Amfa Has Contract

[herkav8r]

MAY. 16 9:38 P.M. ET United Airlines and its mechanics' union reached a tentative agreement on a new five-year contract Monday, moving the carrier a step closer to securing the companywide labor concessions it seeks in order to exit bankruptcy.

The tentative deal gives United the $96 million in annual wage and benefit cuts it was seeking from the Aircraft Mechanics Fraternal Association, union spokesman Terry O'Rourke said late Monday.

The deal was announced as a federal bankruptcy court trial on United's proposal to unilaterally impose lower wages and benefits moved into its final days. Both the mechanics and the machinists' union -- which has not yet reached a contract settlement -- have threatened to strike if United broke the contracts without consensual agreements.

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A mechanics' agreement must still be ratified by the 7,000 mechanics at United, a unit of UAL Corp. They rejected the last tentative agreement in January, with 57 percent voting no.

The results of the new ratification vote will be released May 31, the union said.

"It's not something to celebrate," O'Rourke said of the agreement. "We are under the coercion of the bankruptcy court process, and we made the best of bad choices. "

United officials did not immediately return calls for comment Monday night.

The company and unions are trying to wrap up deals before Judge Eugene Wedoff rules on United's motion to replace existing contracts with lower pay and benefits.

United finished presenting its case on Monday, and Wedoff scheduled closing arguments in the trial for Thursday.

United, the second-largest U.S. airline, is seeking annual wage and benefit cuts totaling $176 million from machinists and $96 million from mechanics as part of targeted labor savings of $700 million yearly. It says it needs the second round of cutbacks in two years so it can persuade banks to lend it $2 billion to help it leave Chapter 11 bankruptcy.

 

[herkav8r]

Main but not all contract terms:
bullet

• Effective through December 31, 2009
bullet

• 3.9% wage cut against all pay factors
bullet

• An added layer of job security language for Line, C-checks, Ground Equipment and Line Plant Maintenance, and most Base Maintenance Shops
bullet

• Permits outsourcing of cabin cleaners system-wide with double severance pay or a three year bridge to retirement
bullet

• Eliminates job protection and allows outsourcing of all Computer Technician (CT) work with double severance pay or a three year bridge to retirement
bullet

• 5% defined contribution pension plan includes a 1% weighted distribution based on an age and service point system
bullet

• $40 million in convertible notes will be distributed to active AMFA employees
bullet

• 2X overtime reduced to 1.5X
bullet

• 2.5X holiday pay reduced to 1.5X
bullet

• 75% sick leave pay for both “N†and “I†time for the first seven workdays, 100% thereafter
bullet

• Holidays reduced from ten to eight effective January 1, 2006 (six fixed and two floaters, Easter and day after Thanksgiving dropped)
bullet

• Current vacation schedule remains unchanged
bullet

• Success Sharing participation reduced to 1%
bullet

• Allows outsourcing of 747/777 heavy maintenance (HMV) to international vendors (work currently performed by domestic outside vendors)

• Company will fund up to $75,000 per year for an audit of the 20% outsourcing limit

 

[Boomer]

Main but not all contract terms:
bullet

• Effective through December 31, 2009
bullet

• 3.9% wage cut against all pay factors
bullet

• An added layer of job security language for Line, C-checks, Ground Equipment and Line Plant Maintenance, and most Base Maintenance Shops
bullet

• Permits outsourcing of cabin cleaners system-wide with double severance pay or a three year bridge to retirement
bullet

• Eliminates job protection and allows outsourcing of all Computer Technician (CT) work with double severance pay or a three year bridge to retirement
bullet

• 5% defined contribution pension plan includes a 1% weighted distribution based on an age and service point system
bullet

• $40 million in convertible notes will be distributed to active AMFA employees
bullet

• 2X overtime reduced to 1.5X
bullet

• 2.5X holiday pay reduced to 1.5X
bullet

• 75% sick leave pay for both “N†and “I†time for the first seven workdays, 100% thereafter
bullet

