ALPA says NO!

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On 8/30/2002 12:31:11 PM

One of two things is going on here. First, management is trying to go to bankruptcy, and proposed cuts they knew the unions would not accept, in an effort to make the unions look bad. The second option is this....basically managment really has no idea how to get this company on track, and therefore wants to shift all the burden for it to labor
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I'd totally agree with you except for one thing: I think BOTH of those things are going on here!
 
Is it credible? Hmmmmmmmmmmmm, you just might want to keep tabs on the newswire on Tuesday. Ya never know what might show up.
 
Well put BlueSkies. I don't agree that CH11 is a forgone conclusion. I am confidnet that they have or are planning on dangling a new ceo in front of labor if they agree to play ball and avoid CH11.

But...if they do file - look out. Have you noticed Carty and Mullins never criticized UA for applying for the loan like NWA and Bethune did? Successful emergence from CH11 would kick AA and DAL's ass.

I wouldn't be surprised if AA didn't threaten to file as well. How would George W. look if the number 1 and 2 airlines are CH11? Don't forget AA sponsored W's innaguration ball.

This is such a complex issue and fluid situation at UA. They have only just begun. That's why I am stubbornly refusing to make any forgone conclusions about what will happen. This will stretch well beyond the imposed deadline as management and labor continue to posture.

This is more than a soap opera than As The World Turns.

It was my birthday last week and I asked friends and family to buy full fare tickets on UA in lieu of gifts [:)]
 
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On 8/30/2002 1:53:32 PM

I personally think your new CEO has already been decided...contingent on UAL entering BK. Their FIRST priority will be to dissovle the ESOP. I then expect them to attack all the contracts with a vengence. If UAL comes out of BK with a ATSB loan backing and a competitive edge, we have not even began to see the earthquake that will be created with the verosity of competitiveness. This is a complex situation that cannot be allowed to create an unfair advantage against the carriers that have maintained financial stability. This is without a doubt, going to get ugly...for ALL of us!
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Check out the price for your unsecured bonds Blue Skies, your implied interest rate, although not as bad as UALs ain't pretty. One could make the argument that Minn shouldn't have bailed you guys out in 1993. Although UAL bears a large amount of responsibility for it's current situation, it has been exacerbated by some preditory activities by 2 other airlines. Now I wonder if old slick (You gotta love that slicked back look) and Carty had any idea the gravity of the situation they put themselves in. If UAL was able to lower total cost in the range of 17%, or 650 million per quarter, what do you think the effect would be on NWA and AMR who won't have the benefit of an ATSB loan. "but we can get loans now" you say. "We have assets"!! Unfortunately, the financial markets are VERY fical. If say 1st Q 2003, UAL post a modest profit while AMR loses more than 500 million (using the number from last Q and assumming NO gain in market share from UAL using pricing power to lure away customers) and AMR having no chance for a loan guarentee, what do you think the effect on AMRs access to capital will be? The same applies to NWA. how long can you afford a 2.5 billion a year cost advantage at UAL? 6 years? I'm not saying this to attack AMR or NWA, I'm saying this because YOU guys at AMR and NWA need to get involved!! UAL WILL get whatever cost savings it needs to survive, one way or another. Do you want that cost savings to be resonable? Small enough so that we don't enjoy a HUGE cost advantage? Then call you sen and reps and express your concern, as an employee at a rival airline, about the nuclear effect the ATSBs current policies will have on the industry. It will serve to destabilize them nearly as much as Sept 11.
 
UAL777Flyer:

I do see your point on getting a new management team in place asap. It's hard to create a business plan that labor will embrace with the old team.

Just read your post about ceo announcement on Tuesday. Do you think it's a credible announcement? If so...any thoughts as to who it is?

Thanks for keeping us in the loop!
 
