AMR stock at $2.43/shr

[WorldTraveler]

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Labor bears responsbility for failing to grant productivity improvements to allow AA to take advantage of their reduced costs.

Not allowing AA to use its massive maintenance capabilities as a source of insourcing revenue instead of a drag on the company will stand as a major mistake.



Labor has done everything that management wants them to do. Some mechanics are assigned 2 to 3 aircraft per night, and most have multiple workcards, MEL's, inbound pireps, and TFI's. How much more work do you expect from mechanics??? Look, every night at ORD management recreates the wheel because management doesn't have a clue how to utilize it's manpower. The nighshift manager arrives 4 to 5 hours before the nighshift starts to get a headstart and by 2200 they still don't know who's here, who isn't here, and where the manpower is needed.....that's not labor's fault is it?????

At ORD, mechanics once serviced Alaska Air and Nippon but, management never renewed those contracts.....it surely wasn't labors fault.

labor was used in a generic context by me here...

 

[strikeforce]

Why is your default to blame AA management?

Josh

Because YOU and others on this forum blame labor!

 

[strikeforce]

Why is your default to blame AA management? You don't have all the facts and considerations they did before making a decision. Did you ever consider that ANA or AS decided not to renew their own contract? I know AS contracts out substantially all of its maintenance operations. ANA is very close with UA so perhaps their mechanics handle their aircraft at ORD. Don't let the facts get in your way.

Josh

Hey, I'm merely pointing out that MANAGEMENT makes all of the business decisions.......they have the right per our CBA to run the business as they wish. On numerous occasions, the union has recommended ideas to management, and time and time again, management doesn't listen. You and others can blame labor, but it took TWO to tango in negotiations, and in 2003 negotiations included a gun pointed at labor and labor buckled and gave into the demands of management. For 8 years management squandered the cost savings and NOW they want more because they've failed to hold people accountable for their BAD business decisions.....and YOU blame labor...YOU better get your facts straight before YOU point fingers! I see the waste everytime I go to work.....some of these guys can't manage a lemonade stand, let alone a $25B operation. Give me break!

 

[Hackman]

EXACTLY, Now for the normal response: Company bootlicker, etc., etc., etc. Some need to wake up.

Good thing not everyone thinks like a scared rabbit, you have played right into the fear like the Twu knew you would. The Twu has given up concessions for 25+ years....even in the good times. A 6 year concession laden contract starting in 1995, where the OSM/SRP program started that no other airline could match. In fact, after 2003, UAL and others had to go back and get more concessions to keep up with AA and it's pet union. Yes, for 25 years the Twu has given AA whatever it wanted. We enjoyed a decent but short lived contract in 2001 thanks to AMFA at NWA, but still had to pay our medical since 1990, the Twu was the first to give it away with Flex Benefits. No other airline union payed a dime for medical until the Twu gave into Flex Benefits.

AA is still hiring AMT's Duck787? At less than what they paid in 1988? That's great isn't it?

Keep up the fear....

 

[Buck]

Good thing not everyone thinks like a scared rabbit, you have played right into the fear like the Twu knew you would. The Twu has given up concessions for 25+ years....even in the good times. A 6 year concession laden contract starting in 1995, where the OSM/SRP program started that no other airline could match. In fact, after 2003, UAL and others had to go back and get more concessions to keep up with AA and it's pet union. Yes, for 25 years the Twu has given AA whatever it wanted. We enjoyed a decent but short lived contract in 2001 thanks to AMFA at NWA, but still had to pay our medical since 1990, the Twu was the first to give it away with Flex Benefits. No other airline union payed a dime for medical until the Twu gave into Flex Benefits.

AA is still hiring AMT's Duck787? At less than what they paid in 1988? That's great isn't it?

Keep up the fear....

Don't forget the "B-Scale" in 1983.....

 

[eolesen]

Hey, I'm merely pointing out that MANAGEMENT makes all of the business decisions.......they have the right per our CBA to run the business as they wish.

Sure, they can make all the decisions they want, but they can only do so much within the terms of the CBAs... and that's the problem, Carmine.

