Who Should Go?

[TechBoy]

Of course, none of the JetBlue data include the value of the equity that the executives receive. I suspect that would change these calculations.

I'm surprised that the airline industry finds people to work at these salaries. I don't think that there is a VP in my company (and there are more than 100 of them) that makes as little as these guys. Not to mention stock options. Hell, I would come close to taking a pay cut.

I know that none of this is of any comfort to line employees taking big pay cuts right now, but maybe US would be better off if it used some of this money to lure people with actual skills to senior management, rather than the current marketing geniuses.

 

[USA320Pilot]

It’s unfair to compare the size of JetBlue’s management team US Airways’ management team. US Airways is about 7 times as large as JetBlue, in regard to fleet plans. US Airways Group has 413 aircraft and JetBlue has 60 A320 aircraft. JetBlue has about 4,200 employees or about 70 per aircraft and US Airways has about 100 employees per mainline aircraft.

If you really want to look at US Airways' labor cost problem, it’s in headcount. It takes about 30 more employees per aircraft to push a US Airways aircraft off of the gate to make money than at JetBlue, e.g. about 100 US Airways mainline employees per aircraft and about 70 JetBlue employees per aircraft.

US Airways has lost about 250 management positions this year and the management staffing is about the same as Southwest, who is a larger company.

I want to have the best management this airline can attract so the company is more profitable and each employee profit sharing check is higher. As the saying goes "you get what you pay for." Therefore, do the employees want bad management that provides less profits or good management that creates higher profits?

In regards to management concessions, the following information has been made public:

Management Cuts

US Airways will file with the U.S. Bankruptcy Court today the details of reductions in compensation, benefits and workforce for its management and non-union employees as part of their participation in the company’s Transformation Plan. In a letter to the affected employees, CEO Bruce Lakefield said most employees and functions in these groups are paid near market rates for their respective jobs and duties. Compared to the low-cost carriers, however, “US Airways has historically had a generous program in other parts of our compensation package, including health care coverage, vacation/sick leave policies, and pension and retirement programs that have been eclipsed by market changes,†he said.

The overall annual target for participation by management/non-union employees, including all officers, is $45 million (or more than 20 percent of total 2004 payroll costs). To meet the target, US Airways is taking the following actions that will have a direct effect on all management and non-union employees. These savings will be obtained through a combination of pay, pension and benefits changes that will be apportioned in the following way and are consistent with our projected status as a successful low-cost carrier:

Senior Officer team (including the company’s 10 most seniors officers -- executive vice presidents and senior vice presidents)

The company’s senior officers will take the largest cuts in keeping with the commitment to lead the way and transform the compensation of our executives to be similar to that at the LCCs. Effective Oct. 11, additional cuts will be made to the senior officers’ cash compensation. The total cuts to these senior officers’ W-2s will range from 15 percent to 20 percent and average 17 percent, consisting of a 10 percent salary reduction and a 25 percent reduction in the contributions to their existing retirement plans. Earlier this year, all officers, including the senior officers, waived their rights to a pay raise that had been approved in our previous plan of reorganization and was consistent with pay raises that both union and non-contract employees received. Along with cancelled pay raises, the total W-2 cuts for senior officers on average will exceed 20 percent.

Vice Presidents and Managing Directors

Effective October 11, all officers and managing directors will take a pay cut of 7.5 percent. Vice presidents have also foregone their pay raise this year. In addition, the total number of company officers has been reduced by 25 percent, from 35 to 26.

All other management/non-union employees:

Effective Oct. 11, other non-union employees will take a 5 percent pay cut.

Modification to Pension Plans

Effective with the payroll cycle beginning Oct. 11, US Airways will modify its defined contribution retirement plans for non-contract and management employees. Contributions to the Employee Pension Plan, known as the Base Account, will be set at 3 percent of salary for all employees regardless of age. Employee contributions to the 401(k) plan will not be affected, but the company match will be eliminated. Current vested balances will remain in place and unvested balances will continue to vest according to the Plan schedule. Investment options for both the 401(k) and Base Accounts will remain unchanged.

