ALPA Code-A-Phone Update - December 3

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chipmunn

Guest
MEC CODE-A-PHONE UPDATE - December 3, 2002
This is Roy Freundlich with a US Airways MEC update for Tuesday, December 3, with two new items:
Item 1. The MEC reconvened its special meeting yesterday and today at the Key Bridge Marriott in Arlington, VA, and received updates, financial analyses and reports on the Company’s financial status from the Negotiating Committee, the Retirement and Insurance Committee, ALPA’s Financial and Economic staff advisors, and the MEC’s investment banker. The MEC also received a report from US Airways President and CEO David Siegel in closed session.
After considering an assessment of the Company’s financial situation from the MEC’s advisors, the MEC determined that US Airways is not achieving its financial requirements for maintaining debtor in possession (DIP) financing. This financing is dependent on the Company’s financial performance, which includes reaching revenue and cash balance targets, and receiving ATSB approval for a government loan guarantee prior to emerging from bankruptcy.
ALPA has determined that if the Company’s financial performance continues to fail to meet the obligations under the terms of the DIP financing with the Retirement Systems of Alabama, the financing under this arrangement may not be continued. The failure to maintain this financing, combined with a continued deterioration of the Company’s cash position, would prevent US Airways from emerging from bankruptcy by March 2003 and expose the Company to deeper risks in the bankruptcy process.
Management’s business plan under the current Restructuring Agreement was established last summer and projected an industry revenue recovery during the second half of 2002 and sustained in 2003 and beyond. Industry and US Airways revenue has significantly under-performed these projections, which is negatively affecting the Company’s cash burn rate, cash position and obligations under the terms of the DIP financing arrangement. To meet DIP financing and ATSB approval conditions, prior revenue assumptions contained in the Company’s business plan and ATSB
loan application have been revised lower, affecting the cost conditions of the application.
Management has taken the position that it cannot adequately enhance revenue to ensure US Airways’ success through the bankruptcy process (even with additional small jet code-sharing relief) and has requested an additional 200 million dollars in annual cost reductions from labor through productivity improvements and benefit changes, of which 101 million dollars would come from US Airways pilots, to compensate for the revenue shortfall. The MEC has not accepted management’s position that cost reductions be achieved strictly through productivity because of the impact this would have on pilot jobs.
ALPA has also determined that the pilots’ pension plan is at risk of being frozen or undergoing a distress termination, as a result of the Company only meeting minimum funding requirements and the negative performance of financial and equity markets. A return to normal market performance would not significantly help the Plan for many years. Therefore, modifications of the Plan’s benefits, including reducing the yearly multiplier going forward, total benefit calculation, and payment options, are being considered by ALPA to help the Company obtain funding deferments from the PBGC, which insures the Plan. Significant funding contributions to the Plan are required to remedy its current financial status and risks to the PBGC.
After careful consideration of the Company’s financial performance, management’s modified business plan, ATSB guarantee loan and DIP financing requirements, risks to the pilots’ pension plan, and management’s request for additional cost reductions, the MEC passed the following resolution:
MEC Resolution
WHEREAS airline revenue has failed to return to levels necessary to support required financial commitments and the ATSB Restructured Business Plan, and
WHEREAS the future of US Airways depends upon continued financing from RSA and the ATSB, as well as a funding waiver from the PBGC, and
WHEREAS the US Airways MEC negotiating committee and financial advisors have completed a study of the current situation and have concluded that additional cost reductions beyond those in the Restructuring Agreement are necessary to sustain the airline through bankruptcy and achieve ATSB approval for a loan guarantee, and
WHEREAS the MEC is committed to minimizing pilot job losses,
THEREFORE BE IT RESOLVED that the Negotiating Committee, supported by the MEC’s financial, R& I and legal advisors, is directed to enter into negotiations with management to develop a comprehensive program of additional cost reductions, including compensation, productivity, and pension modifications, in order to ensure US Airways’ emergence from bankruptcy and approval of an ATSB guaranteed loan, and
BE IT FURTHER RESOLVED that any such cost reductions be limited to those that are necessary and in the best interests of the US Airways pilots with minimum possible impact on pilot jobs, and
BE IT FURTHER RESOLVED that the participation of the US Airways pilots shall be contingent on participation of all labor groups and management in the comprehensive program of cost reductions, and
BE IT FURTHER RESOLVED that the negotiations include appropriate protections and returns, and
BE IT FINALLY RESOLVED that the negotiating committee will report regularly to the MEC on the progress of negotiations and will promptly report the reaching of any tentative agreement.
Item 2. MDA management has informed the MDA Negotiating Committee that it needs to suspend negotiations next week. US Airways has proposed to the MEC that MDA be structured differently than as required by the Restructuring Agreement.
Please remember we have 1,356 pilots on furlough, with 326 pilot furloughs scheduled for January 7, and 145 additional pilot furloughs anticipated through April 2003.
Thank you for listening.
 

