Great Leader at AMR

[FrequentFlierCA]

The comments with the sentiment "bring on bankruptcy" are ignorant and dangerous in the extreme. As eolesen correctly stated, it likely won't be the execs who suffer most from a trip down Chapter 11 lane. If you let it get that far with your wage demands, you will be the big loser when the court guts your contract to make it cost competitive with UA, DL, US, etc.

"Restore and more" will become a very unkind and ironic joke of the past when you're longing for the 2008 wage levels and retirement benefits.

It's a dangerous game you're playing.

 

[Winglet]

The comments with the sentiment "bring on bankruptcy" are ignorant and dangerous in the extreme. As eolesen correctly stated, it likely won't be the execs who suffer most from a trip down Chapter 11 lane. If you let it get that far with your wage demands, you will be the big loser when the court guts your contract to make it cost competitive with UA, DL, US, etc.

"Restore and more" will become a very unkind and ironic joke of the past when you're longing for the 2008 wage levels and retirement benefits.

It's a dangerous game you're playing.

They can take it to chapter 7 as far as I'm concerned. What they want is a UA, DL, US caliber contract WITHOUT the bankruptcy. No dice, pal. It's management and the shareholders that have the proverbial gun to their own heads. It's up to them if they pull the trigger or not.

 

[El Che]

I thought that once the "Shrub" was out office it was going to be smooth sailing for labor? According to the government controlled media, our newly elected "Messiah" is on labor's side.
WELL?! What gives? When will HE intercede? :blink: :blink:
It would behoove management to give us what we want or our "savior" will walk across the reflecting pool and smite them down with great rage and vengeance!

 

[Winglet]

I thought that once the "Shrub" was out office it was going to be smooth sailing for labor? According to the government controlled media, our newly elected "Messiah" is on labor's side.
WELL?! What gives? When will HE intercede? :blink: :blink:
It would behoove management to give us what we want or our "savior" will walk across the reflecting pool and smite them down with great rage and vengeance!

I'd settle for Obama leveling the playing field at the NMB so that it isn't in the pocket of management. Also a company that was at least willing to negotiate in good faith. I doubt the unions (since all contracts are amendable) will get everything they want, but management is being delusional if they think that the APA, at least, is going to just give away 1500 pilot jobs to scope concessions and accept even worse work rules than they have now . . . . in return for a compensation cuts that management will probably spring on them at the last second.

 

[Hopeful]

I'd settle for Obama leveling the playing field at the NMB so that it isn't in the pocket of management. Also a company that was at least willing to negotiate in good faith. I doubt the unions (since all contracts are amendable) will get everything they want, but management is being delusional if they think that the APA, at least, is going to just give away 1500 pilot jobs to scope concessions and accept even worse work rules than they have now . . . . in return for a compensation cuts that management will probably spring on them at the last second.

I agree. What amazes me how we are all being conditioned to not expect a decent contract. We are being told that we are unrealistic to even ask for what was taken from us. Then when we counter attack with the greedy executive argument, the corporate greed defenders say it is necessary to pay the "best" executives the industry offer or else they will leave. We are expected to give the company and the passenger 110% while the economic hardships impacted us 5 years prior to what we see happening now.

How about this novel idea.....NO BONUSES FOR ANYONE UNTIL THE COMPANY IS PROFITABLE......

Oh i forgot, the executives are better than the rest of us..

I hope everyone will applaud the PUP payout and show the company how happy they are for the suits up top. Just think how happy the executives will be that day they are handed their checks and think of that day you look at EPAYS and see how far it goes to pay your bills.

Oh,, BOOOHOOOO,, AMR executives don't make nearly what they could in other industries...BOOOHOOOO...

 

[The Goose]

The difference there is that nObama isn't bright enough to know any better.


WInglet, you can say that a bankruptcy will "clean out the dead wood" in the executive suite, but I suggest you look at Frontier, United, Delta, and Northwest.

The executives went into the roach motel with gas masks, and came out the other side pretty much unscathed.

In the case of UA, they came out a lot richer for it. Can't say the same for the pilots, mechanics, or FA's, though....



Hopeful, you claim "executives threaten to leave unless he/she gets an increase in compensation"....

Got any sauce to go with the red herring? It's a great line to rally the troops, but I'm not sure there's any fact behind it. I know a lot of people L5 thru managing directors, and whenever they had a better job offer, the response almost always along the lines of "if you don't take the offer, I'd have to fire you for being an idiot..."

Sure, a few were talked into staying and got promotions down the line, but that's a different story. They probably would have been promoted with or without an outside offer.