• Holidays reduced from ten to eight effective January 1, 2006 (six fixed and two floaters, Easter and day after Thanksgiving dropped)
bullet

• Current vacation schedule remains unchanged
bullet

• Success Sharing participation reduced to 1%
bullet

• Allows outsourcing of 747/777 heavy maintenance (HMV) to international vendors (work currently performed by domestic outside vendors)

• Company will fund up to $75,000 per year for an audit of the 20% outsourcing limit

[post="270214"][/post]​

---------------------------------------------------------

AMFA UAL Matrix Between Imposed-Denied and Proposed Contracts

With regards to the $40 Million in convertible notes: how many AMFA Members are left at UAL and under what terms are the notes convertible?

 

[aafsc]

Main but not all contract terms:
bullet

• Effective through December 31, 2009
bullet

• 3.9% wage cut against all pay factors
bullet

• An added layer of job security language for Line, C-checks, Ground Equipment and Line Plant Maintenance, and most Base Maintenance Shops
bullet

• Permits outsourcing of cabin cleaners system-wide with double severance pay or a three year bridge to retirement
bullet

• Eliminates job protection and allows outsourcing of all Computer Technician (CT) work with double severance pay or a three year bridge to retirement
bullet

• 5% defined contribution pension plan includes a 1% weighted distribution based on an age and service point system
bullet

• $40 million in convertible notes will be distributed to active AMFA employees
bullet

• 2X overtime reduced to 1.5X
bullet

• 2.5X holiday pay reduced to 1.5X
bullet

• 75% sick leave pay for both “N†and “I†time for the first seven workdays, 100% thereafter
bullet

• Holidays reduced from ten to eight effective January 1, 2006 (six fixed and two floaters, Easter and day after Thanksgiving dropped)
bullet

• Current vacation schedule remains unchanged
bullet

• Success Sharing participation reduced to 1%
bullet

• Allows outsourcing of 747/777 heavy maintenance (HMV) to international vendors (work currently performed by domestic outside vendors)

• Company will fund up to $75,000 per year for an audit of the 20% outsourcing limit

[post="270214"][/post]​

Well, looks like AMFA finally realized it's dream of an AMT only union by "cleansing itself" of the CITs and cleaners. I wonder if AMFA performed it's duty of fair representation (DFR) with respect to the "lower classes".

 

[Bob Owens]

Well, looks like AMFA finally realized it's dream of an AMT only union by "cleansing itself" of the CITs and cleaners. I wonder if AMFA performed it's duty of fair representation (DFR) with respect to the "lower classes".

[post="270273"][/post]​

Yea well what did the TWU get for our Cabin Cleaners or building cleaners when they got rid of them? NOTHING!!

This looks exactly like what the TWU put in place at the non BK AA two years ago with two exceptions, they get more "holidays" and more vacation.

Thats why we need to get rid of the TWU so we are no longer the industry leader in concessions.

By the way if you work the line and this goes through you really get no paid holidays.

A paid holiday is where you get 8 hours pay without working. If you are required to work a holiday in order to get the equivelent of a "paid holiday" you have to get 8 hours in addition to the hours actually worked. At 1.5x for a holiday worked you are in fact working the holiday for half pay since you were entitled to the 1x in the first place.

 

[Bob Owens]

By the way the language is still in the contract for Cabin /building cleaners. They top out at $7.66 after 5 years. Not only did the TWU get them nearly $10/hr less than the average union worker, but they got them 50% less than the average non-union worker. In fact its less than the average WALMART Worker!!!!!!! All for only 2 hours gross pay per month!!! These people would be better off at Walmart than in the TWU.

 

[air_guy]

Why every topic has to end up with the never ending fight between TWU and AMFA ... this is getting boring. By the way, Bob, if United's mechanics are so much better, would you rather work there and loose your pension?

