American Trying To Avoid Concessions

FWAAA

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Jan 5, 2003
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AA is trying to become more productive and survive without seeking more concessions from its unionized employees:

Bucking an industry trend toward slashing wages to offset soaring fuel costs, American Airlines is betting it has more to gain by courting its employees than by squeezing them.

The leading U.S. air carrier, fortified by a $3.5 billion cash pile, has embarked on the industry's greatest experiment in union-management cooperation since an ill-fated attempt at employee ownership at UAL Corp.'s (UALAQ.OB: Quote, Profile, Research) United Airlines ended up with United filing for bankruptcy in 2002.

"Our strategy is...focused on continuing to improve our competitiveness...by having a constructive, collaborative working relationship with our people," American Airlines' Chief Financial Officer James Beer said in an interview. "That approach has continued on a regular basis to yield fruit."

The airline has encouraged cooperation by forming "leadership teams" comprising rank and file as well as management, paying performance bonuses and fully meeting its pension obligations, among other moves.

Remainder of article at http://yahoo.reuters.com/financeQuoteCompa...11470962_newsml

AA says it has obtained $200 million of increased revenue/cost savings at TULE toward the goal of $500 million by the end of 2006. Good news.

Concessions? As I have posted in other threads: Just say NO. Concessions have a place and that place was 2003 when AA was running out of money. Not in 2005 when AA has $3.5 billion of cash.

Now back to the regularly scheduled programming of "AA is gonna demand more concessions." :D
 
My take is that this press release was more meant to inflict damage on other carriers' labor-mgmt relationships than to say anything about their own. It sounds pretty empty other than that. I read "cash pile" and "forming leadership teams" that demonstrates no intention to redistribute even a minute portion of the cash.

Big :down: to the NW/DL comment. AA showed their true colors by trying to add gas to the flames at those carriers. The company should focus on their own issues.
 
Ch. 12 said:
My take is that this press release was more meant to inflict damage on other carriers' labor-mgmt relationships than to say anything about their own. It sounds pretty empty other than that. I read "cash pile" and "forming leadership teams" that demonstrates no intention to redistribute even a minute portion of the cash.

Big :down: to the NW/DL comment. AA showed their true colors by trying to add gas to the flames at those carriers. The company should focus on their own issues.
[post="311206"][/post]​

Read it again. It's not a press release. It's a news article. No AA employees are quoted discussing NW/DL or the "cash pile." Those are the words of the reporter, not AA employees.

Redistribute a portion of the cash? Are you high? Not even Delle Femine himself thinks that legacy airlines ought to redistribute that cash to workers right now.
 
FWAAA said:
Read it again. It's not a press release. It's a news article. No AA employees are quoted discussing NW/DL or the "cash pile." Those are the words of the reporter, not AA employees.

Redistribute a portion of the cash? Are you high? Not even Delle Femine himself thinks that legacy airlines ought to redistribute that cash to workers right now.
[post="311210"][/post]​

Sorry to burst your bubble but these stories don't just get dreamed up. Stories like these are pushed by the company. It happens all the time. Let's make a call to "so and so" at "xxx news" and tell them about our warm and fuzzy mgmt/labor relationship. No outside reporter is going to know of these initiatives! Of course it had to start from AA. Sorry to mis-state it as a PR but it essentially is...only AA does not have to foot the bill to get it out on the news wire.

And I never said that they should redistribute it but rather said that it is a VERY empty article b/c I am still trying to figure out how creating team leaders is going to better the mgmt/labor relationships. Empty words but with what I deem to be an unethical attempt to worsen relations at other legacies. :down: :down: :down: THAT was the intention of the article and the only non-empty portion of it.
 
Lets not forget that the company used this same exact strategy in 2002.

They claimed they were not going to the employees, that they would try other things in order to save money.

In the maentime we saw nothing change in the operation.

Then all of a sudden AA calimed they not only needed concessions but they needed more concessions than any other airline, even the ones that were in BK.

They claimed they "lost" $3.5 billion even though they fluffed up the numbers by writing off $988million in "Goodwill", the liability of AAdvangtage miles, prepaid leases and all sorts of other accounting gimmicks.

What a crock.
 
Not to worry!

The Local 514 Leadership in Tulsa will come up with another t-shirt with a slogan that will fix everything.

We've had...

"Strike Force - Dead Serious"

"An Injustice to One - Is an Injustice to All"

"Show me the Shared Sacrifice"

"United We Stand Contract '95 Negotiations"

"What part of Union Dont You Understand"

"Triumph With Unity"

"TWU - Americans Real Strength"

Therefore, feel secure that these fearless leaders will come forward with another slogan and have it printed and all will be well. B)

satire

satire, term applied to any work of literature or art whose objective is ridicule. It is more easily recognized than defined. From ancient times satirists have shared a common aim: to expose foolishness in all its guises—vanity, hypocrisy, pedantry, idolatry, bigotry, sentimentality—and to effect reform through such exposure.
 
In the maentime we saw nothing change in the operation.

