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US-AA Merger Articles (Merged Topics)
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Beancounter
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I'll second that, thank you. I wish I could link this thread into my news feed, this is waaay better than my Yahoo, Fidelity, or Comcast feeds.
Bean
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USA320Pilot
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- May 18, 2003
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Bill Rochelle conjectures whether a lessening of competition may explain why a merger of American Airlines Inc. and US Airways Group Inc. (LCC) could be an economic success (Audio)
Click here to read the report.
US Airways' Intl. Growth And Cost Discipline Lift Outlook
American Airlines Merger Promises Substantial Cost Synergy Benefits
Click here to read the story.
American announced the retirement of four executives on Tuesday.
-Dave Brooks with American's Cargo division and has worked for American close to 30 years.
-Mark Dupont in Airport Services, a 29-year employee.
-Susan Garcia, vice president of Information Technology with American for 25 years.
-Andrew Watson, vice president of customer technology.
"On behalf of the company and all of its stakeholders, I want to thank these officers for the enormous contribution they have made to American Airlines over the years," said American chief executive Tom Horton.
Click here to read the story.
They don't have senior vice president of human resources Jeff Brundage to kick around any more
Jeff Brundage, architect of American Airlines' labor strategy and a lightning rod for employee unhappiness, will be leaving the carrier, part of an executive reorganization and thinning.
American presented its S.1113 case last week. On May 14, the three unions present their testimony. Immediately after the unions finish, American will begin its rebuttal testimony. Judge Lane is scheduled to issue his decision by June 6.
Click here to read the story.
Click here to read the report.
US Airways' Intl. Growth And Cost Discipline Lift Outlook
American Airlines Merger Promises Substantial Cost Synergy Benefits
Click here to read the story.
American announced the retirement of four executives on Tuesday.
-Dave Brooks with American's Cargo division and has worked for American close to 30 years.
-Mark Dupont in Airport Services, a 29-year employee.
-Susan Garcia, vice president of Information Technology with American for 25 years.
-Andrew Watson, vice president of customer technology.
"On behalf of the company and all of its stakeholders, I want to thank these officers for the enormous contribution they have made to American Airlines over the years," said American chief executive Tom Horton.
Click here to read the story.
They don't have senior vice president of human resources Jeff Brundage to kick around any more
Jeff Brundage, architect of American Airlines' labor strategy and a lightning rod for employee unhappiness, will be leaving the carrier, part of an executive reorganization and thinning.
American presented its S.1113 case last week. On May 14, the three unions present their testimony. Immediately after the unions finish, American will begin its rebuttal testimony. Judge Lane is scheduled to issue his decision by June 6.
Click here to read the story.
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USA320Pilot
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USAPA BPR Meeting Update with details on APA President Dave Bates and Negotiating Committee Chairman Neil Roghair's comments to the BPR: May 1, 2012
President Hummel reconvened the BPR meeting for a presentation from Allied Pilots Association (APA) President Dave Bates and APA Negotiating Committee Chairman Neil Roghair.
Captain Bates discussed how the original process began back when US Airways was looking for a merger partner. In January, US Airways had a team talking with various Wall Street contacts and concluded with a meeting between Doug Parker and the APA. The original meetings were kept quiet and limited to a few members of the APA board. Those meetings led to a meeting in Phoenix. According to Captain Bates, the expectations were low, but the results were high. Dialog was conducted with the previous USAPA President but it was decided to wait until after the USAPA Officer elections to continue talks.
Captain Bates then discussed the current status with American Airlines (AMR) and the results of the discussions with US Airways. AMR is suffering from a poor corporate culture and has lost its previous leading position with business travelers. AMR is currently in bankruptcy and the unions are facing a 1113 motion by AMR to reject their Collective Bargaining Agreement (CBA). The discussions with US Airways were surprisingly productive and resulted in a Conditional Agreement that will exceed current Delta pay rates in the second year of the agreement. Captain Bates continued that the merger process will not be easy, as it has big obstacles and strong opponents.
However, if the CBA succeeds, Captain Bates stated that they need other pieces to fall into place such as a new Transition Agreement, fences, and then the representational issues (who will represent the pilots: APA, USAPA, Teamsters, etc). The last issue that will have to be addressed is seniority, which is governed by the McCaskill-Bond Amendment. Captain Bates also pointed out that the APA is neutral on the current USAPA seniority issue.
Extensive questions were then accepted and answered from pilots in attendance regarding the terms agreed to by APA and US Airways. Of note:
Seniority will be address at a later date.
The majority of APA's required concessions ($130 million) are frozen pensions and in productivity.
Seat pay protection and furlough protection.
US Airways management agreed not to lose one pilot job.
APA wants USAPA's help so that everyone is happy with our future contract. The 1113 motion will be decided by bankruptcy court by June 6.
APA Negotiating Committee Chairman Neil Roghair then continued the presentation with saying APA "tried to put ourselves in your shoes." Captain Roghair commented that the current agreement with the APA and US Airways included Airbus Narrow-Body pay rates of $171/hr at Date of Signing (DOS) and approximately $200 at year five. The Airbus 330 rates will be $216/hr at DOS and $250/hr at year five.