As usual Busdrv, you are compelled to try your best to attack every other airline because of YOUR problem. READ MY LIPS for the tenth time....LBO. Please allow me to share a few "facts" with you. Northwest Airlines was no doubt on the door of BK at one time. However, we got there BECAUSE of the massive debt that comes with LBO's Billions borrowed against ones own unencumbered assets and cash. In 1989 with the leveraged buyout of Northwest Airlines . An investor group(Checchi, Wilson) mounted a bid for the airline, they found an eager equity partner in the Netherlands' national flag carrier KLM Royal Dutch Airlines. KLM was the world's twelfth largest carrier but was operating from a country with only 16 million people and was therefore under strong pressure to link up with another carrier in order to strengthen its position in Europe. Checchi, Wilson contributed $40million total, while KLM provided $400 million as part of the leveraged buyout of Northwest worth $3.7 billion. The foreign ownership aspects became controversial as the KLM/NW deal and the financial weakness of US carriers threatened to kick off a wave of such buyouts with the participation of foreign carriers. To dampen concern about foreign takeovers and fears that the debt burdens associated with leveraged buyouts would compromise safety, US regulators announced that the United States would remain open to foreign investment but would closely monitor cross-border deals for evidence of foreign control. Thus, this is why NWA was the ONLY healthy airline to suffer the LBO fate. This debt had to be repaid of course. So, because of the insane screwed-up laws of business in this country at the time, which have been changed, that is the ONLY reason we got screwed. Prior to the LBO, NWA was the ONLY airline to enjoy 50 straight years of pofitability. Something even SWA has yet to accomplish. Remember the same thing almost caught UAL. You will find that NWA is one of only a few airlines that have a Poison Pill in it's corperate gov. Once burned, twice deserved. I keep hearing all of these great expectations that the government is absolutly NOT going to allow any airline to fail. It has happened BEFORE to far GREATER Carriers...many times. And, I am afraid it WILL happen again. That was the ONLY reason we were in that positon. Regardless of your micro "facts", YOUR house is on FIRE! Do your reputation justice and your fellow UAL'ers and skip the petty ridiculousness. You can try to pick apart every detail of NWA's operation...and the end result is the same, who's shoes would you rather be wearing right now. We're here and you are there. This is strickly a reply to Busdrv, and by no means meant as an insult to the employees of UAL.
 
As usual, you've misread my post Upperdeck. Is UAL bleeding cash? Absolutely. Part of the reason is we just finished up contracts after a number of years of low wages. To say that you somehow suddenly have a much better business model despite the limits of your alliance, your debt to equity, level of pension underfunding, and the age of your fleet is kind of silly. Pay all the NWA employees UAL wages, and you're in the same boat. Your unsecured debt in second only to UAL amoung the bigs with respect to implied interest rates. Yep, AMRs is lower. but make no mistake, UAL WILL survive this in some form or another. It is in your best interest that that form be with wages (costs) as close to your as possible. You site poor financial decisions out of your control as reasons for you debt load with respect to your franchise strength...I think the same argument could be made for others, don't you think?
 
Blueskies,

Although I agree with your posts it does hurt the ego to have an outsider, albeit a friendly one, remind us of how crummy things are here. We just get defensive so please don't take it personally. All the majors are not really that far from where we are so the stones and glass houses thing comes to mind. I appreciate your concern for us so don't take it personal I doubt Bus is thinking we are in better shape than you, for now. It would be nice however if during these troubling times you didn't post a GIGANTIC NORTHWEST LOGO on our board.

I have read the IAM term sheet and have posted it here. I don't see where it addresses these massive outsourcings and base closures. Are people implying based upon speculation of what they want to think or is it based on something I am missing here. Not at all trying to start trouble just need to find out where it says these things. I do see where it removes current grievences related to outsourcing and furloughs but I don't read deeper than a forgiveness of current outstanding grievences.

