Foreign Ownership

[Fly]

Could this be what Tilton has been pushing for?


US considers raising foreign ownership limits

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November 2, 2005 The Bush administration wants to ease restrictions on overseas investment in US airlines, a move that could give struggling carriers a route for fresh capital and break the logjam in transatlantic aviation talks, industry sources said on Wednesday.
Airline industry officials who did not want to be named because it is a government initiative said the Transportation Department is preparing a plan that would ease the tightly scrutinized administrative regulation barring overseas investors from exercising control of domestic carrier operations in certain circumstances.
The administration will not, according to the industry sources with knowledge of the plan, propose any changes to the strict law that caps international investment at 25 percent of voting stock.
Congress has prevented any changes in current ownership regulations, with many lawmakers arguing that control of airlines is a unique component of the American business identity and necessary to ensure national security especially after the September 11, 2001, attacks.
Labor groups and their political allies have also fought hard to prevent ownership changes that they claim could undermine their jobs.
"We've seen dozens of industries from steel to autos to textiles go over the side as a result of globalization or allowing foreign entities to take them over," said Edward Wytkind, president of the AFL-CIO's transportation trades unit.
But US airlines could lose up to USD$10 billion this year, according to industry estimates. Three big carriers are in bankruptcy and face huge hurdles in raising cash to satisfy creditors and potential investors.
Aviation consultants said removing the limits on control might satisfy European negotiators at recently revived talks on liberalizing transatlantic aviation. Previous talks have foundered partly on European demands for greater access to US markets.
John Byerly, the deputy assistant secretary of state for transportation affairs, said the issue is not on the negotiating table. But he said the administration has been exploring options to increase foreign investment.
"It's a good thing to do for our own industry," Byerly said.
The two sides agreed last month in Brussels on key elements of a first-stage deal. The next round of talks is scheduled for the week of November 14 in Washington.

 

[kiowa]

very, very sad. the American worker will soon be extinct with only government workers getting their continuous raises. time to write my senators again although they seldom vote to protect Americans. perhaps we can hire a cheaper senator in say-india.

 

[dc3fanatic]

very, very sad. the American worker will soon be extinct with only government workers getting their continuous raises. time to write my senators again although they seldom vote to protect Americans. perhaps we can hire a cheaper senator in say-india.

European work rules are generally BETTER than those in the US.

This would probably be to your advantage. Can you see anything as positive?

 

[whatkindoffreshhell]

This is correct, the 25% limit on foreign ownership of United States' airlines has always been a silly regulation.

And I said so on this board years ago.

The whole notion of 'flag' carriers expired back around the time of airline deregulation. Sadly it has taken twenty-five years for that ride to spin to a stop.

Back when any nation could subsidize a national-champion airline (tell me again, why o why was Sabena ever a worthy business? And we won't even touch the Italians with Alitalia....) every country in the world aspired to protect their hometown airline. The economics never worked, but the politicians and labor unions adored the pretty planes!


Good article Fly, thanks for posting. But actually the companion WSJ article examining the predicament of the PBGC and the dumping of airline pension plans would have elicited more responses on this board.

Because this board just doesn't care about foreign airlines. Never have.
These posters can't see beyond their immediate labor drama. In places like Allentown that most of the world's citizens don't even know (or care) that exist.

Actually if you pick up a copy of today's WSJ please read the article about Wilbur Ross and what he intends to accomplish in the auto industry. This is the guy who bought distressed steel assets on the cheap, then compelled the steel mgmt & labor types to see the light and molded a hugely successful steel company which he then sold for $4.5bil to Mittal.

Wilbur Ross is quoted today saying he 'looked at the dynamics of the airline business but it just doesn't work...'

Doesn't make you warm & fuzzy, does it??

Good luck!

 

[Bear96]

European work rules are generally BETTER than those in the US.

This would probably be to your advantage. Can you see anything as positive?

You really think we would be adopting the generous European worker packages as a result of this?

Think Cameroon or a Malaysian garment factory.