Captain Roghair then discussed the transition to a Preferential Bidding System (PBS) and scheduling parameters similar to Delta. The flying cap will be 83 hours but allow the ability to fly to FAR's. The 12-month average maximum will be 90 hours per month. Work rule changes for the APA will include a new trip trade system, PBS, duty day and augmented flying provisions, crew rest seats (APA has better provisions, which include blocking of the adjacent seat), and sequence protection. One big issue is to preserve the provision that requires reserve pilots to be "reasonably available via ground transportation."
Captain Bates concluded that negotiations are not over, but Management shows a willingness to negotiate. After their presentation, questions from the BPR and the members at large were answered. Extensive questions from the Board and pilots at large were answered by Merger Counsel Pat Szymanski.
President Hummel reconvened the BPR meeting for a presentation from Allied Pilots Association (APA) President Dave Bates and APA Negotiating Committee Chairman Neil Roghair.
Captain Bates discussed how the original process began back when US Airways was looking for a merger partner. In January, US Airways had a team talking with various Wall Street contacts and concluded with a meeting between Doug Parker and the APA. The original meetings were kept quiet and limited to a few members of the APA board. Those meetings led to a meeting in Phoenix. According to Captain Bates, the expectations were low, but the results were high. Dialog was conducted with the previous USAPA President but it was decided to wait until after the USAPA Officer elections to continue talks.
Captain Bates then discussed the current status with American Airlines (AMR) and the results of the discussions with US Airways. AMR is suffering from a poor corporate culture and has lost its previous leading position with business travelers. AMR is currently in bankruptcy and the unions are facing a 1113 motion by AMR to reject their Collective Bargaining Agreement (CBA). The discussions with US Airways were surprisingly productive and resulted in a Conditional Agreement that will exceed current Delta pay rates in the second year of the agreement. Captain Bates continued that the merger process will not be easy, as it has big obstacles and strong opponents.
However, if the CBA succeeds, Captain Bates stated that they need other pieces to fall into place such as a new Transition Agreement, fences, and then the representational issues (who will represent the pilots: APA, USAPA, Teamsters, etc). The last issue that will have to be addressed is seniority, which is governed by the McCaskill-Bond Amendment. Captain Bates also pointed out that the APA is neutral on the current USAPA seniority issue.
Extensive questions were then accepted and answered from pilots in attendance regarding the terms agreed to by APA and US Airways. Of note:
Seniority will be address at a later date.
The majority of APA's required concessions ($130 million) are frozen pensions and in productivity.
Seat pay protection and furlough protection.
US Airways management agreed not to lose one pilot job.
APA wants USAPA's help so that everyone is happy with our future contract. The 1113 motion will be decided by bankruptcy court by June 6.
APA Negotiating Committee Chairman Neil Roghair then continued the presentation with saying APA "tried to put ourselves in your shoes." Captain Roghair commented that the current agreement with the APA and US Airways included Airbus Narrow-Body pay rates of $171/hr at Date of Signing (DOS) and approximately $200 at year five. The Airbus 330 rates will be $216/hr at DOS and $250/hr at year five.
Captain Roghair then discussed the transition to a Preferential Bidding System (PBS) and scheduling parameters similar to Delta. The flying cap will be 83 hours but allow the ability to fly to FAR's. The 12-month average maximum will be 90 hours per month. Work rule changes for the APA will include a new trip trade system, PBS, duty day and augmented flying provisions, crew rest seats (APA has better provisions, which include blocking of the adjacent seat), and sequence protection. One big issue is to preserve the provision that requires reserve pilots to be "reasonably available via ground transportation."
Captain Bates concluded that negotiations are not over, but Management shows a willingness to negotiate. After their presentation, questions from the BPR and the members at large were answered. Extensive questions from the Board and pilots at large were answered by Merger Counsel Pat Szymanski.
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Earlier today at 10:00 am EDT US Airways CEO Doug Parker addressed USAPA's BPR in "open session."
Doug presented the same power point presentation he has presented to AMR's unions, financial analysts, and now the UCC. The presentation presents the advantages of an AA-US Airways corporate combination. Doug stated that this merger is extremely advantageous for US Airways and AMR. The presentation illustrates AA is losing credibility with the business traveler, AA's route network does not support long term survival without dramatic cost cuts, and Tom Horton's plan to “grow” from their basic structure will not improve their situation.
The presentation displayed the continental United Sates, which is divided into three sections: East, Central and West. As stand-alone airlines AA is ranked number 4 in the east, number 5 in the central, and number 5 in the western potions of our country in ASMs. US Airways ranks number 3 in the east, number 5 in the central, and number 6 in the western portions of our country in ASMs. But, combined the new carrier would be number 1 in the east, number 1 in the central, and number 3 in the western portions of our country in ASMs. Doug indicated there is virtually no overlap, which will prevent a reduction in flying and there will be no need to reduce schedule, pilot, or F/A groups.
Therefore, there will be furlough protection for AA and US Airways' pilots. US Airways expects no anti-trust problems and no regulatory approval problems with the EU, DOT, or DOJ. In addition, the combined network create new growth opportunities (Asia-Pacific Rim?)
