EXECUTIVE BONUSES MAKE ME SICK!

[Bob Owens]

Please. The industry changed. Deal with it. It (like ANY business or industry) is ALWAYS changing. Change happened particularly rapidly to the airline industry over the last five years.

Good thing you weren't a Pony Express driver.

Still waiting for a bunch of disgruntled mechanics to start their own airline and show all the others how they can pay all front line employees six figures yet still be profitable, given the realities of today's market.

So the industry has changed you say? Well productivity has been steadily incraesing and the industry is still trending towards expansion. That usually drives wages and living standards up, not down.

Pony express was put out of business by technology, there was no longer a need for the service they provided, thats not the case with mechanics.

A few weeks back I changed a lid on a 777 toilet, just the lid alone was over $300! Had it needed the entire assy, seat, hinges and lid it would have been over $1000.
Seems that despite all that has "changed" the airlines still dont #### too much about getting raped for parts. Now tell us how the vendors took it in the shorts. The seat couldnt have cost more that $10 to make yet they sell for $1000.

The fact is that you keep citing the so called market and ignore the fact that Federal Judges and the NMB keep forcing unions to accept lower wages or even terms they never agreed to. If we were free to act upon market forces as a union without government interference we could have easily restored our wages, in fact we probably never would have lost them.I know you are going to cite the fact that individual employees could quit but once again if a corporation can be seen as a single entity when its really a collective of stockholders then a union should also be looked at as a single entity even though its a collective of workers. While there might be e few availible mechanics out there still I doubt there has ever been 10000 mechanics out there to take our jobs if we went on strike.

 

[Bear96]

So the industry has changed you say? Well productivity has been steadily incraesing and the industry is still trending towards expansion. That usually drives wages and living standards up, not down.

Usually? OK, let's go with that. But not this time, because the industry has changed. You can continue to deny it, but that doesn't make you correct.

Pony express was put out of business by technology, there was no longer a need for the service they provided, thats not the case with mechanics.

Not quite. For many reasons (including but not limited to gradual changes in technology), the fact remains that there is no longer a need for the service airline employees (including mechanics) were providing at the rates they were requesting.

A few weeks back I changed a lid on a 777 toilet, just the lid alone was over $300! Had it needed the entire assy, seat, hinges and lid it would have been over $1000.
Seems that despite all that has "changed" the airlines still dont #### too much about getting raped for parts. Now tell us how the vendors took it in the shorts. The seat couldnt have cost more that $10 to make yet they sell for $1000.

Sounds like you could make a fortune selling these $10-to-produce-toilet-seats for around $990 a pop. You'd be underselling that competitor who is charging $1000 so you'd get all the business, and you'd be making a $980 per unit profit. You'll be rich! Good luck to you.

 

[Bob Owens]

Let's get some numbers on the table.
So AA could have just continued on without any changes, with the cost structure of the late 1990s, and everything would have been just fine. Is that what you are saying?

The problem wasnt what they were paying workers, SWA pays higher than AA yet their cost structure is lower, its how ineffeciently management manages the business. So because you cant manage we had to compensate for your incompetence with pay and benifit reductions.

It all comes down to how easy it is to replace someone. Apparently AA has decided it is easier to replace front-line folk than it is to replace senior management. You, of course, are free to disagree with that.

So why does the company run to court when a mechanic says "You will see what we think of your offer in the morning when the planes dont go out"? Why not just replace them if its so easy?

 

[Bob Owens]

Over 20,000 AA/TWA employees furloughed in the immediate wake of September 11, 2001; a reduction of 20% of the flight schedule, and yet you think management failed to properly "adjust operations" and "headcount?"

And they brought them all back within months. We saw traffic fall prior to 9-11 and couldnt understand why even after purchasing TWA AA was still hiring off the streets. The overhired and pissed away a lot of money by having many more people on payroll than was needed.

You really hate those first class Flagship Suites, don't you? It's too bad you don't understand what drives the big revenue in NYC. You understand fixing airplanes - of that I'm certain. The problem is that you don't understand that the Flagship Suites are one reason why AA's yields didn't fall as much as at UA or DL or CO in the wake of September 11. AA doesn't buy them and BA and VS capture all the high-yielding customers, leaving AA with the garbage fare vacationers.

