ALPA STATEMENT 12-26-02

wts54

Senior
Sep 16, 2002
374
0
www.usaviation.com
Subject: Fwd: A Letter from MEC Chairman Captain Paul Whiteford
MEC Communications
wrote:
From: MEC Communications
ualmec@united.alpamail.org>
To: UAL MEC
Subject: A Letter from MEC Chairman Captain Paul
Whiteford
Date: Fri, 20 Dec 2002 12:08:41 -0600
Dear Fellow Pilot:
I apologize for the delay in communicating directly
with you. I hope you can understand that my days -
along with many of your fellow pilots who are
working
long hours for the MEC -- have been rather full.
There are several topics that I want to review with
you. The first is an update on the bankruptcy
proceeding. As you know, we have been very actively
engaged in the bankruptcy court since United filed
for
Chapter 11 on December 9th. As part of this effort,
we
have been involved in proceedings including the
State
Street Bank over the sale of the last of the ESOP
stock. In that regard, ALPA has developed an
interesting proposal which we believe serves all
parties'' interests.
Our solution has three components. First, it would
permit State Street to sell the balance of the
stock,
thereby achieving whatever residual value it may
generate for the employees, and permitting it to
fulfill what it perceives as its fiduciary
obligations.
Second, United would get to preserve the tax loss
carry-forwards which are otherwise threatened by the
stock sale. And finally, ALPA and the IAM would
retain
our special governance rights on the Board of
Directors. This proposal is under active
discussion,
but in any event this will all play out by year-end,
and hopefully an acceptable solution will be found.
In addition, as you know, we have succeeded in being
named to the Creditors'' Committee along with AFA and
the IAM. Our representative, Captain Goefrry
Garrett
(SEA 767), has been named Vice-Chairman of the
Committee. We are pleased with our representation
in
this process.
The most important immediate issue in the Bankruptcy
Court is the announcement the company made earlier
this
week regarding its filing of a Section 1113
Petition
on December 26th. The press has made much of this,
and
you have seen stories suggesting that a new contract
will be imposed on us by the court on that date.
That
is not true. What is true is that by February 28th,
in
order to access the second round of DIP financing,
certain financial benchmarks must be met. One of
those
is a reduction in costs for the period of the DIP by
a
specified amount. We believe that much of this
reduction will necessarily occur in the various
labor
agreements. Filing a Section 1113 Petition starts a
timetable under the Bankruptcy Code which will
permit
the Company, if consensual agreements cannot be
reached, to seek a court-imposed solution in advance
of
the February 28th deadline.
However, what must be understood is that Section
1113
imposes an obligation on the Company to negotiate in
good faith to achieve a consensual agreement. Our
advisors believe that the bulk of those negotiations
are likely to occur in January. In short, there is
no
need to be concerned on December 26th when you hear
or
read that the Company has filed such a petition. We
expect the Company to do that as a matter of course,
and we will continue to work with United under the
timetable provided by the statute.



That brings us to the negotiations themselves. The
Company has presented ALPA with a proposal. To date,
this proposal has not been supported by a business
plan
or detailed costing analysis. Our Committee,
together
with our financial, legal and R&I advisors, have
been
working with the Company to get the data necessary
to
assess what total contribution should appropriately
be
made by labor, the proportion fairly attributable to
ALPA, and the manner in which we would propose to
make
that contribution in order to permit United to
successfully emerge from Chapter 11, which is our
ultimate objective. We hope to have largely
completed
that process by year-end so that we can present our
conclusions to the MEC, receive its negotiating
directions, and thereafter engage in serious
discussions with United.
A few words about the Company''s proposal are in
order.
On its surface, it is extremely onerous. It is not
tied
in any way to the Company''s financial plan, and it
has
not yet been fully costed. It appears to represent
a
wish-list of those in WHQ who have long wanted to
dismantle our collective bargaining agreement. We
have
elected not to circulate the document because we do
not want to create uncertainty in the pilot ranks,
because we believe it will create a further feeding
frenzy among the press, and most importantly,
because
it is not our policy to negotiate publicly.
Certain things about the proposal are worthy of
comment, however. First and foremost, the wage
reduction proposed by the Company is well above the
ERP
II reduction, and the build-back is very small.
While
we do not believe that reductions of this magnitude
are
warranted, all pilots need to understand that the
wage
cuts in bankruptcy will exceed - significantly -
those
we agreed to give in ERP II in an effort to avoid
bankruptcy. Other areas where we know relief is
inevitable include some modification and sharing of
cost in the health insurance area, the achievement
somehow of a low-cost alternative to carriers such
as
Jet Blue, and further modifications to our Scope
Clause.
The Company wants relief in many other areas,
including
pensions, productivity, work rules, vacations,
days-off, and on and on. Take your Agreement out
and
find any provision that affords you a benefit. The
Company wants to eliminate it or, at a minimum,
significantly reduce it. All of these, however, will
have to be negotiated and the ultimate result will
have
to be rational. The Company''s Opener in our view
is
not rational and we will not agree to it.
A final word or two. There will be many twists and
turns and new surprises every day. The most
important
thing each of you can do is be patient, stay
informed
and do your professional best to run a safe,
efficient
operation that helps us keep our passengers happy
and
to win new ones for our company. That is absolutely
critical to our emergence from bankruptcy. We will
have
our differences with the Company, but it is of
paramount importance that we maintain the very best
operation we are capable of producing.

> > > Fraternally,


> > > Captain Paul Whiteford