AOG-N-IT

Veteran
Aug 19, 2002
1,132
1
www.usaviation.com
Thanks for the update Chip!!

ALPA's willingness to continue to work with the company comes as no surprise to me...and that's not a bad thing in all respects. The plot thickens however.

I'm pleased to see that ALPA has adopted language that somewhat mirrors those words expressed by the AFA regarding "Managements Contribution" to the needed turn-around

ALPA's Contribution of $101 Million is most significant...However, ALPA has no fear of having a single position completely or entirely "Outsourced"...as do the other labor groups , with the noted exception of the AFA as well. J4J at least provides some mainline ALPA relief as opposed to others getting a straight ticket out of the industry for good!!.

The above issue is supported by previous language from the company..and thier current math presented. The company says it needs $200 to $400 Million to get back on track for the DIP and the ATSB loans. This leaves us with a split between $99 to $299 Million to be absorbed through additional concessions, furloughs...and outright abolishment of USAirways jobs currently to bridge the difference. Here again, This is based on the company being right about thier needs? , which they were obviously wrong about during the September voting period.

The willingness to play along with this , is anything but warm from the IAM-M..or IAM Fleet Services. They would make up the lions share of give-backs...and share a equal burden in out right job losses across the board..that once inacted? Will never ever return , regardless if the economy becomes as bullish as Taurus the Bull himself.

The CWA and TWU will be equally impacted!! Lastly keep in mind..The AFA is on record saying that they will be the very last to respond to any of this...and even the ALPA verbage states that all other Union Groups will have to participate to make thier end happen.

All in all..without Managment being ready to take a major bite along with the Unionized rank and File?...I do not see any of this taking place. The back-peddling on the MDA issues only further supports my mis-givings about that ever having been a real option to begin with.

I still say that the WO's and the MDA are nothing more than another axe to be ground..in favor of more and more outsourcing to MESA and the alike, at all levels except the flight departments required minimum operating figures. This hardly creates an enviroment of teamwork..or a sense of a shared burden for everyone.
 

ForkTime2002

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Nov 27, 2002
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[P]
[BLOCKQUOTE][BR]----------------[BR]On 12/3/2002 1:58:14 PM chipmunn wrote:
[P][BR][BR][BR]MEC Resolution[BR][BR]BE IT FURTHER RESOLVED that the participation of the US Airways pilots shall be contingent on participation of all labor groups and management in the comprehensive program of cost reductions, and[BR][BR][BR]Item 2. MDA management has informed the MDA Negotiating Committee that it needs to suspend negotiations next week. US Airways has proposed to the MEC that MDA be structured differently than as required by the Restructuring Agreement.[BR][BR][/P]----------------[BR][/BLOCKQUOTE]
[P][STRONG][FONT face="Times New Roman" size=3]Be it known that the participation of the other labor groups remains questionable at this time.[BR][BR][BR]MDA restructured differently? Say it aint so...guess that soft landin turned into broken glass.[/FONT][/STRONG][/P]
 

