Bankruptcy

[Bob Owens]

As we keep hearning about BK I have to ask "what exactly do you think will happen to us?" Here is what I've heard;

1. "We will lose our pension."
Wrong, our pensions are insured by the PBGC, as long as you fall below the max, and the pilots are pretty much the only major group of workers that dont, you will get your pension. It may be frozen and your pension would be based on what you earned up to that point but you wont lose anything. Our peers at other carriers did not Lose their pensions, their pensions were frozen and in nearly all cases an alternative DC pension was put in place. Companies do this not so much to save money, because as AA admitted switching would actually cost them more now, but because ever since the 90s the companies had to carry the liabilities for pensions and other benefits on their books which made the companies look less profitable. With DC plans they are paid as they go so no liability is carried.

People who fall above the PBGC maxes would be impacted to a greater degree, but most us us do not fit into that category.

2 "We will lose retiree Medical"
We stand to make out better in BK than we would by agreeing to what Fleet has in the TA and the company has in their proposals for other groups. In BK the company does not get a hold of any of that money, it stays in our accounts, if we agree to their proposal we are agreeing to terminate our participation in the plan and those funds revert to the company which would save them from having to draw funds from their general funds to pay their obligations.

3 We would lose Overhaul.
Well, the company has never ever proposed that so why would they go for it in BK? Where would they send all that work anyway? After 25 years at AA one thing I know is that if AA wants something the TWU will generally do whatever they can to give it to them. Prefunding is one example. Obviously AA has no desire to get rid of its OH facilities, in fact they obtained more space for overhaul (DWH) a short time ago. They were not contractually bound to do so and they currently have nearly 2000 workers without system protection.

4 The company could impose whatever it wanted in BK.
The courts can not impose a new contract, they can allow the company to impose new terms and negotiations continue under the RLA but the question remains as to whether we can resort to self help. The question has never been brought to the top. The Flight Attendants went as high as the appelate court but then settled on a contract and did not challenge the decision in the Supreme Court.

First off there is no guarantee that the judge would agree to abrogate. The company would have to prove that the terms of our contract are onerous. Well our wages and working conditions are nowhere near industry leading and they would have to say which parts of the contract are onerous. At that point the question would be if they were so onerous how come they did not ask for those changes in four years of negotiations? At this point, assuming the TWU puts up resistance, what would their arguement be? Our wages are well below what they were in 2003 and the company has seen a dramatic increase in revenues, they would have to explain what they did with all those extra revenues and why they did what they did and all those arguements would be for public comsumption. The company would expose themselves in BK. Even if the judge did rule in favor, and with the political climate in flux as evidenced by movements such a OWS we would likely get more support from the public than we would have a few years back, Judges may be more hesitant to impose an injunction barring us from self help when the RLA clearly says we can engage in self help under those conditions if they thought the ruling would be used by the those movements as proof of government complicity in the corporate conspiracy to crush working peoples rights and movements and workers were camped out on the "courthouse steps". (Its a short walk from Zucotti Park to the Bankruptcy Court) If anything, now is the time, we recently saw the working class backlash in Ohio where the people overruled the politicians, do you think they want more of that?

 

[wrencher]

As we keep hearning about BK I have to ask "what exactly do you think will happen to us?" Here is what I've heard;

1. "We will lose our pension."
Wrong, our pensions are insured by the PBGC, as long as you fall below the max, and the pilots are pretty much the only major group of workers that dont, you will get your pension. It may be frozen and your pension would be based on what you earned up to that point but you wont lose anything. Our peers at other carriers did not Lose their pensions, their pensions were frozen and in nearly all cases an alternative DC pension was put in place. Companies do this not so much to save money, because as AA admitted switching would actually cost them more now, but because ever since the 90s the companies had to carry the liabilities for pensions and other benefits on their books which made the companies look less profitable. With DC plans they are paid as they go so no liability is carried.

People who fall above the PBGC maxes would be impacted to a greater degree, but most us us do not fit into that category.

