Crandall on CNBC -

ss278

Member
Aug 25, 2002
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On 3/13/2003 8:28:12 AM AKAAB wrote:

Crandall was just on CNBC. One of the things he said was that all labor contracts must be torn up and labor costs brought down to LCC levels. How about bringing down the management costs while your at it!

AKAAB
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Can't do that. It makes too much sense.
 
Dec 5, 2002
66
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www.usaviation.com
[blockquote]
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On 3/13/2003 8:28:12 AM AKAAB wrote:

Crandall was just on CNBC. One of the things he said was that all labor contracts must be torn up and labor costs brought down to LCC levels. How about bringing down the management costs while your at it!

AKAAB
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Given that management rates are set by the market and union labor rates are set by contract, it would be hard to lower management rates in the same manner as union ones. You can always fire management staff...which I understand AA has done a fair amount of.
 
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bagsmasher

Guest
Rational Thought wrote:
"Given that management rates are set by the market and union labor rates are set by contract, it would be hard to lower management rates in the same manner as union ones."

Union rates are set by contract, and the rate they get by contract are set by the market, so what is your point? Why would it be hard to lower management rates? They don't have a contract, and it wouldn't have to go up for a vote, would it?


"You can always fire management staff...which I understand AA has done a fair amount of."


Yes, they say they have trimmed 22% out of management, that along with a pay freeze for the last 2 years. There is also no guarantee of any more cuts. All I can say is that there have been layoffs all over the system, in all workgroups. So the 22% doesn't impress me. Also the fact that they have had a pay freeze over the last 2 years is irrelevant. We are not talking "pay-freezes", we are talking BIG PAY CUTS that will last for SIX LONG YEARS!

If management really wanted us to get behind these pay cuts, they would take the cuts first. Before they cut the workers pay. That is called "LEADERSHIP". Right now, if we give in, and it turns this ship around, management will recieve huge bonuses, (as they should), without having to ever take a PAY CUT.
 

Connected1

Senior
Aug 20, 2002
332
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On 3/13/2003 4:25:31 PM bagsmasher wrote:

If management really wanted us to get behind these pay cuts, they would take the cuts first. Before they cut the workers pay. That is called "LEADERSHIP".
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As I understand it, the deal on the table makes management cuts contingent upon new union agreements. Management will continue to outpace union givebacks when new contracts are struck, rest assured.

If management were to go first, then when it came time for you to ante up, you would be back on this board crying foul and asking management, "What have you done for me lately?" Don't believe me? Check your last post - the 22%, no pay raises, and no profit sharing don't impress you anymore.

Personally, I'm bitter enough that my paycheck has to be used as a political pawn to bring your wages/workrules back to Earth. I certainly am not going to allow you to double-dip in my pocket.
 

RV4

Veteran
Aug 20, 2002
1,885
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Did Crandall mention anything about Country Club memberships, autmobiles, or revenue passengers being paid vouchers to take another flight while Carty and his family flew?
 
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bagsmasher

Guest
Connected1 wrote:
"As I understand it, the deal on the table makes management cuts contingent upon new union agreements. Management will continue to outpace union givebacks when new contracts are struck, rest assured."

A VP recently visited our station, and told us that management paycuts were not outlined yet. The unions don't trust management, put up or shut up. Rest assured my ass. "Management continue to outpace union givebacks", what givebacks have they given? None so far.


"If management were to go first, then when it came time for you to ante up, you would be back on this board crying foul and asking management, "What have you done for me lately?" Don't believe me? Check your last post - the 22%, no pay raises, and no profit sharing don't impress you anymore.

Management should go first, to set an example. Then the unions would have more trust in management. And then if they get things turned around, management should be rewarded handsomely.

"Personally, I'm bitter enough that my paycheck has to be used as a political pawn to bring your wages/workrules back to Earth. I certainly am not going to allow you to double-dip in my pocket."

I'll have to have this management double talk interpreted to me.
 
Dec 5, 2002
66
0
www.usaviation.com
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On 3/13/2003 4:25:31 PM bagsmasher wrote:

Union rates are set by contract, and the rate they get by contract are set by the market, so what is your point?

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You are incorrect. If union rates were set by the market, you wouldn't need a contract. The rate paid a pilot or a mechanic is completely unrelated to the free market. It is set by the relative strength of that parties collective bargaining position. Labor rates only set the limit to how low those rates could go.


