I don't recall that but I do remember the UAL execs proposing that they receive about 15% of the new stock upon exit from BK - that would have been worth about a billion dollars. Even right-wing Republicans said that was unbridled greed. The judge agreed and awarded the execs something like 8% of the new stock. Of course, that was value extracted not only from the employees but also from the other unsecured creditors.
http://www.nytimes.com/2006/01/18/business/worldbusiness/18iht-ual.html
So half a billion between a handful of execs is ok?
Will AA file BK? Who knows, and really since have no control over it why get overly concerned about it? One thing we do know is that making the pilots think they may file is about all the company has left as far as leverage. In reality what does AA stand to gain? They have billions in cash, their revenues are up and they have been spending money like crazy for years.
If AA plans on filing we should take a lesson from USAir. They were told "give us concessions now and we will leave you alone later", they gave concessions, the company went BK and they came back for more, after they saw how easy that was they came back a third time. I recall back in the 80s guys quitting AA and going to USAir. Sad how they sit at the bottom of the industry now.
As far as UAL and maintenance, their costs went up after going BK and shedding their OH. You claim that those numbers must be wrong even though they were given out by UAL to their mechanics. Guess you know more from looking at their 10k filings than the guys actually running the company. When you add " Maintenance and related purchased services (13%) to Salaries and related costs (22%) it comes out to 35%, fuel was 26% (2009).
So, from maintenance, what would AA have to gain?
Spinning off overhaul may shift costs, moving it from labor expense to somewhere else but would it actually cut overall costs? That has not been UALs experience. So lowering labor costs may make Wall Street happy, which we hear from both the company and the International is important, but their approval would be short lived when overall costs go up instead of down.
Terminating the pensions probably would not save them much either, at least that's what they admitted during negotiations. It may produce paper gains because if they can remove the liability it shows up on the books as a gain, like selling an airplane. We would not lose our pensions, they would be frozen. However then we would be more focused on extracting higher wages and more OT from the company so we could fund our 401ks.
Benefits, well here is where things get interesting. Our medical benefits are not industry leading, so they won't get much there. Retiree medical, well what happened to our peers? Their free retiree medical was taken away. Ok, we did that in 1990. AA has had that concession for twenty years already. We started Prefunding back then. Our retiree medical isn't free, we paid for it ahead of time and the price is pegged to what we have in the fund when we retire. While everyone else was promised free retiree medical or was able to use their generous allotment of sick time to buy coverage ( 12 days per year vs 10, now 5 for us) we were Prefunding our retiree medical. The fund was matched dollar for dollar but all the money eventually went back to the company unless they terminated the plan, then we got both contributions. If we left the company or decided to stop contributing they kept the match and we were on our own. These funds are sitting in a BK safe trust held by JP Morgan. The only way the company can get at them is if we leave or if we agree to give it to them, which is what they are asking us to do. So if they are planning to file BK they need to get us to agree to this first. Remember when this concession was put in place our peers paid nothing, and the company agreed to refund the match if they terminated the plan in order to get the contract passed in 1992. For at least. 15 years AA had a cost advantage over their competitors, provided by us. All those who left the company prior to retirement left their match, further reducing AAs costs because it was money already spent. When someone leaves prior to retirement it's like found money for AA. None of AAs competitors had this. Now, twenty years later they want us all to just give them back the match, essentially writing them a check for $5000 and letting them dump us into what their competitors had to go into BK in order to get. Like I said before, it would be as if we had agreed to a 401k with a match as part of our compensation twenty years ago and then twenty years later the company was asking us to sign over twenty years worth of match over to them. Got to admit, they have balls.
