decided to take the company's side and work against its own membership, picking up payments from both sides of the fence.
Kindly notice there was no meaningful reduction in dues after our 25% compensation cuts.
I agree. IIRC the $1billion covenant was on a $800million dollar loan, so yea they could have dipped below and "technically" been in default of the covenant but if the bank decided to call in the loan they could have paid it off and still had $200 million if they didnt find other financing.
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- #23
The quote above reveals just how little you know what you're talking about that it reminds me of Fletch talking with the airplane mechanics about a "Fetzer" valve:
Fletch said:
Because of cross-default provisions in the credit agreements, a default of one loan would cause a default in all. And no, AMR could not just "pay it off," leaving itself with just $200 million when it was spending $5 million more each day than it was taking in. In just over a month, the till would have been dry.
You have access to all the credit agreements?
They would not have defaulted if they paid it off. Even if they dipped below the covenant that doesnt automaticaly mean that the lender would demand full payment, they may have simply changed the rates.
Even if they had defaulted, so what, thats what BK is for. Delta, UAL, USAIR, Continental(2x), and NWa all went that route, none of them liquidated and AA was in better shape than any of them.
One thing for sure. Their pilot costs are going up. AA pilots are approaching the attitude of UAL pilots with their toxic relationship with their incompetent managements.
Right now in the contract costs, AA wants very severe productivity improvements that would chop 2000 pilots off the active list (not to mention the 2000 still on furlough for 7 years) and completely and utterly gut any scope and job protections. Essentially, they want a sub-Delta contract without having the inconvenience of going through bankruptcy. And they are NOT going to get it.
Right now in the contract costs, AA wants very severe productivity improvements that would chop 2000 pilots off the active list (not to mention the 2000 still on furlough for 7 years) and completely and utterly gut any scope and job protections. Essentially, they want a sub-Delta contract without having the inconvenience of going through bankruptcy. And they are NOT going to get it.
FrequentFlierCA
Veteran
- Feb 25, 2008
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I disagree that they couldn't get it. Maybe they will, maybe they won't, but going through Chapter 11 is always an option on the table. Pilots have the nuclear threat of a strike, and the company has the nuclear threat of bankruptcy. Obviously everyone is going to be better off if neither of these weapons of mass destruction are used. Let's hope some cooler heads prevail and the negotiators can find a way to keep AA cost competitive while giving the pilots back some of what they gave up.
T
The Goose
Guest
All the threats aside, AA's management seems to be wishing for an implosion and looking for some excuse to file bankruptcy as they evidently wish had been done in 2003. I can't think of another reason why they would continue with things like lawsuits to limit FAA manadated rest time and going against their own rules re: sicktime by pilots.
While those of us in the industry understand the posturing, from the outside it looks terrible for the company to be fighting the FAA over crew rest time and a pilot's right to call in sick when they are ill and not 100%.
As the saying goes, perception is reality - it's doubtful the frat boys and bean counters understand this.
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- #28
The lawsuit over the crew rest rules was filed by AA, CO, UA, US and even B6. Several cargo carriers have joined the suit. The only airline of significance not part of the suit is DL/NW, and it's their ridiculous agreement with the FAA that set this in motion. Are each of those airlines trying to run their airlines into the ground by suing the FAA? The CO pilots are in agreement with CO on this issue, probably because they don't want to sit in hotels for up to 50 hours following a flight to HKG or DEL or BOM.
Sick time arguments with a couple of pilots? You think anyone outside the APA or this forum cares about that case? Didn't make the news where I live.
You may be right about AA management wanting to implode the airline, but you haven't presented any credible evidence. Your two exhibits are merely routine legal matters for an airline. Not evidence of someone trying to crater an airline.
T
The Goose
Guest
I understand very well the arguments, pro and con, both of the company and pilots on both issues. Methinks, however, you're missing my point.
Both issues are excellent fodder for misrepresentation by both sides of the fence at a later date if they don't get their way - it doesn't matter if it "made the news where you live" or not. The potential is there to raise many questions unless someone starts explaining. I'm fully aware the finance and frat boys don't have a slot on their spreadsheets for damage control but I believe it's time to start paying attention - quantified or not, DC can be a great investment but, unfortunately, these are accountants and marketing people running the airline, not businessmen/women that would understand these things.
As far as credible evidence re: a company implosion; if you're not there watching on a day-to-day basis, you'll never see it. The consistant stupidity of decisions, from the floor to the top rungs of the ladder is what I question. You say you're not employed by AMR, so it would be rather difficult to present everything the employees see on a daily basis for approval.
I'm not looking to lock horns with you - just stating my opinion of what I believe I see.
BK's ok with me. Bring it on. Maybe we can get some new management and some executives with leadership skills. The current set of overpaid executive shoe clerks is devoid of any leadership ability whatsoever. It's hard to see how the executive managers relationship with it's workers could be any worse.
