$41 million is the magic number

stlslim

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Aug 20, 2002
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Wing -

Not to put too fine a point on it, but I agree with you. There is a national embarrassment here, but I think we disagree on what it really is.

Oh yeah, the tax payment was part of the $41 million.
 

AAObserver

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Apr 18, 2003
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Once again Wing, you don''t know what you''re talking about.

This was not a "slush" fund (give me a break!). It''s a tax deferred pension fund (which is underfunded)that holds funds that are already earned.

Maybe you''re mad because you don''t have that pension, but you aren''t the CEO or on the executive team of a fortune 500 corporation either.

And since Carty has ruined AA as you claim, I guess that means all the CEOs of every major full service airline are incompetant as well since they are all losing money.

That''s it. 9/11, the economy, the war, and SARs have nothing to do it -- these CEOs are all incompetant.
 
OP
S

stlslim

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Aug 20, 2002
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On 4/22/2003 4:05:16 PM TWAnr wrote:




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On 4/22/2003 3:43:50 PM KCFlyer wrote:


41 million translates into $338 per emplyee.  Yep, that''s worth killing the company over.

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$41,000,000.00 is $35,000,000.00 more than the paltry $6,000,000.00 the company is saving, according to its own figures, by stealing the furlough pay from the soon to be laid off flight attendants.

Just to put a feather in their cap, it became known today that effective with the May 1 furloughs, management arbitrarily reduced the subsidized COBRA payments from 90 to 30 days.

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Before you slam management to hard, remember, it was the union that decided to eliminate the furlough pay provision from the new TA. Even in the list of cuts provided to the union if the company had to go into bankruptcy, furlough pay was reduced by only 50%. Mr Ward and company chose to eliminate this option as a way to get to the dollar figure the company needed in concessions.

Maybe this is why we have all the hoopla now over $41 million. The union doesn''t want the membership to focus on the choices and decisions it made in the negotiations.
 

TWAnr

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Aug 19, 2002
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On 4/22/2003 3:43:50 PM KCFlyer wrote:


41 million translates into $338 per emplyee. Yep, that''s worth killing the company over.

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$41,000,000.00 is $35,000,000.00 more than the paltry $6,000,000.00 the company is saving, according to its own figures, by stealing the furlough pay from the soon to be laid off flight attendants.

Just to put a feather in their cap, it became known today that effective with the May 1 furloughs, management arbitrarily reduced the subsidized COBRA payments from 90 to 30 days.
 
OP
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stlslim

Member
Aug 20, 2002
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In today''s NYTimes, Edward Wong wrote an article that gave the magic number. The number that was so secret. The number that everyone wants to know. AA contributed $41 million to the executives pension fund.

So -

The bottom line is:

1. You don''t trust management.

2. You don''t want the retention bonuses to stay. (They went away.)

3. You are willing to take $500 million in additional cuts by placing the company in bankruptcy because it spent $41 million to partially fund a retirement plan for executives at a level below the the funding level of the retirement plans for the rest of the employees. (And the $500 million number is being dictated, not by the company, but by the folks who will lend it the money to get through bankruptcy.)

Makes perfectly good sense to me.
 

WingNaPrayer

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Aug 20, 2002
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Now, put yourself in place of any one of those 40+ executives that will benefit from that slush fund.

Still make good sense to you? That fund was specifically funded to make sure that Carty gets $900,000.00 a year for the rest of his life for retirement, that's $75,000.00 a month for life. What will YOUR pension pay you every month? Year? This is money you are advocating that it's ok to pay to someone who took a completely viable floating boat and in less than five years turned it into a sinking ship, and a national embarassment. Don't forget they also paid 18 Million dollars to the federal government in order to fund that little perk.

Still make good sense to you?

***** ***** ***** ***** *****
 

WXGuesser

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Aug 20, 2002
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$41 million? That''s what all this b!tching is about?

Let''s put this into perspective... Let''s assume AA has around 82,000 employees (I think even with all the layoffs that number is more, but this makes the math nice and simple). That comes out to $500 per employee.

$500 per employee is equal to (under the present Contract):

2 8-hour days base pay for a top of scale mechanic.
3 8-hour days base pay for a top of scale aircraft cleaner
1 and 1/2 days of base pay for a top of scale dispatcher
21 hours of base pay for a Top of scale FSC.
7 and 1/2 days base pay for a starting FSC.

I don''t know what the corresponding ones are for F/A''s and pilots, but I think I showed my point.

This is BEANS, folks!!! You''re going to throw into chaos the lives of thousands of your fellow workers over this?

YGBSM!
 

WXGuesser

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Here's another way to look at it:

What is the daily cash burn right now?

Let's be conservative and say $6 million a day.

At that rate, this money would hold off the demise of the airline for less than a week.

TANSTAAFL
 

KCFlyer

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Aug 20, 2002
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41 million translates into $338 per emplyee. Yep, that''s worth killing the company over.

Management pullled a boneheaded move, no doubt about that, but you''ve got more than $41 million dollars worth of problems.
 

FWAAA

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Jan 5, 2003
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On 4/22/2003 4:31:50 PM Segue wrote:

So, what is that, two days cash burn at the current rates? Agonizing about it will end up costing precious time well in excess of the $4MM.



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By my math it''s about seven days ($6 million/day X 7 days = $42 million).

Pocket change compared to AMR''s labor expenses of over $8 billion in 2002.
 

TWAnr

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Aug 19, 2002
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On 4/22/2003 4:15:04 PM stlslim wrote:

Before you slam management to hard, remember, it was the union that decided to eliminate the furlough pay provision from the new TA...

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What is the saying, "Birds of a feather..."?
It was a part of the pick and choose menu offered the union by the company.
 

jimboli

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Oct 20, 2002
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Just one other point to add to this:

The pension in question has already been expensed through the P&L of the company. All the company is doing is paying a liability.

It is similar to the pilot''s pension plan. The company expenses a certain amount for the pension plan and puts a liability on the books. The company then writes a check out to the pension TRUST that exists for the pilots and the liability is reduced on the books.

There are two things the company is looking for -- "expense savings" - those items that will effect net income and "cash savings." Even if the $41 million was not paid, there is still a need for the company to save $1.8 billion a year since that DIRECTLY effects net income.

The company entered into a contractual obligation with its officers in 1985 with respect to the SERP. The expense has been recognized over all these years.

A bigger question is that the company opened its books and records to the unions and the union''s financial advisors. Why didn''t the financial advisors ask for draft copies of Form 10-K? I find it hard to believe that the first time anyone saw the document is when it was filed with the SEC. It is not like the document is prepared overnight. It was not prepared from 3/31 - 4/15 -- any company starts preparing the document in February due to the level of review (in house accountants, external auditors, outside counsel, etc...) In addition, the outflow of cash would be evident if the financial advisors reviewed the October - December cash flow statements or changes in account balances. What happened?
 

AAObserver

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Apr 18, 2003
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On 4/22/2003 4:31:50 PM Segue wrote:

So, what is that, two days cash burn at the current rates? Agonizing about it will end up costing precious time well in excess of the $4MM.



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Assuming the reports that AA burns $5 million per day in cash are correct, the unions' stalling has already cost the company more than the $41 in question.

And to top it off, the $41 that the unions are mad about is actually deferred earnings by the executives.

Amazing.