Doug reiterated over-and-over the combined company would generate sufficient revenue to provide career stability and industry standard wages and benefits. Doug indicated that if Tom Horton agreed to merge the two companies could combine by years end. If US Airways has to wait until September 28 (the day AMR's exclusive period to file its POR ends) then add another six months to close the deal (approximately April 1, 2013).
A BPR member asked Doug why he spoke to AA's union first and not US Airways' unions. Doug indicated AA's management was and is still not interested in merging. And, in order to pursue the merger, it was important to get the AA employee’s support. US Airways' merger team secretly met with the AA labor groups so the process would not get derailed from the onset with just a few people initially included in the discussions. Expectations were low, but the results were very good. The BPR told Doug they had received copies of the APA's Term Sheet and that there were areas which are not favorable to the US Airways' pilots. Doug acknowledged that there may be areas that may not satisfy both parties and it is up to APA and USAPA to form a TA which would be acceptable to both sides. However, Doug said the “value” of the Term Sheet is set and if both pilot groups want to negotiate changes without changing the base value, great. But, there would be “push back” if any proposed changes increased the overall costs because US Airways' contemplated POR/merger plans are based on those financials.
Doug presented the same power point presentation he has presented to AMR's unions, financial analysts, and now the UCC. The presentation presents the advantages of an AA-US Airways corporate combination. Doug stated that this merger is extremely advantageous for US Airways and AMR. The presentation illustrates AA is losing credibility with the business traveler, AA's route network does not support long term survival without dramatic cost cuts, and Tom Horton's plan to “grow” from their basic structure will not improve their situation.
The presentation displayed the continental United Sates, which is divided into three sections: East, Central and West. As stand-alone airlines AA is ranked number 4 in the east, number 5 in the central, and number 5 in the western potions of our country in ASMs. US Airways ranks number 3 in the east, number 5 in the central, and number 6 in the western portions of our country in ASMs. But, combined the new carrier would be number 1 in the east, number 1 in the central, and number 3 in the western portions of our country in ASMs. Doug indicated there is virtually no overlap, which will prevent a reduction in flying and there will be no need to reduce schedule, pilot, or F/A groups.
Therefore, there will be furlough protection for AA and US Airways' pilots. US Airways expects no anti-trust problems and no regulatory approval problems with the EU, DOT, or DOJ. In addition, the combined network create new growth opportunities (Asia-Pacific Rim?)
Doug reiterated over-and-over the combined company would generate sufficient revenue to provide career stability and industry standard wages and benefits. Doug indicated that if Tom Horton agreed to merge the two companies could combine by years end. If US Airways has to wait until September 28 (the day AMR's exclusive period to file its POR ends) then add another six months to close the deal (approximately April 1, 2013).
A BPR member asked Doug why he spoke to AA's union first and not US Airways' unions. Doug indicated AA's management was and is still not interested in merging. And, in order to pursue the merger, it was important to get the AA employee’s support. US Airways' merger team secretly met with the AA labor groups so the process would not get derailed from the onset with just a few people initially included in the discussions. Expectations were low, but the results were very good. The BPR told Doug they had received copies of the APA's Term Sheet and that there were areas which are not favorable to the US Airways' pilots. Doug acknowledged that there may be areas that may not satisfy both parties and it is up to APA and USAPA to form a TA which would be acceptable to both sides. However, Doug said the “value” of the Term Sheet is set and if both pilot groups want to negotiate changes without changing the base value, great. But, there would be “push back” if any proposed changes increased the overall costs because US Airways' contemplated POR/merger plans are based on those financials.
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American says TWU proposals save more than 3,000 jobs and it is committed to consensual agreements
Click here to read the story.
TWU members get to vote on American's latest offer starting on May 10
Click here to read the story.
TWU International President Jim Little Letter to American Airlines' TWU Locals: May 1, 2012
DEAR SISTERS AND BROTHERS,
This is one of the most critical letters I have ever sent to you. It is now time for you to vote.
At the start of this bankruptcy case, a very labor unfriendly process indeed, I made two promises.
First, it was clear that the TWU strategy needed to be one of maintaining all possible options, since the results of a bankruptcy on workers are always negative. We did just that. We are working on possible mergers, litigating in court, and have worked hard at the bargaining tables trying to limit as much as possible the harsh concessions sought by the Company.
Second, I guaranteed that you would vote on the Company's last offer before the judge rules. It is important for you to have the final say as to whether we are going to approve the Company's last concessionary offer (April 2012) or accept the risk of the judge rejecting our contract resulting in us working under the 1113 terms filed in court (identified in the March 22 ask).
Both situations are concessionary and painful. But there are huge differences between these two outcomes. WHETHER YOU VOTE "YES" OR "NO," IT IS MOST CRITICAL THAT YOU HAVE ALL THE FACTS. Please review the enclosed materials, go online to review the full text changes and all the other posted information, and attend information sessions.
There are a few key points I want to highlight:
This vote has NOTHING to do with a possible US Airways merger; and even a YES vote will not prevent the possible US Airways merger. The issues are legally unrelated. This vote is only about what conditions we will work under at AA, as there is no certainty a merger will take place.