Management wanted to fly 777s from DFW to China with 1 CA and 3 FOs (legal per the FAA). Bzzzzzt! Can't do that under the pilots contract.

Management wanted to contract out more flying, and add 70-90 seat jets. Bzzzzt! Scope clause with both the TWU and APA.

Management would probably love to have a full codeshare with Jetblue. Bzzzzzzzzzt! Another scope clause issue.

Management has always wanted flight attendants to clean turns with under 90 minutes of ground time like they already do on thru flights.

Bzzzzzzzzzzzt! Can't do that thanks to the APFA agreement. They couldn't even get some flight attendants to make up a bed in international first class....

Management would also like to contract out dayline cabin cleaning, since they can't get the flight attendants to do it on turns.

Bzzzzzzzzzzzzzzzzzzzt! TWU contract...


So, sure, management can run the business as they wish. With some serious constraints.

Really, it would appear the only things they have total freedom on is everything not directly tied to an airplane, i.e. how they price, sell, and directly service the customer, and how they borrow money. Just about everything else tied to an airplane is controlled by a CBA.

 

[Hackman]

Don't forget the "B-Scale" in 1983.....

Oh I haven't Buck. I just don't have the time to list all the concessions the Twu has sold out the membership for, using the dues machine to pay its high roller international and 140k secretary.
But AA is still hirng at less than Wal-Mart wages! Just ask Duck787...

 

[737823]

Sure, they can make all the decisions they want, but they can only do so much within the terms of the CBAs... and that's the problem, Carmine.

Management wanted to fly 777s from DFW to China with 1 CA and 3 FOs (legal per the FAA). Bzzzzzt! Can't do that under the pilots contract.

Management wanted to contract out more flying, and add 70-90 seat jets. Bzzzzt! Scope clause with both the TWU and APA.

Management would probably love to have a full codeshare with Jetblue. Bzzzzzzzzzt! Another scope clause issue.

Management has always wanted flight attendants to clean turns with under 90 minutes of ground time like they already do on thru flights.

Bzzzzzzzzzzzt! Can't do that thanks to the APFA agreement. They couldn't even get some flight attendants to make up a bed in international first class....

Management would also like to contract out dayline cabin cleaning, since they can't get the flight attendants to do it on turns.

Bzzzzzzzzzzzzzzzzzzzt! TWU contract...


So, sure, management can run the business as they wish. With some serious constraints.

Really, it would appear the only things they have total freedom on is everything not directly tied to an airplane, i.e. how they price, sell, and directly service the customer, and how they borrow money. Just about everything else tied to an airplane is controlled by a CBA.

I heard from local management in BOS they are trying to outsource daytime aircraft cleaning like the RONs. Currently the cornerstone cities plus BOS, SFO, and STL still have TWU workers doing daytime cleaning.

Josh

 

[Hopeful]

Sure, they can make all the decisions they want, but they can only do so much within the terms of the CBAs... and that's the problem, Carmine.

Management wanted to fly 777s from DFW to China with 1 CA and 3 FOs (legal per the FAA). Bzzzzzt! Can't do that under the pilots contract.

Management wanted to contract out more flying, and add 70-90 seat jets. Bzzzzt! Scope clause with both the TWU and APA.

Management would probably love to have a full codeshare with Jetblue. Bzzzzzzzzzt! Another scope clause issue.

Management has always wanted flight attendants to clean turns with under 90 minutes of ground time like they already do on thru flights.

Bzzzzzzzzzzzt! Can't do that thanks to the APFA agreement. They couldn't even get some flight attendants to make up a bed in international first class....

Management would also like to contract out dayline cabin cleaning, since they can't get the flight attendants to do it on turns.

Bzzzzzzzzzzzzzzzzzzzt! TWU contract...


So, sure, management can run the business as they wish. With some serious constraints.

Really, it would appear the only things they have total freedom on is everything not directly tied to an airplane, i.e. how they price, sell, and directly service the customer, and how they borrow money. Just about everything else tied to an airplane is controlled by a CBA.

