How many jobs will AA outsource?

usa1

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Oct 6, 2008
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How Airline Companies Outsource Jobs And Drive Down Wages
 
Once considered a secure path to middle class life, airport jobs are quickly becoming some of the worst paid, least stable positions in the low-wage economy. A new report from UC Berkeley’s Labor Center found that airlines and airports are increasingly outsourcing jobs to low-paying contractors, driving wages down to near-poverty levels. Salaries have fallen as much as 45 percent for some workers.
 
As is the case with most low-wage jobs, taxpayers are picking up the slack for airlines’ labor practices. More than a third of all cleaning staff and baggage handlers at American airports must supplement their wages with public benefits like food stamps and Medicaid. Wages for airport jobs have failed to keep up with inflation, falling by 14 percent over 20 years, while they grew more slowly even than those in food services and retail. Meanwhile, some airline CEOs make 300 times what their baggage porters, transportation attendants, and vehicle cleaners make, according to the SEIU.

The decline began with airport deregulation in the 1970s, which led to two-tiered contracts that lowered wages for new workers hired by airlines. As more airlines merged, a lack of competition allowed companies to further reduce wages and cut jobs. Industry buildup through the 90s shed more than 100,000 jobs between 2000 and 2008. Eventually, airlines realized that using contractors for services like maintenance, cleaning, and baggage handling was even cheaper, accelerating the replacement of direct employees with outsourced workers who make significantly less.

Even security screeners were at first outsourced to companies that paid less than even fast food employees working in the same airport. The U.S. Government Accountability Office warned in June 2000 that these low wages bred a dangerous environment, where turnover was high, training was spotty, and few staff were experienced at flagging potential risks. After September 11, the government took over security screening through the newly-created Transportation Security Administration (TSA). Though widely maligned, the TSA now pays higher wages with full benefits in recognition that it needed to attract and hold on to skilled security staff.

Yet virtually all other airport workers — baggage porters, janitors, cabin cleaners, plane fuelers, mechanics, gate agents, and even some pilots — have seen their wages sink or their jobs contracted out. While these workers are not directly involved in security, their poor working conditions can still wreak havoc on passenger safety. In one example, a flight contracted out by Continental Airlines to a regional company crashed and killed 50 people in 2009. An investigation found that the co-pilot made $16,200 a year and worked a second job at a coffee shop to make ends meet. Experts also concluded that she was possibly fatigued after pulling an all-nighter to get a free cross-country commute to work.

Some airports have passed living wage laws and tightened standards for contractors to combat this growing problem. However, conservatives have advocated for yet more privatization of currently stable government airport jobs, like air traffic controllers and security screeners. The argument for privatization has especially gained traction since harsh sequestration budget cuts have crippled agencies’ abilities to modernize and upgrade to new technologies.
 
http://thinkprogress.org/economy/2013/11/04/2881651/wage-airport-jobs/
 
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Outsourcing is a factor that no doubts presents a challenge, but the bigger factor is Unions have failed their memberships.
 
Around 80% of the airline industry is still Unionized and with that power they could pressure for favorable regulation and have adequate leverage to bring back compensation to fair levels but the problem is many Union leaders treat their memberships as commodities and design their strategies on maintaining their dues flow instead of maintaining the level of compensation that one expects as a Union member. While many carriers have disappeared and the industry has consolidated the number of Unions, remains the same, or has increased as disillusioned memberships unable to reform the unions they have form new ones. The trend towards consolidation was inevitable once the industry was deregulated and the Unions adopted the strategy that they wanted to be the bargaining representative of the carrier that survived which put their members in a race to the bottom. Its not just coincidence that those workers, such as pilots and flight attendants, who had fewer dominant Unions competing for members, fared better than the others.
 