2 "We will lose retiree Medical"
We stand to make out better in BK than we would by agreeing to what Fleet has in the TA and the company has in their proposals for other groups. In BK the company does not get a hold of any of that money, it stays in our accounts, if we agree to their proposal we are agreeing to terminate our participation in the plan and those funds revert to the company which would save them from having to draw funds from their general funds to pay their obligations.

3 We would lose Overhaul.
Well, the company has never ever proposed that so why would they go for it in BK? Where would they send all that work anyway? After 25 years at AA one thing I know is that if AA wants something the TWU will generally do whatever they can to give it to them. Prefunding is one example. Obviously AA has no desire to get rid of its OH facilities, in fact they obtained more space for overhaul (DWH) a short time ago. They were not contractually bound to do so and they currently have nearly 2000 workers without system protection.

4 The company could impose whatever it wanted in BK.
The courts can not impose a new contract, they can allow the company to impose new terms and negotiations continue under the RLA but the question remains as to whether we can resort to self help. The question has never been brought to the top. The Flight Attendants went as high as the appelate court but then settled on a contract and did not challenge the decision in the Supreme Court.

First off there is no guarantee that the judge would agree to abrogate. The company would have to prove that the terms of our contract are onerous. Well our wages and working conditions are nowhere near industry leading and they would have to say which parts of the contract are onerous. At that point the question would be if they were so onerous how come they did not ask for those changes in four years of negotiations? At this point, assuming the TWU puts up resistance, what would their arguement be? Our wages are well below what they were in 2003 and the company has seen a dramatic increase in revenues, they would have to explain what they did with all those extra revenues and why they did what they did and all those arguements would be for public comsumption. The company would expose themselves in BK. Even if the judge did rule in favor, and with the political climate in flux as evidenced by movements such a OWS we would likely get more support from the public than we would have a few years back, Judges may be more hesitant to impose an injunction barring us from self help when the RLA clearly says we can engage in self help under those conditions if they thought the ruling would be used by the those movements as proof of government complicity in the corporate conspiracy to crush working peoples rights and movements and workers were camped out on the "courthouse steps". (Its a short walk from Zucotti Park to the Bankruptcy Court) If anything, now is the time, we recently saw the working class backlash in Ohio where the people overruled the politicians, do you think they want more of that?

Bob one case in point the PBGC uses 55 and 65 as the bench mark for retirement so anyone not age 55 at the time the PBGC takes over would take a 5% hit based on 65 so a person retireing not 55 when the PBGC takes over and then retires at 55 would take a 50% hit and for every year they defered retirement would gain 5% so yes we are loosing something depends on how and when you retire. These are facts I know if you really want to know talk to a former TWA employee, this is nothing new for us. The one thing I think might be a sticking point is the 50-55 boys out there who are on retirement mode I could honestly say I would assume this might not be recognized by the PBGC . The one question I would have if they offered an early out and you qualified for the 50-55 option what does the PBGC recognize?Good luck getting that answer and if it does show up get it in writeing from someone with authority who ever that might be.

 

[strikeforce]

As we keep hearning about BK I have to ask "what exactly do you think will happen to us?" Here is what I've heard;

1. "We will lose our pension."
Wrong, our pensions are insured by the PBGC, as long as you fall below the max, and the pilots are pretty much the only major group of workers that dont, you will get your pension. It may be frozen and your pension would be based on what you earned up to that point but you wont lose anything. Our peers at other carriers did not Lose their pensions, their pensions were frozen and in nearly all cases an alternative DC pension was put in place. Companies do this not so much to save money, because as AA admitted switching would actually cost them more now, but because ever since the 90s the companies had to carry the liabilities for pensions and other benefits on their books which made the companies look less profitable. With DC plans they are paid as they go so no liability is carried.

People who fall above the PBGC maxes would be impacted to a greater degree, but most us us do not fit into that category.

2 "We will lose retiree Medical"
We stand to make out better in BK than we would by agreeing to what Fleet has in the TA and the company has in their proposals for other groups. In BK the company does not get a hold of any of that money, it stays in our accounts, if we agree to their proposal we are agreeing to terminate our participation in the plan and those funds revert to the company which would save them from having to draw funds from their general funds to pay their obligations.