Again, E......Don't you think the company realizes the unions are not willing to bend on these issues? They are using the 2003 playbook of BK threats in order to get them to capitulate. Either S### or GET OFF THE POT.! They would like nothing more than to get all these changes in contracts so they could always say "Well you people bought off on these changes, sorry'"

But you fail to mention that many of the changes AA wants but can't get is because of "this contract or that agreement or this or that workgroup" will cost jobs.
And you cannot blame any union for trying to protect jobs.
Maybe if the company makes it perfectly clear and PUTS IT IN WRITING that NO ONE will lose their jobs as a result of said changes they desire...then MAYBE a deal could be struck on these issues!

 

[Hopeful]

Really, it would appear the only things they have total freedom on is everything not directly tied to an airplane, i.e. how they price, sell, and directly service the customer, and how they borrow money. Just about everything else tied to an airplane is controlled by a CBA.

Yeah, these pesky CBA's are almost as ironclad as executive contracts!

 

[chris perry]

Sure, they can make all the decisions they want, but they can only do so much within the terms of the CBAs... and that's the problem, Carmine.

Management wanted to fly 777s from DFW to China with 1 CA and 3 FOs (legal per the FAA). Bzzzzzt! Can't do that under the pilots contract.

Management wanted to contract out more flying, and add 70-90 seat jets. Bzzzzt! Scope clause with both the TWU and APA.

Management would probably love to have a full codeshare with Jetblue. Bzzzzzzzzzt! Another scope clause issue.

Management has always wanted flight attendants to clean turns with under 90 minutes of ground time like they already do on thru flights.

Bzzzzzzzzzzzt! Can't do that thanks to the APFA agreement. They couldn't even get some flight attendants to make up a bed in international first class....

Management would also like to contract out dayline cabin cleaning, since they can't get the flight attendants to do it on turns.

Bzzzzzzzzzzzzzzzzzzzt! TWU contract...


So, sure, management can run the business as they wish. With some serious constraints.

Really, it would appear the only things they have total freedom on is everything not directly tied to an airplane, i.e. how they price, sell, and directly service the customer, and how they borrow money. Just about everything else tied to an airplane is controlled by a CBA.

Day cabin cleaning is contracted out now at DFW....

 

[chris perry]

Another thing we have to take a online course at DFW.com now to drive on the west service road.Wanna know why?Because the contract cleaners drove from 136 access gate across the runways and taxi ways to Terminal D. Safety is our highest priority other than profit's....

 

[WorldTraveler]