Workforce Reduction

We will reduce headcount by more than 10 percent from the total number of employees who were in place at the beginning of the year. Among the ways we have and will continue to reduce the workforce are not filling open and budgeted positions, outsourcing of work where appropriate, elimination and consolidation of positions, and in certain cases, outright reorganization of entire departments. We have already started this process and will have it completed by the end of October.

Paid Time Off (PTO) system

Effective Jan. 1, 2005, the current sick and vacation accrual system for management and non-union employees, including all officers, will be converted to a PTO system. All leave will be accrued under a single category and the number of paid holidays will be reduced. A summary of the new PTO system is presented below.

Service Paid Time Off Holidays Total

1 – 5 years 15 days 8 23
6 – 11 years 20 days 8 28
12 plus years 25 days 8 33

Holidays observed will be New Year’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Christmas Day and two floating holidays. Additional details regarding the conversion from the current system to PTO will be available on theHub shortly.

Modification to Retiree Benefits

Effective Jan. 1, 2005, US Airways will make changes to retiree medical, dental, and life insurance benefits. Complete details regarding these changes will be forwarded to those who could be impacted and will be available on theHub.

Hiring Moratorium

Effective immediately, we will implement a hiring moratorium covering management, administrative, and crew scheduling employees. Only those positions deemed critical to the success of the Transformation Plan will be filled. All other open positions will be eliminated. Further replacements will be considered for backfill only after a complete justification has been approved by the senior officer team. No new positions will be created without an exception from the Chief Executive Officer. If we need to fill an approved position, we will focus our efforts on internal candidates. External hires will be permitted only if there are no fully qualified internal candidates.

Profit sharing

All employees will be offered an opportunity to participate in the profit sharing plan previously announced, subject to various approvals required by the bankruptcy process. We are also examining the possibility of providing some form of equity for employees who participate in the Transformation Plan. More details will become available as we move through the bankruptcy process and actively work toward emergence.

Regards,

USA320Pilot

 

[ClueByFour]

I want to have the best management this airline can attract so the company is more profitable and each employee profit sharing check is higher. As the saying goes "you get what you pay for." Therefore, do the employees want bad management that provides less profits or good management that creates higher profits?

[post="201207"][/post]​

So you support the sacking of the entire executive suite at CCY? For the most part, the same group of people has now ridden the airline into the ground. Twice.

Executive compensation should be pay for performance, in the form of large portions of executive compensation coming in the form of equity. It's been noted in this thread and elsewhere that Jetblue and Southwest and America West execs are not getting rich on their cash compensation or their retirement or golden parachutes--they are getting rich because their performance drives up the value of the stock based compensation they receive.

The employee/aircraft ratio is a strawman--Jetblue is not a hybrid (p-t-p/hub-n-spoke) operation. When and if US becomes strictly a point to point carrier, only then will your comparison have any meaning.

 

[Dont call me Shirley]

It’s unfair to compare the size of JetBlue’s management team US Airways’ management team. US Airways is about 7 times as large as JetBlue, in regard to fleet plans. US Airways Group has 413 aircraft and JetBlue has 60 A320 aircraft. JetBlue has about 4,200 employees or about 70 per aircraft and US Airways has about 100 employees per mainline aircraft.

[I won't pick a fight with you a over a director's 7.5% cut (after a probable 4% raise) compared to my 21% - soon to be 35% - cut.] The main point of Mr McCorkle's article was not the number of veeps at eachine, but the pay for comparable positions.

 

[USA320Pilot]

LCC expansion & Internet booking to reduce yield and security and fuel costs had nothing to do that "the same group of people has now ridden the airline into the ground. Twice."

Every legacy carrier is experiencing record losses due to rapidly changing fundamentals, which are not the fault of any legacy carrier manager or employee.

I find it interesting how some union harliners and their supporters look at issues such as fuel prices as management's fault versus looking at the real problem.

What's is it truly called? Denial...

I believe every employee at the airline should be paid incentive pay for performance versus hourly pay. This might stop sick calls for employees who believe this benefit is an extension of vacation time.

Regards,

USA320Pilot

 

[USA320Pilot]

On top of the $1 billion in labor concessions, US Airways also has identified $275 million in nonlabor cuts, according to bankruptcy documents.

At the top of the list are management payroll cuts of $65 million -- up from $45 million it disclosed a few months ago -- achieved by cutting executive and management salaries 5 percent to 10 percent and eliminating 10 percent of the nonlabor work force.