By the way the language is still in the contract for Cabin /building cleaners. They top out at $7.66 after 5 years. Not only did the TWU get them nearly $10/hr less than the average union worker, but they got them 50% less than the average non-union worker. In fact its less than the average WALMART Worker!!!!!!! All for only 2 hours gross pay per month!!! These people would be better off at Walmart than in the TWU.

[post="270351"][/post]​

 

[Emil.Howes]

FYI,

Full Contract Language

-BigE

 

[Bob Owens]

Why every topic has to end up with the never ending fight between TWU and AMFA ... this is getting boring.  By the way, Bob, if United's mechanics are so much better, would you rather work there and loose your pension?

[post="270424"][/post]​

Well actually I once considered going to UAL and was offered a position in Avionics at LAX. I chose not to go. I figured that the TWU would fix the problems with our contract-boy was I wrong. However if I had gone to UAL then I would have made considerably more money up till this point. The additional earnings could have been a decent nest egg. Pension? My pension is no more secure than theirs. Do you really think that AMR and the TWU are going to allow UAL to have the competative edge of not funding a pension? Sure the AMR will issue PRs saying how UAL should be forced to live up to their promises, when they dont , AMR will say that they tried but they can not allow any other carrier to enjoy any cost advantage that AMR does not have so we will lose ours.


The fact is that health benifits and pensions for working people have been on the Conservative hit list for a long time. Now they are taking everything away simply because they can. As Cheney said "We won the midterms (election). This is our due".

The best bet nowadays is make more money now and put some of it away, and dont let Bush F-up Social Security.

 

[synchronicity]

The best bet nowadays is make more money now and put some of it away, and dont let Bush F-up Social Security.

[post="270581"][/post]​

But (channeling Bush and Cheney for a minute) if you allow people to invest Social Security in other assets (like stocks), then they might earn a higher rate of return! And it's YOUR money, to invest as you wish, which is all good because this is an ownership society, so of course owning your money is better. Get it?

(End channeling Bush and Cheney. Wow, that felt strange, I feel like I need to take a shower or something. Ick)

What they leave out is that with higher return comes higher risk, as anybody with a basic knowledge of investing is aware. Introducing greater risk into a program that is a societal safety net is generally not a good thing. OK, so you can have the same amount of risk with privatisation. Fine, show me the results from taking SocSec contributions, investing them in US Treasuries exclusively, and each year paying out an amount to a private insurer for a benefit matching the disability and survivor benefits Social Security offers, then purchasing an annuity from a private insurer upon retirement. Are the results better or worse? Hmm?

Shifting from DB-type plans overwhelmingly to DC-type plans also shifts the responsibility of making investment choices on to the individual. (channeling again for a minute) "And that's great, because in a free society people should have the freedom to invest their money as they see fit" (end channeling). Uh, yeah, but what about all those people out there who aren't so great at investing, as they lack either the time or the skills (or both) to understand that (for example) the Efficient Frontier is not something out of a Star Trek episode?

By making retirement investing more "self-service", this means people either have to i) spend time learning how to invest intelligently and appropriately for their goals, or ii) hire a financial advisor (hopefully a good one) on their own dime to give them advice. But hey, we live in a free country, isn't that great! No big brother stopping you from doing any of this. Woo-ha!

Of course, the shift from DB to DC plans does help a few groups of people, namely 1) those people who already have a pretty good knowledge of investing, 2) people with enough resources in "safe" investments to shift a greater portion of their savings into higher risk/higher return investments; 3) people with enough resources that they can afford to hire good financial advisors, and of course 4) people who are in the financial services industry.

(pause while I go over that list again and the light bulb flashes on)

Which means I love this trend! Oh yeah, it's the greatest thing since sliced bread, pirated cable, and Beer Can Chicken. Oh sure, it may not be the best thing for, say, the overwhelming majority of people, but for me it's great, and after all, the US is a country based on rugged individualism, the same sort of rugged individualism that means I don't have to worry about anybody other than myself and my family (well, unless people rise up in a revolution, but that's what Kevlar, reinforced SUV's, and gated communities with security guards are for, right?). The sort of country where I can use my skills to max out my retirement savings, allow me to quit my job at an early age and enjoy the freedom this great country offers me to move to, say, New Zealand.