Just look at the cruise ship industry. Do the cruise ships docking at US ports have western European flags on them and are they staffed with French and Swedish citizens who enjoy eight weeks of paid vacation per year? Or do they have flags from places like Liberia with work rules to match ...


BTW, for the record, I think that cabotage / foreign ownership in the airline industry is inevitable, and is probably a good thing for the industry overall. But the effect on American airline workers will be catastrophic.

 

[firstamendment]

You really think we would be adopting the generous European worker packages as a result of this?

Do the cruise ships docking at US ports have western European flags on them and are they staffed with French and Swedish citizens who enjoy eight weeks of paid vacation per year?

Eight weeks vacation?

 

[Fly]

Now is the time to get involved. If this passes, the end for ALL of us is very near. Think Cruise Lines!!! How many Americans do you see working on those?

 

[SoftLanding]

Labor groups across the pond have kept their conditions largely because of one item: STRIKES

Also, most countries (European) have laws on the books for all, worksers and companies.

Guess who is behind the new bankruptcy laws?

Capital will seek lowest cost, why else would Wal-Mart buy their "stuff" in 3rd world countries? And to topp it off, a communist regime...

SoftLanding

 

[Bear96]

Labor groups across the pond have kept their conditions largely because of one item: STRIKES

True.

Are you trying to imply one way or the other that that is a good or a bad thing? Just wondering.

 

[SoftLanding]

True.

Are you trying to imply one way or the other that that is a good or a bad thing? Just wondering.

Just depends on what one is looking for,no?

Nothing wrong with standing up for one's right, or perceived right...


SoftLanding

 

[The Gopher]

I think things are reversed... US workers are more productive than EU workers, meaning we can provide a better service for less.

http://www.cato.org/research/articles/firey-030924.html

"One reason is that American carriers generally provide more efficient, less expensive service than their European rivals. Researchers Paul Seabright and Charles Ng, in a 2001 academic article, found that public ownership and the market power of European airlines appeared to result in significantly less productivity than their U.S. counterparts."

One BIG item in the proposed open skies agreement is that the company must be incorporated in the USA. Are workers in Toyota and Honda plants in Ohio Japanese? No, they are American. US labor law would NEVER allow foreign nationals to fly on domestic routes, nor US citizens to work foreign routes. I don't get where the fear of Bangladeshi flight attendants comes from, I doubt we would enter into an open skies deal with them anyway.

 

[SoftLanding]

I think things are reversed... US workers are more productive than EU workers, meaning we can provide a better service for less.

http://www.cato.org/research/articles/firey-030924.html

"One reason is that American carriers generally provide more efficient, less expensive service than their European rivals. Researchers Paul Seabright and Charles Ng, in a 2001 academic article, found that public ownership and the market power of European airlines appeared to result in significantly less productivity than their U.S. counterparts."

One BIG item in the proposed open skies agreement is that the company must be incorporated in the USA. Are workers in Toyota and Honda plants in Ohio Japanese? No, they are American. US labor law would NEVER allow foreign nationals to fly on domestic routes, nor US citizens to work foreign routes. I don't get where the fear of Bangladeshi flight attendants comes from, I doubt we would enter into an open skies deal with them anyway.

Hope you don't mind me picking apart your comment...US workers are more productive than EU workers, this does NOT mean we can provide BETTER service, means we can provide CHEAPER service...

Bottom line of the affected companies should be better off...SHOULD be...in the mean time the American worker is being squeezed left and right...Have not seen that same squeezing happening across the board...i.e. CEO's that will walk the walk...

SoftLanding

 

[Dizel8]

"US labor law would NEVER allow foreign nationals to fly on domestic routes, nor US citizens to work foreign routes. I don't get where the fear of Bangladeshi flight attendants comes from"

You have seen the proposal NWA gave their F/A's, if not, you might want to take a look.

 

[trollydolly]

Eight weeks vacation?

Actually they only get 6 weeks paid vacation, but they are trying to change that law by cutting it down to 2 weeks. I do not know if they will be successful, but they are trying.