First, anyone who thinks that I am giving management a pass for the problems at AA hasn’t comprehended anything I have been writing for a very long time.
There are those who want to completely blame mgmt and give labor a free pass and that cannot be seen as accurate. Likewise, there are those who want to completely blame labor and that is completely inaccurate.
I am far less concerned about who is at fault – who to blame – as I am to figure out how to get AA out of its present precarious situation and back on stable footing.
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AA's problem is intense low fare competition and aggressive network carriers... Given that AA's costs are above its peers - network and low fare carrier - and AA's finances are the most stressed in the industry, AA is in a very limited position to fight back and defend its markets.
Absent AA's ability to defend its markets, its network will crumble to both low fare and network carriers. As brutal as that sounds, you need only look at NYC and ORD to see what is happening - VX's sudden success in DFW-LAX/SFO shows how easily it is for low fare carriers to set up a presence in key AA markets - because they are some of the largest in the country.
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AA must be able to win against its network and low fare carrier peers.
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Labor must provide mgmt the tools to be able to compete but they do not have to give away the shop in order to do so.
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It is unrealistic for AA labor to think they will do better than their network carrier peers - DL and UA predominantly - but AA people should be able to do as well - or at least no worse.
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AA's costs at the employee level are not the problem; those who argue that AA has higher pension costs ignore the fact that DL has higher pension obligations than AA and they are still on DL's books. Plus DL pays 401k benefits to current employees who are no longer covered by defined pensions.
There is no reason to think that AA's current employees should take pay cuts relative to DL and UA... and UA now includes CO.
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AA's labor cost problem is productivity driven which means AA needs more work or fewer employees... it's that simple. If the airline can't grow with its current costs, they need to shrink the workforce. Arpey is TRYING to gradually chip away at the size of the airline by improving productivity as employees retire/leave the company, including by changing scope - such as outsourcing OH on a few planes here or there - cabin cleaning at this city etc. Good start but the rate it will take for AA to become competitive w/ its peers will allow those competitors to eat the rest of AA's lunch in the process.
Many have argued that AA could improve its productivity without a single change to its CBAs - and if that is true then the company needs to take the initiative and lay off some people to match the airline's workforce w/ the airline's current size.
It comes down to whether you want to lay off 3-5% of the people today or impose much deeper cuts on 100% of the people later.
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Scope is cited as an issue - but I'm not sure it is really the issue outside of the pilot
E lists a number of scope issues that prevent AA from doing what it wants… but let’s ask the question of whether they are really competitive with other airlines, including AA’s primary peers, DL and UA.
What flight attendants clean the plane on turns, let alone on thru flights? I don’t know but I don’t think DL or UA FAs clean turns… what about low fare carriers?
AA wants to outsource cabin cleaning… so far as I know, MOST airlines in the US and many worldwide outsource cabin cleaning. AA is more in line with the industry to outsource cabin cleaning than to expect AA FAs to do most of it except for overnight/deep cleaning.ffaoi;
AA wants to outsource station ops at many small/medium sized cities… again, much of the industry does it and DL and UA are larger airlines meaning that it is hard to believe that AA could obtain cost benefits that DL and UA can’t…. but DL’s decision – at least for now – to leave the PMNW small/medium cities under DL employees seems to indicate that it is possible to do so.. and DL did move quickly to convert cabin cleaning to contractors so I don’t think they would hesitate to challenge the PMNW CBAs if they couldn’t make the numbers work for DL employees in small stations.
Regional jets? Again, everyone else in the network carrier segment of the industry has more liberal scope policies than AA –except for CO which got bought out – and had one of the weakest domestic networks; before the merger, CO was the number one or two carrier in fewer domestic markets than any other airline. Like it or not, RJs - even with the industry “standard” limited to 76 seat seaters provide the network carriers with the ability to create mass. Absent mass, those carriers lose pricing control.
Two captains on long haul flights? DL at least has it, most of the rest of the industry does not. Given that DL is willing to put two captains on a 210 seat 763ER flying a 12.5 hr route says it is possible to make the numbers work even on a larger 332 or 772ER. In my opinion, AA pilots should stand firm in demanding that over 12 hr flights be staffed with 2 captains.
And then you get to overhaul…. Since the majority of this forum is AA mechanics, this becomes the key issue here. The answer as with all of the others above, is that if AA mechanics can effectively convince management that they can do the work as efficiently as outsourced maintenance. Despite all the talk we have on this forum about how much of a disadvantage or advantage that AA has by doing OH in house, no one can seem to be able to put a price on it. To me, that is a complete failure of the TWU not to be able to know the value of the work they actually do. Arguing that it doesn’t matter and that the TWU will demand that AA continue w/ the present arrangement regardless of whether it makes sense for the company or not is a recipe for the company to dictate the terms of the arrangement – and that will clearly be at the expense of labor.
Every case where labor and management has a good working relationship exists because labor understands the needs of the company and is willing to work with them to achieve the desired results. IN the absence of labor’s understanding of what mgmt needs for the company to be profitable and a willingness for labor to meet mgmt, labor will be seen merely as an expense that needs to be controlled regardless of the impact it has on personal lives or the future of the unions.
Those who want to use WN as an example of where AA’s labor should be would do well to note that WN mgmt and labor understand each other’s needs and work to achieve them; much of the same can be said about DL’s pilots post BK. The DL pilots have surely given a lot of scope but DL mgmt has given back many of the cuts that DL pilots took and have rewarded them w/ a lot of high value international flying.
Labor and management can work together for the benefit of both.
And where it is necessary for labor to relax concessions or cut pay in order for the company to achieve what it needs, labor needs to be rewarded. Absent rewards, then the mindset will clearly be to get everything you can as long as you can – and then leave the company in rubble to die.
AA’s problems won’t be fixed by one side expecting that the other side will cave in.
Expecting AA to get out of its current tail spin absent changes in AA productivity and scope is unrealistic. Expecting AA labor to take cuts w/o achieving some sort of protection or reward for their cuts are also unrealistic.
Whether someone else comes in to buy the company won’t change those dynamics. If labor can’t work w/ mgmt, the mgmt (whoever that may be) will call the shots and they will decimate labor’s position in at attempt to ensure the survival of the company.
AA has a little time left to control its destiny – but the amount of time is growing shorter and shorter.
If AA labor and mgmt can’t figure out how to work together, the cuts will grow deeper and the options available to turn the company around will be greatly reduced compared to today.

