AA on the Bandwagon

[BeenThere]

WXGUESSER:
As per your last post, the management salaries I was referring to are the upper crust, six figure, golden parachuted stock optioners who never lose a thing. As far as your willing to take a 25% paycut so you could have stayed in this glorious industry is a common response for those who lost their jobs. You see, WXGUESSER, I was an employee at an airline called, ............hmmmmmmmmm let me think..........ah yes EASTERN AIRLINES. A place where the givebacks started in the mid 70's. It started with 3.5% and worked it's was up to 18%. GIVEBACKS IN THIS INDUSTRY DO NOT WORK! Givebacks and concessions did not save Eastern, did not save PANAM and did not save TWA. Once you give back, you will never see what you ceded ever again. When I hear people such as yourself offer to give back everything except their first-born to stay in this exciting field of aviation, it saddens me. It saddens me because Management loves to hear it. Former EAL chairman Frank Borman used to play on our fears. He would send letters home addressed to the spouses threatening the demise of Eastern if they did not pursuade their better halves to give in. He played on the fears of the familes of employees. WXGUESSER, do you think 25% paycut would suffice? What about when AA asks you for vacation back, no more pension, no sick time? How much are you willing to give back just to stay in this game to live and give back more another day?

 

[WXGuesser]

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On 10/26/2002 9:15:51 AM BeenThere wrote:

WXGUESSER:
As per your last post, the management salaries I was referring to are the upper crust, six figure, golden parachuted stock optioners who never lose a thing. As far as your willing to take a 25% paycut so you could have stayed in this glorious industry is a common response for those who lost their jobs. You see, WXGUESSER, I was an employee at an airline called, ............hmmmmmmmmm let me think..........ah yes EASTERN AIRLINES. A place where the givebacks started in the mid 70's. It started with 3.5% and worked it's was up to 18%. GIVEBACKS IN THIS INDUSTRY DO NOT WORK! Givebacks and concessions did not save Eastern, did not save PANAM and did not save TWA. Once you give back, you will never see what you ceded ever again. When I hear people such as yourself offer to give back everything except their first-born to stay in this exciting field of aviation, it saddens me. It saddens me because Management loves to hear it. Former EAL chairman Frank Borman used to play on our fears. He would send letters home addressed to the spouses threatening the demise of Eastern if they did not pursuade their better halves to give in. He played on the fears of the familes of employees. WXGUESSER, do you think 25% paycut would suffice? What about when AA asks you for vacation back, no more pension, no sick time? How much are you willing to give back just to stay in this game to live and give back more another day?
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BeenThere:

Again, RE-Read my post.


Re-read what I am suggesting. Is it concessionary? Yes, over a term. But it comes back to where it is now. It is also not the 25% cut you keep insisting on. It may not be enough to save the airline by itself, but it will help.
I am suggesting the unions make the offer to try to pre-empt the situation where it becomes airline or no airline. The company keeps painting labor as the evil vampire draining the resources out of the body of the airline. Why not try to get some good PR for the union side? It is ALL about the marketing and the spin, folks. Let's get some for ourselves!

As far as Eastern and any other airline which has been concessed into oblivion, I ask this question (simply out of my own ignorance): Has this ever been TRIED before???? Where the employees have gone to the company *first*?????

As far as management types, how many of those people are there again? 50? 100? Sadly, we need those people because someone has to make the tough decisions. They are in management for a reason. You want to get to be a fat cat? Then get your business or beancounting degrees, go into management and work your way up the ladder there by doing whatever is necessary to get there. Those people have worked hard to get where they are, just like anybody else. You just go on believing they are your enemy; if you do, THEY HAVE ALREADY WON.

And to as far as what is too much... everybody draws that line for themselves. Some folks are Max pay to the last day! Some are more reasonable.

Peace!

 

[kirkpatrick]

I'll agree with the Weatherman here. TWA employees gave back some 10 BILLION in wage concessions starting with Icahn in 1985, and look where it got us.

MK

 

[BeenThere]

WXGUESSER: If you believe for one minute that what you give back now you will get back later, you are misguided. Let's say we do it your way. We give back 25% in salary, a week's vacation and loss of sick days and even more radical work rule changes (ala US AIr). We give all this back for say 3, 5 or EVEN more years. We will be fighting to get back what we lost at contract time. So in, say, 5 years, AA brings us back to 2002 wages in 2007. Great deal, eh, WXGUESSER? All those concessions we gave back in 2002 will become bargaining chips in future negotiations. Do you realize that USAIR has demanded concessions and givebacks that will last up to 5 years and USAIR HAS SAID THEY EXPECT TO EMERGE FROM BANKRUPTCY IN 6 MONTHS??????????????????????????????????????. This makes sense to you?????????????WX, you have a short memeory. Do you remember AA's record profits up until 2 years ago where they were reaping in net profits in the billions of $$$$$$$$$$$$. They were more than generous to give the TWU 6 1/2 % of six years. Sure there was profit sharing. But don't mistake profit sharing for a salary increase. Your pension and benefits are based on salary. Profit sharing is a lump sum payout that is not actual earnings. I would rather have half the profit sharing amount added to my salary. I would be better off down the road. And in response to your statement, I do not belittle the FAT CATS as you call them. I do, however, have a problem with them continuing to reap in their high salaries and excercise their stock options in these trouble times. I have always believed one should be rewarded as they move up the corporate ladder. But not the the way the ENRON and MCI WORLDCOM FAT CATS did. I have a suggestion for you WXGUESSER: WHY DON'T YOU JUST WORK FOR NO SALARY IF YOU ARE THAT WILLING TO HELP THE COMPANY?

