Alpa Mec Code-a-phone Update

[USA320Pilot]

MEC CODE-A-PHONE UPDATE - September 14, 2004

This is MEC Chairman Bill Pollock with a US Airways MEC update for Tuesday, September 14th, with two new items:

Item 1. In response to the MEC’s resolution of Friday, September 10th that redirected the Negotiating Committee to resume negotiations with the Company, the Negotiating Committee forwarded a counterproposal to management on that same day. This proposal, as directed by the MEC’s resolution, used the framework of ALPA’s August 28th proposal to the Company, although that proposal had already been rejected by the Company by August 30th. On Sunday, the Company rejected this proposal for a second time, saying it fell far short of the financial goal and that it did not take into account the realities of our situation. The Company’s response is available on the pilots only home page under “Negotiating Committee Information.â€

As the Negotiating Committee is restricted by the MEC’s resolution on September 10th, and as our advisors have said that unless these restrictions are lifted—which only the MEC can authorize—we are unlikely to reach a consensual agreement with the Company during bankruptcy unless the MEC removes these restrictions. It is the hope of the MEC officers that the MEC will soon make the decision to remove these restrictions on the Negotiating Committee so that we can engage in serious discussions with the Company to work toward a consensual agreement. Please continue to use the code a phone and website to keep updated on all negotiations news.

Item 2. In response to U.S. Senator Rick Santorum’s comments regarding ALPA and US Airways’ bankruptcy, I have released a statement that will be available shortly on the pilots only website.

Please remember we have 1,879 pilots on furlough.

Thank you for listening.

 

[EyeInTheSky]

Folks, you're watching ALPA implode.

 

[USA320Pilot]

Here's the sequence of events:

1. On September 4 the NC provided the company with a proposal that called for a 20.25% pay cut and a 40% DC plan cut with other contract changes. The company valued and proposal at about $270 million, $25 million short of the $295 million target that is now apparently being demanded by the ATSB.

2. On September 5 NC chairman Doug Mowrey told Bruce Ashby to make up the difference by adding more to a pay cut. The company reponded with a 23% pay and 50% DC Plan cut on September 6. September 6 was the last day the MEC could obtain a TA and have the mebership ratify the deal by September 11, the day before the bankruptcy filing.

3. Then on September 10 two events occured. The Company provided ALPA with a new proposal calling for a 16.5% pay cut and converting the DC Plan to the America West 401(k) that is a 7% gross pay contribution and a 3% match, for a total of 13%. Shortly thereafter the RC4 issued their 27th "roll call vote" in 6.5 months in office directing the NC to offer a 16.25% and a 10% DC Plan cut, which was further away from getting a deal and nowhere close to the company's/ATSB pilot cost cut target and the previous ALPA proposal of a 20.25% pay and 40% DC plan cut.

This is what has Senator's Santorum and Specter so upset.

Meanwhile, Boston First Officer Rep Garland Jones wrote today according to our advisors, it's simply a logical business decision that any business would now take once in bankruptcy. The company's ask will go up (by 125-150%) because they will be in a position of trying to persuade an investor to provide us with DIP financing without any labor groups having voluntarily come on board, thus raising the returns that an investor will demand for his participation. And from where do they get those returns?

Out of the labor contracts that the company hopes will be imposed by the judge in the 1113 process.

And specifically, what will the company need to take from our contract and give to an investor? Scope (fragmentation, as it depreciates the market value of the assets), Profit Share (goes to the DIP investor), Equity Participation (also goes to the DIP investor), and the 279 fleet guarantee (that guarantee takes away flexibility from the new owner).

And this, of course, is in addition to Jet Blue work rules and America West pay scales, with an America West 401K replacing our DC Plan. Chillingly, all these issues are addressed in the company's proposal on Friday, Sept. 10, now the latest proposal before the bankruptcy filing, with all prior company offers and proposals officially withdrawn.

What else do we now have that the company might want back? According to our advisors, our entire contract is now in jeopardy of being thrown out, resulting in the company's ability to furlough out of seniority. And the list goes on and on.

The company's Sept. 6 proposal was a 23% pay cut, worked off of our contract, thus protecting many quality of life issues, and preserved 50% of our DC Plan. Moreover, it protected Fragmentation, Profit Share, Equity Participation, the 279 fleet, and left many other portions of our contract, such as Seniority, Furlough, Training, Grievance, and Discipline virtually untouched.