 

[jimntx]

WT, good points. However, current AMR management has so poisoned the well that I doubt any employee--union or not--much believes or will believe anything management says. I made the observation to my base manager 3 or 4 years ago, that "I spent 20+ years in the oil business. There is no more cutthroat business than the petroleum industry. Yet, I have never seen another company where the executives so openly display their contempt for the front-line employees as at AMR." "Pull Together. Win Together???" I think not. More like, "You do the pulling. I'll do the winning (of undeserved bonusses)."

Personally, I think this is going to end badly. For everyone. Even though the stock is back up to $2.50/shr at the moment. (I thought I would throw that in since it was the original topic of the thread. )

 

[strikeforce]

And then you get to overhaul…. Since the majority of this forum is AA mechanics, this becomes the key issue here. The answer as with all of the others above, is that if AA mechanics can effectively convince management that they can do the work as efficiently as outsourced maintenance. Despite all the talk we have on this forum about how much of a disadvantage or advantage that AA has by doing OH in house, no one can seem to be able to put a price on it. To me, that is a complete failure of the TWU not to be able to know the value of the work they actually do. Arguing that it doesn’t matter and that the TWU will demand that AA continue w/ the present arrangement regardless of whether it makes sense for the company or not is a recipe for the company to dictate the terms of the arrangement – and that will clearly be at the expense of labor.
Every case where labor and management has a good working relationship exists because labor understands the needs of the company and is willing to work with them to achieve the desired results. IN the absence of labor’s understanding of what mgmt needs for the company to be profitable and a willingness for labor to meet mgmt, labor will be seen merely as an expense that needs to be controlled regardless of the impact it has on personal lives or the future of the unions.

And where it is necessary for labor to relax concessions or cut pay in order for the company to achieve what it needs, labor needs to be rewarded. Absent rewards, then the mindset will clearly be to get everything you can as long as you can – and then leave the company in rubble to die.
AA’s problems won’t be fixed by one side expecting that the other side will cave in.
Expecting AA to get out of its current tail spin absent changes in AA productivity and scope is unrealistic. Expecting AA labor to take cuts w/o achieving some sort of protection or reward for their cuts are also unrealistic.
Whether someone else comes in to buy the company won’t change those dynamics. If labor can’t work w/ mgmt, the mgmt (whoever that may be) will call the shots and they will decimate labor’s position in at attempt to ensure the survival of the company.
AA has a little time left to control its destiny – but the amount of time is growing shorter and shorter.
If AA labor and mgmt can’t figure out how to work together, the cuts will grow deeper and the options available to turn the company around will be greatly reduced compared to today.

Why do you think there's this rift between OH and Line mechanics on this forum??? I see what other carriers have done with OH, and I'm also well aware of the pay structure of these third world countries doing OH for UA and others. I know my pay cannot compete against some unlicensed person in SA making $5 a day. In other words, I'm not stupid or ignorant to the fact that our gov't, the FAA, has sold out the licensed mechanics jobs to other emerging markets, just like every other job in this country. But, how do you convince the majority of aircraft mechanics in TUL that their jobs are in jeopardy without angering our so called "union brothers"? I get accused of being management one day and golden goose killer the next. I blame management for AA's problems because they too had an opprotunity to get as much relief from our CBA's as they could in 2003, and didn't, and now they go around and claim that they are at a labor disadvantage to other carriers. Really? Well, let me just say that management only gets one bite at the apple, and they failed to devour the apple....WE are NOT management's piggy bank, and it's time for senior management to figure out how to run this crazy business without harming the people that actually do take care of their customers....the employees, because without somewhat happy employees....AA's customers will always suffer, and management and the employees will always point fingers at each other and WE ALL LOSE!