Maybe my memory is failing me, but I thought Doug said that if the merger was successful there wouldn't be a layoff for a couple of years.
Does anyone know?
Does anyone know?
AA/USAir Layoff
- Thread starter DNTULSA
- Start date
- Thread Starter
- #4
I guess not.
It all sounds like soft soap, and soft soap is mostly lie.
Thanks anyway.
It all sounds like soft soap, and soft soap is mostly lie.
Thanks anyway.
Reduction in headcount? Most likely, there is no way that Parker will be able to achieve his one billion in synergies with the same number of heads on payroll. Will that mean mechanics are forced to the street? That's less clear, but there will be less. A layoff would be counterproductive as far as gaining those synergies. The new AA probably has the oldest mechanics work force in the industry, average age around 55. A layoff would drive that figure up, and increase unit costs for mechanics at the same time. Nearly all the mechanics on payroll would be at top pay with max vacation and more health issues, despite the fact we at the old AA get the least amount of vacation in the industry AA would be paying more per unit than their competitors, for every 50 guys with one week of Vacation that's another head added to headcount. Even with our abysmal 5 weeks of Vacation most will actually take six weeks plus time off per year in part thanks to our oppressive sick time policy that encourages people to take longer periods off when sick, for mechanics its 5.1 days per year. (We showed them in negotiations how getting rid of the penalty would save them $7million a year but they weren't interested. Once the penalty was introduced sick time spiked up, and stayed there) If you already lost a days pay you may as well stay out for the week because if you return too soon and have to call in again you lose another days pay. So many take the whole week if they call in sick.
So lets say the company decides to RIF the bottom 100 guys. With the bottom guys for 2080 hours of pay they get 2040 hours on the floor,(because they only get one week of Vacation) but with the senior guys for 2080 hours of pay at best they get 1840 hours on the floor. The goal is to cut costs as much as possible, but keep as much of the productivity as possible. The unit cost is the average between all the workers, the bottom guys bring the average Unit cost way down. One new guy offsets five senior guys as far as paid time off. So when you cut the bottom guys, who produce 200 more hours at much lower hourly rates, your unit costs go up dramatically. having an aged workforce presents other problems as well as far as competing with younger staffed competitors. Reduction in force through layoffs make those problems even worse. Just the paid time off, makes the senior mechanic cost the company $7,000 more per year than the Junior guy, that's assuming both are at top pay, throw in the difference in pay between a topped out mechanic and a new hire-which AA wouldn't see if they had a layoff- add another $27500 based on straight time, the company figure 250 hours of OT per mechanic per year so add another $5000 there. so each topped out mechanic costs the company $39,500 per year more than a new hire. Sure some of that would be offset by training costs but with AA getting new fleets even the Senior mechanics will have to be trained. So now you know where the company came up with the $40k for the buyout they offered, for each topped out guy that took it they saved that much by not having to RIF a guy at the bottom, and that was just the savings for one year. Figure over the time it takes a new hire to get to the top they save well over $100,000 per man. (Not counting the reduced liability of the sick banks-many of those who took the $40 k EO had 1200 hrs sick time, the value of which was around $40k if used, or $3750 if they took the cash instead. So for those with a max sick bank it cost the company nothing on paper to give those guys the EO.The $40k they gave them was balanced by writing off a potential liability of $40k in sick time if used. )
So we should consider those savings before we jump on any EO should the company offer us one, UAL offered their guys $75 K because they were in the same boat, they could not hire new hires because they still had guys on recall. By buying off Senior guys and guys on Recall it would allow them to hire new people and over the term of five years save well over $100,000 per man between lower wages, less PTO and lower medical and pension costs. You have to remember that the 401K is a percentage based match, so someone earning a lower wage gets a lower company contribution =more savings.
So if you are a new hire don't lose too much sleep over a RIF, if there is one it could be the best thing to ever happen to you. If it does happen you will likely not have much trouble finding another job, and when you do, the odds are that when AA does call you back, and they will, you will say "thanks, but no thanks".
So lets say the company decides to RIF the bottom 100 guys. With the bottom guys for 2080 hours of pay they get 2040 hours on the floor,(because they only get one week of Vacation) but with the senior guys for 2080 hours of pay at best they get 1840 hours on the floor. The goal is to cut costs as much as possible, but keep as much of the productivity as possible. The unit cost is the average between all the workers, the bottom guys bring the average Unit cost way down. One new guy offsets five senior guys as far as paid time off. So when you cut the bottom guys, who produce 200 more hours at much lower hourly rates, your unit costs go up dramatically. having an aged workforce presents other problems as well as far as competing with younger staffed competitors. Reduction in force through layoffs make those problems even worse. Just the paid time off, makes the senior mechanic cost the company $7,000 more per year than the Junior guy, that's assuming both are at top pay, throw in the difference in pay between a topped out mechanic and a new hire-which AA wouldn't see if they had a layoff- add another $27500 based on straight time, the company figure 250 hours of OT per mechanic per year so add another $5000 there. so each topped out mechanic costs the company $39,500 per year more than a new hire. Sure some of that would be offset by training costs but with AA getting new fleets even the Senior mechanics will have to be trained. So now you know where the company came up with the $40k for the buyout they offered, for each topped out guy that took it they saved that much by not having to RIF a guy at the bottom, and that was just the savings for one year. Figure over the time it takes a new hire to get to the top they save well over $100,000 per man. (Not counting the reduced liability of the sick banks-many of those who took the $40 k EO had 1200 hrs sick time, the value of which was around $40k if used, or $3750 if they took the cash instead. So for those with a max sick bank it cost the company nothing on paper to give those guys the EO.The $40k they gave them was balanced by writing off a potential liability of $40k in sick time if used. )
So we should consider those savings before we jump on any EO should the company offer us one, UAL offered their guys $75 K because they were in the same boat, they could not hire new hires because they still had guys on recall. By buying off Senior guys and guys on Recall it would allow them to hire new people and over the term of five years save well over $100,000 per man between lower wages, less PTO and lower medical and pension costs. You have to remember that the 401K is a percentage based match, so someone earning a lower wage gets a lower company contribution =more savings.