Dont hate them, just feel they are a waste. Carty was the one who said they wouldnt pay for themselves, he was even quoted in the papers. But I guess you know more than he does. Its funny how the value of these seats seems to change with the subject of the discussion. On the one hand it dosent matter if we leave them placarded because more than likely the person who gets the seat is a free upgrade but then those are the seats that have people pick AA over everyone else.

Probably should have never bought those 777s either. Much too expensive for Budget-Minded Bob Ownes. Should have kept the 707s and DC-10s. Expensive airplanes are for others.

Go ahead buy away, but dont tell me that I have to pay for them.

For a mere couple hundred million you guys could have bought enough of the stock in Feb-March of 2003 to enable you to take over the board and fire all the management. But easier to not do that and complain.

Uh, easier to complain than cough up a couple of hundred million $, well yea. Dose that suprise you?

You said that AA "pissed away billions in capital." In one respect, I agree with you. From September, 2001 thru April, 2003, AA borrowed about $3 billion to make payroll. Used it for wages for employees instead of demanding wage concessions in early October, 2001. "Pissed away" $3 billion it didn't have.

Didnt have it because they bought back stock, built up terminals in BNA, RDU,and ISP only to abandon them. Intalled $100,000 desks at all the gates, completely refurbished JFK only to tear it down and replace it with a Billion$ boondoggle.

Oh, I see, it's only pissed away if it was spent on something with which you disagree.

So you think it makes sense to spend a couple of years and millions of dollars refurbishing a building to start ripping it down a short time later?

Usually? OK, let's go with that. But not this time, because the industry has changed. You can continue to deny it, but that doesn't make you correct.

Well they still move people and goods from point A to point B and they still need people to do it.

Not quite. For many reasons (including but not limited to gradual changes in technology), the fact remains that there is no longer a need for the service airline employees (including mechanics) were providing at the rates they were requesting.

So if a plane breaks and they have to pay $45/hr instead of $30 then it doesnt need to be fixed? The fact is that AA pretty much does that already, if they want the mechanics to fix anything they have to hold OT.

 

[Wretched Wrench]

The changes enacted in 2005 didn't go far enough in my opinion.

For example, Ch. 7 is only permitted for individuals once within a six year period. That same restriction doesn't seem to apply for corporations.

Yup. I doubt that potential individual filers of chapter 7 are among the present administration's large contributers.

He is responding to his constituency.

Ya dance with who brung ya.

 

[Bear96]

The problem wasnt what they were paying workers, SWA pays higher than AA yet their cost structure is lower, its how ineffeciently management manages the business. So because you cant manage we had to compensate for your incompetence with pay and benifit reductions.

Poor Bob. You're still confused. I don't manage anything to do with AA.

In any case, you didn't "have" to compensate anyone for anything. You could have voted against paycuts, kicked out your union if you thought they were doing a poor job on your behalf, or left to find an employer who in your opinion compensates you adequately for your skills. All those choices . . . choices that I had nothing to do with and that don't affect me in the least.

So why does the company run to court when a mechanic says "You will see what we think of your offer in the morning when the planes dont go out"? Why not just replace them if its so easy?

Because they can. Running to court is easier than hiring replacements, as long as there is a good legal argument to be made.

Go ahead buy away, but dont tell me that I have to pay for them.

So you envision a world where AA flies planes like the 707 and DC10, while other airlines have moved on with other fleets, and AA is paying its bloated mechanic ranks (bloated because those old planes would need LOTS of maintenance) six figures?

Sounds like a business plan to me!

Well they still move people and goods from point A to point B and they still need people to do it.

Who said they didn't?

So if a plane breaks and they have to pay $45/hr instead of $30 then it doesnt need to be fixed?

Huh? I'm not following that sentence.

An airline would prefer to pay $30/hr to have the plane fixed. If they can find someone qualified to do it for $30/hr, the airline will do it for $30/hr. If they can't, they'll raise the wage to the point where they have sufficient numbers of qualified people to do the job.

If you all are worth $45/hr, why you are working for $30/hr
is beyond me. But, again, your choice.

 

[FWAAA]

And they brought them all back within months.

Seriously? Brought them all back? Maybe you're right, but what about the APA members on furlough? How about the APFA members? Aren't there AA TWU members currently on furlough? I personally know agents and rampers who were furloughed and never called back.

Dont hate them, just feel they are a waste. Carty was the one who said they wouldnt pay for themselves, he was even quoted in the papers. But I guess you know more than he does.

