AMR Earnings: $162M Loss
- Thread starter eolesen
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Not a full bankruptcy. A restructure maybe. By full bankruptcy I mean total liquidation.
robbedagain
Veteran
That's correct. A Ch 11 filing (reorganization) is likely unless AA achieves satisfactory agreements with its represented workgroups, but a Ch 7 filing (liquidation) would not be filed before a Ch 11 petition. Only if the reorganization effort completely fails would AA liquidate. It's possible, but highly improbable.
Last week, Arpey repeated his reluctance to use bankruptcy to fix AA. Unfortunately, bankruptcy may be the only way to fix what ails AA.
I agree bankruptcy may be the only way. The majority of
employees will not voluntarily take more concessions while
managements has been rewarding themselves all these years
No more concesions period.
The RLA says that if our agreements are abrogated we can go directly to self help and thats what we should do.
We may have to follow the lead of Mike Quill and tell the Judge the same thing he did if they think they can take any more from us, this aint 2005.
As much as the corporate media tries to downplay the OWS movement the fact is public sentiment is shifting, people are getting fed up with corpoarte greed and the accounting games they get away with, $24 billion, record revenues after slashing 40,000 jobs and they demand more concessions, who knows, maybe the OWS protestors will hop on the AirTrain and join our pickets!!
Management haven't really been rewarding themselves all too much. According to their bonus structure, they make a bonus when profit margins are >=5%. How many times has that happened the past 8-10 years?
People are getting more fed up with messed up public pensions of unions as well.
Regardless, employees will take a "brunt" of the costs (along with shareholders who will be wiped out) if AA files Chapter 11. I don't want to be rude or blunt, but that is what it is..whether you like it or not.Bob, I agree with you as far as "concessions," I think most employee's are way done with that issue regardless of AA's cries. The company used up their "free ticket," if you will, and produced no gains. My beef with the company has been with leadership, governance, ingenuity, or lack of, and most importantly to me, accountability. I believe AA had an obligation to it's employee's, once it accepted employee give back's, to strive to succeed. As far as the media and the battle between AA and it's unions, AA will always spin to win. I agree that public perception has turned seemingly for the worker and against corporate, but in the end, union's will always be perceived as the bad guy's. To this I say.... oh well, it is what it is.......
Who's to say that after American settle's with their labor groups, they wouldn't enter BK anyways, and blame the unions due to their "demands"?
Exactly, why the lower the bar so they can try and lower it even more.
Case in point-Prefunding of Retiree Medical.
Since 1990 we have been contributing to a trust for retiree medical, that trust is matched dollar for dollar by the company, this was a concession back in 1990 because prior to that Retiree Medical was completely paid for by the company as part of our compensation package. The match by the company is basically deferred compensation, the money is for us, for us to pay to the company when we retire for continued Medical coverage (so you see they get the money back later anyway but we get Medical in exchange for it, the fund is so if the company goes bankrupt we can use money from the Trust to buy coverage on the outside) Back in the early 90s this was a huge gain for the company because it shifted costs to the workers and lowered their liability, pretty much eliminates it except for those who use more money than the fund has in their account, since some never use it, or dont use all of it, and in that case only get back half, the company gets to use the other half for that, in addition to that any worker who left the company prior to retirement forfieted his deferred compensation as well, the company match stayed in the fund. The more people they terminate the more funds they get to confiscate and keep in the fund. Its similar in some ways to the defined benefit pension except that its partially funded by us, if its properly invested the company could pay nothing except for the match which comes out to roughly less than $2 million a year. ($12/month x 11500 members).
The company saw a windfall when some groups such as Tech services, Pilot Instructors and non-union people accepted or had the proposal impoosed on them. The company expected $57 million just from the M&R group. Thats $57 million that would not have come from the General Fund to cover benefits. essentially what the company did to all those workers, from the Trust perspective, was terminate them and hire them back without a prefunded retiree medical, they refunded what the terminated employees paid into it, just like they do when they terminate an employee, and hired them back without prefunded retiree medical and pocketed millions of dollars, more than enough in the case of the agents and non-union workers to pay for the lump sums they gave in leiu of real pay increases. What they did was, for 50 cents on the dollar, give up a fund that was secure even in BK that was set aside to provide medical benefits when they retire.