So if you are a new hire don't lose too much sleep over a RIF, if there is one it could be the best thing to ever happen to you. If it does happen you will likely not have much trouble finding another job, and when you do, the odds are that when AA does call you back, and they will, you will say "thanks, but no thanks".
While some headcount reduction is inevitable (mergers ALWAYS involve shrinking, not growing), furloughs would be the worst possible way to reduce the numbers. Instead, buyouts/early outs are the only sensible way of cutting heads, as that cuts the highest-cost employees, and if they need replaced in the future, they're replaced with new-hires at the very low starting wages.
Someone posted recently that another early-out is already planned for flight attendants from US and AA for the same buyout price as AA's early out in 2012.
For agents and fleet service, it's possible that the recent announcement of re-banking the AA hubs will reduce the need for headcount reduction as banked hubs will require higher numbers of ground employees to handle the rushes. De-peaking the hubs in 2002-03 allowed management to cut the number of agents and fleet service to skeleton levels.
Someone posted recently that another early-out is already planned for flight attendants from US and AA for the same buyout price as AA's early out in 2012.
For agents and fleet service, it's possible that the recent announcement of re-banking the AA hubs will reduce the need for headcount reduction as banked hubs will require higher numbers of ground employees to handle the rushes. De-peaking the hubs in 2002-03 allowed management to cut the number of agents and fleet service to skeleton levels.
RJcasualty
Advanced
- Jun 29, 2004
- 187
- 67
I'm hearing about a big announcement from the new regime on JAN 07. A glimpse of the promised land might leave some with second thoughts.
Kev3188
Veteran
In the interest of clarity, I'm going to assume (and hope) that by writing "should," your actual intent was "will likely."
IOW, "Fleet Service will likely get hit..."
Yes?
IOW, "Fleet Service will likely get hit..."
Yes?
Kev3188
Veteran
Bob Owens said:
Lots of great info in this post, Bob. Hope people take the time to check it out.
So the question is do we fight to make this a job worth keeping or keep rolling over till its not? If we roll over every time the company threatens bankruptcy then thats what we end up with. What else can they threaten us with? After two rounds we have ended up setting new lows for the profession, we earn much less than Non-union Jet Blue, Fed Ex and Delta. And those carriers pay significantly less than what the job paid years ago in real dollars. In other words we got a double whammy, significantly lower compensation beyond the significantly lower compensation that prevails throughout the industry. Much of what AA took was pure spite, you should remember that every day. What they took was not what they needed to survive, they took it out of spite. We have less Holidays and the few we have are at lower multipliers than their non-union employees, they still get doubletime. We are the only ones in the (any?) industry, union or non-union that only get half pay for working the holiday. We are the only ones in the company that get penalized for calling in sick by losing half pay for two days, we proved that this costs them money but they insisted on keeping it anyway, even tried to use our response to the penalty as a way of screwing us in pre-bk negotiations by trying to get rid of Prefunding and have our sick time fund our retiree medical even though they knew there was no possible way we could accumulate enough sick time to pay for it at the rates they were charging-double what others were charging while giving us less than half the sick time to pay for it. Even if you had perfect attendance for thirty years you would still not have enough sick time to pay for retiree medical from 55. We are the only ones in M&R that lost the additional week of vacation, Stores kept it. They knew that Videtich and Little were going to make sure they got everything they wanted and then some, which they did, and it all came from your pockets. It wasn't needed, they simply wanted it, and they took more than non-union companies took .
If you had it all to do over again would you choose to be here? If there is a RIF it would be interesting to see how many from Tulsa actually land in NY, LAX and ORD, the stations where Junior guys are, and how many simply say "thanks but no thanks". I suspect that those who leave will be more than ever before, and like I said younger workers will probably never return although they will be called back.
If you had it all to do over again would you choose to be here? If there is a RIF it would be interesting to see how many from Tulsa actually land in NY, LAX and ORD, the stations where Junior guys are, and how many simply say "thanks but no thanks". I suspect that those who leave will be more than ever before, and like I said younger workers will probably never return although they will be called back.
Now you will get to see what a liar Parker and his team are , they have done nothing but lie to the US employees for 8 years .
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