AND YOU TOTALLY MISSED THE EASTERN AIRLINES COMPARISON. WE GAVE BACK SINCE THE MID-70'S AND THEY CONTINED TO LOSE MONEY HAND OVER FOOT THANKS TO THE FAT CATS.

 

[WXGuesser]

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On 10/27/2002 9:36:08 AM BeenThere wrote:

WXGUESSER: If you believe for one minute that what you give back now you will get back later, you are misguided. Let's say we do it your way. We give back 25% in salary, a week's vacation and loss of sick days and even more radical work rule changes (ala US AIr). We give all this back for say 3, 5 or EVEN more years. We will be fighting to get back what we lost at contract time. So in, say, 5 years, AA brings us back to 2002 wages in 2007. Great deal, eh, WXGUESSER? All those concessions we gave back in 2002 will become bargaining chips in future negotiations. Do you realize that USAIR has demanded concessions and givebacks that will last up to 5 years and USAIR HAS SAID THEY EXPECT TO EMERGE FROM BANKRUPTCY IN 6 MONTHS??????????????????????????????????????. This makes sense to you?????????????WX, you have a short memeory. Do you remember AA's record profits up until 2 years ago where they were reaping in net profits in the billions of $$$$$$$$$$$$. They were more than generous to give the TWU 6 1/2 % of six years. Sure there was profit sharing. But don't mistake profit sharing for a salary increase. Your pension and benefits are based on salary. Profit sharing is a lump sum payout that is not actual earnings. I would rather have half the profit sharing amount added to my salary. I would be better off down the road. And in response to your statement, I do not belittle the "FAT CATS" as you call them. I do, however, have a problem with them continuing to reap in their high salaries and excercise their stock options in these trouble times. I have always believed one should be rewarded as they move up the corporate ladder. But not the the way the ENRON and MCI WORLDCOM "FAT CATS" did. I have a suggestion for you WXGUESSER: WHY DON'T YOU JUST WORK FOR NO SALARY IF YOU ARE THAT WILLING TO HELP THE COMPANY?

AND YOU TOTALLY MISSED THE EASTERN AIRLINES COMPARISON. WE GAVE BACK SINCE THE MID-70'S AND THEY CONTINED TO LOSE MONEY HAND OVER FOOT THANKS TO THE FAT CATS.
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BeenThere:

First, you keep bringing up this 25% number, which I never suggested.

Second, yes, I remember when AA was making record profit. I also remember that the TWU took that 6 1/2% raise over 6 years (cause they wanted the security) before things were at record profits, and were kicking themselves ever since. Then they wanted to get a nice short-term contract this last time, because they thought they were really going to stick it to the company. Guess what? They DIDN'T. They actually gave BACK our profit sharing. That T/A came out 9/10. We all know what happened next, and we all know (whether we admit it or not) that is the main reason we are in the tank right now!!!!!!!!

Also, what good are trying now to protect pensions, benefits, and bargaining chips for the next negotiation if there is NO ONE TO NEGOTIATE WITH? At present cash burn, AA will run out in 2003 3Q. When does the conract become amendable again? What I am suggesting is a little belt-tightening for now to help the airline survive. You think they aren't going to screw the union employees over in the next contract anyway (if we survive that long!)????? Why not try to deflect a bunch of that before and give us a barganing chip to work with?????

As far as management failures, I think Carty & Co are doing a commendable job at this point, and that a lot of the troubles the media are trumpeting are because AMR management is playing things above the board. Did they make mistakes before 9/11? Yes, they did. But I think that since 9/111 they have made the best dicisions of anyone. Almost half the loss we reported last quarter was on one-time charges (write-down of aircraft, employee severance, etc....) Plus the big announcement about the write-off of goodwill. Basically, AMR is trying to deflate the bubble and get the company's calculated worth down to around its actual worth (And I'm not talking about stock prices... that's a whole other animal); before the bubble bursts (ala Enron). Hard as this is to believe, I think Carty & Co. are trying their best to be honest with their stockholders and their employees. Unlike some other airlines (who shall remain nameless), they aren't sugarcoating how bad their situation is. Not great for PR, but I believe in the end that the decisions they are making today will bring this airline through the present crisis.

And if I'm not mistaken, didn't Carty do some salary givebacks the end of last year?