Assuming the airline industry still exists to fly me there.

-synchronicity

PS- last week I spent 2 hours on the phone with one of my wife's co-workers, helping her figure out how to invest a small amount she's rolling over from a former employer's 401(k). She seemed to get a lot out of the conversation, for which I'm grateful, but I still shudder at the thought of her being solely responsible for figuring out how to invest all her retirement savings. Especially during the inevitable downturns in the markets.

 

[air_guy]

I just hope you shut up when that does not happen.

Well actually I once considered going to UAL and was offered a position in Avionics at LAX. I chose not to go. I figured that the TWU would fix the problems with our contract-boy was I wrong. However if I had gone to UAL then I would have made considerably more money up till this point. The additional earnings could have been a decent nest egg. Pension? My pension is no more secure than theirs. Do you really think that AMR and the TWU are going to allow UAL to have the competative edge of not funding a pension? Sure the AMR will issue PRs saying how UAL should be forced to live up to their promises, when they dont , AMR will say that they tried but they can not allow any other carrier to enjoy any cost advantage that AMR does not have so we will lose ours.
The fact is that health benifits and pensions for working people have been on the Conservative hit list for a long time. Now they are taking everything away simply because they can. As Cheney said "We won the midterms (election). This is our due".

The best bet nowadays is make more money now and put some of it away, and dont let Bush F-up Social Security.

[post="270581"][/post]​

 

[Bob Owens]

But (channeling Bush and Cheney for a minute) if you allow people to invest Social Security in other assets (like stocks), then they might earn a higher rate of return! And it's YOUR money, to invest as you wish, which is all good because this is an ownership society, so of course owning your money is better. Get it?

(End channeling Bush and Cheney. Wow, that felt strange, I feel like I need to take a shower or something. Ick)

What they leave out is that with higher return comes higher risk, as anybody with a basic knowledge of investing is aware. Introducing greater risk into a program that is a societal safety net is generally not a good thing. OK, so you can have the same amount of risk with privatisation. Fine, show me the results from taking SocSec contributions, investing them in US Treasuries exclusively, and each year paying out an amount to a private insurer for a benefit matching the disability and survivor benefits Social Security offers, then purchasing an annuity from a private insurer upon retirement. Are the results better or worse? Hmm?

Shifting from DB-type plans overwhelmingly to DC-type plans also shifts the responsibility of making investment choices on to the individual. (channeling again for a minute) "And that's great, because in a free society people should have the freedom to invest their money as they see fit" (end channeling). Uh, yeah, but what about all those people out there who aren't so great at investing, as they lack either the time or the skills (or both) to understand that (for example) the Efficient Frontier is not something out of a Star Trek episode?

By making retirement investing more "self-service", this means people either have to i) spend time learning how to invest intelligently and appropriately for their goals, or ii) hire a financial advisor (hopefully a good one) on their own dime to give them advice. But hey, we live in a free country, isn't that great! No big brother stopping you from doing any of this. Woo-ha!

Of course, the shift from DB to DC plans does help a few groups of people, namely 1) those people who already have a pretty good knowledge of investing, 2) people with enough resources in "safe" investments to shift a greater portion of their savings into higher risk/higher return investments; 3) people with enough resources that they can afford to hire good financial advisors, and of course 4) people who are in the financial services industry.

(pause while I go over that list again and the light bulb flashes on)

Which means I love this trend! Oh yeah, it's the greatest thing since sliced bread, pirated cable, and Beer Can Chicken. Oh sure, it may not be the best thing for, say, the overwhelming majority of people, but for me it's great, and after all, the US is a country based on rugged individualism, the same sort of rugged individualism that means I don't have to worry about anybody other than myself and my family (well, unless people rise up in a revolution, but that's what Kevlar, reinforced SUV's, and gated communities with security guards are for, right?). The sort of country where I can use my skills to max out my retirement savings, allow me to quit my job at an early age and enjoy the freedom this great country offers me to move to, say, New Zealand.