I'd hate to see bankruptcy at AMR, but it's your game now, guys. My pension will be under the PBGC cap, so there's not much for me to lose except perhaps some unused AAdvantage upgrades and miles.

Part of the language of the new Chapter 11 rules says the execs must present a viable job of another company to the BK judge in order to get a bonus to stay. In theory, the judge can tell the exec to take the other job but I have yet to see this in practice as there hasn't been the rash of bankruptcy filings for examples to draw on. The companies that have filed after the Oct 2005 date seem to gone away.

It was pitifully obvious this was the reason for the Delta and NWA filings; to get in under the wire before a new and more restrictive law took effect.

The new law is not nearly as friendly to corporations as the old law. Where there was unlimited time, as was shown by United with their 3 years stay in BK protection, the max is now 18 months without special dispensation from the judge. Again, there isn't much in the way of example to draw on as to what the judges might do.

The greatest test of the law will be its application and seeing if judges have the ability under the law to give the corps. all they want as before. The uncertainty of the executives as to their treatment under the new law may well be why a filing hasn't happened yet as many have expected.

 

[FWAAA]

Part of the language of the new Chapter 11 rules says the execs must present a viable job of another company to the BK judge in order to get a bonus to stay. In theory, the judge can tell the exec to take the other job but I have yet to see this in practice as there hasn't been the rash of bankruptcy filings for examples to draw on. The companies that have filed after the Oct 2005 date seem to gone away.

Do these changes prevent the execs from working for normal base compensation and doing without large retention bonuses and then grabbing a big pile of stock upon bankruptcy exit ala UAL, DAL and NWA?

It was pitifully obvious this was the reason for the Delta and NWA filings; to get in under the wire before a new and more restrictive law took effect.

I agree that the timing of their filing was to benefit from the old rules, but are you saying that they would not have filed had the law not been changed?

The new law is not nearly as friendly to corporations as the old law. Where there was unlimited time, as was shown by United with their 3 years stay in BK protection, the max is now 18 months without special dispensation from the judge. Again, there isn't much in the way of example to draw on as to what the judges might do.

Agreed. We may get to see some large Ch 11 filings soon to see how the new rules work.

The greatest test of the law will be its application and seeing if judges have the ability under the law to give the corps. all they want as before. The uncertainty of the executives as to their treatment under the new law may well be why a filing hasn't happened yet as many have expected.

Are you talking about a filing at AMR?

 

[The Goose]

Do these changes prevent the execs from working for normal base compensation and doing without large retention bonuses and then grabbing a big pile of stock upon bankruptcy exit ala UAL, DAL and NWA?

As has been opined by others, anything passing to the execs will be subject to court approval IF it can be shown they have a better deal elsewhere and the judge believes said exec's continued employment at the bankrupt entity is beneficial.

I agree that the timing of their filing was to benefit from the old rules, but are you saying that they would not have filed had the law not been changed?

No - I'm not saying that at all.

Their filing of BK was obviously part of their joint merger/acquistion plans. The timing simply assisted them in getting it done the way they wanted.

Agreed. We may get to see some large Ch 11 filings soon to see how the new rules work.



Are you talking about a filing at AMR?

Yes - that's what I was referring to. It has become evident the execs' only concern is their own benefit. I feel when they find a legal way to benefit themselves in the process, the company will probably be toast.

From where I sit, it appears as though the company has done all in its power to sabotage the third party work they claim to be seeking. How avionics people were chosen to install the winglet mod for the 73s is a shining example. Such a large number of mistakes were made that Boeing Partners pulled their recommendation for American to do the work for other airlines. Nothing was done to the so-called management that engineered the fiasco. The TWU didn't say a damned thing about this example of gross stupidity, either to management or its people, so it's rather evident both are on the same page regardless of benefit/harm.

 

[Winglet]

Prevailing wisdom is that there might not be anymore Chapter 11 filings since money for restructuring isn't there. Might go straight to Chapter 7.

 

[The Goose]

Prevailing wisdom is that there might not be anymore Chapter 11 filings since money for restructuring isn't there. Might go straight to Chapter 7.

You're making the assumption there won't be any opportunity to plan - considering the conspirators, that's doubtful.

A "prepackaged" deal where all financing and other details are arranged in advance of need would be what I would expect from the board. They'll not jeopardize their cushy positions/free money for a bankruptcy filing.

 

[Winglet]

I guess we'll have to see what preparations the bosses at American make in preparation of a self-help campaign by the pilots later this year. It's going to really ugggllllly for management.

 

[restore03]

I guess we'll have to see what preparations the bosses at American make in preparation of a self-help campaign by the pilots later this year. It's going to really ugggllllly for management.