So Donald Carty the Liar is now a trustworthy source of financial info for you? Gotta link to any such publication? I've looked but I can't find any. Actually, I do know more than he does. On top of that, the AMR board of directors never had to force me to resign. B)

Its funny how the value of these seats seems to change with the subject of the discussion. On the one hand it dosent matter if we leave them placarded because more than likely the person who gets the seat is a free upgrade but then those are the seats that have people pick AA over everyone else.

Uh - where to begin? Your imagination is getting the better of you. First you post an inflated figure representing the hypothetical damage the mechanics could inflict on AA by working to rule, refusing overtime and thereby leaving one F seat broken, as if it's likely that AA would have sold all 16 Flagship Suites on that flight. My J -> F upgrades to NRT, PVG, GRU and LHR have cleared often enough to convince me that it's a rare flight when AA manages to sell all 16-18 F seats. Your experience may differ.

Anyway - those Flagship Suites ARE a primary reason that long-haul passengers choose AA over other airlines. And their choice isn't affected by the possibility that the mechanics placard one or two of them. Their existence (placarded or not) is a factor in their purchase decision. The very possibility of an upgrade to them helps convince passengers to buy a business class ticket on AA instead of someone else, in the hopes that their upgrade will clear. If their existence motivates people to buy Full Fare J tickets on AA instead of another airline, that's real value. I've got friends who will only buy their full J ticket on AA if they can confirm A inventory at the time of booking. If they can't, then they book another airline instead. Again, your experience may differ.

So you think it makes sense to spend a couple of years and millions of dollars refurbishing a building to start ripping it down a short time later?

No, I don't. That wouldn't make much sense. But I'm having trouble remembering that JFK terminal refurbishment. Did AA pay to refurbish it or did the PA?

 

[eolesen]

Didnt have it because they bought back stock, built up terminals in BNA, RDU,and ISP only to abandon them. Intalled $100,000 desks at all the gates, completely refurbished JFK only to tear it down and replace it with a Billion$ boondoggle.

I guess reading is one of your weak points, Bob, since I already covered this once this week...

AA doesn't fund airport terminal construction - the airport does because they own the real estate. It gets passed along incrementally once AA assumes the leasehold.

Unless I missed something, JFK's last refurbishment was finished well over ten years ago, when UAL was finally kicked out of the D concourse, NWA moved out to the IAB, and the "Jerry Jacob" connector was opened (sometime in 1993, perhaps?). What little rehabbing they did to the rest of the legacy terminal was window-dressing, i.e. new carpet, a couple of nifty banners in the ATO lobbies, and maybe a few jetbridge overhauls (which, like aircraft, need to be done every couple years for safety reasons).

Also, even though I'm sure you probably haven't read this far, the so-called $100K desks and backdrops are completely portable -- if they aren't re-used at JFK, they're trucked to storage or somewhere else to be re-installed. That was one of my jobs in the 90's -- helping find new homes for gate desks, backdrops, safes, furniture and jetways that were being removed from airports that were losing jet service.

 

[Hopeful]

I guess reading is one of your weak points, Bob, since I already covered this once this week...

AA doesn't fund airport terminal construction - the airport does because they own the real estate. It gets passed along incrementally once AA assumes the leasehold.

Unless I missed something, JFK's last refurbishment was finished well over ten years ago, when UAL was finally kicked out of the D concourse, NWA moved out to the IAB, and the "Jerry Jacob" connector was opened (sometime in 1993, perhaps?). What little rehabbing they did to the rest of the legacy terminal was window-dressing, i.e. new carpet, a couple of nifty banners in the ATO lobbies, and maybe a few jetbridge overhauls (which, like aircraft, need to be done every couple years for safety reasons).

Also, even though I'm sure you probably haven't read this far, the so-called $100K desks and backdrops are completely portable -- if they aren't re-used at JFK, they're trucked to storage or somewhere else to be re-installed. That was one of my jobs in the 90's -- helping find new homes for gate desks, backdrops, safes, furniture and jetways that were being removed from airports that were losing jet service.

Oh, I get it now. RDU and BNA and now JFK cost American Airlines next to nothing?

Is that right Eric?

SO if all thse things cost American Airlines next to nothing, then why oh why are they singing the blues?

 

[eolesen]

Go read what I wrote, sir. I said it was paid for on an incremental basis over, as opposed to the misconception that AA fronted all this money to make terminal improvements, just to walk away from them a year or two later.