Assuming the airline industry still exists to fly me there.

-synchronicity

PS- last week I spent 2 hours on the phone with one of my wife's co-workers, helping her figure out how to invest a small amount she's rolling over from a former employer's 401(k). She seemed to get a lot out of the conversation, for which I'm grateful, but I still shudder at the thought of her being solely responsible for figuring out how to invest all her retirement savings. Especially during the inevitable downturns in the markets.

[post="270705"][/post]​

I agree on the issue of Social Security. With all it has to offer, disability, survivor benifits plus the retirement its a good deal. Thats why the insurance companies and Wall Street want to kill it.

I also agree that most people really dont want to and are ill equiped to handle their own investments.

Most of the trade unions in the NY city have a defined contribution plan although I dont know how the funds are handled. I do know that most of these guys dont hold an MBA in economics. I also know that since they are not tied to any one company that they are more willing to fight to maintain their pay and benifits. While I would rather have a DB in this industry its turning into a liability when all they have to do is go BK and then they get out of them or threaten to in order to get more concessions now. I have to wonder if it really makes sense to give up hundreds of thousands in pay and benifits in order to "save" a pension that they will take away later. Is giving all that now worth it? If I take the money now and put it in Savings Bonds I would probably be better off.

With the guys I know in the city the company they work for puts anywhere betwen $4 to $6 per hour worked into what they call the Anuity Fund. These guys retire well.

It seems that DB pensions are becoming as risky as DC plans when you could end up losing much of it through BK. And there really isnt anything you can do to protect yourself. With a DC you can move from company to company and take your pension with you.

From a bargaining position having a DC plan takes away much of the companies leverage. Theatening to go BK, when your pension is independant of the company would be much less effective.

Perhaps a better alternative would be having a DB plan through the Union when we all get into one union across the industry.

However a DC plan tied to investments could be a real disaster should Bush have his way with SS. Now everything would be at risk.

 

[Winglet]

And when part of the SS gets privatized, Bush's Republican buddies will be racking in the dough with management fees, etc. from all those private accounts. Sure, it'll be in "safe" "low fee" "low risk" investments. Sure. Once the camel's nose is under the tent, you can bet the Republicans will push to liberalize the rules and get more money into their financial aristocrat's pockets. Meanwhile Joe Sixpack invests in high cost annuities without the slightest idea of what he's doing and winds up with a lot less than he would with SS. And meantime the Republican financial aristocracy gets ever richer.

 

[synchronicity]

And when part of the SS gets privatized, Bush's Republican buddies will be racking in the dough with management fees, etc. from all those private accounts. Sure, it'll be in "safe" "low fee" "low risk" investments. Sure. Once the camel's nose is under the tent, you can bet the Republicans will push to liberalize the rules and get more money into their financial aristocrat's pockets. Meanwhile Joe Sixpack invests in high cost annuities without the slightest idea of what he's doing and winds up with a lot less than he would with SS. And meantime the Republican financial aristocracy gets ever richer.

[post="270797"][/post]​

And to all the people who say "Oh no, there won't be high management fees, you're just being paranoid, I have one thing to say....

Check out the 529 plans lately?

Balky plans with limited investment choices, and you guessed it, high fees! The tax-free earnings (combined with the state tax break for most 529's) make up for some of the fee issues, but we're still doing Coverdell first (even though there's no state income tax reduction on those) and the 529's second. Lot more control over 529's, and you can invest in very low fee index funds.

As for 529's, even those that are done through Vanguard have fairly high fees (not eligible in our state for the income tax reduction, but yes, I checked).

