I agree Mikey
I have heard flight attendants say that unless they offer them at $500,000 they won't consider retiring early.
In what planet are these people living?
Voluntary Options Opening
- Thread starter jimntx
- Start date
I agree Mikey
I have heard flight attendants say that unless they offer them at $500,000 they won't consider retiring early.
In what planet are these people living?
Kev3188
Veteran
I agree with you both, but for every 1 of the examples you listed, I'll bet there's at least an equivalent number who would jump if the right "trigger" was there. Maybe it's $$$, maybe it's decent retiree medical, maybe a combo of both. Will they get 5k? 500? I have no clue, but none of us will really know until something is presented. Are Glading and co. doing any kind of surveying to see what would pique people's interest in an early out?
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
- Banned
- #18
Given that the company is in the position of laying off as many people as it wants and doesn't have to ask the court's permission to do so, there is little incentive for them to offer any early out packages at all. Unlike UA which is offering some packages as part of a merger, AA can force the changes it wants.
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Yes, there are a whole lot of senior people who are retiring but the biggest factor that weighs against alot of retirements is that AA's philosophy in restructuring its CBAs is to not cut pay but instead increase productivity. There are many senior FAs in the US industry and they do what they do because they like what they do - and have nothing else to do if they quit. Probably already on Medicare, most of the tactics that can be used to force younger workers out won't work.
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Yes, there are a whole lot of senior people who are retiring but the biggest factor that weighs against alot of retirements is that AA's philosophy in restructuring its CBAs is to not cut pay but instead increase productivity. There are many senior FAs in the US industry and they do what they do because they like what they do - and have nothing else to do if they quit. Probably already on Medicare, most of the tactics that can be used to force younger workers out won't work.
Kev3188
Veteran
Nobody said anything different. I'm asking what the APFA will bring back to the table.
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
- Banned
- #22
Unfortunately for the unions, 700, their ability to have much if any influence ended Nov 30, 2011 or whatever day AA filed.
You and others are well aware that the unions will do what they can to appear to try to soften the blow but ultimately the company will get what most if not all it wants. And there is still broad latitude in AA's CBAs to work w/ fewer people anyway... that has been said here for years among those that acknowledged that AA was overstaffed based on their 2003 assumption that other carriers would fail and AA would grow into their then-new sized workforce.
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Given that even early out/retirement packages cost money, there will not be a huge appetite for those that remain to subsidize the exit plans of those that leave...
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Perhaps you, Kevin, can share historical examples with us to the contrary but I doubt very seriously that the unions will divert much of any of their "budget" toward early outs.
You and others are well aware that the unions will do what they can to appear to try to soften the blow but ultimately the company will get what most if not all it wants. And there is still broad latitude in AA's CBAs to work w/ fewer people anyway... that has been said here for years among those that acknowledged that AA was overstaffed based on their 2003 assumption that other carriers would fail and AA would grow into their then-new sized workforce.
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Given that even early out/retirement packages cost money, there will not be a huge appetite for those that remain to subsidize the exit plans of those that leave...
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Perhaps you, Kevin, can share historical examples with us to the contrary but I doubt very seriously that the unions will divert much of any of their "budget" toward early outs.
I think the info has been misunderstood. 5000 Fa's are "eligible" for retirement.... Nothing said about they are ready or prepared to retire.
I have to disagree! There is an incentive to get the older/senior FA's off the books and hire new blood. New FA's at the bottom of the pay scale, healthy young adults who do not drain the health care budget, etc.... In the end, a buy out will save money. UA and DL have both done this. AA needs to get on the buyout band wagon.
Kev3188
Veteran
NWA, 2006.
1000 early out offers to the members covered under the ramp/stores agreement, and 100 per year made available in each subsequent year. This has been explained to you before.
No one said the APFA would be paying for it; only that they need to explore it as an option to mitigate potential invol. furloughs, and bring it back to the table.
^Yes^
The company is proposing to end retiree medical. No one will be able to retire till they are at least 65 and
eligible for Medicare.
And How many do we have that are 65 and over??? Their retirements could save several hundred jobs or more I would imagine!
Kev3188
Veteran
Them proposing it doesn't mean it ultimately has to come to pass. What we did was vote in language called "blended" retiree medical, which was a cute way off saying that the premiums of those still active helped offset the costs of the retirees. Sounds like a sh*tty deal, but wasn't. In fact, even with the increase, we (active employees) were covering on average 15% of our health care costs. AA wants you to pay 23%.
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
- Banned
- #29
Kev,
I knew there were early outs as part of the post BK CBA but I do not recall that the IAM negotiated early outs during BK.... perhaps you said it before and I missed that detail. That's why I asked and that's why we are discussing it.
If the IAM negotiated those kinds of early outs, then they proved their value... but remember that DL was offering early outs about the same time to its non-contract employees. There was some precedent that all job reductions didn't have to be involuntary.
Of course there is an incentive to get older FAs off the books and replace them w/ newer ones who are lower on the payscale and also who use less health care - which AA will stay pay for active employees.
But I believe that for a working employee who is on Medicare, Medicare becomes the primary insurance coverage so health care costs to the company for a senior FA who is on Medicare might actually be lower than it would be for an active employee for whom AA provided insurance is primary. I'm sure someone will correct me if I am wrong.
