Cry For Cost Cuts Grows Louder

[BoeingBoy]

Cry for cost cuts grows louder

By Thomas Olson
TRIBUNE-REVIEW
Thursday, February 26, 2004

US Airways' CEO and chairman are turning up the volume on calls for cost cuts this week, in labor meetings in Alabama set for today and in a public speech delivered Wednesday outside Washington, D.C.

PIT Trib-Review Article

Jim

 

[PITbull]

Well, there is no disputing or speculation..."cats out of the bag". Siegel just said the famous "wages, benefits" and workrules noise..another $1.5 billion in cost reductions.
Boy, he sure moved off his statment from the Dec.hotline that the cuts would not effect w-2s. Guess the world is changing faster than lightening on his planet. Full blown negotiations is what they seek. And if he is asking for another $1.5 billion, that is far far deeper than the first two concession combined. Insanity!

As employees, we are not going to make it. It just too damn unrealistic. And I am sure Siegel is not going to cough up a reduction in his salary of $600,000, which is double the salary of Dr. Bronner. And bonuses are "benched marked" for year's end of 2004, unless managment decides to forfeit another year's bonus.

No mention of anything that smells like that. And as far as AFA's resolution...no movement by management on that in the least.

The PIT Pres. will motion for the f/as to be balloted on whether to open contracts when and if a meeting is called. Management better hope they have a good relationship with the f/as enough to carry a vote to even begin a process :down:

 

[MarkMyWords]

I agree.....the terms Wages and Benefits have found their way back into the equation.

Best of luck to the AFA and their meeting. Getting this leopard to change his spots seems a near impossible task. Thank you AFA for taking up the cause.

 

[BoeingBoy]

Food for thought....

Increase in labor cost per ASM 1998 - 2001

American 23%
Delta 22%
Continental 13%
Northwest 12%
US Airways 5%
Southwest 5%
JetBlue N/A

Our labor costs increased at the same rate as Southwest's.

Labor Cost as Percent of Total Cost
1st Half 2002

American 44.4%
US Airways 44.1%
Northwest 41.0%
Southwest 40.4%
Delta 37.5%
Continental 35.9%
JetBlue 33.4%


Labor Cost as Percent of Total Cost
1st Half 2002 (Stage Length Adjusted)

American 44.6%
US Airways 45.5%
Southwest 41.2%
Northwest 40.8%
Delta 40.0%
JetBlue 37.4%
Continental 35.5%

Our labor cost as a portion of total cost was about 4% higher than Southwest's before concessions.

Block Hours per Month per Pilot 2001

Southwest 62
US Airways 50
Continental 49
JetBlue 47
Delta 45
Northwest 40
American 39

I threw this one in to highlight we pilots. Our productivity was about 20% less than Southwest's but better than all the others including JetBlue.

Jim

 

[High Iron]

Ah yes, "The Plan". Did it ever exist till now?...and this is the crisis-management reponse?

Did it in fact exist weeks/months ago, but was of such draconian nature that it was never defined, save for its basic ostensible existence ( and with a 60 A/C carrot )?...and now that the hard-sell via crisis has sufficiently ratcheted up it's finally time to unveil it?

Can't see any other explanation for the unfolding of info...and I'll tell you what, doesn't inspire much confidence either, no matter who's been watching...regardless of what they may say publicly

 

[Dea Certe]

"The decision to kill the airline now rests with its unions. They are placed in an impossible situation that is not one of their making," said Paul Stifflemire, director of Media Research Center's Free Market Project, Alexandria, Va., which critiques the financial media.



Dea comments:

I knew the unions and labor would get the blame for U's failure. No mention of the many years of poor management and bad decisions made by those in management. No mention of how much and how hard the employees worked to make this airline survive.

I would like to see the rest of Paul Stifflemire's statement. It's possible he was quoted out of context. Anyone know how I can find it?

I just don't believe employees can give up enough to save this airline. Obviously, it will never be enough.

Dea h34r:

 

[UseYourHead]

"The decision to kill the airline now rests with its unions. They are placed in an impossible situation that is not one of their making," said Paul Stifflemire, director of Media Research Center's Free Market Project, Alexandria, Va., which critiques the financial media.



Dea comments:

I knew the unions and labor would get the blame for U's failure. No mention of the many years of poor management and bad decisions made by those in management. No mention of how much and how hard the employees worked to make this airline survive.

I would like to see the rest of Paul Stifflemire's statement. It's possible he was quoted out of context. Anyone know how I can find it?

I just don't believe employees can give up enough to save this airline. Obviously, it will never be enough.

Dea h34r:

Dea,

I don't think you find one analyst that will claim that the unions are entirely responsible for where we were are today. Unless of course you’re debating "why" we are still here. It is common knowledge that US Airways has executed a series of blunders over the years and run from most competition, retrenching into high yield markets. Now the day of reckoning has arrived, and we simply must compete, with financial results black in color instead of red, or we will go away as an entity.

Getting back to the statement from the reporter:

"The decision to kill the airline now rests with its unions."

It is not our fault, however, that is a true statement in that what we do today and tomor-row is all that will matter, and with no participation from employees, we will in fact drive in the last nails into the coffin. It is not fair, however, we are where we are.