The bankruptcy judge DOES NOT decide what the terms of our contract will be. If he rejects our contract, we will have no contract. The judge does not pick and choose between the terms proposed by American or otherwise rewrite its proposal – he will either grant AA’s motion to reject or deny it.
Since large corporations almost always win 1113 cases according to past court decisions, it is important for us to vote now before the judge rules.
The decision to vote "yes" or "no" is yours alone and that is why we are not recommending any position. But, I do want you to review all the facts so you may cast an educated ballot.
This is your union. I await your directions.
Fraternally,
James C. Little
Click here to read the story.
TWU members get to vote on American's latest offer starting on May 10
Click here to read the story.
TWU International President Jim Little Letter to American Airlines' TWU Locals: May 1, 2012
DEAR SISTERS AND BROTHERS,
This is one of the most critical letters I have ever sent to you. It is now time for you to vote.
At the start of this bankruptcy case, a very labor unfriendly process indeed, I made two promises.
First, it was clear that the TWU strategy needed to be one of maintaining all possible options, since the results of a bankruptcy on workers are always negative. We did just that. We are working on possible mergers, litigating in court, and have worked hard at the bargaining tables trying to limit as much as possible the harsh concessions sought by the Company.
Second, I guaranteed that you would vote on the Company's last offer before the judge rules. It is important for you to have the final say as to whether we are going to approve the Company's last concessionary offer (April 2012) or accept the risk of the judge rejecting our contract resulting in us working under the 1113 terms filed in court (identified in the March 22 ask).
Both situations are concessionary and painful. But there are huge differences between these two outcomes. WHETHER YOU VOTE "YES" OR "NO," IT IS MOST CRITICAL THAT YOU HAVE ALL THE FACTS. Please review the enclosed materials, go online to review the full text changes and all the other posted information, and attend information sessions.
There are a few key points I want to highlight:
This vote has NOTHING to do with a possible US Airways merger; and even a YES vote will not prevent the possible US Airways merger. The issues are legally unrelated. This vote is only about what conditions we will work under at AA, as there is no certainty a merger will take place.
The bankruptcy judge DOES NOT decide what the terms of our contract will be. If he rejects our contract, we will have no contract. The judge does not pick and choose between the terms proposed by American or otherwise rewrite its proposal – he will either grant AA’s motion to reject or deny it.
Since large corporations almost always win 1113 cases according to past court decisions, it is important for us to vote now before the judge rules.
The decision to vote "yes" or "no" is yours alone and that is why we are not recommending any position. But, I do want you to review all the facts so you may cast an educated ballot.
This is your union. I await your directions.
Fraternally,
James C. Little
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Latest AMR offer could salvage 2,600 TWU jobs
Unions say best alternative is AMR-US Airways merger
In a letter to his constituents on Tuesday, the president of the pilot's union, APA, was circulating a petition of "no confidence" in that business plan.
MR and its three primary unions -- the TWU, the Association of Professional Flight Attendants and the APA -- are in the midst of a two-week hiatus in a court battle over the company's bid to abrogate its collective bargaining agreements and impose its own work rules. The sides are allowed to use the two-week window to negotiate consensual deals, but neither the APFA nor the APA were actively bargaining as of Tuesday afternoon, AMR spokesman Bruce Hicks said. "There are no negotiations scheduled at the present with the APA and APFA, although the company remains available to meet at any time and we are anxious to do so," Hicks said. A spokesman for the APFA confirmed that the union was not bargaining with AMR.
Click here to read the story.
APA President's Update (The Right Stuff): May 1, 2012
Fellow pilots,
In 1939, the pilots of American Airlines made history by signing the first-ever collective bargaining agreement between the newly formed Air Line Pilots Association and an air carrier. That agreement, modified multiple times over the years, has lived on continuously for more than seven decades—for almost as long as the history of air travel itself.
After spending much of last week in New York bankruptcy court observing AMR’s lawyers and expert witnesses testify against us, there is little doubt regarding what management intends to do. It is clear to me that AMR’s CEO intends to try to wipe out 70 years of good-faith bargaining with one bang of a gavel. Management’s attitude has been “take it or leave it”—we either give them everything they want, or they’re going to terminate our contract. APA estimates that AMR is demanding nearly a half billion dollars a year in additional concessions—on top of the $660 million a year we already gave nine years ago. It’s not enough that we now earn the same hourly salaries that we did in 1993. Management is now trying to set the clock all the way back to 1939 and force us to start bargaining without an existing contract. Given that the National Mediation Board will not allow us to legally exercise the right to withhold our services, we could be living without a contract for a very long time.
AMR is also seeking the wholesale elimination of a substantial percentage of AA pilot jobs. Management has said they (“only”) intend to lay off 400 pilots, but APA estimates that the actual number of American Airlines pilot jobs at risk of elimination could easily exceed 2,000. When you factor in the unrestricted large-scale productivity increases management demands, combined with the massive outsourcing of pilot jobs built into their business plan, American Airlines would have far more pilots than necessary. The “carrot” of new narrow-body airplanes (which could all be replacements) to be flown at commuter pay rates is a hollow promise.