 Look at the debacle planned for ground workers at AA, while USAIR and AA have become one airline, the leaders of the TWU and IAM decided to split the membership between two unions based solely on making sure that each union keeps the same number of members that they had prior to the merger. In the case of the mechanics they both produced agreements where compensation is lower than non-union. They have designed a structure based solely on the cash flow to the parent unions and does nothing to create a common culture between the two groups of workers.  Its so blatant that this design is about retaining dues that members at different locations get horse traded between Unions based on Location, move from NY to BOS and you move into a different Union. They even agreed to reshuffle the deck is stations close. So lets say Pittsburg shuts down, members in Denver who were never IAM members could see themselves forced into the IAM and have to pay more dues for the same exact work rules and pay. The focus of this structure clearly isn't to correct the fact that both came together with their dues paying members at the very bottom of the industry but rather to insure that both organizations continue to collect the same amount of dues from those poorly represented members. 
 
Blaming it on outsourcing provides the Unions with an excuse for poor performance, yes those two factors present challenges, always have and always will, but thats not an excuse for the failure of Unions to face up to those challenges, if the Unions were doing a good job they would be able to quickly organize those vendors who do the outsourcing and wages would be maintained. 
 
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Dougie and Scooter consider labor as cost units. The fewer cost units at the lowest price is what they are constantly striving for.
It dehumanizes their management style, but you just have to realize where their heads are when they are speaking to/about you and your 'cost unit' tasks that they pay you for.
If they can lower the price of cost unit pay for tasks that need to be performed, they'll do it.
So, the answer is: they would outsource the entire airline if the price was right and they could get away with it.
It's just business, after all.
Cheers.
 
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PullUp said:
Dougie and Scooter consider labor as cost units. The fewer cost units at the lowest price is what they are constantly striving for.
It dehumanizes their management style, but you just have to realize where their heads are when they are speaking to/about you and your 'cost unit' tasks that they pay you for.
If they can lower the price of cost unit pay for tasks that need to be performed, they'll do it.
So, the answer is: they would outsource the entire airline if the price was right and they could get away with it.
It's just business, after all.
Cheers.
Thats just it, outsourcing is easy if the Unions allow them to do it piecemeal. Replacing a workforce of 10,000 or 20,000 all at once , not so easy. The larger the workforce the harder it is to replace them. 
 
We often hear the pro-management folks here talk about AMFA at NWA's arrogance at thinking they could not be replaced, well 9-11 provided NWA with an opportunity that no longer exists, every legacy carrier and many intermediate and smaller carriers laid off mechanics in the years following 9-11. So there were thousands of experienced mechanics out their without work, still NWA was never able to restore full operations or get to their desired mechanic headcount, NWA continued to fly, but at a reduced capacity and subsequently was absorbed by Delta, who then fired most of NWA management, many of whom now are at AA.
 
Over the last 10 years or so we have seen the industry go through several mergers, UAL-CAL, DAL-NWA, even SWA merged, and not one of those mergers resulted in the company laying off mechanics, although many other groups did see layoffs. The fact is that this country does not produce enough mechanics to replace the ones its losing. 
 
I recently went up to see a new hire class at JFK. I was expecting to see guys in their 20s, instead I saw guys in their 50s most of whom were not from NY. They had to scour the whole country for a hand full of mechanics. Could NWA management repeat the same feat as they did at NWA? Not at the moment, that could change if the company continues to outsource a little at a time but right now, no. AA cant even keep up with the work they have with the 7000 mechanics they have, the biggest problem AA is facing as far as compliance is keeping mechanics within their duty time limits which is four days off work per month. Overtime is well into double digits. Many are making 50% of their base pay in OT but they live at work.
 
If outsourcing everything was that simple and that cost effective then why wouldn't Delta be doing it and why do they pay the mechanics they have more than AA? Because it isn't, but it makes a convenient excuse for false Unionists and management to keep us in a race to the bottom. 
 
Bob Owens said:
Outsourcing is a factor that no doubts presents a challenge, but the bigger factor is Unions have failed their memberships.
 
The real "failure" in the last few decades was the "failure" of airline mechanics and their unions to demonstrate credibly to politicians, the media and - ultimately - the traveling public why outsourced maintenance, in particular to foreign countries, is "bad."
 