Just like the "turnaround plan" :lol:
"Pull together win together" :lol:

I definately aint wining and there aint too much turning around going on :huh:
 
Bob Owens said:
They claimed they "lost" $3.5 billion even though they fluffed up the numbers by writing off $988million in "Goodwill", the liability of AAdvangtage miles, prepaid leases and all sorts of other accounting gimmicks.
[post="311261"][/post]​

The liability shown on the balance sheet for AAdvantage miles sold to partners and for miles awarded by AA to its passengers was not included in the $3.5 billion net loss for 2002.

But then again, you knew that already. B)
 
Bob Owens said:
Lets not forget that the company used this same exact strategy in 2002.

They claimed they were not going to the employees, that they would try other things in order to save money.

In the maentime we saw nothing change in the operation.

Then all of a sudden AA calimed they not only needed concessions but they needed more concessions than any other airline, even the ones that were in BK.

They claimed they "lost" $3.5 billion even though they fluffed up the numbers by writing off $988million in "Goodwill", the liability of AAdvangtage miles, prepaid leases and all sorts of other accounting gimmicks.

What a crock.
[post="311261"][/post]​
The FASB (Financial Accounting Standards Board) which is the authority that makes the accounting pronouncements (rules), issued a pronouncement that required companies to examine their "goodwill" account and to write it down if it is impaired. They ususally write it down on a straight line basis for up to 40 years. Most of AA's "goodwill" account was because of the TWA transaction. AA paid in total consideration about $1 billion more than the fair value of the assets. This amount is debited to "goodwill". Goodwill consists of intangibles that are hard to quantify like customer loyalty and experienced employees. After 9/11, AA got rid of a lot of TWA "assets", (cut STL about 70%, laid off about 70-75% of it's experienced workforce, etc.). There fore, the balance in the account was written down because AA deemed it impaired. AA also had write downs concerning permanently grounding aircraft. When an asset is no longer producing revenue (like a grounded aircraft) it must be written down. Leased aircraft and facilities are charged against earnings when they are grounded along with some devalued aircraft. And of course, AA did in the recent past have large operating loses. Can they use the accounting rules to their "advantage"? Sure, but they don't just put down whatever they feel like (which would be illegal).
 
aafsc said:
. Can they use the accounting rules to their "advantage"? Sure, but they don't just put down whatever they feel like (which would be illegal).
[post="311394"][/post]​

Thats the point, things were not as bad as they led us to believe, our union dropped the ball, or conspired with the company, in order to get them the biggest concessions package ever. The union just accepted the figures as put forward. The FASB demands that corporations dont paint a rosy picture, if they paint an overly bleak one they dont care.

What we should have had was a firm that looked through AAs books to show AAs comparative stregnth when compared to other legacy carriers with an extensive International route structure. Then we would have seen that despite the current hardship, much of it self imposed by management, that AA was situated to be not only one of the survivors but "THE" major carrier in the world.

Why would the TWU hire the firm that the company just hired to make a presentation about how bleak things were?

Why would the TWU do that?
Several possible reasons.

1) The comapny was going to take away company paid union business from union officials, that would cost these officials a total of $3.1 million right out of their pockets. Monies that neither the DOL or the members knew these officials were recieving.

The company would not have to go BK for that. They could simply just stop paying them since they not required to do so and its illegal for them to do so.

2) The industry has been poised for more consolidation for some time. This is a natural process that takes place as most industries mature. The TWU wanted to make sure that they were the union in place at the airline that took over. When the industry consolidates the remaining companies become larger, this would mean that the dues flow, due to volume, would increase despite lower wages.

3)Jim Little got paid off.

4)Jim Little is completely incompetant.

He hired the same company to review AAs claims of impending BK that AA hired to present their case to the union. As we see with the recent Wright Amendment "study" Eclat will make up a story and spin it to however AA wants them to. If Jim Little was not "on the take" then he was an utter imbecile to hire the same people. Either way he is not fit to be our leader but we can not have him removed. In fact the TWU promoted him!
 
LGA Fleet Service said:
I saw a mention of a one time $80 million dollar charge in Q3 due to the termination of a contract, anyone know what that was?
[post="311395"][/post]​

I'm pretty certain it is related to AA's replacement as the MIA terminal project manager. AA agreed to pay $105 million over 10 years to resolve all issues with the MIA airport management, dicussed in August in the thread linked below:

http://www.usaviation.com/forums/index.php...=21133&hl=miami
 
Bob Owens said:
Why would the TWU hire the firm that the company just hired to make a presentation about how bleak things were?

Several possible reasons.

1) .................................

2) ..................................

3)..................................

4)Jim Little is completely incompetent.

[post="311403"][/post]​


Nah...................He knows EXACTLY what he is doing.

.
 
Ken MacTiernan said:
"Strike Force - Dead Serious"
The twu? Thanks for the Pepsi through my nose! HA!
[post="311536"][/post]​


I bet Pepsi in the nose burns almost as much as 17.5% burned my ass!