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But even apart from medical costs, the vast majority of AA's employees are at top of scale now because AA has had little growth.... they could move out the top X number of people and replace them w/ lower cost employees but they get a far bigger and faster cost reduction by targeting cost cuts across all ages....
It still holds that the productivity and benefit changes that AA is proposing will go straight to the bottom line very quickly.
Regardless, it still costs money to offer some sort of voluntary package.... esp. if there is cash involved as UA is doing now and other programs in the industry have done.
Subsidized health care costs money - in the case noted by Kev, the union decided to subsidize the cost of those who were leaving... it is far from certain that another group would choose to do that even if spreading the pain is the "union thing" to do.
Further, AA's cost advantage really kicks in when they start growing w/ lower costs. They can hire new people at off the street wages. DL's int'l growth brought with it a need for new hires (in part due to language requirements) and the lower incremental cost growth pushed down DL's CASM. While DL's int'l growth largely came from 767s and 777s which still have industry standard or better costs for the missions they fly, AA wants to best DL's plan by growing its domestic network w/ lower cost aircraft although the domestic network will face a lot more competition than DL faced in its international expansion.
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I hope that the unions at AA do have some ability to rearrange the components of AA's cuts as Kev has noted NW's unions were able to do....
but let's also not forget that AA is negotiating with its non-contract personnel on what matters to them and is very likely to make it clear that they will be more responsive to the needs and desires of the non-represented group than they will be to the unionized employees.
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AA will not miss the opportunity to make it clear that its preference will be to deal with its employees directly and manage its business as it sees fit to do so.
I knew there were early outs as part of the post BK CBA but I do not recall that the IAM negotiated early outs during BK.... perhaps you said it before and I missed that detail. That's why I asked and that's why we are discussing it.
If the IAM negotiated those kinds of early outs, then they proved their value... but remember that DL was offering early outs about the same time to its non-contract employees. There was some precedent that all job reductions didn't have to be involuntary.
Of course there is an incentive to get older FAs off the books and replace them w/ newer ones who are lower on the payscale and also who use less health care - which AA will stay pay for active employees.
But I believe that for a working employee who is on Medicare, Medicare becomes the primary insurance coverage so health care costs to the company for a senior FA who is on Medicare might actually be lower than it would be for an active employee for whom AA provided insurance is primary. I'm sure someone will correct me if I am wrong.
.
But even apart from medical costs, the vast majority of AA's employees are at top of scale now because AA has had little growth.... they could move out the top X number of people and replace them w/ lower cost employees but they get a far bigger and faster cost reduction by targeting cost cuts across all ages....
It still holds that the productivity and benefit changes that AA is proposing will go straight to the bottom line very quickly.
Regardless, it still costs money to offer some sort of voluntary package.... esp. if there is cash involved as UA is doing now and other programs in the industry have done.
Subsidized health care costs money - in the case noted by Kev, the union decided to subsidize the cost of those who were leaving... it is far from certain that another group would choose to do that even if spreading the pain is the "union thing" to do.
Further, AA's cost advantage really kicks in when they start growing w/ lower costs. They can hire new people at off the street wages. DL's int'l growth brought with it a need for new hires (in part due to language requirements) and the lower incremental cost growth pushed down DL's CASM. While DL's int'l growth largely came from 767s and 777s which still have industry standard or better costs for the missions they fly, AA wants to best DL's plan by growing its domestic network w/ lower cost aircraft although the domestic network will face a lot more competition than DL faced in its international expansion.
.
I hope that the unions at AA do have some ability to rearrange the components of AA's cuts as Kev has noted NW's unions were able to do....
but let's also not forget that AA is negotiating with its non-contract personnel on what matters to them and is very likely to make it clear that they will be more responsive to the needs and desires of the non-represented group than they will be to the unionized employees.
.
AA will not miss the opportunity to make it clear that its preference will be to deal with its employees directly and manage its business as it sees fit to do so.
WyomingIan
Newbie
- Nov 30, 2011
- 11
- 3
To save jobs, APFA would like to see some kind of a buy out. The reason that I don't see this happening is pure economics.
Let's say that ### senior f/a's took the buy out at whatever price.
You have now removed ### f/a's at max pay but you still have 950 former TWA f/a's who are sitting at the bottom of the seniority
list making max pay. The problem doesn't go away.
AA has been saying that they would like to hire 2000 new flight attendants.
It costs AA $3,059,000 per month in base pay for the bottom 950 f/a's.
It would cost AA $2,833,600 to pay 2000 new hires in base pay per month.
I'm not saying that this is right, I'm just pointing out the numbers.
Let's say that ### senior f/a's took the buy out at whatever price.
You have now removed ### f/a's at max pay but you still have 950 former TWA f/a's who are sitting at the bottom of the seniority
list making max pay. The problem doesn't go away.
AA has been saying that they would like to hire 2000 new flight attendants.
It costs AA $3,059,000 per month in base pay for the bottom 950 f/a's.
It would cost AA $2,833,600 to pay 2000 new hires in base pay per month.
I'm not saying that this is right, I'm just pointing out the numbers.