As the experience of AA in the last 15 years illustrates, airlines are not going to willingly keep higher-paid U.S. AMTs on their payroll unless forced to do so - the economic and competitive pressure is simply too great once one (or, in AA's case, all) of the competitors outsource and/or go offshore.  So any change will have to be mandated - but politicians and regulators, too, have far bigger issues to care about, and until they're forced by their constituents to take the issue seriously, they will not.  Unfortunately for airline mechanics and their unions, though, U.S. carriers have steadily outsourced more and more of their maintenance, either to third party vendors in the U.S. or to foreign repair stations, since 9/11 and yet safety appears - at least to the untrained eye of the average traveler - to be generally getting better and better.  Planes generally aren't crashing any more frequently than they were in 1980, and so U.S. air travelers today frankly take safety for granted, as a given.  Now I get it that mechanics back here talk about the shoddy work they see on planes coming back from overseas, the errors made and close calls, etc. - but that's honestly noise to most people who don't understand and never see anything but the $199 fare to MCO.  Sadly, like with most things, nobody will really start paying attention until people start dying, and - thankfully - that hasn't happened yet.
 
I say this as someone who actually quite likes (or liked, past tense) the fact that stepping foot on an AA airplane meant that my aircraft had last been overhauled by a U.S. mechanic, fully capable of reading and understanding a manual or instruction written/spoken in English, at a facility operated by AA itself, under the purview of the FAA, and where that mechanic knew that the plane he was touching could one day soon be carrying his family.  But, again, in the long-run, economic reality is going to win every single time - and AA, and its mechanics, are no exception.
 
Airline mechanics and their unions have failed to answer this basic question: "why should a passenger pay $5 more so their plane is overhauled in Tulsa instead of Beijing, or Tampa instead of San Salvador?"  Until they answer that question, the general trend will not change.
 
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Bob Owens said:
Thats just it, outsourcing is easy if the Unions allow them to do it piecemeal. Replacing a workforce of 10,000 or 20,000 all at once , not so easy. The larger the workforce the harder it is to replace them. 
The 'piecemeal' thing is significant.
The pilots have been outsourcing, through a relaxation of scope, to the regionals for years. The mechanics have had heavy checks go to China, El Salvador, and other vendors for a while.
The constant chipping away at the group will eventually whittle it down from the 10-20,000 to just a small percentage of that.
The union contract is now the only instrument preventing this erosion, and that is under attack via the impetus in Congress to 'revise' the RLA.
Republicans have already gutted most other union activity via state's "Right to Work" laws (which is an ironic and laughable label for a union-busting document).
Now, union activity in the US is at it's lowest, and new workers are either apathetic toward unionism, don't understand it, or would rather not pay for it.
And the strike? History.
The horizon does not look bright. Personally, I discourage anyone entertaining thoughts of working in the airline industry, because I don't believe it will get better, only worse for the workers.
 
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Bob Owens said:
Thats just it, outsourcing is easy if the Unions allow them to do it piecemeal. Replacing a workforce of 10,000 or 20,000 all at once , not so easy. The larger the workforce the harder it is to replace them. 
 
We often hear the pro-management folks here talk about AMFA at NWA's arrogance at thinking they could not be replaced, well 9-11 provided NWA with an opportunity that no longer exists, every legacy carrier and many intermediate and smaller carriers laid off mechanics in the years following 9-11. So there were thousands of experienced mechanics out their without work, still NWA was never able to restore full operations or get to their desired mechanic headcount, NWA continued to fly, but at a reduced capacity and subsequently was absorbed by Delta, who then fired most of NWA management, many of whom now are at AA.
 
Over the last 10 years or so we have seen the industry go through several mergers, UAL-CAL, DAL-NWA, even SWA merged, and not one of those mergers resulted in the company laying off mechanics, although many other groups did see layoffs. The fact is that this country does not produce enough mechanics to replace the ones its losing. 
 
I recently went up to see a new hire class at JFK. I was expecting to see guys in their 20s, instead I saw guys in their 50s most of whom were not from NY. They had to scour the whole country for a hand full of mechanics. Could NWA management repeat the same feat as they did at NWA? Not at the moment, that could change if the company continues to outsource a little at a time but right now, no. AA cant even keep up with the work they have with the 7000 mechanics they have, the biggest problem AA is facing as far as compliance is keeping mechanics within their duty time limits which is four days off work per month. Overtime is well into double digits. Many are making 50% of their base pay in OT but they live at work.
 
