U
UAL_TECH
Guest
Day two negotiation notes (PDF Link)
Day two negotiation notes
By Terry O'Rourke AMFA Local 9 member and Way Points Editor
Rosemont, Illinois, December 1, 2004 11:15 PM
Today marks the second day of negotiations with the company. As an observer, I witnessed some significant developments today. The company and AMFA reached a considerable philosophical impasse in the morning meeting. In the afternoon Pete McDonald, Executive Vice President and Chief Operating Officer met with the Negotiating Committee.
The late afternoon session featured a question and answer session with the Negotiating Committee and many Chicago observers.
The company maintained its position today that it only wants to talk about collective bargaining agreement (CBA) changes. They only want to reduce CBA items such as pay, benefits, vacation and sick leave. They refuse to talk about any fundamental business changes that feature non-CBA items.
The AMFA Negotiations Committee has spent the last few weeks preparing to offer substantive and independently verifiable cost saving suggestions to the company. They have engaged the help of their professional staff as well as a consultant firm.
Al Koehler, the lead negotiator for the company, asserted that the bankruptcy exit lenders require the company to reduce costs only through CBA changes. This stance, to me, severely strains the company credibility. I do not think that any lender draws a distinction about the source of any cost savings, provided these cuts can be independently verified. From my point of view, the only thing the lenders really care about is that they lend money at a profitable rate while they minimize their risk of loan default.
AMFA negotiator David Frizzell commented that this shift of responsibility from the company to the exit lenders reminded him of the position the company took when it decided last summer to stop pension funding. You may remember at that time that they blamed the lenders for their actions. The company made a business decision and then tried to evade responsibility. Within a short time the company retracted their story because it was not true. It turned out the company decided to stop funding the pensions; the lenders did not require that action.
This stance leaves me baffled. The company not only wants to save a dollar but also control source. Why do they care who provides the cost savings? I can only conclude that they see a unique opportunity to roll back generations of CBA improvements. Former generations of workers suffered strikes, lockouts, and other injustice to win the CBA terms that we enjoy today.
The behavior and words that the company negotiators exhibited during these first two days leaves me with very little room to draw a conclusion. They display no interest in the unique perspective and expertise of our membership. They simply desire to gut our CBA.
Perhaps the greatest cost that the company reaps from this action is the loss of opportunity to proceed in a truly viable sustainable path. By tossing off the possibility of non-CBA cost savings, the company loses a valuable asset for its long-term success. Do they really think that only management can conceive cost-saving ideas?
If we allow a wholesale CBA reduction, a demoralized workforce will then have little incentive to help the company transform itself into a long-term competitor. The company, as demonstrated by its narrow negotiation focus, does not view us as an asset, only a liability.
The Negotiating Committee informed Al Koehler that they found his position incredible and they wanted to meet with an executive level company official such as CEO Glenn Tilton or COO Pete McDonald. The Negotiating Committee wanted to verify that this attitude went all the way to the top. Al Koehler responded that he would forward our request but he felt the chances of arranging a meeting as “pretty remote.â€
The AMFA negotiators reconvened after lunch and learned that Pete McDonald, Executive Vice President and Chief Operating Officer would arrive at the negotiation table at 3:30. Shortly before Mr. McDonald arrived, the observer contingent swelled to more than 30 with mechanics coming off of day shift. After repositioning a few rows of chairs, the observers watched the AMFA negotiators prepare for Mr. McDonald’s session.
Mr. McDonald arrived with company negotiators Al Koehler, Phil Coley, and Gary Kaplan. Mr. McDonald opened his remarks by affirming the full authority that he delegated to Mr. Koehler. He continued by saying that the company now focused on one thing: a sustainable, profitable business that provides good jobs. After briefly reviewing the series of company programs aimed at cutting costs, he concluded that the company still found itself short $725 million to secure “exit financing that meets financial metrics.â€
He then went right to the heart of our disagreement with the company. He maintained that AMFA would only receive credit for CBA cuts. Any suggestions that are not directly CBA related will not count. Several committee members asked repeatedly, in several different ways, why AMFA would not be able to make cost saving suggestions beyond the CBA and receive credit for them. He continually insisted that while the company encourages non-CBA cost saving ideas, it would not award credit for them.
When one questioner inquired as to what would motivate a work group to give cost saving suggestions when it would not receive credit, his reply left many aghast. He replied, “You should be happy that you have good jobs with competitive wages and benefits.â€
He often gave the same answer when asked about our cost-saving suggestions. Cost saving suggestions could take only two paths: the CBA cuts would receive credit toward the company’s $101 million savings target or the non-CBA cuts would follow a “parallel path†and receive no credit. One questioner asked why we would bother to offer non-CBA cost saving ideas. He replied that a healthy company could offer a “profit-sharing program.†The ripple of laughter that moved through the observer gallery betrayed the skepticism of an ESOP-weary audience.
Many observers commented on Mr. McDonald’s demeanor as arrogant and insincere. When his arguments failed to persuade, he simply repeated himself. He must have mentioned the “parallel path†description five or six times. I sensed that he felt if he just said it a few more times we might finally get it! No one smiled when the meeting ended.
Mr. McDonald made one thing perfectly clear. This company does not wish to engage a collaborative work force. It does not want to tap our creativity in helping this company out of its life-threatening financial morass. It only wants to reduce our standard of living and hope that we cooperate in acting against our clear financial self-interest.
Following the McDonald session, the meeting moved to another room. Most of the Chicago observers stayed and occupied chairs lining the walls around a large table. O.V. Delle-Femine opened this session by asking the observers one-by-one for comments and questions. Some of the comments:
• “The company acts like it’s a one-way street.â€
• “It’s a smokescreen, all window dressing.â€
• “The company has no credibility.â€
• “I think that it’s a front. They’re just going through the motions, biding time.â€
• “It seemed rehearsed, repetitive, staged.â€
• “Nothing will happen until the final hour.â€
Many of the questions were posed to Scott Petersen, the AMFA attorney. Scott fielded many questions related to the intersection of bankruptcy and Railway Labor Act law. Scott noted, “Since the bankruptcy law reforms of the early 1990s there has never been a contract rejection.†Scott feels that the US Air case “will be precedent setting.â€
There have been some small victories during these first two days of negotiations. Our position on observers prevailed. The Chicago members, if this afternoon is any indication, clearly enjoyed playing a role in negotiations. I expect this trend will continue next week in Chicago and San Francisco members can look forward to participating as observers in two weeks.
The company quickly responded to our late morning request to meet with a senior UAL leader. Mr. McDonald’s afternoon session allowed the Negotiating Committee to draw some important conclusions. The company clearly assigns some importance to our sessions. I will return to San Francisco tomorrow morning. I have found the observer experience informative, energizing, and interesting. I encourage any members to take advantage of any opportunity to sit in as an observer. While we remain uncertain as to the outcome of these negotiations, the competence and energy of our negotiators encourage me.
I feel the 'Love' now!!!
B) UT
h34r: and his cronies 
. Stand the line, it's the ONLY thing that will bring dignity and respect from your piers in the industry. 