Let’s put this all in historical perspective. Back in 2001, we had approximately 13,000 pilots. Today, we have around 8,300 active pilots on the property. Within a short period of time if management succeeds in having our contract terminated, our ranks could be less than 6,000.
Management’s goal seems very clear. They want to annihilate our contract, wipe out our unsecured claim and do everything in their power to preempt any attempts for a new management team to assume control. Except for the handful of entrenched managers at AMR, nearly everyone in the airline industry believes that consolidation now is the right way to go. Not since Frank Lorenzo’s actions in the early 1980s has a pilot union had their contract abrogated. After watching this once-proud airline continuously deteriorate for more than a decade because of poor decisions made by management—and knowing how disillusioned our pilots have become—if Mr. Horton succeeds in his goal of emulating Mr. Lorenzo, it would not be surprising if a great many of our pilots were to decide they’ve had enough.
We all know there is an alternative path that is far superior for us, all of American Airlines, the communities we serve and the industry overall. A merger now with US Airways will save jobs, pensions and salaries and provide a much brighter future for American Airlines, our customers and all the airline’s employees.
Everyone should be asking these questions: are the managers who drove American Airlines into bankruptcy the ones to lead us out? How well has the “Cornerstone” plan worked out so far? How well did “convergence” work out? Or the “kick the can” or “limp along” plans? What about “Pull Together-Win Together” or “Flight Plan 2020?” What did AMR management do with the many billions of dollars of concessions we have already provided? Oh, and let’s not forget Performance Unit Plan/Performance Share Plan bonuses and the bankruptcy-proof Supplemental Executive Retirement Plan. All of APA’s advisers are of the opinion that American Airlines’ “Cornerstone” plan will fail and that the current management team is not up to the task of successfully restructuring this company.
Given the backdrop of all that has happened, why are the managers at AMR so steadfast in refusing to do the right thing? It can be summed up in two words: control and money. As many have pointed out before, management stands to make large sums of money if they can remain in control until the company emerges from bankruptcy. It’s a classic case of management entrenchment. Should the personal agendas of a couple dozen people be permitted to jeopardize the futures of 70,000 employees? If you factor in the families and dependents of all those employees and the economic ramifications for all of the communities we serve, many hundreds of thousands of people could be adversely affected by the financial interests of a few.
As stated by writer Steven Pearlstein on April 28 in the Washington Post, “For years now, Corporate America has viewed the bankruptcy court as a blunt instrument by which failed executives and directors can shift the burden of their mistakes onto shareholders, employees and suppliers. The auto industry bailout orchestrated by the Obama administration posed the first challenge to that assumption. Now the unions at American Airlines have taken another step in curbing this flagrant corporate abuse and restoring the rule of law.”
As you may have seen, AMR announced today that Denise Lynn will be replacing Jeff Brundage as Senior Vice President-People. This executive shift had been expected for some time and we do not believe it signals any meaningful change in direction. If anything—since Mr. Brundage will be retained as a consultant to finish what he started—it strikes me as a classic case of rearranging the deck chairs while the deck tilts at an ever-more precipitous angle.
It takes the "right stuff" to run a world-class airline. Unfortunately, I know very few AA pilots who believe that AMR’s management has what it takes. For this reason, the APA leadership has decided to circulate a petition of “no confidence” in management’s business plan. I urge every pilot to add your name to this petition. Click here now to let your voice be heard on the future direction of American Airlines. The time has come for real change.
Captain Dave Bates
APA President
APA Petition of “no confidence” in AMR Management’s Business Plan Website: May 1, 2012
Click here to view the website.
APA launches petition drive to express 'no-confidence' in American Airlines business plan
Click here to read the story.
APFA Non-members can receive APFA Hotline Messages: May 1, 2012
Click here to receive APFA Hotline messages as a subscription in your email inbox.
Unions say best alternative is AMR-US Airways merger
In a letter to his constituents on Tuesday, the president of the pilot's union, APA, was circulating a petition of "no confidence" in that business plan.
MR and its three primary unions -- the TWU, the Association of Professional Flight Attendants and the APA -- are in the midst of a two-week hiatus in a court battle over the company's bid to abrogate its collective bargaining agreements and impose its own work rules. The sides are allowed to use the two-week window to negotiate consensual deals, but neither the APFA nor the APA were actively bargaining as of Tuesday afternoon, AMR spokesman Bruce Hicks said. "There are no negotiations scheduled at the present with the APA and APFA, although the company remains available to meet at any time and we are anxious to do so," Hicks said. A spokesman for the APFA confirmed that the union was not bargaining with AMR.
Click here to read the story.
APA President's Update (The Right Stuff): May 1, 2012
Fellow pilots,
In 1939, the pilots of American Airlines made history by signing the first-ever collective bargaining agreement between the newly formed Air Line Pilots Association and an air carrier. That agreement, modified multiple times over the years, has lived on continuously for more than seven decades—for almost as long as the history of air travel itself.