If outsourcing everything was that simple and that cost effective then why wouldn't Delta be doing it and why do they pay the mechanics they have more than AA? Because it isn't, but it makes a convenient excuse for false Unionists and management to keep us in a race to the bottom. 
 
You make some valid points.
 
But until you face the reality that politics is controlled by money, not the tax paying middle class, combine with the fact that most members thrive in fear and anxiety cause by their wordly attachment, also there isn't much of a unified militant group because everyone is out only for themselves, and even that were to change, the labor laws and bankruptcy laws create an no win situation.
 
Now if all mechanics in the industry were united and willing to defy the law without fear, then your panacea view of labor might actually be a reality. But for the truth, your reality is nothing but a fantasy. Even your own words and actions prove that you are without shame to feed your own ego and self at the expense of others. Union Man, your reality differs from mine.
 
You constantly talk as if the solution is simple and we are all just too ignorant to grasp it. Not true, as long as we are selfish and the laws are against us, then unionism and you believe is real is nothing but a fantasy.
 
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TWU informer said:
 
You make some valid points.
 
But until you face the reality that politics is controlled by money, not the tax paying middle class, combine with the fact that most members thrive in fear and anxiety cause by their wordly attachment, also there isn't much of a unified militant group because everyone is out only for themselves, and even that were to change, the labor laws and bankruptcy laws create an no win situation.
 
Now if all mechanics in the industry were united and willing to defy the law without fear, then your panacea view of labor might actually be a reality. But for the truth, your reality is nothing but a fantasy. Even your own words and actions prove that you are without shame to feed your own ego and self at the expense of others. Union Man, your reality differs from mine.
I see Angry Dave is out and about today.
 
You will never eliminate fear, but you can overcome it.  
 
commavia said:
 
The real "failure" in the last few decades was the "failure" of airline mechanics and their unions to demonstrate credibly to politicians, the media and - ultimately - the traveling public why outsourced maintenance, in particular to foreign countries, is "bad."
 
True, part of that is due to the fact that mechanics are not a dominant force in any major union and on a National scale their pay is likely more than what their peers in the same unions get. Mechanics are too spread out to be an effective political force. I've come across this when at meetings with representatives from other industries in the same union I brought up the need to collectively go after court interpretations of the RLA as it relates to Airlines in Bankruptcy. Got almost zero support, I was told by the head of the political department that instead I needed to support legislation that would protect the Pensions of public workers in BK. It was made clear to me that the fact that airline unions were being singled out for especially harsh treatment in BK was not going to be a priority. 
 
As the experience of AA in the last 15 years illustrates, airlines are not going to willingly keep higher-paid U.S. AMTs on their payroll unless forced to do so - the economic and competitive pressure is simply too great once one (or, in AA's case, all) of the competitors outsource and/or go offshore.  
 
 
Not quite that simple, if it was then the biggest challenge facing domestic MROS would be a lack of work, not a lack of workers. AA enjoyed lower costs than its competitors as a result of a steady stream of concessions from 1983 on. 
 
 
 
So any change will have to be mandated - but politicians and regulators, too, have far bigger issues to care about, and until they're forced by their constituents to take the issue seriously, they will not.  Unfortunately for airline mechanics and their unions, though, U.S. carriers have steadily outsourced more and more of their maintenance, either to third party vendors in the U.S. or to foreign repair stations, since 9/11 and yet safety appears - at least to the untrained eye of the average traveler - to be generally getting better and better.  Planes generally aren't crashing any more frequently than they were in 1980, and so U.S. air travelers today frankly take safety for granted, as a given.  Now I get it that mechanics back here talk about the shoddy work they see on planes coming back from overseas, the errors made and close calls, etc. - but that's honestly noise to most people who don't understand and never see anything but the $199 fare to MCO.  Sadly, like with most things, nobody will really start paying attention until people start dying, and - thankfully - that hasn't happened yet.
 