Biffeman

Senior
Nov 25, 2002
447
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www.usaviation.com
[P class=MsoNormal style="MARGIN: 0in 0in 0pt; mso-margin-top-alt: auto; mso-margin-bottom-alt: auto"][FONT color=#000000][SPAN style="FONT-SIZE: 13.5pt; FONT-FAMILY: Arial"]Bankrupt US Airways Seeks Deep Cuts[BR][/SPAN][SPAN style="FONT-SIZE: 10pt; FONT-FAMILY: Arial"]Management at bankrupt US Airways notified employees last week it wants an additional $200 million in annual cost reductions from work rule and benefit changes to help the carrier emerge from bankruptcy.[/SPAN][?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:eek:ffice:eek:ffice" /][o:p][/o:p][/FONT][/P]
[P class=MsoNormal style="MARGIN: 0in 0in 0pt; mso-margin-top-alt: auto; mso-margin-bottom-alt: auto"][FONT color=#000000][SPAN style="FONT-SIZE: 10pt; FONT-FAMILY: Arial"]The carrier also announced it will furlough an additional 2,500 employees and closed a maintenance facility in Tampa, Florida, forcing more than 500 IAM members out of work. [/SPAN][o:p][/o:p][/FONT][/P]
[P class=MsoNormal style="MARGIN: 0in 0in 0pt; mso-margin-top-alt: auto; mso-margin-bottom-alt: auto"][FONT color=#000000][SPAN style="FONT-SIZE: 10pt; FONT-FAMILY: Arial"]The bankrupt airline is proposing to outsource aircraft mechanic work, including receipt , dispatch and deicing of aircraft, daily maintenance checks and plant maintenance work. From Fleet Service employees, the company is seeking to outsource aircraft catering, mail and cargo operations, and the removal of Fleet Service employees from stations with less than 28 weekly flights. Additionally, US Airways is proposing to double employee contributions for medical benefits and wants an immediate 5 percent “wage deferralâ€￾ if the United States goes to war with Iraq.[/SPAN][o:p][/o:p][/FONT][/P]
[P class=MsoNormal style="MARGIN: 0in 0in 0pt; mso-margin-top-alt: auto; mso-margin-bottom-alt: auto"][SPAN style="FONT-SIZE: 10pt; FONT-FAMILY: Arial"][FONT color=#000000]“The leadership of Districts 141 and 141-M are in agreement that additional changes to our collective bargaining agreements are not acceptable,â€￾ said District 141 President Randy Canale and District 141-M president Scotty Ford in a joint statement. “IAM members have already answered US Airways’ distress call, and acted responsibly. US Airways needs to work within the framework they designated to find solutions to their latest situation.â€￾[/FONT][/SPAN][o:p][/o:p][/P]
 
OP
C

chipmunn

Guest
MDA management suspended ALPA negotiations because US Airways has proposed to the MEC that MDA be structured differently than as required by the Restructuring Agreement.

The new company proposal includes resolving Mesa/Freedom Air 70-seat RJ issues and operating the 70-seat EMB-170 and EMB-175 aircraft as a separate mainline division under American Eagle contractual limits.

Specifically, the company's proposal states:

The Company agrees to operate MDA as a separate division within mainline-US Airways, Inc.

Wages, benefits and work rules will match the AA Eagle pilots agreement.

70-seat "large jets" to be placed at Mainline, 50-seat "medium jets" to be placed at participating affiliates (150 percent MDA ratio to be modified accordingly).

Reports indicate these aircraft would be in addition to the proposed minimum aircraft fleet size of 279 aircraft, which would be A-318/B-737 size and above.

The corporate advantage of placing the 70 and 78-seat RJs on the mainline is that the airline would not need a new DOT operating certificate, the company would simply introduce a new fleet type, and the RJ airline infrastructure would be in place.

This could provide much needed RJ feed and additional incremental revenue 12 months earlier than if US Airways waited for MDA to begin operations in 2004 and provide "soft landing" J4J opportunities faster for all employee groups.