IAM 141 Company Proposal
08/28/02 1:43 PM
TERM SHEET REQUlREMENTS
Effective Date Subject to the conditions described below, the effective date of the
Union's participation in the Recovery Program will be [ ].3
Contract The amendable dates of the 141 Agreements will be extended to Extension [ ].4 The provisions in the 141 Agreements concerning opening of negotiations, completion of negotiations and request for release will likewise be extended for [ ] .
Revisions to All The hourly pay rates and premiums contained in the 141
Pay Factors: Agreements will be revised as follows:
· .For all classifications, all base hourly pay rates, premium
pay rates and all other pay factors (including but not limited
to line, shift, longevity pay and Hawaii Differential) in
effect on May 14,2002 will be reduced by 9.5%.
· .Cancel the base hourly pay rate increases scheduled for June 1,2003 and July 1,2004.
· .Cancel the premium rate increase (Service Director) scheduled for June 1,2003.
· .The base hourly pay rates will be increased by 1.5 percent
each year effective on the anniversary of the Effective Date until [ ].
Medical and Modify the Medical and Dental Plans to provide that employees
Dental shall contribute 20% of the cost of the coverage. For an employee
Coverage who chooses the HMO or Dental HMO option, if the cost of th
Contribution HMO or DHMO exceeds the cost of the PPO, the employee share
of the cost for the HMO or DHMO shall be equal to the employee
share of the cost of the PPO option plus 100% of the additional
cost.
2 The parties agree to amend the Agreements and execute such other agreements or documents as may be necessary to achieve the final terms of this Term Sheet.
3 The Effective Date will be the first calendar day of the calendar month following the closing of an A TSB loan facility.
4 The amendable date of the 141 Agreements will be extended to [the date immediately before the end of the term of the A TSB loan facility.]


IAM 141 Company Proposal 08/28/021 :43 PM
Success
Sharing Open for discussion.
Job Security Modify Letter 94-5 of the Ramp and Stores and Security Officers' Agreements, Letter 02-05 of the Public Contact Employees' Agreement and Letters 84-15,84-16,87-10 and 94-5 of the Food Services Agreement.
Settlement of Grievances The Union will withdraw with prejudice all grievances challenging reduction in force and outsourcing.
Documentation The Union's and the Company's participation in the Recovery
and Approvals Program will be contingent on (i) full and complete documentation of this Term Sheet in a manner acceptable to the Company and the Union not later than , ___2002, (ii) approval by the Union, (iii) membership ratification, (iv) such approvals by the UAL Board of Directors and Board committees as the Company deems necessary and (v) a commitment for a substantial loan facility for the Company guaranteed in substantial part by the Air Transportation Stabilization Board on terms reasonably acceptable to the
Company. The Company reserves the right to terminate its participation in the event the Company invokes the protections of the Bankruptcy Code prior to the fulfillment of the foregoing contingencies.
 
Kcabpilot,

Poor choice of words on my part. It seems relative to what is leaking out of various MEC members that we are taking compensation hits in the vicinity of 40% (700,000,000/9182 pilots = 76,236 per pilot, if average pilot makes 190,000 we make less but for the arguement use it 76,236/190,000=40%) . That is significantly more than has been publicly stated for the other groups. It sucks for all of us. I have read the IAM term sheets and have not seen the concessions on SFO<IND<OAK, outsourcing, ESOP furlough protection could you specify for me where this is mentioned in the term sheet?

UAL777,

I am not holding my breath anymore to many false alarms.[::)]

I believe in retrospect 2things about my fellow Unions on the property. Maybe, just maybe the IAM has been taking the correct tact on this situation all along. The second thing is that the press release by the AFA today was spectacular. Well written and appropriately cautious. Give us a leader and a good business plan we will talk with you about giving the money you need. Best press release yet. We can't yell and scream at each other here anymore because THEY are out to do more than just get us. THEY are out to make an example out of us to the rest of the industry and it will have far reaching affects on every airline in this country. We are in this pot so we have to deal. We can at least defend the profession for all of our commrades at our competitors.
 
UAL24, I suspect mgmt may be trying to impose concessions very similar to what U pilots agreed to.

It wasn't all pay. There were concessions on productivity, pensions, and medical. Perhaps a U pilot could provide more specifics.
 
Scope/Job
Security

Delete Article II, Paragraphs D, E, F and G of the Mechanics'
Agreement and modify all cross-references to these provisions.
Delete Article II Paragraph E and F of the Maintenance Instructors’
and Article II, Paragraph E of the Fleet Technical Instructors'
Agreements and modify all cross-references to these provisions.
Modify Letter 94-5 of the Mechanics' Agreement
 
Found them sorry you are right. Dont know the specifics of those deletions but if it is under the SCOPE section it can't be good.
 
Thats why this was not a proposal, this was a direct act of aggression. To go along with these demands was to give up maintenance entirely. They don't want money....THEY WANT OUR RE-WRITE WHAT THEY FEEL WAS DONE TO THEM WITH THE CONTRACT OF 2000....and everyone is gonna pay
 

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