3 We would lose Overhaul.
Well, the company has never ever proposed that so why would they go for it in BK? Where would they send all that work anyway? After 25 years at AA one thing I know is that if AA wants something the TWU will generally do whatever they can to give it to them. Prefunding is one example. Obviously AA has no desire to get rid of its OH facilities, in fact they obtained more space for overhaul (DWH) a short time ago. They were not contractually bound to do so and they currently have nearly 2000 workers without system protection.

4 The company could impose whatever it wanted in BK.
The courts can not impose a new contract, they can allow the company to impose new terms and negotiations continue under the RLA but the question remains as to whether we can resort to self help. The question has never been brought to the top. The Flight Attendants went as high as the appelate court but then settled on a contract and did not challenge the decision in the Supreme Court.

First off there is no guarantee that the judge would agree to abrogate. The company would have to prove that the terms of our contract are onerous. Well our wages and working conditions are nowhere near industry leading and they would have to say which parts of the contract are onerous. At that point the question would be if they were so onerous how come they did not ask for those changes in four years of negotiations? At this point, assuming the TWU puts up resistance, what would their arguement be? Our wages are well below what they were in 2003 and the company has seen a dramatic increase in revenues, they would have to explain what they did with all those extra revenues and why they did what they did and all those arguements would be for public comsumption. The company would expose themselves in BK. Even if the judge did rule in favor, and with the political climate in flux as evidenced by movements such a OWS we would likely get more support from the public than we would have a few years back, Judges may be more hesitant to impose an injunction barring us from self help when the RLA clearly says we can engage in self help under those conditions if they thought the ruling would be used by the those movements as proof of government complicity in the corporate conspiracy to crush working peoples rights and movements and workers were camped out on the "courthouse steps". (Its a short walk from Zucotti Park to the Bankruptcy Court) If anything, now is the time, we recently saw the working class backlash in Ohio where the people overruled the politicians, do you think they want more of that?

Haven't WE endured almost 9 years of concessions similar to BK, so what's the difference.

 

[Bob Owens]

Bob one case in point the PBGC uses 55 and 65 as the bench mark for retirement so anyone not age 55 at the time the PBGC takes over would take a 5% hit based on 65 so a person retireing not 55 when the PBGC takes over and then retires at 55 would take a 50% hit and for every year they defered retirement would gain 5% so yes we are loosing something depends on how and when you retire. These are facts I know if you really want to know talk to a former TWA employee, this is nothing new for us. The one thing I think might be a sticking point is the 50-55 boys out there who are on retirement mode I could honestly say I would assume this might not be recognized by the PBGC . The one question I would have if they offered an early out and you qualified for the 50-55 option what does the PBGC recognize?Good luck getting that answer and if it does show up get it in writeing from someone with authority who ever that might be.

Thanks for the info, I should have added "at 65" to the post, the point is you dont lose what you have accumulated, granted the last few years add the most to what you get and you may be denied the opportunity to accumulate those years in the plan. Not too many guys in my neck of the woods are looking at being able to retire early after all with 30 years in the plan it works out to around half your working wages as a pension, if you cant survive on your full wage you wont be able on half that(remember OT is not pensionable), and as you said, just because they get out early doesnt mean they wont be impacted. We will still have a pension.

 

[Mach85ER]

No from the pilot end.

There would be fear if current salaries were 50%-75% more than other pilot jobs as was the case 15-20 years ago. As it stands now, contract delays and failure to match COLA raises have decimated salaries. Furloughed pilots are flying corporate at salaries greater than B777 CA's. Pilot jobs worldwide are booming, and while many are still the dregs, aircraft orders and lack of pilots are driving salaries up rather quickly. Several Asian carriers are hiring pilots for equal or better pay than AA and basing them on the west and east coasts, no expat living. AA is delusional if it thinks it will not hemmorage pilots in a few years given what is happening worldwide. We have many active and furloughed military pilots on leave. Many have no intention of coming back to AA with a garbage contract since they already make more.