After spending much of last week in New York bankruptcy court observing AMR’s lawyers and expert witnesses testify against us, there is little doubt regarding what management intends to do. It is clear to me that AMR’s CEO intends to try to wipe out 70 years of good-faith bargaining with one bang of a gavel. Management’s attitude has been “take it or leave it”—we either give them everything they want, or they’re going to terminate our contract. APA estimates that AMR is demanding nearly a half billion dollars a year in additional concessions—on top of the $660 million a year we already gave nine years ago. It’s not enough that we now earn the same hourly salaries that we did in 1993. Management is now trying to set the clock all the way back to 1939 and force us to start bargaining without an existing contract. Given that the National Mediation Board will not allow us to legally exercise the right to withhold our services, we could be living without a contract for a very long time.
AMR is also seeking the wholesale elimination of a substantial percentage of AA pilot jobs. Management has said they (“only”) intend to lay off 400 pilots, but APA estimates that the actual number of American Airlines pilot jobs at risk of elimination could easily exceed 2,000. When you factor in the unrestricted large-scale productivity increases management demands, combined with the massive outsourcing of pilot jobs built into their business plan, American Airlines would have far more pilots than necessary. The “carrot” of new narrow-body airplanes (which could all be replacements) to be flown at commuter pay rates is a hollow promise.
Let’s put this all in historical perspective. Back in 2001, we had approximately 13,000 pilots. Today, we have around 8,300 active pilots on the property. Within a short period of time if management succeeds in having our contract terminated, our ranks could be less than 6,000.
Management’s goal seems very clear. They want to annihilate our contract, wipe out our unsecured claim and do everything in their power to preempt any attempts for a new management team to assume control. Except for the handful of entrenched managers at AMR, nearly everyone in the airline industry believes that consolidation now is the right way to go. Not since Frank Lorenzo’s actions in the early 1980s has a pilot union had their contract abrogated. After watching this once-proud airline continuously deteriorate for more than a decade because of poor decisions made by management—and knowing how disillusioned our pilots have become—if Mr. Horton succeeds in his goal of emulating Mr. Lorenzo, it would not be surprising if a great many of our pilots were to decide they’ve had enough.
We all know there is an alternative path that is far superior for us, all of American Airlines, the communities we serve and the industry overall. A merger now with US Airways will save jobs, pensions and salaries and provide a much brighter future for American Airlines, our customers and all the airline’s employees.
Everyone should be asking these questions: are the managers who drove American Airlines into bankruptcy the ones to lead us out? How well has the “Cornerstone” plan worked out so far? How well did “convergence” work out? Or the “kick the can” or “limp along” plans? What about “Pull Together-Win Together” or “Flight Plan 2020?” What did AMR management do with the many billions of dollars of concessions we have already provided? Oh, and let’s not forget Performance Unit Plan/Performance Share Plan bonuses and the bankruptcy-proof Supplemental Executive Retirement Plan. All of APA’s advisers are of the opinion that American Airlines’ “Cornerstone” plan will fail and that the current management team is not up to the task of successfully restructuring this company.
Given the backdrop of all that has happened, why are the managers at AMR so steadfast in refusing to do the right thing? It can be summed up in two words: control and money. As many have pointed out before, management stands to make large sums of money if they can remain in control until the company emerges from bankruptcy. It’s a classic case of management entrenchment. Should the personal agendas of a couple dozen people be permitted to jeopardize the futures of 70,000 employees? If you factor in the families and dependents of all those employees and the economic ramifications for all of the communities we serve, many hundreds of thousands of people could be adversely affected by the financial interests of a few.
As stated by writer Steven Pearlstein on April 28 in the Washington Post, “For years now, Corporate America has viewed the bankruptcy court as a blunt instrument by which failed executives and directors can shift the burden of their mistakes onto shareholders, employees and suppliers. The auto industry bailout orchestrated by the Obama administration posed the first challenge to that assumption. Now the unions at American Airlines have taken another step in curbing this flagrant corporate abuse and restoring the rule of law.”
As you may have seen, AMR announced today that Denise Lynn will be replacing Jeff Brundage as Senior Vice President-People. This executive shift had been expected for some time and we do not believe it signals any meaningful change in direction. If anything—since Mr. Brundage will be retained as a consultant to finish what he started—it strikes me as a classic case of rearranging the deck chairs while the deck tilts at an ever-more precipitous angle.
It takes the "right stuff" to run a world-class airline. Unfortunately, I know very few AA pilots who believe that AMR’s management has what it takes. For this reason, the APA leadership has decided to circulate a petition of “no confidence” in management’s business plan. I urge every pilot to add your name to this petition. Click here now to let your voice be heard on the future direction of American Airlines. The time has come for real change.
Captain Dave Bates
APA President
APA Petition of “no confidence” in AMR Management’s Business Plan Website: May 1, 2012
Click here to view the website.
APA launches petition drive to express 'no-confidence' in American Airlines business plan
Click here to read the story.
APFA Non-members can receive APFA Hotline Messages: May 1, 2012
Click here to receive APFA Hotline messages as a subscription in your email inbox.