Did AA lose money by paying rent on vacant leasehold?? Sure. But that was short term in nature, as BNA's and RDU's leases were either subleased to other carriers or renegotiated entirely to include only the space being occupied.

In the case of RDU, AA really dodged a bullet. They'd been subleasing space to Midway Airlines for a couple of years, and that lease had just been transferred over to JI a year or so before they collapsed into liquidation. BNA was also a matter of luck -- the airport authority wanted the ability to lease that space out to other carriers. The same thing occurred at STL after the hub downsizing, and also with DL at DFW.

JFK's rent is considerably higher than it was two years ago, but again, if AA were to file bankruptcy and walk away from the new terminal, the only money they'd be out was the rent paid in the short term before a hypothetical lease termination. Given the recent Open Skies announcement, the JFK improvements may pay off sooner than you think. 757's have a pretty far reach into western Europe, especially now that there are no restrictions whatsoever into Ireland, Portugal, and Spain.


So... Is AA singing the blues? I don't think they are, but at the same time, employees have to realize that they aren't the only ones who've been neglected over the past five years.

Capital expenditures ground to a halt in January 2001, more than two years prior to employees taking concessions. Since then, AA only made a few investments in their physical plant (facilities at DFW, MIA, and JFK were simply too far along to abandon) and practically no investments in the fleet. The only deliveries AA took were the few that either Boeing refused to allow AA to defer, or that AA needed to backfill TW aircraft being returned to lessors (i.e. the PW powered 763 fleet).

Now that AA appears to be back in the black, they need to start reinvesting in all three areas (fleet, facilities, and employees) on an equal basis. I know the employees want more of that pie to go to them, but the other two areas are just as critical.

 

[Hopeful]

Go read what I wrote, sir. I said it was paid for on an incremental basis over, as opposed to the misconception that AA fronted all this money to make terminal improvements, just to walk away from them a year or two later.

Did AA lose money by paying rent on vacant leasehold?? Sure. But that was short term in nature, as BNA's and RDU's leases were either subleased to other carriers or renegotiated entirely to include only the space being occupied.

In the case of RDU, AA really dodged a bullet. They'd been subleasing space to Midway Airlines for a couple of years, and that lease had just been transferred over to JI a year or so before they collapsed into liquidation. BNA was also a matter of luck -- the airport authority wanted the ability to lease that space out to other carriers. The same thing occurred at STL after the hub downsizing, and also with DL at DFW.

JFK's rent is considerably higher than it was two years ago, but again, if AA were to file bankruptcy and walk away from the new terminal, the only money they'd be out was the rent paid in the short term before a hypothetical lease termination. Given the recent Open Skies announcement, the JFK improvements may pay off sooner than you think. 757's have a pretty far reach into western Europe, especially now that there are no restrictions whatsoever into Ireland, Portugal, and Spain.
So... Is AA singing the blues? I don't think they are, but at the same time, employees have to realize that they aren't the only ones who've been neglected over the past five years.

Capital expenditures ground to a halt in January 2001, more than two years prior to employees taking concessions. Since then, AA only made a few investments in their physical plant (facilities at DFW, MIA, and JFK were simply too far along to abandon) and practically no investments in the fleet. The only deliveries AA took were the few that either Boeing refused to allow AA to defer, or that AA needed to backfill TW aircraft being returned to lessors (i.e. the PW powered 763 fleet).

Now that AA appears to be back in the black, they need to start reinvesting in all three areas (fleet, facilities, and employees) on an equal basis. I know the employees want more of that pie to go to them, but the other two areas are just as critical.

I'm not here to dot the I's and cross the T's...

The bottom line is that AA has made some big blunders in the past. If you want to minimize what they did by basing it on actual cost, go right ahead. Do you realize how many employees' lives and families were affected when they moved to those two stations, to only have it taken away a few years later?
What about the cost basis for them?


Once again, I am going to repeat my gripe with AA management. I know what your reply will be, but I will say it anyway.

Prior to the concessions, NO ONE gave a rat's ass what executives were paid....NO ONE!
It's what came after the period following concessions. The executives have shared more in the rewards than all other employees. People like yourself blame the unions for the woes of the company, but never seem to have a problem with corporate greed.
It is sickening to have a Senior VP come to JFK and tell us how much he has suffered with his concessions..as was done a few weeks ok...Sickening.