 

[TWU informer]

Bob one case in point the PBGC uses 55 and 65 as the bench mark for retirement so anyone not age 55 at the time the PBGC takes over would take a 5% hit based on 65 so a person retireing not 55 when the PBGC takes over and then retires at 55 would take a 50% hit and for every year they defered retirement would gain 5% so yes we are loosing something depends on how and when you retire. These are facts I know if you really want to know talk to a former TWA employee, this is nothing new for us. The one thing I think might be a sticking point is the 50-55 boys out there who are on retirement mode I could honestly say I would assume this might not be recognized by the PBGC . The one question I would have if they offered an early out and you qualified for the 50-55 option what does the PBGC recognize?Good luck getting that answer and if it does show up get it in writeing from someone with authority who ever that might be.

That actually sounds like a LOT to lose to me.

Not to mention while Bob claims AA has never talked our elimination of overhaul, the Vermont Plan had substantial removal of overhaul jobs within it,

Including Composite Center, APU Wiring Center, and Wheel and Brake shop just to name some. I think my current work assignment would be eliminated in BK but I would bump someone esel using my seniority, but I would likely lose my skill premiuim pay. You will never convince me that we have nothing to lose in BK. That is 100% BS!!!

Why are people so one sided and blind unless it directly effects them?
Go tell those members working in those areas that AA has never talked about elimination of their jobs.

I did vote NO on the poll, but only because we have no control, not because I don't worry about it.

So far it appear we have only gone further backwards since the Bob vote NO show. And until he shows me a gain I am not following the logic.

 

[Bob Owens]

No from the pilot end.

There would be fear if current salaries were 50%-75% more than other pilot jobs as was the case 15-20 years ago. As it stands now, contract delays and failure to match COLA raises have decimated salaries. Furloughed pilots are flying corporate at salaries greater than B777 CA's. Pilot jobs worldwide are booming, and while many are still the dregs, aircraft orders and lack of pilots are driving salaries up rather quickly. Several Asian carriers are hiring pilots for equal or better pay than AA and basing them on the west and east coasts, no expat living. AA is delusional if it thinks it will not hemmorage pilots in a few years given what is happening worldwide. We have many active and furloughed military pilots on leave. Many have no intention of coming back to AA with a garbage contract since they already make more.

BK is the only threat the company has on you guys because of your pensions but in reality you have them by the nads. Besides is not worth sacrificing decent pay over a working lifetime for the promise of a pension.

The shortage of pilots is real and not likely to be fixed soon, and they cant sub your work out to non-pilots and have another sign for him. The number of people getting qualified for your category is down by 2/3.

I ran into an ex AA pilot a few months ago who was working for a charter outfit and he said he had turned down the recall, he was doing better where he was and had no intentions on coming back.

Why dont you guys just demand to be released so we can all end this BS?

 

[TWU informer]

BK is the only threat the company has on you guys because of your pensions but in reality you have them by the nads. Besides is not worth sacrificing decent pay over a working lifetime for the promise of a pension.

The shortage of pilots is real and not likely to be fixed soon, and they cant sub your work out to non-pilots and have another sign for him. The number of people getting qualified for your category is down by 2/3.

I ran into an ex AA pilot a few months ago who was working for a charter outfit and he said he had turned down the recall, he was doing better where he was and had no intentions on coming back.

Why dont you guys just demand to be released so we can all end this BS?

All I can say to that post is " WOW Are you shittin me"?
Yeah Mr Pilot, your pension is worthless why don't you throw it away.

 

[Bob Owens]

That actually sounds like a LOT to lose to me.

Not to mention while Bob claims AA has never talked our elimination of overhaul, the Vermont Plan had substantial removal of overhaul jobs within it,

Including Composite Center, APU Wiring Center, and Wheel and Brake shop just to name some. I think my current work assignment would be eliminated in BK but I would bump someone esel using my seniority, but likely lose my skill premiuim pay. You will never convince me that we have nothing to lose in BK. That is 100% BS!!!

Why are people so one sided and blind unless it directly effects them?
Go tell those members working in those areas that AA has never talked about elimination of their jobs.

