Just A Thought

Oct 31, 2003
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Could the companies posturing in the current pilot negotiations be a spillover, from the farming out of the heavy Airbus checks ?

If the company were to lose this arbitration on the farmout issue, they will be left with egg on their face and have very little wiggle room to still take it from the mechanic and related. Unless there is a motion in chapter 11 to ask that this be done.

So, if the company is intent on ridding themselves of heavy maintence (inhouse) and the feeling, is the arbiter will render a decision favorable to the union, why negotiate in good faith with the remaining labor groups, knowing they will file to take the maintenance anyway. They can also ask for motions on the items the other unions and company can't agree upon all in one shot. The company will claim they let the unions know they needed these concessions to survive. Will the court aprove this, anybodys guess.

But, at first the company claimed they didn't have the tooling to do the checks. When that was disproved the company then relied on the lack of facilities arguement, which was also disputed. So the track record of being forthright is lacking.

Below is an excerpt of the company news release, when it was announced that the work was being farmed out. Even though the company claims lack of tooling and facilities, it goes on to say, it would explore options to do work in house and in addition explore third party maintenance for other carriers. Sounds like speaking out of both sides of the pie hole.

This press release would have come out early October 2003. Now, I'm sure the IAM would jump at the chance to have more work for it's membership. So here we sit almost a year later and nothing has been said about this additional work. The arbiters ruling should be out within the next 2 weeks.

Again alot of ifs, but logical ????

US Airways today informed the International Association of Machinists (IAM) that it will contract with ST Mobile Aerospace Engineering, Inc. (Mobile Aerospace) located in Mobile, Ala., for the overhaul of only 10 Airbus narrow body aircraft that are due for heavy maintenance checks this fall. The airline will continue to explore with the union the assignment of future Airbus heavy maintenance work.

The airline lacks existing facilities and equipment to complete the scheduled maintenance required by Airbus and the Federal Aviation Administration (FAA). US Airways said that it will work with the IAM to immediately look at all options and to determine whether a cost-effective new facility and other adjustments can result in future maintenance on these aircraft to be done in-house. However, no furloughs or layoffs will result from today’s announcement.

Discussions regarding future Airbus work being brought in-house is supported by an agreement US Airways reached with the IAM in June that resulted in a Federal Mediation and Conciliation Service grant to fund a labor-management committee to identify such opportunities. “The issue of how to manage existing maintenance activity and how to incorporate new lines such as this Airbus maintenance is a perfect opportunity for the union leadership and the company to team up,â€￾ said John Prestifilippo, US Airways senior vice president-maintenance operations. “We will need to look at whether there are economically-feasible facilities and work adjustments that may lead to either the Airbus maintenance to be brought in-house or other maintenance activities that can be done on a contract basis for other airlines.â€￾
 
My understanding is that the bankruptcy judge has two options only: (1) throw out the contract en toto or (2) keep it intact. No judge is going to pick apart a labor contract clause by clause... they simply don't have time. The company is taking a gamble if it is only filing to throw out labor contracts because the argument from labor will be we've been through it before. If the company wants to throw out labor contracts, it should have done it in Chapter 11 version 1. In addition, we all have 1113 letters which I would argue applies now. The further argument is "not only did we give once and get the 1113 letters, but we then gave again.
 
Dcaflyer I didn't mean to imply a chp 11 filing just for the removal of heavy inhouse. I agree the company will ask to set aside the current contract in total. But also the company can do the same for all parties involved.

So, by toying with the pilots especially, with the reports that have been leaked to the media about the company not negotiatingin good faith, but continuosly asking for more as time drags on , what is the motive ??? Again, could it be the company feels they are going to lose the arbitration on the airbus ???
 
I honestly believe the motive is management doesn't know what it's going to do and doesn't want to lock itself into labor contracts and 1113 letters it can't get out of.
 
You keep forgetting, the laws were changed iin 1983, if and when the company files, the judge will order the two parties to negotiate, they have to negotiate for at least 30 days before an abrogation motion can be filed.

The judge only rules yes or no to the abrogation and then enacts terms the company files for in the motion as new "contracts".

Levine also went over all the procedures and steps in the bankruptcy codes. One item she covered in depth is the 1113 letter, which refers to the section of code that ensures that a company negotiates with the union before they seek abrogation of the labor agreement. When a company seeks protection, the agreement remains in effect. When a union negotiates an 1113 letter it secures an agreement with the company showing that the company will not seek further cuts from labor. To this date, no company that has had an 1113 letter negotiated has ever asked the court to abrogate it.

Companies that request abrogation of the labor agreement but it must meet the following nine (9) distinct requirements:

1. The debtor in possession must have made a proposal to the union.
2. The proposal must be based upon the most complete and reliable information available at the time of the proposal.
3. The modification must be necessary to permit reorganization.
4. The modification must provide that all affected parties be treated fairly and equitably.
5. The debtor must provide the union with such relevant information as is necessary to evaluate the proposal.
6. The debtor must have met with the collective bargaining representative at the reasonable times subsequent to making the proposal.
7. The debtor must have negotiated with the union concerning the proposal in good faith.
8. The union must have refused to accept the proposal with good cause.
9. The balance of the equities must clearly favor rejection of the agreement.

Levine also noted that bankruptcy is not the preferred course for your contract.
 
To this date, no company that has had an 1113 letter negotiated has ever asked the court to abrogate it.

So, does the IAM have a S1113 letter from the last BK...??
 
No 1113 has been abrogated, but that is because the company and unions have reached an new agreements, IE UAL Retiree medical insurance, and the S1113 are from the bankruptcy are not valid anymore.
 
I believe you guys are on the right track, I do not see Bronner commiting to anything until the Airbus Arbitration is settled. I find it ironic that Bronner is the one thats "dragging his feet".
 
I'm confused....

Does the IAM have a S1113 letter on file or not, or is it a part of a negotiated BK filing...???

Also, does any the last BK S1113 letters count on future BK filings..??
 
I would think that usair would tell the judge that they tried to negogiate in good faith and may try to show proof of it but i dont know.
 
like you said.."earliest"...day to day i get queried as to when he will decide and the common assumption is it will come down on the 31st.....thats not entirely correct...he is under no obligation for the 31st.
 
dell,

In keeping with the thread title "Just a thought"...

I know it's not supposed to influence the arbitrator, but any thoughts on the possibility that the company's financial condition might have an effect on the decision (possibly abeted with some behind the scenes discussions)?

Hope it goes in your favor...

Jim
 
Jim,

Speculation is that he will split the baby.

Award the IAM the scope language violation, but award no monetary damages.

I know after the hearing was over the company asked for an executive session to discuss damages.