OP
USA320Pilot
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Pilots unions at American, US Airways meeting Wednesday
Leaders of the pilots unions at American Airlines and US Airways met in Charlotte, N.C., this week. And committees from both unions plan to meet on Wednesday in Dallas to map out the broad outlines of a joint contract
Gregg Overman, a spokesman for the APA said a merger with American would create an opening for US Airways to resolve the US Airways-America West divide, but he acknowledged it would be difficult.
US Airways CEO Parker has said he is focusing on convincing the committee of American's creditors to support a deal.
Click here to read the story.
Leaders of the pilots unions at American Airlines and US Airways met in Charlotte, N.C., this week. And committees from both unions plan to meet on Wednesday in Dallas to map out the broad outlines of a joint contract
Gregg Overman, a spokesman for the APA said a merger with American would create an opening for US Airways to resolve the US Airways-America West divide, but he acknowledged it would be difficult.
US Airways CEO Parker has said he is focusing on convincing the committee of American's creditors to support a deal.
Click here to read the story.
OP
USA320Pilot
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ALPA unit to help American's pilots in contract talks
Click here to read the story.
USA320Pilot's Commentary: May 1, 2012
Today was another day chock full of merger news, which I believe is designed to move the merger forward. APA's petition voicing "no confidence" in AMR management's business plan, the departure of AMR's VP in charge of HR, APA & APFA (the F/A's union) not negotiating with management during the final 12 days before the unions put on their S.1113 rebuttal, the TWU sending its 7 different work groups AMR's last offer without a recommendation, and news that USAPA and APA's Negotiating Committees will meet in Dallas tomorrow.
The Negotiating Committees are going to begin work on a Transition Agreement and a Joint Contract to possibly move around sections of the CPLR, without changing the Term Sheets economics.
I believe each of these actions will make it harder for AMR to emerge from its formal reorganization and APA's Petition of “no confidence” in AMR Management’s Business Plan is a direct effort to influence the UCC before and during its meetings with Doug Parker. It is clear APA supports the proposed merger and the pilots want the UCC to know that the pilots believe AMR's POR is not worth the paper it will be printed on.
In addition, the only professional negotiators available for tomorrow's USAPA and APA negotiating meeting is ALPA's International Pilots Service (IPS). IPS is ALPA's consulting firm lead by Seth Rosen and is the professional negotiators/advisers for Southwest Pilot's Association (SWAPA) and APA; along with pilots group at AirTran (until fully integrated with Southwest), Alaska, Continental, Delta, FedEx, Hawaiian United, and Spirit.
How ironic it would be for USAPA to have no professional negotiators at tomorrow's meeting and APA provide ALPA's professional negotiators and E&FA advisers to the joint APA-USAPA negotiations. After more than four years of failed negotiations leading to the US Airways pilots new contract talks "parked" by the NMB...it appears that ALPA will play a big part in helping the US Airways pilots get out of purgatory, if the merger proceeds.
Click here to read the story.
USA320Pilot's Commentary: May 1, 2012
Today was another day chock full of merger news, which I believe is designed to move the merger forward. APA's petition voicing "no confidence" in AMR management's business plan, the departure of AMR's VP in charge of HR, APA & APFA (the F/A's union) not negotiating with management during the final 12 days before the unions put on their S.1113 rebuttal, the TWU sending its 7 different work groups AMR's last offer without a recommendation, and news that USAPA and APA's Negotiating Committees will meet in Dallas tomorrow.
The Negotiating Committees are going to begin work on a Transition Agreement and a Joint Contract to possibly move around sections of the CPLR, without changing the Term Sheets economics.
I believe each of these actions will make it harder for AMR to emerge from its formal reorganization and APA's Petition of “no confidence” in AMR Management’s Business Plan is a direct effort to influence the UCC before and during its meetings with Doug Parker. It is clear APA supports the proposed merger and the pilots want the UCC to know that the pilots believe AMR's POR is not worth the paper it will be printed on.
In addition, the only professional negotiators available for tomorrow's USAPA and APA negotiating meeting is ALPA's International Pilots Service (IPS). IPS is ALPA's consulting firm lead by Seth Rosen and is the professional negotiators/advisers for Southwest Pilot's Association (SWAPA) and APA; along with pilots group at AirTran (until fully integrated with Southwest), Alaska, Continental, Delta, FedEx, Hawaiian United, and Spirit.
How ironic it would be for USAPA to have no professional negotiators at tomorrow's meeting and APA provide ALPA's professional negotiators and E&FA advisers to the joint APA-USAPA negotiations. After more than four years of failed negotiations leading to the US Airways pilots new contract talks "parked" by the NMB...it appears that ALPA will play a big part in helping the US Airways pilots get out of purgatory, if the merger proceeds.
OP
USA320Pilot
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A Message from AMR Chairman and CEO Tom Horton: May 1, 2012
Dear American Team:
Building the new American includes streamlining our organization to be focused on faster innovation, high performance and accountability. Today we are announcing the completion of the next phase.
As you know, the effort started at the top. The senior leadership team got smaller and better aligned, bringing together related functions. With the third phase of our redesign effort now complete, you will be hearing directly from your respective leaders about the redesign of their organizations and individual changes. Overall, at this point in the process, we have reduced the number of senior positions by 20 percent, and we are well on our way to meeting the objective set forth in our plan.