And along with this proposal the company offered a 1113 waiver letter stating that they would not take this Agreement before the judge in an 1113 action for the first 60 days of bankruptcy, and if Transformation Agreements were in place with all other labor groups (voluntary or imposed), that this 1113 protection would extend to Jan 31, 2005.

Why these restrictions on the 113 waiver letter? Because if we don't have all labor groups with a Transformation Agreement done by the end of the first 60 days, then the company loses control of the process, allowing the creditors to put forth motions in front of the judge that may very well be for our liquidation. Similarly, if we don't exit bankruptcy by Jan 31, 2005, then it means that a successful reorganization was not possible anyway.

And all of this is now at risk of being lost by the decision of Freshwater, Brookman, Crocker (proxy) and Von Bargen not to allow the company's Sept. 6 proposal to go out for a membership vote. And why didn't they allow the membership to decide?

Because to do so, they would have had to send it out from the MEC, thus acknowledging that this was the best deal that the pilots were likely to get, either before or after bankruptcy. This they were unable to bring themselves to do, as they ran on a platform of "not another dime" to the company, and thus they chose the cowards way out by "letting the judge decide."

And as was explained by the MEC's legal counsel, the judge does not "split the baby," contrary to the popular misconception held by many, not does he care about how much "pain and suffering" this pilot group has endured prior to reaching his courtroom, but can only rule up or down on the company's motions put before him.

And the first ruling? The company did not move to pay us the monies owed to our DC Plan pre-bankruptcy, and the judge approved the company's motion. Tell you something as how this is going to go for us? And it's only the company that has the exclusive right during the next 60 days to bring reorganization motions before the judge.

What's next? Expect the 1113 process to start (again a call by our advisors) within a matter of days from our filing, as the company needs to hoard all cash in order to provide its own DIP financing (the ATSB has allowed some very restricted use of their guaranteed loan money, and for a one month period only, with the company's lawyer stating in bankruptcy court that this is going to be a "contentious" issue with the ATSB).

And the irony of it all is that the Roll Call 4, who are directly responsible for putting us in this untenable situation, still don't get it.

Don't believe it? Just ask them.

And our legal and financial advisors, those who the RC4 refused to believe? So far, they have been batting 1000.

Respectfully,

USA320Pilot

 

[USA320Pilot]

Yesterday Judge Mitchell approved all 35 company motions, which is just like his actions during the last proceeding.

Here comes da' judge!

Respectfully,

USA320Pilot

 

[700UW]

Wrong, he did not approve all 35. There were several he did not.

The pension payment was ordered to a hearing.

You really need to seek some help, sounds like you take glee in the PAIN the company will be inflicting upon you.

 

[Walmartgreeter]

Yesterday Judge Mitchell approved all 35 company motions, which is just like his actions during the last proceeding.

Here comes da' judge!

Respectfully,

USA320Pilot

[post="180090"][/post]​

Were any of the motions in the last BK related to the deleting of current employee contracts? Were any of the motions yesterday related to the termination or change of any employee contracts? Hmmm. Here comes the judge, indeed. This time placing ALL employees, and hopefully management employees, on a level playing field for cuts. As to the Senators from PA.......heck, it deserves it own thread under "guys who hate certain pilots because other pilots told them so." Also, how is your letter writing campaign to ALPA national going? Greeter.

 

[700UW]

There were no motions filed in regard any union contracts.

 

[PITbull]

I was watching channel 4 in Pittsburgh and it showed Rick Santorum making statments regarding labor, ALPA and USAirways in BK.


He blamed labor.

Couldn't believe it came from him.

Iwill ensure he has not only my "NO VOTE", coming this NOV., but everyone I come into contact with, via e-mail, word of mouth, media etc....

No one knows the intimate sacrifices of these employees like we on the inside do.

 

[SpinDoc]

Wrong, he did not approve all 35. There were several he did not.

The pension payment was ordered to a hearing.

You really need to seek some help, sounds like you take glee in the PAIN the company will be inflicting upon you.

[post="180092"][/post]​

No, 700. He is taking glee in the fact that the IAM members will
finally get what they deserve. The IAM chose to ignore the
problems the company is having, and now, the judge will make
the problems crystal clear. The IAM had the chance to play ball,
now they will watch from the sidelines because they forfeited the
game.