The company warned in bankruptcy documents Friday that management pay has to keep pace with the rest of the industry if it has any hopes of retaining key personnel.

Through October, according to the company, more than 250 management and administrative employees had left the company, with 20 percent of them taking positions at other airline companies, "most at higher pay."

US Airways said it needed to balance its desire to "share the pain" with the "market reality" of what is necessary to keep managers, adding, "Substantial departure of management employees could cripple" the airline.

See Story

Regards,

USA320Pilot

 

[ClueByFour]

LCC expansion & Internet booking to reduce yield and security and fuel costs had nothing to do that "the same group of people has now ridden the airline into the ground. Twice."

Every legacy carrier is experiencing record losses due to rapidly changing fundamentals, which are not the fault of any legacy carrier manager or employee.

Were Airtran, JetBlue, and Southwest around when the company exited bankruptcy the first time? Yes. (let's not forget that the "new" phenomenon of Southwest "expansion" had run US out of California in the early 1990s and BWI in the late 1990s).

Were they expanding? Yes. (remember that Airtran, for instance, had already made a small run at PIT 2 or 3 years ago).

Security costs are bunk--US, like everyone else, passes them all along to the consumer.

Has internet booking and price transparency been around for years? Yes. (this third item is the biggest bunk I've ever seen--I've been purchasing as much travel in a year as the average US employee makes since before 9/11 using the price transparency available online, as has a large portion of the business world).

These problems did not manifest themselves since the last bankruptcy. You can repeat that mantra until you are blue in the face, and it won't change the fact that the LCCs, their expansion, and price transparency were quite evident during the first trip thru bankruptcy. Ergo, "the same group of people who has ridden the airline into the ground. Twice."

I find it interesting how some union harliners and their supporters look at issues such as fuel prices as management's fault versus looking at the real problem.

Fuel is the only thing that's not directly the fault of the folks in CCY. Blowing a few billion on RJs instead of hedging fuel, however, was. Add up all the money blown on non-E-jet RJs, and ponder how nice it would have been to have spent that on hedges at $30/bbl.

What's is it truly called? Denial...

I believe every employee at the airline should be paid incentive pay for performance versus hourly pay. This might stop sick calls for employees who believe this benefit is an extension of vacation time.

Are you nuts? Anyone who flies, fixes, or is anyway involved in the safety of the aircraft's operation can't be paid by "performance" as it would incent individuals to cut corners in the name of profits--witness the flaps-out landings and other sundry emergencies experienced by the airbus equipment overhauled in Alabama.

Ultimately, US is going to fail because the best workforce in the history of air travel is going to refuse to work for the wages in question--for the most inept management in the history of air travel.

If US had competent management, I suspect the situation would be different. However, there is little point about giving a fool another bullet with which to shoot his foot, and that's exactly what any further concessions to the current management team accomplishes.

US Airways said it needed to balance its desire to "share the pain" with the "market reality" of what is necessary to keep managers, adding, "Substantial departure of management employees could cripple" the airline.

Had that (the massive exodus) already taken place, perhaps more competent talent could have been brought in, and the estate saved. Alas, US is stuck with the cruft currently running the joint into the ground. Twice.

 

[USA320Pilot]

ClueByFour:

With all due respect, as an angry outsider, who probably has his own problems, you should really change your name to ClueLessByFour.

By the way, professionals do not cut corners, they do not call in sick when they are healthy, and they always provide their best performance, regardless of circumstances. I'm not surprised you do not understand this considering your message board posts. It's called personal pride.

Were you laid off from the Steel Mills too?

Respectfully,

USA320Pilot

 

[Finish or Ignore]

LCC expansion & Internet booking to reduce yield and security and fuel costs had nothing to do that "the same group of people has now ridden the airline into the ground. Twice."

Every legacy carrier is experiencing record losses due to rapidly changing fundamentals, which are not the fault of any legacy carrier manager or employee.

I find it interesting how some union harliners and their supporters look at issues such as fuel prices as management's fault versus looking at the real problem.

What's is it truly called? Denial...

