5% wage deferal to stop

MarkMyWords

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Aug 20, 2002
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The following letter from Dave Siegel is a special edition of US Airways Today.

Dear US Airways Colleague:
Earlier today, US Airways reported our 2003 second quarter results. Due to the one-time $214 million federal grant representing a refund of security fees, we reported a small pre-tax profit for the quarter. After much deliberation, we have decided to stop the five percent pay deferral and begin repaying the deferred pay.
This decision is made with significant reservations because having a one-time grant determine our profitability for the quarter should by no means indicate that we are back on the road to sustained profitability. However, I realize that this pay deferral has been an additional sacrifice made by all of our employees, and I know that the pay restoration is an important financial issue for many.
I know that all employees will be pleased with this news. So while I have your attention, I want to use this opportunity to convey a couple of other points related to this.
We have heard from some of you that with the war over and the planes full, the company had an obligation to halt the pay deferral. In fact, the concept of a pay deferral was put in place last year to assure our financial partners, including the ATSB, the Retirement Systems of Alabama and General Electric, that we had a contingency plan in the event that war or terrorism negatively impacted the industry. We are still feeling the impact of depressed industry revenues associated with war, and it will take many months for a full recovery. We also have obligations to these financial partners with regard to our credit rating and cash balance that we must live up to, and those requirements will become all the more challenging without the savings from the pay deferral.
Our restructuring is far from complete. We have come a remarkable way thanks to the hard work, participation, sacrifice and support of our employees. But we are not out of the woods. Every day, our competitors are figuring out new ways to come after us. Look at the very positive earnings results of Southwest, JetBlue and AirTran all of which made money this quarter even without the government grant. And all three airlines recently announced airplane orders and big plans to deploy those planes over the next several years. You should assume that we are only going to see more of these low-cost competitors flying up against us in the future.
I am concerned that stopping the five percent pay deferral will add to the perception that the crisis is over. Some employees believe that since we are out of bankruptcy, we have the $1 billion loan, and the war is over, that everything is fine. The immediate crisis and the threat of liquidation are indeed over, but we still have plenty of challenges that we must navigate together.
US Airways has routinely outperformed the rest of the industry on customer service, and over the past year, our employees have shown an even more remarkable capacity to deliver on the safety and service that our customers expect. It has not been easy, as we are all learning to do more with less. Unfortunately, that is the new reality of a very competitive industry. But we must focus every ounce of available energy on battling with our competitors, and not each other.
We are going to continue to manage this great airline to be a success. I know that is what our employees want, and I also believe that is what our customers want. But to be a success and to be a survivor requires us to be profitable on an ongoing basis. Your efforts to help in that regard are absolutely vital. No one should be satisfied with our being unprofitable, and any employee, manager, labor leader or customer who suggests otherwise is sadly and dangerously mistaken.
The administrative details of the five percent pay deferral termination and the repayment of the deferred pay are being worked out, and will be implemented in accordance with labor agreements. We will make those details available to you as soon as possible. In the meantime, I hope we can use this opportunity to further re-build the spirit of cooperation and camaraderie that is necessary and that we all understand that the enemy is the other airlines, and not each other.
Please continue to work safely, and continue to give our customers a reason to keep coming back.
Sincerely,
Dave Siegel
 
Wow, I first thought the thread topic title was a parody...I can't believe it. Better to square up now then to let the tab get too large later.

Question though:
How long before the business press wags it's finger at "providing employees with a 5% raise" or somesuch shill-ery?
 
WWWWWWoooooooHHHHHHoooooooooooo. That's the way!!!!!!! Keep it up all.
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Hopefully this will go a long way to mend employee morale. Way to go Dave, it was the right thing to do!
 
Well Folks.....



Just heard the news...5% WILL BE RETURENED....YEAH BABY, YEAH BABY, YEAH BABY...

Just for you nay sayers... The AFA resolution was presented to Bronner on Friday's Board of Directors meeting along with CWA...

We were planning leafleting the entire month of August for the 5% deferral and the violations of our contract.

This was the right thing to do and the only thing for mangement to do. This ONE ACT alone, will help improve morale imensely.

God Bless the employees of U and all the unions who collectively took a stand for the 5% deferral to be returned.
 
Does anybody know how employees who are no longer on the payroll will be repaid?Just curious because next friday is my last day.Thanks.
 
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Pity -

Thank you for your efforts on behalf of the employees. I must admitt that I never expected the 5% back until next year, but it is a very welcome offering and greatly appreciated.
 
Pitbull,

Don't give yourself that much credit for the 5% termination. I do have concerns about ending the 5% with a very turbulent industry. The company will need this money to weather this storm that is affecting the major carriers. Don't complain when there are more furloughs in the future. If it means saving the airline then the employees should continue giving the 5%.
 
There's a lot of congratulations to go around here, I think. The CWA, AFA, all who emailed Dave, even all of gripers on this forum had a part in this. Don't think that had all of us just sat back and been quiet, this would have gone away. Way to go.

Even bigger congrats to Dave. Classy move.

INVOL
 
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On 7/28/2003 3:58:10 PM High Iron wrote:



Question though:
How long before the business press wags it's finger at "providing employees with a 5% raise" or somesuch shill-ery?

..."Don't give yourself that much credit for the 5% termination. I do have concerns about ending the 5% with a very turbulent industry. The company will need this money to weather this storm that is affecting the major carriers. Don't complain when there are more furloughs in the future. If if means saving the airline then the employees should continue giving the 5%."

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Not long apparently.
 
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Sorry, but I couldnt HELp myself!

HOOOOOOYAAAAAA!

Tis About Darn Time...............
hello mirenfairehereicome!
 
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On 7/28/2003 3:57:56 PM Analyst wrote:


Pitbull,
 
Don't give yourself that much credit for the 5% termination. I do have concerns about ending the 5% with a very turbulent industry. The company will need this money to weather this storm that is affecting the major carriers.  Don't complain when there are more furloughs in the future. If it means saving the airline then the employees should continue giving the 5%.

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Analyst,

I will not let you steal away our "thunder". Please, mangement or whoever you are, let us enjoy this moment and victory. Do not try to dampen our spirits.

This management was planning on furloughing with or without the deferral. We have approx 1400 f/as coming back in Dec., and if the furlough incentive is what it is for VF7, very few will participate in the voluntary program.

We are not stupid people. We as employees ALREADY SAVED the company. The rest is up to mangement. WE gave this mangement everything they asked for. The 5% was for a war effect, not because of downturns in the economy or a management team that does not know how to compete and is still focused on "cost savings" as if that is the end to all end.

We as employees are rejoicing...so, who ever you are, and where ever you sit in Corporate headquarters, be glad this decision was made, or for sure, there would be no company left for anyone to save.

Peace.
 
Please dont feel sorry for me.I got to quit!All though I wont be there pulling with you anymore I'll still be pulling for all of you.Continue to fight the good fight.Don't let the revolving door of mismanagment beat you down.
 
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On 7/28/2003 4:04:49 PM 757fixer wrote:

Does anybody know how employees who are no longer on the payroll will be repaid?Just curious because next friday is my last day.Thanks.

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Sorry, sir, to hear this, truly.

The deferral will be paid back one month at a atime, in the same manner it was taken, whether you are furloughed, retired, or terminated.

You, unfortunately, will not get it in a "lump sum".
 
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