So for 21 years we have been contributing to this fund and the company has matched our contributions, keep in mind, this was a concession, the company saved hundreds of millions over the last twenty one years, and now the company wants us to agree to give back our deferred compensation and expose ourselves to not having any coverage when we retire except for Medicare when we reach that age whatever it may be by then. Sure they say they will set up a place where we can buy coverage but they will not guarantee what it will cost, right now we have a guarantee, so long as the company is around to honor it, and if they arent, at least we get all the funds due to us to buy it on our own.
The company, con artists that they are (and some in the union), is selling their proposal as "you no longer have to contribute to prefunding" making it sound like we are being relieved of a financial burden, when in fact its "the company no longer has to contribute to prefunding AND they get to take back the monies they paid to our accounts as deferred compensation and we no longer get the benefit of a prefunded retiree medical", they get $57 million of our money, no longer have to contribute to the secure fund and we only get back what was deducted from our paychecks for the last twenty one years(plus interest). It would be as if we had a 401K match and the company decided after 21 years to no longer match it, and wanted us to return any matching funds already deposited but turned around and said "You no longer have to contribute to a 401K to get the match".
The company was clear back in the early 90s. They promised the TWU that if the plan was terminated by them we are entitled to not only our contributions plus interest but the company match (plus interest)as well. They are trying to pull a fast one by getting us to agree to give them the match, which is deffered compensation. Its no different than getting us to write a check out to AA for up to $10,000 and handing it over to them. This is nothing less than fraud and theft.
So, lets say we were foolish enough to give the company back the matching funds in exchange for something now, like not giving up the DB or keeping OH in house. Pretty much the only two things that differentiate us from the BK carriers. There's nothing to stop the company from filing BK the day after ratification and going after those things anyhow. They get to pocket at least $100 millionjust from the TWU(Fleet, M&R and Stores) . However if we dont give it up and the company terminates the plan in BK we get all of it back instead of half.
The Prefunding account to date is pretty much the only thing, besides pension accruals up to date, that is protected in BK, we would be very foolish to give it up.
Frank Szabo
Veteran
Tell ALL the "truth", Bob.
This "retiree medical" is only applicable to those who retire before 65 years of age, when Medicare kicks in. At Medicare age, the company's so-called insurance goes away and Medicare is one's only game. It's piss-poor insurance anyway and isn't worth the money paid for it even though it is better than nothing.
This is no more than bridge insurance for pre-65 retirees - hardly worth arguing over. If one retires pre-65, far better to take a refund of what money is there and purchase one's own insurance rather than going for the company's poor deal. Maitaining any dependence on this company is a damnfool thing to do - we've seen many examples of what they think of their workers since Crandall left.
The company is more than welcome to do away with this so-called "insurance" IF this so-called "union" will negotiate a return of all funds, both the employee contributions and the supposed company match that you claim is deferred compensation, and do so in such a way a second class of "citizen" isn't created as the previous joke of a TA did. Just because those already retired always bought into that "sell-out-your-coworker" crap to get a few sheckles extra doesn't mean today's people will.
Actually Frank you would fall under the standard plan and yes it is pretty good compared to what it would cost you on the outside you just have to navigate and keep good records in order to make the insurance work for you. I choose to be under the standard plan for a variety of reasons and after a couple of years it's worked out better than the higher cost ppo option.
Frank Szabo
Veteran
You are wrong. There's more to it than that. The point was the company did not want to return all the money, only the part we contributed from our paychecks and they want to keep the match. Otherwise its no different than saying that since a 401K match sucks compared to a DB we should, after 21 years give them back the supposed matching funds and worry about our own retirement.
Most members have not seen "The Plan" but if you'd like I'll send it to you.
I was a long time critic of the plan as well, but I certainly would not be in favor of signing over half my fund to the company. For $3/week its insurance down the road. I figure my fund is around $12,000, if they want out thats one thing, but they are not going to treat me like a terminated employee or someone who quit and confiscate half my fund, I want it all.
See wrenchers response.
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