Regards,

USA320Pilot

[post="201217"][/post]​

W&G's powerpoint roadshow CLEARLY pointed out the onslaught of the LCC carriers. They: Meaning HIGHLY compensated W/G and other legacy carriers let the good economy lull them into doing NOTHING. Now drastic changes must be made and the brunt of it must come from my wallet. I do see denial. Denial by you to put some accountability where it belongs. Chill with the internet/hardliners/fundamentals bulls**t! You are management material or perhaps a politician.

 

[ClueByFour]

ClueByFour:

With all due respect, as an angry outsider, who probably has his own problems, you should really change your name to CluelessByFour.

By the way, professionals do not cut corners, they do not call in sick when they are healthy, and the provide their best performance, regardless of circumstances. I'm not surprised you do not understand this considering your message board posts. It's called personal pride.

Were you laid off from the Steel Mills too?

Respectfully,

USA320Pilot

[post="201226"][/post]​

I'd say "don't shoot the messenger" to you, but that's too easy.

And no, I'm not a former steelworker. Your very job depends upon a few key components that my firm makes (and, since we are a bit smarter than the average creditor, have been selling to US on a Net-0 payment status for 6 or 8 months). So, I do have a dog in the fight in a sense--we'll have to go and find someone else to sell our stuff to and I'll have to find an airline whose employees don't treat me as well. The fundamental point is that I'm not running around urging others (thru the poor use of very rudimentary propoganda techniques) to toss their dignity, expectations, and first born under the bus to keep selling stuff to US, even though it might materially impact my finances (never addressing the point that you attacked me rather than address--to toss said stuff in front of the bus to give the folks who drove the place into the ground twice another crack at the apple).

As for professionals, why is ALPA's motto "schedule with safety?" Why have the union? Could it be that without it, people might be incented to cut corners in persuit of profits? Naaah.

As an aside, I do find the trend of attacking the poster (another one of those poor propoganda techniques) amusing--it's amazing how often certain posters will fall back on such a tactic when completely unable to respond in a coherent or effective manner. But keep trying the "clueless" thing. It's amusing, childish, a poor effort at a personal attack, and making me wonder if US offeres remedial CRM training during those recurrent checks.

 

[ELP_WN_Psgr]

I never thought I would read something posted by an individual ostensibly in charge of driving a multi-million dollar metal tube through the air that contained less truth and was more outrageously stupid than the tv sitcom "My Mother The Car."

But now I have.

By the way, professionals do not cut corners, they do not call in sick when they are healthy, and they always provide their best performance, regardless of circumstances. I'm not surprised you do not understand this considering your message board posts. It's called personal pride.

The professional management teams have run your airline into the ground. repeatedly. There are other airlines out there. Some are making money. Most are in much less dire financial straits. Your management team has failed. F-A-I-L-E-D. In another era they would slink off after having to take a bankruptcy and defenestrate themselves or somehow or another "do the right thing." Creditors, shareholders, and employees would not be forced to sit idly by as they continue to pour more money down a rathole with their foolishness. If the management at USAirways has personal pride in what they have wrought, I would sincerely hate to see what they might be ashamed of.

At the top of the list are management payroll cuts of $65 million -- up from $45 million it disclosed a few months ago -- achieved by cutting executive and management salaries 5 percent to 10 percent and eliminating 10 percent of the nonlabor work force.

The company warned in bankruptcy documents Friday that management pay has to keep pace with the rest of the industry if it has any hopes of retaining key personnel.

WalMart is the leading retailer in the world. We can all argue over whether that is good or bad. But one thing they have had and continue to have.....is creative leadership. WalMart's President/CEO....when he goes on the road.....shares a $49 hotel room with one of the VPs. All WalMart employees traveling are required to "bunk up" to cut down on travel costs. I know for a fact that WN management used to ride "4th hostess" when a flight was full and they were on a business trip...better to have the revenue. It's all about leading by example. The goons at the top of your food chain have never learned it nor will they. My response to the folks claiming that "we have to pay a few bucks more to retain our wonderful management personnel at USAirways" would be to tell those inclined to leave to "not let the door hit them in the butt on the way out." You couldn't run an airline any worse than you have....if you were to lay out a poster board with various courses of action written in marker.....and select and adopt the one a blind chicken might peck at.