About European contracts... Well I know at Lufthansa when they re-negotiate new pay scales, they create a new hire pay scale which I think is now around 1,300 Euros a Month. The older contracted FA keeps their pay at the point where it was, while the new hires get less and less in their contracts. So a person flying 10 years on an old contract could make double to triple of what the new hire would make and the new hire would have to work a long time to reach that level of the old contracted FA. Although I will add that they do renegotiate all contracts and pay, but an old contracted FA will still make 2 to 3 times that of a new hire, cause it is all relative.

They also have mandatory part time laws in Germany. A person can take 75% part time, 50% part time, or take their part time as follows. One month on; one month off, one month on; two months off; or three month on; and three months off. It all depends which part time package they choose. Flying 75% of the scheduled line is exactly that. They fly 75% of regular hours. I might add their regular hours are more then UAL. I think 70 hours is their regular

They layover in great hotels, well better then ours, and the whole crew lays over together. None of this separation between church and state. What is good enough for one group is good enough for the other.

The cockpit receives some Christmas and or New Years money (can not remember which one) to take the whole crew (including spouses and domestic partners) to dinner. They also give the spouses/domestic partners free tickets to travel with the employees who are working. And get this, they (the spouses or domestic partners) flying with the crew get priority over all other SA's.

Their purser program is also very tough. A purser must speak three languages fluently and pass the written and oral test. German, English, and another language is the norm. The pursers are in charge of the flight and anything that goes on on the flight is the purser’s responsibility. None of this, lets bring the whole crew in to write reports nonsense, unless it is a report against the purser. The qualifying people who want to become pursers have to go through psychological examinations, and everything else that would determine their ability to be a effective purser. Compared to our program at UA, their purser program is by far superior. They also have two types of pursers. The P2, which only fly’s international and the P1 (aft purser). This does not mean that the P1 purser always works the galley in couch. It is determined on where the P2 wants the P1 to work, and the P2 does not have a working position. They are there to represent the airline, work out the crew differences, and talk to the pax's.

FA's are only qualified on two to three aircrafts. This determines the type of flying they will do.

Some bad things about their work rules, is that it is hard to trade trips. It is allowed, but you have to find a person on the same day with around the same hours and same days off afterwards and the crew desk can still say no.

A person is only allowed to bid for one trip a month and bid for 4 protected days off in a row. The rest of their schedule is given to them by the schedulers.

If a FA calls in sick, your entire work schedule is taken away. This could include your requested trip, but they can not take away, nor change, your protected days off. When a FA calls off sick, they are given a new schedule and it is usually to the most undesirable locations. Lagos and Tel Aviv turns are two that I know of. The good thing about being sick at LH verses UA is that a FA can call in sick and receive no drama from their supervisors as long as they have a doctor’s note.

They do have foreign national FA's from Japan, Korea, China, Thailand, and India. They are treated as equals on the flights, and do not get picked apart as if they were scabs stealing German jobs. Every group from the McDonalds to the PanAmer’s, the language speakers, foreigners hired out of Germany, France, England, Japan, Hong Kong have all been made to feel as if they were stealing American jobs, or stealing seniority. These bases were opened to all FA's. If a FA chooses to remain state side and not commute, then it is their choice and they must accept that choice. If they want to fly international but a language speaker who is junior to them is flying it, because they are LQ, then learn a Language.

What FA's should be afraid of are the constitutional and by-laws that govern the AFA. Especially the clause that allows 100% of seniority of the AFA FA being bought out by another AFA carrier. For those who carriers have fallen, they have fallen, sorry, but this is life. Where does someone get the right to take a job from a FA who was originally hired by the successor only because they have more years of service on another carrier? The words here are "another carrier," not the successor. Just because you held "Park Place" in Monopoly last game, does not mean that you are entitled to it in the next game. It is my belief that 50% of seniority would be acceptable. Most should just be happy they still have a job.

If this law passes, it would not surprise me that if Lufthansa, or some other "Star" partner buys into UAL to secure the US market. Actually I have felt this all along that Lufthansa and UAL would join, but the laws were what was stopping them.

 

[Fly]

Let me guess. You're junior and you speak a foreign language.