I did vote NO on the poll, but only because we have no control, not because I don't worry about it.

The Vermont Plan was never a formal proposal, it was a threat.

The committee back in 2003 actually told the company cut the jobs and leave everything else as is, the company backed out of it. turns out they eliminated as many as they wanted to anyway.

So tell me, how many people do you thing AA would shed from maint in BK? And why are they still hiring?

 

[TWU informer]

The Vermont Plan was never a formal proposal, it was a threat.

The committee back in 2003 actually told the company cut the jobs and leave everything else as is, the company backed out of it. turns out they eliminated as many as they wanted to anyway.

So tell me, how many people do you thing AA would shed from maint in BK? And why are they still hiring?

The Vermont Plan would be become fact in BK and they are hiring to get more yes voters to counter you and others like you.
Once they get a T/A they will have an early out and keep those they hired.
Everyday I can see over 2000 jobs in Tulsa gone once the MD-80's experience heavy grounding and elimination from the fleet

YES I said 2000 jobs, then as the new aircraft fall out of warranty and need overhaul, and if we get the work to begin with they will then hire more.

 

[Bob Owens]

All I can say to that post is " WOW Are you shittin me"?
Yeah Mr Pilot, your pension is worthless why don't you throw it away.

I'm no expert on the pilots pension but they have multiple plans, one of which is a DC so I dont believe that would be affected if the company dumped the DB plans into the PBGC.

The question is should they be willing to sacrifice several hundred thousand dollars in wages for a fraction of that in a pension they may not live to see?

I figure we gave around $200k in concessions so far, so if I retire at 65 I basically funded my pension to 71 already.

 

[TWU informer]

I'm no expert on the pilots pension but they have multiple plans, one of which is a DC so I dont believe that would be affected if the company dumped the DB plans into the PBGC.

The question is should they be willing to sacrifice several hundred thousand dollars in wages for a fraction of that in a pension they may not live to see?

They should be given that choice and vote on it before asking for a release.
I cannot answer for them and you cannot either.
Most likely some would agree you, some would not.
I have no idea which side would be the majority.

 

[TWU informer]

deleted dupe post

 

[Frank Szabo]

The Vermont Plan was never a formal proposal, it was a threat.

The committee back in 2003 actually told the company cut the jobs and leave everything else as is, the company backed out of it. turns out they eliminated as many as they wanted to anyway.

So tell me, how many people do you thing AA would shed from maint in BK? And why are they still hiring?

The company and its wholly owned subsidiary, the twu, conspired to create a "plan" designed to instill fear of a bankruptcy filing that wasn't going to happen. I must admit the story line was good enough to make a 60 or 90 minute TV movie as it had all the players and drama - all it lacked was some friggin' in the riggin' (like the old 'Airport' chick-flick dramas) and that would have easy to add if it wasn't already hidden from view.

A bankruptcy just isn't going to happen as too much control would be ceded to a judge - our CPAs would never allow that.

The company has three contracts it can live with as it is and sees no need to finalize any of them as that would cost money that could be "better spent" on executive bonuses.

Re: "Still Hiring" - proof of bullshit.

 

[Bob Owens]

The Vermont Plan would be become fact in BK and they are hiring to get more yes voters to counter you and others like you.
Once they get a T/A they will have an early out and keep those they hired.
Everyday I can see over 2000 jobs in Tulsa gone once the MD-80's experience heavy grounding and elimination from the fleet

YES I said 2000 jobs, then as the new aircraft fall out of warranty and need overhaul, and if we get the work to begin with they will then hire more.

OK, lets say you are right, wont that be the case (MD-80) either way? What does BK have to do with the elimination of the MD-80s?

By the way AA loses around 500 mechanics per year, thats why they refused to let the line guys get in on the VBR. So at the rate the MD-80s are retired and replaced more than likely attrition would still outpace any resulting surpluss. Sure Tulsa will shrink for a while, as it already has, but I doubt we will see guys hitting the street. I would not count all those new hires as yes votes either.

Your 2000 number seems high, that would bring AA to just 14 M&R per aircraft, thats lower than UAL at 15 per aircraft.