Our competition is on the sidelines salivating at the idea of our demise.

I am interested to see how much productivity and the like will amount to when examining what can be done to address a more efficient airline. If you go to work at one of our com-peting airlines, we will be starting at year one pay, those work rules, ect. anyway....

 

[usfliboi]

Well, there is no disputing or speculation..."cats out of the bag". Siegel just said the famous "wages, benefits" and workrules noise..another $1.5 billion in cost reductions.
Boy, he sure moved off his statment from the Dec.hotline that the cuts would not effect w-2s. Guess the world is changing faster than lightening on his planet. Full blown negotiations is what they seek. And if he is asking for another $1.5 billion, that is far far deeper than the first two concession combined. Insanity!

As employees, we are not going to make it. It just too damn unrealistic. And I am sure Siegel is not going to cough up a reduction in his salary of $600,000, which is double the salary of Dr. Bronner. And bonuses are "benched marked" for year's end of 2004, unless managment decides to forfeit another year's bonus.

No mention of anything that smells like that. And as far as AFA's resolution...no movement by management on that in the least.

The PIT Pres. will motion for the f/as to be balloted on whether to open contracts when and if a meeting is called. Management better hope they have a good relationship with the f/as enough to carry a vote to even begin a process :down:

Pitbull either your out of touch here are you enjoy making threats. You nor I or AFA hold any cards! Period.... What dont you get about that statement? I mean its ok to be p o'd or upset but ummmm afa has zero card playing ablity at this point. Oh im sure management will sweeten up but hey still they basicall hold all the cards ( all of them) No one will defend some of the actions and tactics that some mid level management has taken over the past year or so but still we are in no position to make threats. In the end there will be discussions. Afa will talk there will be a vote and the vote will pass by a wide margin at best . I n my opinion we have no other choice. Everyone has a time to choose their battles. This isnt the time to wage war because neither will win. There will be another day if and when we survive to fight the war.....

 

[shaka]

I have been watching the US Air story unfold for a number of years. I must say I was really excited that Siegel was able to get this company out of bankruptcy so quickly, but my feelings toward Siegel really changed in the way he has handled the employees at US Air and the good folks of PA who have alot at stake with US Air.

My feelings about the situation now are that this airline is going to go out of business in the next year if things do not change dramatically. I am not in favor of anyone getting anymore reductions in their pay and benefits, there are so many families out there that have suffered already through the first two rounds of pay cuts. I just look at the aviation industry and it has changed so rapidly, four years ago I would have told you no way in hell could you go from coast to coast for under 1k during the week without a 21 day advance. Now you can do it for under $ 600 by walking up to the counter the day of travel. The reality of the situation is the LCC's have invaded US Air turf in the northeast and they are there to stay and continue to take away market share.

What to do?? I think the productivity rules have to change dramatically for this airline to have a shot at surviving. I travel often and I spend alot of time sitting around in the hub airports. I look around and see it for myself there are many areas to increase productivity dramatically. How do you compete with another airline whose cost is dramatically lower than yours? YOU CAN NOT!!!! At this point all the name calling and finger pointing ain't going to do anyone any bit of good. This airline has a ton of great things going for it but the reality is this company is on the verge of collapse because of the expenses outweighing the revenue. I think that management must participate in anything that is asked of the employees plus an additional 25%.

If I were Dave Bronner I would tell Dave Siegel thanks for getting this company out of bankruptcy but it is time for you to make a graceful exit. I would tell him the only fighting chance this airline has is working with the employee groups to get it where it needs to be and Siegel is not the man to accomplish this task. This airline is in desperated need of not only a turn around specialist but also a leader that is able to do just that "LEAD".

Good luck, I hope this great airline survives its biggest challenge it has ever faced.

 

[Facts?]

Boeing Boy. Some interesting stats but are there any more recent stats (2003) that might show how much more productive US pilots are now? It would be interesting to see how Airways' position has changed since 2001 and 2002. Good point though that they were not too far out of alignment to begin with.

 

[delldude]

bring the airbuses in house and maybe...just maybe IAM will listen.

 

[tim]

bring the airbuses in house and maybe...just maybe IAM will listen.

That and get rid of Dave and Dave

 

[OldGuyinPA]

I wonder if the grocery stores will triple my discount coupons if I tell them I work for USAir..ways (not really an employee..OK). I'm tired of buying my trash bags at Ollies Bargin Outlet store because their a few pennies cheaper than elsewhere.....

Life's hard enough already Millionaire Dave...How much harder do you want to make it for us manual laborers. It's not labor..it's management or lack of thats got us to where we are today.....

No more concessions.....no more. Don't even ask.

 

[robbedagain]

just wondering if usair's mgmt is the same as the now almost gone ground round restaurant. ground round just sent their employees home and their last pay checks bounced--they declared bankrupt thursday and now out of business could this be what is going on with usair and its dirty mgmt team??????

 

[Heinrich]

If this is insanity and you are unhappy then why not resign voluntarily? The evidence is all over the place and it's not just from Siegel. Why say "the concession stand is closed", bring the company into bankruptcy and then have thousands of people with no jobs? Who is keeping you "stuck" at USairways? You are not a victim. Stop living in denial.