While cost reduction is not the only goal of our effort, this result demonstrates exactly what we mean by transforming the organization, with lower costs tied directly to working differently, doing things more efficiently, and with a relentless focus on the customer. In short, we are rethinking every aspect of our business as we redesign the organization, breathing new ideas and talent into all functions and levels of the company.
One of the changes that will come as we implement this next phase is the transition of leadership in our HR role from Jeff Brundage to Denise Lynn, who will become Senior Vice President, People. Jeff has served in one of the most challenging roles in our company with great skill, perspective and resolve. When Jeff moves on to the next phase of his career, he will take with him the great appreciation of our Board and senior leadership team. Denise brings to her new role broad experience, but most importantly, a deep commitment to the people of American and the success of our company.
In just a few months, we have made great strides in refreshing and strengthening our senior leadership team. We have gained new perspectives by placing talented people, such as Denise and Chief Information Officer Maya Leibman, in key roles. We have also asked other strong leaders, such as Jim Ream, Senior Vice President Operations; Craig Kreeger, Senior Vice President Customer; Chief Financial Officer Bella Goren; and Chief Commercial Officer Virasb Vahidi, to shoulder more responsibilities in expanded roles. In doing so, we have created a very strong leadership foundation for the future.
As we have discussed before, many other talented and capable colleagues will be leaving the company simply because we need to do more with fewer people in the leaner, faster new American. Each of these colleagues has our gratitude for the enormous contributions made to American over the years and I know you join me in wishing them all the very best in the future.
Redesigning the organization will help accelerate our progress toward profitability and success. Every step increases our clarity of purpose and helps speed decisions in the interest of best serving our customers. When the process is complete, we will be even better equipped to capitalize fully on the extraordinary opportunity before us.
Thank you again for your energy, your commitment, and your hard work as we continue to build the new American.
Sincerely,
Tom
TWU outlines a better bad proposal from American Airlines
Click here to read the story.
Dear American Team:
Building the new American includes streamlining our organization to be focused on faster innovation, high performance and accountability. Today we are announcing the completion of the next phase.
As you know, the effort started at the top. The senior leadership team got smaller and better aligned, bringing together related functions. With the third phase of our redesign effort now complete, you will be hearing directly from your respective leaders about the redesign of their organizations and individual changes. Overall, at this point in the process, we have reduced the number of senior positions by 20 percent, and we are well on our way to meeting the objective set forth in our plan.
While cost reduction is not the only goal of our effort, this result demonstrates exactly what we mean by transforming the organization, with lower costs tied directly to working differently, doing things more efficiently, and with a relentless focus on the customer. In short, we are rethinking every aspect of our business as we redesign the organization, breathing new ideas and talent into all functions and levels of the company.
One of the changes that will come as we implement this next phase is the transition of leadership in our HR role from Jeff Brundage to Denise Lynn, who will become Senior Vice President, People. Jeff has served in one of the most challenging roles in our company with great skill, perspective and resolve. When Jeff moves on to the next phase of his career, he will take with him the great appreciation of our Board and senior leadership team. Denise brings to her new role broad experience, but most importantly, a deep commitment to the people of American and the success of our company.
In just a few months, we have made great strides in refreshing and strengthening our senior leadership team. We have gained new perspectives by placing talented people, such as Denise and Chief Information Officer Maya Leibman, in key roles. We have also asked other strong leaders, such as Jim Ream, Senior Vice President Operations; Craig Kreeger, Senior Vice President Customer; Chief Financial Officer Bella Goren; and Chief Commercial Officer Virasb Vahidi, to shoulder more responsibilities in expanded roles. In doing so, we have created a very strong leadership foundation for the future.
As we have discussed before, many other talented and capable colleagues will be leaving the company simply because we need to do more with fewer people in the leaner, faster new American. Each of these colleagues has our gratitude for the enormous contributions made to American over the years and I know you join me in wishing them all the very best in the future.
Redesigning the organization will help accelerate our progress toward profitability and success. Every step increases our clarity of purpose and helps speed decisions in the interest of best serving our customers. When the process is complete, we will be even better equipped to capitalize fully on the extraordinary opportunity before us.
Thank you again for your energy, your commitment, and your hard work as we continue to build the new American.
Sincerely,
Tom
TWU outlines a better bad proposal from American Airlines
Click here to read the story.
OP
USA320Pilot
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That article is like 2 years old...
im back..!!
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I guess 320 thinks were to stupid to actually read the article. If that dosent show he has an push alpa at all costs agenda, nothing will. Shame on you 320, nothing but yellow journalism, i thought better of you.......
Zone5
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It never ceases to amaze me how top management ALWAYS comes out with an announcement detailing how they are now (crisis management 101) going to start doing a really great job of running the show, once they have their "tit in a ringer". Next will come the announcement that outside high priced "consultants" will be joining the "new" show! My immediate thought when these sorts of pronouncements are made is; Isn't this the sort of thing that you have been being paid for all along and why hasn't this already been done long ago?
I call this the "shared sacrifice" management statement, as they throw 20% of the management team off the train as a gesture of "good faith" to labor. Most of the time it turns out to be too little too late.
seajay
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