At 2 Airlines

[BoeingBoy]

At 2 Airlines, Management and Unions Focus on Cuts
By MICHELINE MAYNARD

Published: February 17, 2004

Unions and management at two troubled airlines are facing off over cuts that executives say are critical to their companies' survival.

NY Times Article

Jim

 

[cavalier]

At 2 Airlines, Management and Unions Focus on Cuts
By MICHELINE MAYNARD

Published: February 17, 2004

Unions and management at two troubled airlines are facing off over cuts that executives say are critical to their companies' survival.

NY Times Article

Jim

If this management team and specifically Dave Siegel absolutely comes to work for under six figures until we turn a profit, then maybe and then only do I feel the union leadership should lend him an ear, if even then.

 

[BoeingBoy]

"Executives told labor leaders that they wanted to cut costs by four cents a mile, to roughly six cents a mile"

[I presume they mean "cents a seat mile" - Jim]

"To help achieve the four cents a mile savings, US Airways proposed that labor groups grant concessions equal to roughly two cents a mile. According to the presentation, employees would grant concessions equal to 0.9 cents a mile in wages, 0.7 cents a mile in productivity gains and another 0.4 cents in wage cuts."

[Personnel costs (labor) is about 4 cents a seat mile now so this translates into about 50%. I presume that one of the two places it says wages should be benefits, but that's just my guess - Jim]

"The company, for its part, is promising to cut its operating costs by one cent a mile, its distributing and marketing costs by 0.4 cents a mile, and other costs by 0.2 cents a mile."

[My math says the company will cut structural costs by 1.6 cents per seat mile and wants 2 cents a seat mile from labor. What happened to the other 0.4 cents per seat mile is anybody's guess (bonus for management?) - Jim]

 

[robbedagain]

may be for the employees in the big cities such as bos phl lga etc etc but what about the little ones on the bottom of the tattam pole such as the ones in srq pwm abe avp where the top pay after 12 yrs of service is a crappy 13.00? i am not going to vote yeah if this includes more paycuts. further more we at expressed stations such as avp abe cle srq pwm cant afford any further paycuts. this airline will have to do it without the expressed mainline cities!

 

[PITbull]

I thought that the cuts from labor were NOT to be w-2 hits...

Medical and wages are a hit. There is no way we can afford higher medical contributions. 29% from pilots and 22% from all other groups is enough for contributions. We still have to endure co-pays and deductables, which ALL go up again in 2006. And we all know that our contributions are going up every January until 2009 amedable contract date.

Contrary to what folks on these boards are saying and our execs, I have found that we are in the UPPER ranks of employees who are paying over 20% for health care contributions, excluding out-of-pocket expenses that are even higher than most. Our wages do not support higher increases. Management has on the table for Mid Atlantic employees 30% contribution for medical...higher than our mainline pilots, and senior exec contributions. Insanity!

And even though I know this seems to be an argument among many companies today with their employees, I am of the opinion, that its because corporations THINK they can get away with it in this environment to offer less and less benefits to their workers. Of course, those who make the rules are in 6 digits.

If I were in 6 digit income, I would pay the entire premium. Contrary to that thinking, our execs pay the same contribution as the pilots. Fact.

Healthcare offering as a benefit from companies is only good, if it affordable to the employee.

 

[BoeingBoy]

Ok, I've dug out the 4th qtr report and here are the refined numbers - assuming that the breakdown reads "0.9 cents a mile in wages, 0.7 cents a mile in productivity gains and another 0.4 cents in BENEFIT cuts"

20% in wages, 15% in productivity, and 9% in benefits.

Jim

 

[ktflyhome]

BoeingBoy: Are you giving figures that would mean U employees would be taking another 20% pay cut and 9% in benefits??? And about the productivity, this confuses me. Please explain. 🙁

 

[Twicebaked]

20%???????? What the *@#! are they smoking.
Where was it mentioned that any cost per seat mile was to be obtained by senior management? Are we not to notice that? They need to take a heftycut and pay ALL of their benefits.

 

[BoeingBoy]

Evening ktflyhome,

What the article said was "concessions equal to 0.9 cents a mile in wages, 0.7 cents a mile in productivity gains and another 0.4 cents in wage cuts".

In the 4th quarter (as near as I can figure), employee costs equaled 4.6 cents per seat mile. Thus the 0.9 cents a [seat] mile in wages would equal a 20% reduction in wages, the 0.7 cents a [seat] mile in productivity gains would equal a 15% gain in productivity, and the 0.4 cents a [seat] mile in wage cuts [benefits?] would equal a 9% reduction in whatever that catagory should be, presumably benefits but that's only my guess.

As before, I would expect that the pilots (who make more) would take a bigger hit in wages. As you probably know, the minimum pay cut for pilots last time was about 35%. Of course the max was 100% for those furloughed.

For flt crews, the productivity could be a higher pay cap or whatever (interestingly, going to 95 hours from 85 hours is about a 12% increase). For other groups, it would depend on their specific "work rules". Just as an example, does outsourcing the Bus heavy maintenance represent a 15% increase in "productivity"?

If you want to assume that the second mention of wages in the article really meant benefits, it could come from medical, retirement, or anything else that is considered a benefit. Higher insurance premiums, different calculation for retirement, or whatever.

Jim

 

[A320 Driver]

20%???????? What the *@#! are they smoking.
Where was it mentioned that any cost per seat mile was to be obtained by senior management? Are we not to notice that? They need to take a heftycut and pay ALL of their benefits.

Late last fall and right up through January the only thing on managements wish list was productivity. They also said the plan wasn't finished yet.

Everyone get it now?

They couldn't finish the plan until they successfully blackmailed the labor groups back into a concessionary posture with the threat of asset sales. THEN and only then was the plan "complete". We went from work rules to the wallet with nothing more than a willingness to listen. 6 cents a mile my eye. WN's at 7.6 a mile in Q4. We're going to play match games with our competition until we're all broke.

A320 Driver :angry:

 

[700UW]

The IAM has not met with the company, the CWA met with the company nad refused to sign the confidentiality agreement and proposed one that would let them tell thier members all non-financial matters that were discussed and the company refused.

The AFA met with the company on 2/11.

It would be amazing if a reported would use the facts.

 

[USAirUnited]

20% there is no way that must be wrong, No one will agree to this. I just wish they would make the plan public so we all know whats going on.

 

[bluetoad]

Ali took to many to the head and now he cant talk straight. Foreman has lived long and is making millions selling grills at walmart