I believe every employee at the airline should be paid incentive pay for performance versus hourly pay. This might stop sick calls for employees who believe this benefit is an extension of vacation time.

This starts at the top. let your President/CEO and Vice Presidents of this, that, and the other all work at the pay of the most junior FA on premises and give them a gazillion dollars of stock options if they manage to turn it around. The real issue, as I see it, is they are gonna make their money one way or the other....they have no vested interest in the company succeeding. If I was a shareholder in the firm I would be looking long and hard at the laws about malfeasance and failure of management to exercise prudent fiduciary responsibility.

I want to have the best management this airline can attract so the company is more profitable and each employee profit sharing check is higher. As the saying goes "you get what you pay for." Therefore, do the employees want bad management that provides less profits or good management that creates higher profits?

Not a bad goal. But if you want the best management you can find, you'd have to start by getting rid of the ones you have. You'd do just as well with hiring a Pres/CEO from Kelly Girl or some other temp firm. In fact, based upon their longevity (although not by their compensation) I would say several of your recent leadership (and I use that term loosely) have been temp hires. Profit sharing? Don't make me laugh. What makes you think that management would share anything...and I do mean anything....with any of the rank and file? All the contracts abrogated...there's no reason to abide by any of the promises made under duress. A more reasoned, rational approach...would be profit sharing combined with snap backs if and when things improve. I don't seem to recall seeing anything in any of the proposals about snap backs.

There is always something wrong when people do things that aren't right, that aren't honorable....simply because they can. Had the management of USAirways been honest and upfront with their folks..."this is what we need, and this is what we're going to do.......we will make sacrifices greater than or equal to the rank and file to turn it around." then I imagine that the employee groups would have gotten on board....some more gladly than others....but when there is some trust and sense of shared sacrifice, people do what they have to do. Such was not the case. These guys hosed the shareholders (again), some creditors (ditto), and insisted on healthy sacrifice from the employees while demonstrating their unwillingness to participate in the sacrifice equitably.

What would I do? I'd shut it down. Strike, self help, work actions, whatever you want to call it. The company's situation is precarious at best. They know and you know and we all know a strike would fatal. I think I would go ahead and kill it. I realize you can't eat high moral principles and sometimes being right don't pay the house note. But sometimes one has to suck it up and do what is right, the consequences be damned.

 

[D M G]

Contrast that with AA, where one agent is the minimum, and two (plus a lead if needed) as the maximum... Both are Sabre users, so you can't say the automation is more complex for US....

[post="201172"][/post]​

No, but I can say that I'm talking about the ramp and not inside.

 

[Finish or Ignore]

I never thought I would read something posted by an individual ostensibly in charge of driving a multi-million dollar metal tube through the air that contained less truth and was more outrageously stupid than the tv sitcom "My Mother The Car."

Good post ELP.. These type of individuals can also be vice presidents in large corperations.

 

[High Iron]

In deference to bandwidth, I seldom post "what he ( or she ) said" posts, but I've got to tip my hat to such adroit and fun to read dissections by Cx4 and ELP WN Psgr. No stone left unturned....though, it'll be either maddening or curious to see a certain poster, having being beat to a bloody pulp ( yet again...and again ), stagger to his feet again and take wild, aimless swings. And on it goes...............

 

[USA320Pilot]

Clue:

The fallacy in your argument is that US Airways' route network, developed by Ed Colodny, can no longer support legacy carrier pay, benefits, and work rules. Do I like it? No, of course not.

The company's hub and spoke network with poor O&D hubs in CLT & PIT, PHL issues, relatively high PIT operating costs, a hemmed in route network, and very high labor costs all contribute the problem. Then have a relatively high percentage of short haul flights, which increase costs, and enormous merger integration issues to deplete cash, and you have a money loser.

The secular shift in passenger booking habits who prefer low cost quality service cannot support US Airways' high operating costs.

To look even deeper into the problem... what is US Airways' number one labor problem? Work rules and a lack of productivity because of the employee to aircraft ratio. It is not competitive with the LCC's, period.

Either US Airways transforms itself into a LCC/network carrier hybrid, with its employees and management directly confronting the issues, or you will have to peddle your goods elsewhere. It's really quit simple. Denial does not work.

Best regards,

USA320Pilot