 
Well the number of crashes may not have increased but the number of delays certainly has., and delays cost money.  Crashes have been declining mainly through technology and crew training improvements. Still should we continue to decrease standards and wait till those decreased standards cause people to die? 
 
 
 
Airline mechanics and their unions have failed to answer this basic question: "why should a passenger pay $5 more so their plane is overhauled in Tulsa instead of Beijing, or Tampa instead of San Salvador?"  Until they answer that question, the general trend will not change.
 
 
Who is asking them to? If anything they are paying $5 more because the carrier wants to post $4 billion a year in profits instead of $3 billion, and they are outsourcing to make it $4.001 billion. 
 
Bob Owens said:
Outsourcing is a factor that no doubts presents a challenge, but the bigger factor is Unions have failed their memberships.
 
Around 80% of the airline industry is still Unionized and with that power they could pressure for favorable regulation and have adequate leverage to bring back compensation to fair levels but the problem is many Union leaders treat their memberships as commodities and design their strategies on maintaining their dues flow instead of maintaining the level of compensation that one expects as a Union member. While many carriers have disappeared and the industry has consolidated the number of Unions, remains the same, or has increased as disillusioned memberships unable to reform the unions they have form new ones. The trend towards consolidation was inevitable once the industry was deregulated and the Unions adopted the strategy that they wanted to be the bargaining representative of the carrier that survived which put their members in a race to the bottom. Its not just coincidence that those workers, such as pilots and flight attendants, who had fewer dominant Unions competing for members, fared better than the others.
 
 Look at the debacle planned for ground workers at AA, while USAIR and AA have become one airline, the leaders of the TWU and IAM decided to split the membership between two unions based solely on making sure that each union keeps the same number of members that they had prior to the merger. In the case of the mechanics they both produced agreements where compensation is lower than non-union. They have designed a structure based solely on the cash flow to the parent unions and does nothing to create a common culture between the two groups of workers.  Its so blatant that this design is about retaining dues that members at different locations get horse traded between Unions based on Location, move from NY to BOS and you move into a different Union. They even agreed to reshuffle the deck is stations close. So lets say Pittsburg shuts down, members in Denver who were never IAM members could see themselves forced into the IAM and have to pay more dues for the same exact work rules and pay. The focus of this structure clearly isn't to correct the fact that both came together with their dues paying members at the very bottom of the industry but rather to insure that both organizations continue to collect the same amount of dues from those poorly represented members. 
 
Blaming it on outsourcing provides the Unions with an excuse for poor performance, yes those two factors present challenges, always have and always will, but thats not an excuse for the failure of Unions to face up to those challenges, if the Unions were doing a good job they would be able to quickly organize those vendors who do the outsourcing and wages would be maintained. 
 
I can see the company convincing CWA leadership to keep mainline agents in a handful of large cities and everyone else falling under Envoy. For agreeing to it the company allows the CWA to represent Envoy, increasing overall union dues for them and saving the company money. Basicly hub employees will top out around $27.00 an hour while most the rest at Envoy top out around $17. The company and union make out fine, while most agents take another cut. 
 
usa1 said:
 
I can see the company convincing CWA leadership to keep mainline agents in a handful of large cities and everyone else falling under Envoy. For agreeing to it the company allows the CWA to represent Envoy, increasing overall union dues for them and saving the company money. Basicly hub employees will top out around $27.00 an hour while most the rest at Envoy top out around $17. The company and union make out fine, while most agents take another cut. 
 
Wow, you have been a TWU for a long time I see. It takes years to build up that kind of cynicism. 
 
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usa1 said:
 However, conservatives have advocated for yet more privatization of currently stable government airport jobs, like air traffic controllers and security screeners. 
Bob Owens said:
Outsourcing is a factor that no doubts presents a challenge, but the bigger factor is Unions have failed their memberships.
Conservatives (of which I am one) SHOULD fight to privatize airport jobs. 
 
At least Bob knows where the REAL problem is.
 
usa1 maybe you could learn something from Mr Owens.
 
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