As far as working for free, you know what? If my manager over there were to call and say Hey, we would like you to come in and cover some mid-shifts. We can't pay you, but at least you would be able to keep up your skills. You know how fast I would be back there? I have another job for the simple necessity of keeping the bills paid and not eating government cheese in a van down by the river. But I loved my career. I like the area I live in. I would rather stay here and work for American for less than I was making than move somewhere else. I know my feelings aren't shared by everyone; all I am doing is offering up an idea to help preserve the company so I can get back to work.

Peace!

 

[FrugalFlyer]

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On 10/27/2002 7:01:10 AM kirkpatrick wrote:

I'll agree with the Weatherman here. TWA employees gave back some 10 BILLION in wage concessions starting with Icahn in 1985, and look where it got us.

MK
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Yes TW employees did give back to Icahn, but Icahn was a corporate raider, only interested in himself, not using the givebacks to improve the company.

Whether givebacks/concessions work may depend on who is running the company. If the management says that wage concessions from labor are the only way to save the company and has no other plans or ideas for improvement, then I would not be surprised if the givebacks don't work and management is back asking for more. On the other hand, if management attacks other costs and looks at other ways of improving revenue, and then comes to labor and says - 'We've implemented X and Y to improve revenue and decrease costs but it is not enough we need some concessions from labor' - then labor should be more open to concessions, on a temporary basis.

I know that at Eastern, Pan Am, TWA and the old Continental concessions did not work, and may or may not work for US Airways. But a recent example where concessions may be working is at Air Canada. Under pressure from Westjet and the mess it inherited from absorbing Canadian, their CEO reduced labor costs by setting up AC TANGO and AC ZIP - subsidiaries where wages are 25% less than Air Canada mainline. Although similar attempts (MetroJet, COLite) have been a disaster, they seem to be working fine (for now) at AC.

So, I guess I was just trying to say that concessions are OK if management has other plans/ideas/vision in addition to attacking labor.

 

[AAquila]

Yes, wage concession didn't work in the past, but these are much different times. Never has the airline industry have over 40% our their personnel laid off for more than a year period. Never have said industry lost over over 50% of their equity value in that same period. Never has said industry collectively lost Billions in 3Q (which is traditionally said industry's best quarter). And, all the while the Southwests and Jetblues of the airline world continue to expand at a malignant rate. If USAir and UAL get debt relief by going into bankruptcy, AMR will respond, quickly and decisively.

 

[Bob Owens]

1982- Airline industry reports record losses-$733 million
1984- Airline industry report Highest profits ever $2.1 Billion
1987- Airline industry reports new record of ptofitability-$2.4 Billion
1988- Airline industry tops old record by nearly 1 billion.
1990-Airline industry reports record $1.9 Billion loss
1992-Airline reports new record losses-$2.7 Billion
1995-Airline industry reports record profits $5.8 Billion
1996-Airline industry reports record profits $6.2 Billion
1997-Airline industry reports record profits $8.5 Billion
1998-Airline industry reports record profits $9.3 Billion
2001- Airline industry report record losses $10 billion

Yea this time is different, just as 1982 was different and 1992 was different. What has not changed is that this industry is still very sensative to the business cycle. The recession of 1982 resulted in record losses, as the economy recovered so did the industry. Profits in 1988 were $3.4 Billion. Far far greater than ever earned under Regulation. The recession of 1992 resulted in losses that were triple those of 1982. By 1995 the industry was once again posting record profits.
The losses of 1992 were greater by a factor of 3.6 than those of 1982.
The losses of 2001 were greater than 1992 by a factor of 3.7.
Both prior periods of record losses (1982,1992)were followed by much longer periods of record profits.
Apparently in this industry it pays to lose huge amounts of money for a short period if it can result in long term concessions that help the industry earn higher and higher profits. How many times are we going to fall for the same trick?

 

[BeenThere]

AA, UA and USAIR, and Delta and Northwest are not Southwests and Jetblues. I do, however, believe the only way to compete with them is to become them! Instead of concessions, AA should shrink to profitability. Layoff about 50,000 more employees and get out of half the markets it now serves. CONCESSIONS DO NOT WORK! I Don't care who is running the company. You people will gladly give up wages and benefits, see the company thru these tough times, and hope that years later you will receive the wages you are making today. The airline industry is the most volatile and most cyclical one there is. First, the employees of the airline industry had to foot the bill for deregulation while golden parachutes and obscene stock optioons and perks were paid out. If you think any one airline management cares more about its employees then its shareholder and passengers, you are mistaken. Using the bankruptcy courts is the most convenient way to turn back the gains made by employees over the past 10 years. And please don't hand me the trivial WELL, IF AA DOESNT KEEP ITS PASSENGERS AND SHAREHOLDERS, THERE WILL BE NO AIRLINE FOR EMPLOYEES TO WORK AT. I heard it all before. Yes, these are tough times. WXGUESSER. I respect your opinions in beleiving that every little bit helps. I don't know your tenure in this industry. But I have been around quite a while. I believe that concessions and givebacks do not work because they are NEVER ENOUGH for airline management. By rolling over and giving them everything they DEMAND is setting the precedent that the one easy way to be profitable and make the shareholders happy is to go after wages and benefits. So whatever the crisis is,wages and benefits become the fall guys.