Chip
 

gilbertguy

Senior
Aug 29, 2002
368
0
WHEREAS the MEC is committed to minimizing pilot job losses,

THEREFORE BE IT RESOLVED that the Negotiating Committee, supported by the MEC’s financial, R& I and legal advisors, is directed to enter into negotiations with management to develop a comprehensive program of additional cost reductions, including compensation, productivity, and pension modifications, in order to ensure US Airways’ emergence from bankruptcy and approval of an ATSB guaranteed loan, and

BE IT FURTHER RESOLVED that any such cost reductions be limited to those that are necessary and in the best interests of the US Airways pilots with minimum possible impact on pilot jobs, and

BE IT FURTHER RESOLVED that the participation of the US Airways pilots shall be contingent on participation of all labor groups and management in the comprehensive program of cost reductions, and

BEST INTERESTS? MINIMUM POSSIBLE IMPACT? IAM....CWA....THEY ARE COMING(GUNNING) FOR YOU!!!
7.gif']
 

delldude

Veteran
Oct 29, 2002
28,253
5,882
Downrange
www.youtube.com
[P]
[BLOCKQUOTE][BR]----------------[BR]On 12/3/2002 1:58:14 PM chipmunn wrote:
[P]MEC CODE-A-PHONE UPDATE - December 3, 2002[BR][BR]This is Roy Freundlich with a US Airways MEC update for Tuesday, December 3, with two new items: [BR][BR]Item 1. The MEC reconvened its special meeting yesterday and today at the Key Bridge Marriott in Arlington, VA, and received updates, financial analyses and reports on the Company’s financial status from the Negotiating Committee, the Retirement and Insurance Committee, ALPA’s Financial and Economic staff advisors, and the MEC’s investment banker. The MEC also received a report from US Airways President and CEO David Siegel in closed session.[BR][BR]After considering an assessment of the Company’s financial situation from the MEC’s advisors, the MEC determined that US Airways is not achieving its financial requirements for maintaining debtor in possession (DIP) financing. This financing is dependent on the Company’s financial performance, which includes reaching revenue and cash balance targets, and receiving ATSB approval for a government loan guarantee prior to emerging from bankruptcy.[BR][BR]ALPA has determined that if the Company’s financial performance continues to fail to meet the obligations under the terms of the DIP financing with the Retirement Systems of Alabama, the financing under this arrangement may not be continued. The failure to maintain this financing, combined with a continued deterioration of the Company’s cash position, would prevent US Airways from emerging from bankruptcy by March 2003 and expose the Company to deeper risks in the bankruptcy process.[BR][BR]Management’s business plan under the current Restructuring Agreement was established last summer and projected an industry revenue recovery during the second half of 2002 and sustained in 2003 and beyond. Industry and US Airways revenue has significantly under-performed these projections, which is negatively affecting the Company’s cash burn rate, cash position and obligations under the terms of the DIP financing arrangement. To meet DIP financing and ATSB approval conditions, prior revenue assumptions contained in the Company’s business plan and ATSB loan application have been revised lower, affecting the cost conditions of the application.[BR][BR]Management has taken the position that it cannot adequately enhance revenue to ensure US Airways’ success through the bankruptcy process (even with additional small jet code-sharing relief) and has requested an additional 200 million dollars in annual cost reductions from labor through productivity improvements and benefit changes, of which 101 million dollars would come from US Airways pilots, to compensate for the revenue shortfall. The MEC has not accepted management’s position that cost reductions be achieved strictly through productivity because of the impact this would have on pilot jobs.