The difference between you and me is that you can never find fault with management whereas I can easily find fault with my union leadership. They are equally greedy. And because the upper crust of the union are appointed, we have no say in their positions, they are no better than management.
So you can give me all the numbers and costs and the "OH, RDU and BNA WERE REALLY NO BIG DEAL TO AA'S BOTTOM LINE" mantra......EMPLOYEES ARE ALWAYS MORE LIKELY TO SUFFER THE BRUNT OF MANAGEMENT DECISIONS, GOOD OR BAD...hARDLY EVER THE MANAGEMENT!

 

[eolesen]

Hopeful, the bigger difference between you and I is that I'm willing to look at both the bad and the good.

You (and other perpetually bitter folk around here) tend to focus only on the screw ups, but I rarely ever see you balance that out by admitting what management (or your union for that matter) has ever done right.

Am I aware of the impact that build-up/tear-down had? Absolutely. My wife was one of those affected -- transferred to BNA at her expense just to be displaced a couple years later, and the only options available at the time were MIA or DFW.

Has AA management screwed up? Certainly. They obviously screwed up by promoting me as many times as they did, and it was management screw ups that eventually made me chose to walk away from AA.

Still, I'm of the opinion they've done far more right than wrong over time.

AA hasn't survived for 80+ years simply because its front line workers are hard working men and women who deliver a service day in and day out. They had some pretty good leadership and corporate governance along the way, something people like you fail to recognize the value of far too often.

Go re-read any of the 2300 or so posts I've made on these boards over time, and show me where I've blamed the unions for the "woes of the company" as you put it. I think you'll find that my only gripe with labor as it relates to AA's cost structure and financial situation has been a reluctance to look at changing archaic workrules or situations which make AA non-competitive with your competition.

 

[nbmcg01]

Hopeful, the bigger difference between you and I is that I'm willing to look at both the bad and the good.

You (and other perpetually bitter folk around here) tend to focus only on the screw ups, but I rarely ever see you balance that out by admitting what management (or your union for that matter) has ever done right.

Am I aware of the impact that build-up/tear-down had? Absolutely. My wife was one of those affected -- transferred to BNA at her expense just to be displaced a couple years later, and the only options available at the time were MIA or DFW.

Has AA management screwed up? Certainly. They obviously screwed up by promoting me as many times as they did, and it was management screw ups that eventually made me chose to walk away from AA.

Still, I'm of the opinion they've done far more right than wrong over time.

AA hasn't survived for 80+ years simply because its front line workers are hard working men and women who deliver a service day in and day out. They had some pretty good leadership and corporate governance along the way, something people like you fail to recognize the value of far too often.

Go re-read any of the 2300 or so posts I've made on these boards over time, and show me where I've blamed the unions for the "woes of the company" as you put it. I think you'll find that my only gripe with labor as it relates to AA's cost structure and financial situation has been a reluctance to look at changing archaic workrules or situations which make AA non-competitive with your competition.




Those archaic workrules and the cost structure are both items that AA Labor Relations
signed off on in "good faith" negotiations. All the Co has to do these days is cry "BK!" and the Courts abrogate decades of labor agreements. In hard times I can certainly understand and support EVERYONE contributing to the financial recovery BUT not at under valued concessions (value is established at the time the item is negotiated and not a greatly diminished amt. produced during concessionary negotiations), and not without snapback provisions. And certainly not when the "value" of those concessions are being given to Sr. Management for doing what they are already paid to accomplish. I have said it before, I don't begrudge Sr. Management stock shares. I think they should receive what the other AA employees received. (plus maybe 10 to 20 %) I got 198 shares..lol

 

[Ken MacTiernan]

bear96,

"If you all are worth $45/hr, why you are working for $30/hr
is beyond me. But, again, your choice.'

Beyond you? My choice? You aren't THAT ignorant are you?

Today's AMTs are worth more than $45.00/HR. As for my choice? I didn't get one. Remember the twu international accepted concessions on my behalf. They own my contract, I don't.

 

[Bear96]

Today's AMTs are worth more than $45.00/HR.

"Worth"? Define how you are using "worth."

Hey, I like to think my labor "worth" at least $1M/hr. But if someone is only willing to pay me, say, $10/hr. for my labor and I keep on showing up to work at that rate (instead of going out and working for the employer out there willing to pay me $1M/hr.), guess what. My labor is "worth" $10/hr.

As for my choice? I didn't get one.

You always have a choice.