 

[SpinDoc]

I was watching channel 4 in Pittsburgh and it showed Rick Santorum making statments regarding labor, ALPA and USAirways in BK.
He blamed labor.

Couldn't believe it came from him.

Iwill ensure he has not only my "NO VOTE", coming this NOV., but everyone I come into contact with, via e-mail, word of mouth, media etc....

No one knows the intimate sacrifices of these employees like we on the inside do.

[post="180106"][/post]​

A typical "knee-jerk" reaction from the the union representatives.
Santorum was right. Read the supplemental filing that is on
www.transformingusairways.com. It tells the REAL story about
why the company is in the position it is in and what needs to occur
to fix the problem.

 

[USA320Pilot]

Greeter:

It was good to see you at the MEC meeting last Friday when you spoke to the MEC. By the way, why did you not come up and speak to me?

Respectfully,

USA320Pilot

 

[700UW]

No, 700. He is taking glee in the fact that the IAM members will
finally get what they deserve. The IAM chose to ignore the
problems the company is having, and now, the judge will make
the problems crystal clear. The IAM had the chance to play ball,
now they will watch from the sidelines because they forfeited the
game.

[post="180111"][/post]​

You can trust the company,but I won't, they violated every contract post bankruptcy last time.

They have proven to be liars and untrustworthy.

Burn me once shame on you, burn me twice shame on me.

You really need to educate yourself on what happened.

Glad to see you are living up to your moniker.

 

[planejane]

Hum...Is Rick Santorum running? I thought it was Spector seeking re-election?

 

[kiloromeo]

How many man-hours does Jet Blue put into ALPA negotiations?.... of course none, they put their energies into executing buisness plans... legacy carriers can not compete with this baggage. Why not adopt Jet Blue's work rules and benefits now? ... after all, one of the best scenario if U goes C7 is that you would get hired by Jet Blue and end up with their work rules anyhow...

the 29$, 49$ and 79$ fares are not going to go away in fact they will continue to invade all US domestic markets... these fares will not support the last 50 years of negotiated stuff...unfortunatly.

 

[sfb]

Read the supplemental filing that is on
www.transformingusairways.com. It tells the REAL story about
why the company is in the position it is in and what needs to occur
to fix the problem.

You mean this:

The growth of low-cost carriers (“LCCsâ€￾) over the past 18 months, and their increase in pricing power in the domestic market, have had a profound structural impact on the airline industry. US Airways did not accurately anticipate the magnitude of this structural shift.

And this:

...US Airways was wrong about the revenue environment in which it would have
to compete.

And this:

US Airways assumed that the LCCs would not be able to compete effectively with legacy carriers for business travel, in large part because of the nature of their product. As it turns out, however, the LCCs have dramatically penetrated not only
US Airways’ core markets...

And this:

Admittedly, US Airways failed to predict the full impact of these transforming developments in the industry.

Right?

It's not like Southwest's, AirTran's, or jetBlue's orders for new aircraft weren't matters of public record back in 2003. You can look at WN's 10-K for 2002 and see that they had at least 86 firm orders and 45 options for 737-700's for 2003-2006 -- they were going to need to fly them somewhere. JetBlue had orders and options for 75 A320's. It was public knowledge that AirTran was in negotiations with Boeing and Airbus for a large new order.

Look at how WN dominates short-haul business-oriented routes in Texas, the Midwest, and California -- they sent United Shuttle packing -- and try to say with a straight face that they can't "compete effectively with legacy carriers for business travel, in large part because of the nature of their product." What a crock! It's not like this was a secret to anyone in the industry. You can go look at DAL or HOU or BUR or SJC or MDW or BWI or MCI -- there are a lot of suits and briefcases waiting to get on what PineyBob so eloquently calls "the turd-brown bus." 30-40% of their tickets are sold at the walk-up fare -- the people buying those tickets are largely "business travelers."

The problem is that labor is indeed stuck with paying for management's cranio-rectal inversion. The choice is crystal-clear -- either you bend over or the company goes out of business because management is unable/unwilling to fix its near-industry-high non-labor CASM. The company's stage-length-adjusted non-labor CASM is higher than LUV's stage-length-adjusted total CASM. Even if you worked for free, the company's structural inefficiency would still mean that Southwest had lower costs.