[BR][BR]ALPA has also determined that the pilots’ pension plan is at risk of being frozen or undergoing a distress termination, as a result of the Company only meeting minimum funding requirements and the negative performance of financial and equity markets. A return to normal market performance would not significantly help the Plan for many years. Therefore, modifications of the Plan’s benefits, including reducing the yearly multiplier going forward, total benefit calculation, and payment options, are being considered by ALPA to help the Company obtain funding deferments from the PBGC, which insures the Plan. Significant funding contributions to the Plan are required to remedy its current financial status and risks to the PBGC.[BR][BR]After careful consideration of the Company’s financial performance, management’s modified business plan, ATSB guarantee loan and DIP financing requirements, risks to the pilots’ pension plan, and management’s request for additional cost reductions, the MEC passed the following resolution:[BR][BR]MEC Resolution[BR][BR]WHEREAS airline revenue has failed to return to levels necessary to support required financial commitments and the ATSB Restructured Business Plan, and[BR][BR]WHEREAS the future of US Airways depends upon continued financing from RSA and the ATSB, as well as a funding waiver from the PBGC, and[BR][BR]WHEREAS the US Airways MEC negotiating committee and financial advisors have completed a study of the current situation and have concluded that additional cost reductions beyond those in the Restructuring Agreement are necessary to sustain the airline through bankruptcy and achieve ATSB approval for a loan guarantee, and[BR][BR]WHEREAS the MEC is committed to minimizing pilot job losses,[BR][BR]THEREFORE BE IT RESOLVED that the Negotiating Committee, supported by the MEC’s financial, R& I and legal advisors, is directed to enter into negotiations with management to develop a comprehensive program of additional cost reductions, including compensation, productivity, and pension modifications, in order to ensure US Airways’ emergence from bankruptcy and approval of an ATSB guaranteed loan, and[BR][BR]BE IT FURTHER RESOLVED that any such cost reductions be limited to those that are necessary and in the best interests of the US Airways pilots with minimum possible impact on pilot jobs, and[BR][BR]BE IT FURTHER RESOLVED that the participation of the US Airways pilots shall be contingent on participation of all labor groups and management in the comprehensive program of cost reductions, and[BR][BR]BE IT FURTHER RESOLVED that the negotiations include appropriate protections and returns, and[BR][BR]BE IT FINALLY RESOLVED that the negotiating committee will report regularly to the MEC on the progress of negotiations and will promptly report the reaching of any tentative agreement.[BR][BR]Item 2. MDA management has informed the MDA Negotiating Committee that it needs to suspend negotiations next week. US Airways has proposed to the MEC that MDA be structured differently than as required by the Restructuring Agreement.[BR][BR]Please remember we have 1,356 pilots on furlough, with 326 pilot furloughs scheduled for January 7, and 145 additional pilot furloughs anticipated through April 2003.[BR][BR]Thank you for listening.[BR][BR][/P]----------------[/BLOCKQUOTE]
[P][/P]BE IT RESOLVED WHEREAS AND WHEREFORE:YOU GUYS WERE IN BED WITH THE COMPANY WHEN IAM PUT THEIR ASSES ON THE LINE AND YOU HELPED THEM THROUGH OUR STRIKE SO NOW ITS YOUR TURN AGAIN TO HELP OUT YOUR "PARTNERS IN CRIME" ONCE AGAIN,THIS TIME MY FREIND-BEND OVER HERE IT COMES AGAIN-BOHICA RULES!
 