And every other employee that works at American. As they say "it is what it is"!

 

[FrequentFlierCA]

They can take it to chapter 7 as far as I'm concerned. What they want is a UA, DL, US caliber contract WITHOUT the bankruptcy. No dice, pal. It's management and the shareholders that have the proverbial gun to their own heads. It's up to them if they pull the trigger or not.

Ok, but if they pull the trigger, you will lose just as much - and probably more - than they will.

It's your job and retirement. Act accordingly.

 

[The Goose]

Ok, but if they pull the trigger, you will lose just as much - and probably more - than they will.

It's your job and retirement. Act accordingly.

How about learning how the different entities function before you begin the office hand-wringing and fear mongering.

American's main retirement money is in a supposed bankruptcy-proof trust that, in the event of a Chapter 7 BK filing could be transferred to the PBGC for payment to the plan participants. It was 90% or so funded recently.

Even if PBGC gets to disburse the bucks, there is a maximum payout of $45k per year @ 65 years of age. Those who retired early (<65) will take a major hit to their monthly income if that happens, otherwise, very little will happen.

I worked for a company years ago that ended its defined benefit program in favor of a 401(k) and made a considerable payout to the 401 accounts of those still working (I do not know what happened to the retirees - perhaps it wasn't so kind to them). It wouldn't bother me for this to happen at all if it were done fairly (which I seriously doubt would be done).

American also sold their "investment" business (that never showed up on an annual report) so now, there will less income from the employees' accounts even though the fees are being charged elsewhere. All the so-called "investment arm" was anyway was a firm set up to re-direct employee contributions/funds to mutual funds that sucked the hardest on the directors of the investment business (the funds being chosen by employees from a quite limited listing). To my knowledge, they was no actual investing done by this business.

Ending the Defined Benefit "Plan" would remove an anvil hanging over the employees' heads that isn't really there. The company will have none of that.

If they want a 401)k) across the board and are willing to match up to 6%, buy me out and have at it. It's a far better deal for everyone and less cost to the company.

Don't try to scare people with half truths and outright lies as the company and TWU would do; that's not a very nice thing to do.

 

[FWAAA]

American's main retirement money is in a supposed bankruptcy-proof trust that, in the event of a Chapter 7 BK filing could be transferred to the PBGC for payment to the plan participants. It was 90% or so funded recently.

Excellent post, The Goose, and I agree with much of it. The AA pensions were 96% funded on 12/31/07 but the asset value decline in 2008 brought them down to 70% funded on 12/31/08. Over the long term, asset values are likely to recover. After all, Obama will see to it, right? 😀

Even if PBGC gets to disburse the bucks, there is a maximum payout of $45k per year @ 65 years of age. Those who retired early (<65) will take a major hit to their monthly income if that happens, otherwise, very little will happen.

And that's why the APA would never allow a Ch 7 filing or Ch 11 filing by AMR. At least not until the pensions are fully funded again. The APA will find financing itself to keep AMR alive if only to guarantee their multi-million dollar retirement payouts.

As I've posted before, the APA owes a huge debt of gratitude to the FAs and the TWU represented workgroups for accepting the imposed concessions in 2003. Had either group prevented the concessions, and AA filed for Ch 11 in 2003, it is a certainty that AMR would have pulled a USAir or UAL or DAL and terminated the pilot pension in a very underfunded status, leading to miniscule pilot pension payouts.

I worked for a company years ago that ended its defined benefit program in favor of a 401(k) and made a considerable payout to the 401 accounts of those still working (I do not know what happened to the retirees - perhaps it wasn't so kind to them). It wouldn't bother me for this to happen at all if it were done fairly (which I seriously doubt would be done).

Didn't IBM do something similar a few years ago - a cashout of their DB plans? As long as the pension is fully funded, and the employees invest wisely, and the markets don't tank forever, that can be a good deal for everyone.

Problem is, as I've posted before, the DB plan has required less cash out of AMR's pocket the past few years than a Defined Contribution plan would have. At the beginning of 2008, AMR's pensions had $9 billion invested and if the pension managers achieve decent returns, AMR's contributions to the pensions are very reasonable each year. One only has to look at WN or UA to see how expensive a Defined Contribution plan can be each year. It's all about cash flow - and for the time being, AMR's DB plans require less cash. In 2009, AMR has ZERO required contributions to the DB plans. Airlines with DC plans will have to spend cash (which is gonna be in tight supply this year) to fund their employee DC plans. THAT's an advantage (no pun intended) to AA this year. AMR has big contributions required for next year unless asset values recover substantially this year. But that's next year. Surviving this year is the problem de jour.