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On 3/13/2003 4:25:31 PM bagsmasher wrote:

Why would it be hard to lower management rates? They don't have a contract, and it wouldn't have to go up for a vote, would it?

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Because rates for a particular skill are set in the market, and even with a labor market recession, if you lower the wage of some sector of management, they may be able to find a position in a different firm. Hence, an AA IT manager could work at AA or DuPont or 3M. So if they think they are being underpaid, they can and will likely receive an offer from some firm. That is not the same as unions. AA could decide that they can take that chance, but a firm who lowers its rates below those of its peers takes the risk of losing its best employees...not its worst. So, lower management rates...but be prepared to be managed by the least marketable.

Hope that clears things up for you.
 

Hopeful

Veteran
Dec 21, 2002
5,998
347
So using this logic, it is acceptable to for upper management to receive compensation in line with other airlines but is GREEDY for union workers to receive comparable wages. It is necessary to pay an executive extravagant wages and perks or else he leaves for greener pastures but is of no consequence to lose pilots and mechanics along with their experience.

These executives are the same ones who have also contributed to company downfalls, not only union wages and workrules. The main issue here is that you still advocate high executive compensation while we are headed for the bankruptcy courts. We are being asked to foot the bill, while upper executives are getting their country club dues renewed.
 
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On 3/13/2003 4:25:31 PM bagsmasher wrote:

If management really wanted us to get behind these pay cuts, they would take the cuts first. Before they cut the workers pay. That is called "LEADERSHIP". Right now, if we give in, and it turns this ship around, management will recieve huge bonuses, (as they should), without having to ever take a PAY CUT.

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Excuse me, but management already has led by example.

While the TWU and APFA saw contract increases this year, and the APA has seen their step increases under the terms of their now open contract, and the agents got their annual increase last year, management recieved nothing.

If going without even token raises for the past two years doesn't count for anything, why would taking a cut now make a difference?

There's no guarantee that taking a cut will motivate anyone. My opinion is that even if management worked for nothing, you'd still have people looking to drag out the process and keep pay cuts at bay as long as possible.

The only fair thing to do is make -all- of the cuts effective on the same day.

Also, the way that the bonus plans worked in past years, there are no performance bonuses paid out unless profit sharing was paid out. When y'all were enjoying your last profit sharing check, those in the performance bonus plan got a thank-you letter and zero profit sharing. While y'all were out putting down down-payments on bass boats and a new dualee, I was off buying one of those inflatable rubber boats at Walmart (couldn't afford the one at Target) and wondering how much longer my dino-Jeep was going to keep running...

....

Time for a brief reality check, folks.

The people that y'all are 8itching the most about (senior management) comprise less than 1% of management (51/9000).

Why not focus all of that energy on something that actually will make a difference?...
 

Hopeful

Veteran
Dec 21, 2002
5,998
347
So eolesen:

SO asking Carty for a 16% paycut is like a grain of sand in the hour glass compared to 16% and other goodies AA wants from the TWU totalling $630 million and therefore why bother? Sounds kind of like the top 1% richest people in this country paying only 5% of the tax bill so why bother to increase their tax rate?
 

oldbscaler

Member
Mar 13, 2003
72
0
Crandall has always preached tearing up labor contracts. That is what he did in the early 80's to start the "B scale". There were LCC's then, PEX, Apple, CAL, etc. The problem this time is there is no growth, so the problems have to be solved by the people on the property.
To his credit though, 83-92 were probably the best 10 years AA has ever seen!
 

Buck

Veteran
Contributor
Aug 20, 2002
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On 3/14/2003 9:54:48 AM oldbscaler wrote:

Crandall has always preached tearing up labor contracts. That is what he did in the early 80's to start the "B scale". There were LCC's then, PEX, Apple, CAL, etc. The problem this time is there is no growth, so the problems have to be solved by the people on the property.
To his credit though, 83-92 were probably the best 10 years AA has ever seen!
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While I agree with most of what you say, there was no real growth for any B-scaler or C-scaler etc... As a B-scaler I started with wages at 50% of my fellow employee. First any growth would have to catch me up to this level and then any increases ect.... The airline did grow and the TWU will tell you, you would not be here if we had not taken the B-scale approach.

Why is there no growth now?
 

oldbscaler

Member
Mar 13, 2003
72
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Probably something to do with Enron, Worldcom, The Dow going from 11,000 to 8,000, (on a good day),Argentina going south, too much capacity, and 9/11.
The perfect storm- go figure