Winglet

Veteran
Aug 20, 2002
1,377
15
www.usaviation.com
It sure looks like Siegle is trying to turn U into a commuter style airline with no work rules. Outsourcing at will and a pilot contract at commuter compensation and retirement. If he can't get that, then he'll parse out the parts that are worth something and bin the rest. This slow-leak approach to compensation cuts is classic.
 

autofixer

Veteran
Aug 20, 2002
1,804
241
www.usaviation.com
It is all about protecting those pilots at the top! This way the captains get to keep their seat, after all,that is the most important thing in the world to alot of guys. Pay and benifits are secondary, "junior" pilots (14 years) are thriceary. I guess I was never cut out for this airline stuff!
 

AOG-N-IT

Veteran
Aug 19, 2002
1,132
1
www.usaviation.com
autofixer, Don't begin to discount your efforts or personal accomplishments by saying "You weren't cut out for the airline business".

Nobody was cut out for a slanted slope that only chooses to protect a favored few..at the terrible expense of a junior yet powerless majority.

Sure "powerless" is not exactly accurate..but to impower the lower eschelon it would also take down the entire airline by the means that power would be achieved and exercised.

Basically it would take everyone in every work group whom is junior to band together in a collective voice saying NO to whatever Dave asks.

This would give us power over only those senior to us...and would ultimately lead to a quick end to USAirways as a whole. That kind of power would be a short lived issue..and still put everyone on the payroll on the street. You would really have to reach down deep...and ask yourself if you wish to be party to that?

FYI...I ask myself this same question frequently...and I keep coming to a conclussion somewhere in an area of "Middle-Ground" Hopefully Dave and our so called esteemed unions can find this place as well.
 

ITRADE

Veteran
Aug 19, 2002
2,860
0
DCA/IAD US2
www.geocities.com
[P]
[BLOCKQUOTE][BR]----------------[BR]On 12/4/2002 1:13:48 PM diogenes wrote:
[P][BR]Well, well, well - who's your daddy? I floated this idea as soon as Gangwhal started hollering RJ's. U once had a fleet of RJ's (F28's) and the pay scale for them was STILL a part of ALPA's current contract - why not buy RJ's of a comparable size, or resurrect the F28's, place them in the fleet and have done with it? But noooooooo, U was hellbent on outsourcing THEN, so this was an idea that did not fly. Funny how things come full circle. And to think, I gave them the idea for nothing - shoulda gone into management and scored some of that bonus (employees spell that 'bone us') money.[BR][BR]---------------[BR][BR][STRONG]There are at least 30 or 40 F-28s sitting out in the desert right now.[/STRONG][/P][/BLOCKQUOTE]
 

diogenes

Veteran
Aug 22, 2002
2,515
0
Chip posted[blockquote]
----------------
The new company proposal includes resolving Mesa/Freedom Air 70-seat RJ issues and operating the 70-seat EMB-170 and EMB-175 aircraft as a separate mainline division under American Eagle contractual limits.

Specifically, the company's proposal states:

The Company agrees to operate MDA as a separate division within mainline-US Airways, Inc.



Reports indicate these aircraft would be in addition to the proposed minimum aircraft fleet size of 279 aircraft, which would be A-318/B-737 size and above.

The corporate advantage of placing the 70 and 78-seat RJs on the mainline is that the airline would not need a new DOT operating certificate, the company would simply introduce a new fleet type, and the RJ airline infrastructure would be in place.

This could provide much needed RJ feed and additional incremental revenue 12 months earlier than if US Airways waited for MDA to begin operations in 2004 and provide "soft landing" J4J opportunities faster for all employee groups.
-----------------------------------------------------------
Well, well, well - who's your daddy? I floated this idea as soon as Gangwhal started hollering RJ's. U once had a fleet of RJ's (F28's) and the pay scale for them was STILL a part of ALPA's current contract - why not buy RJ's of a comparable size, or resurrect the F28's, place them in the fleet and have done with it? But noooooooo, U was hellbent on outsourcing THEN, so this was an idea that did not fly. Funny how things come full circle. And to think, I gave them the idea for nothing - shoulda gone into management and scored some of that bonus (employees spell that 'bone us') money.
 

ForkTime2002

Advanced
Nov 27, 2002
110
0
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[P]
[BLOCKQUOTE][BR]----------------[BR]On 12/4/2002 1:22:32 PM ITRADE wrote:
[P][BR][BR]
[BLOCKQUOTE][BR]----------------[BR][BR][BR][STRONG]There are at least 30 or 40 F-28s sitting out in the desert right now.[/STRONG][/BLOCKQUOTE]
[P][/P]----------------[BR][/BLOCKQUOTE]
[P][BR][STRONG][FONT face="Times New Roman" size=3]Training materials? Current F28 airmen on the property?[BR]Whats it going to cost to bring them back from the desert and get them into shape for revenue service?[BR][BR]Almost make you wonder why we ditched paid for dc9s...[BR][BR]northwest seems to be having success with em.[/FONT][/STRONG][/P]
 

diogenes

Veteran
Aug 22, 2002
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FT, as of NOW it is unfeasible to resurrect the F28's. Two or three years ago - doable. The larger point is, U HAD RJ's, and frittered them away.
 

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