And 529's generally attract higher net worth investors, on average (but usually not VERY high net worth individuals, as they have better ways to shift money out of their estates, and actually have to worry about such things). Imagine what it'll be like for investment programs set up for a larger, less financially literate audience.

-synchronicity

 

[synchronicity]

I agree on the issue of Social Security. With all it has to offer, disability, survivor benifits plus the retirement its a good deal. Thats why the insurance companies and Wall Street want to kill it.

I also agree that most people really dont want to and are ill equiped to handle their own investments.

Most of the trade unions in the NY city have a defined contribution plan although I dont know how the funds are handled. I do know that most of these guys dont hold an MBA in economics. I also know that since they are not tied to any one company that they are more willing to fight to maintain their pay and benifits. While I would rather have a DB in this industry its turning into a liability when all they have to do is go BK and then they get out of them or threaten to in order to get more concessions now. I have to wonder if it really makes sense to give up hundreds of thousands in pay and benifits in order to "save" a pension that they will take away later. Is giving all that now worth it? If I take the money now and put it in Savings Bonds I would probably be better off.

With the guys I know in the city the company they work for puts anywhere betwen $4 to $6 per hour worked into what they call the Anuity Fund. These guys retire well.

It seems that DB pensions are becoming as risky as DC plans when you could end up losing much of it through BK. And there really isnt anything you can do to protect yourself. With a DC you can move from company to company and take your pension with you.

From a bargaining position having a DC plan takes away much of the companies leverage. Theatening to go BK, when your pension is independant of the company would be much less effective.

Perhaps a better alternative would be having a DB plan through the Union when we all get into one union across the industry.

However a DC plan tied to investments could be a real disaster should Bush have his way with SS. Now everything would be at risk.

[post="270795"][/post]​

One nitpick: you can get an MBA, or you could get a Master's in Econ, but you can't get an MBA in econ. Sorry to be a pedant.

Another, smaller, nitpick: Wall Street doesn't want to "destroy" Social Security, but they would really like to get in on the action. Just think of the potential management fees! (it would mean "destroying SocSec as we know it, I'd agree). As for insurance companies, they're generally mixed on this administration's proposals. They DON'T like LSA's (neither do I, even after they were toned down from "blatant tax shelter for the wealthy" to "just another tax shelter for the wealthy"). They don't like the idea of the estate tax being repealed (on another forum I've been told that the only people fighting to keep the "death tax" intact are estate tax attorneys. I just roll my eyes at that).

Other than that: the current DB pension situation and the administration's inaction on it makes me wonder: I've known for awhile they wanted to gut Social Security, but now I'm wondering if they wouldn't mind gutting ERISA, too. On the DC side, they want to "simplify" 401(k)'s, replacing all flavors of 401(k)/403(B)/SIMPLE with the ERSA, which would make it a lot easier for companies to effectively "discriminate" with qualified plans (401(k)'s have a host of rules to ensure that participation is open across the board, the new proposal would dramatically alter those rules).

As for DC vs. DB, generally DB plans have been "safer" (at least since ERISA), and distress terminations of DB plans are few and far between. BK is not something a company enters into lightly. However, the airline industry seems to be the exception to the rule.

One thing about "cash balance" plans that have replaced traditional DB plans: the portability is an asset when one is an industry like the airlines. Unfortunately, the seniority rules make it difficult to move about within the industry: if you're going to leave, you pretty much have to be completely gone.

$-$6/hour to an annuity plan? Are you sure? Sheesh, that's a LOT of retirement plan. Even if they're earning $40/hr, that's an effective 10-15% contribution.

Last, I like DC plans, but they are best when they are in addition to some base amount. Also, I worry that eventually we'll be in a situation where DB plans are gone and companies don't make matches to DC plans, leaving retirement savings almost solely in the hands of employees. If that's not a plan doomed to failure, I don't know what is. Sure, some people will be better off, but others, not so much.

Geez, long winded posts 'r us.

-synchronicity, just a BA in Econ, rambling late