This week in court during the companys rebuttal their Lawyers and experts were comparing AAs Labor CASMS to competitors. Then they made a huge blunder as far as maintenance is concerned.
They claimed that AA had to get their labor CASMS at around the same as their competitors. Then they claimed that it was improper to include or factor in what competitors pay to Vendors who do work that used to be done in house. That they had to compare "Apples to Apples and Oranges to Oranges". They repeated it several times.
The company stated that they were seeking 20% across the board from all creditors.
The company has also stated in the past that none of the raises, 401k etc would be given in the Mar 22 ASK if the court allowed them to impose it.In other words they were increasing the concession. So in addition to punishing us for not ratifying their proposal by taking stuff off and increasing the "ASK" they are asking the court to allow them to:
Cut 4600 heads -thats a 40% reduction right there in Labor costs (apples to apples)
Eliminate the Pension-thats another 10% (remember they said no 401k Match Apples to apples)
Eliminate Retiree Medical-figure around 5%
Increase costs for Medical coverage-Figure another 5%
Eliminate System Protection(which would allow them to eliminate far more than 4600 heads)-anywhere from 0% to another 50%
In addition to scores of other changes.
So in reality how much are they really seeking from us? The numbers will be off a little due to compounding but these are roughly about right.
40% just in headcount
10% Pension
10% in benefits workrules etc.
So in reality the company is seeking to lower maintenance labor costs from the TWU by roughly 60%or more. Sure they may not net 60% in total savings after paying others to do what we used to do but thats still what we are being asked to give up. The same is not being asked of any other creditors. We are being asked to give up more than triple what anybody else is being asked give up. The value of the TWU contract would be cut by at least 60% not 20% and it could be much more than that.*
The company also testified that during previous bankruptcies it was not uncommon for workers to go from being" the top paid to at or near the bottom". I know of no cases where workers went from the bottom to a new, much deeper bottom.
To me those are just two "good reasons" to reject the companys terms. Its an unfair burden to tell mechanics that they need to give up 60% of the value of their contract in order to cut 20% off the companys total maintenance costs (based on their best guess "estimates") when we control what we charge for our labor not what vendors charge. They didnt tell the pilots they need to cut 20% of the cost for operating the aircraft, that would be absurd, its just as absurd for them to expect that from us.
If the company wants to match competitors labor CASMS to ours (Apples to Apples) and not factor in what they pay to vendors (Oranges) fine, but they cant turn around and say we need to cut our total costs by 20% and meet others Casms because the Oranges have an effect on the cost of Apples. If they were able to achieve a certain cost for Apples by substituting Oranges then that has to part of our recipie as well to achieve the same labor Casms.
* The company testified that A-320s maintenance be done at market rates and when speaking as to how they would expand regional service and right gauge the fleet they said they would replace MD-80s with large RJs and also described three ways of reaching their goal aquiring more regional feed;
1-Existing Aircraft and contracts in the market
2-Buy Aircraft and keep on the books
and;
3-Buy aircraft but keep them off the books and assign them to regional feed.
I read this as when the MD-80s go away we will not see A-320s being OH by TWU, As they go away more jobs go away, which explains why they want to get rid of System Protection even on the April 26th proposal.
Interestingly enough the company argued to introduce into evidence what they offered on April 26th, the Judge allowed it despite the fact on several occasions he admonished the Union that the only thing that mattered was the Mar 22 Term sheet. Dont bring up the past or the future. He didnt want to hear what happened in the past or how the terms would affect us going forward but he accepted into evidence for him to review what the company offered on April 26th. In a sense it was like the company was saying "let us punish them for not submitting". Throughout the hearing the Judge gave wide lattitude to the company but very little to the Unions. He allowed the company to do a little bit of propagandizing by giving an hour long dissertation about Allegheny-Mohawk and how the workers from the BK carrier in mergers get screwed as far as seniority, I guess there are two ways of reading this;
A) The Judge had his mind made up, he was just waiting for the company to say the right things so he could plug them into his written decision and grant the motion. It was clear that he only took notes when the company was speaking.
or
B) The Judge wanted to make sure that he gave the company every opportunity to say whatever they wanted to thwart any chance of an appeal by the company when he rules against the motion.
We were told that every case is different and that the odds for rejecting the companys motion are slim (although a Judge recently denied Hostess) but if granted we have a great case to present to the public to explain why we have resorted to lawlessness and left thousands of passengers stranded at airports across the country.
-Its only lawless when Airline workers do it, every other group is free to strike under similar conditions
-AA came into this with over $4 billion, AA isnt broke and they have 500 new airplnes on order
-We are at the bottom of the industry and they want to push us even lower-many people can relate to that.
-We offered to make changes on the terms where what we had was not what others had, but we needed it to go the other way around as well.
-The company admitted the proposal was "Riduculously bad"
-The company admitted that if they got what they wanted that AA would be a "Very Healthy Airline" (has such a thing ever existed?)
-AA is demanding $990 million from its unions not so it can survive or compete but because they are looking to make $3billion a year in profits. In other words if they left all our contracts as is they would still be the most profitable carrier ever under their secret BP.
This is corporate greed run amuck.
We will find out June 22. Well if it goes bad at least its good weather for walking a picket line!
They claimed that AA had to get their labor CASMS at around the same as their competitors. Then they claimed that it was improper to include or factor in what competitors pay to Vendors who do work that used to be done in house. That they had to compare "Apples to Apples and Oranges to Oranges". They repeated it several times.
The company stated that they were seeking 20% across the board from all creditors.
The company has also stated in the past that none of the raises, 401k etc would be given in the Mar 22 ASK if the court allowed them to impose it.In other words they were increasing the concession. So in addition to punishing us for not ratifying their proposal by taking stuff off and increasing the "ASK" they are asking the court to allow them to:
Cut 4600 heads -thats a 40% reduction right there in Labor costs (apples to apples)
Eliminate the Pension-thats another 10% (remember they said no 401k Match Apples to apples)
Eliminate Retiree Medical-figure around 5%
Increase costs for Medical coverage-Figure another 5%
Eliminate System Protection(which would allow them to eliminate far more than 4600 heads)-anywhere from 0% to another 50%
In addition to scores of other changes.
So in reality how much are they really seeking from us? The numbers will be off a little due to compounding but these are roughly about right.
40% just in headcount
10% Pension
10% in benefits workrules etc.
So in reality the company is seeking to lower maintenance labor costs from the TWU by roughly 60%or more. Sure they may not net 60% in total savings after paying others to do what we used to do but thats still what we are being asked to give up. The same is not being asked of any other creditors. We are being asked to give up more than triple what anybody else is being asked give up. The value of the TWU contract would be cut by at least 60% not 20% and it could be much more than that.*
The company also testified that during previous bankruptcies it was not uncommon for workers to go from being" the top paid to at or near the bottom". I know of no cases where workers went from the bottom to a new, much deeper bottom.
To me those are just two "good reasons" to reject the companys terms. Its an unfair burden to tell mechanics that they need to give up 60% of the value of their contract in order to cut 20% off the companys total maintenance costs (based on their best guess "estimates") when we control what we charge for our labor not what vendors charge. They didnt tell the pilots they need to cut 20% of the cost for operating the aircraft, that would be absurd, its just as absurd for them to expect that from us.
If the company wants to match competitors labor CASMS to ours (Apples to Apples) and not factor in what they pay to vendors (Oranges) fine, but they cant turn around and say we need to cut our total costs by 20% and meet others Casms because the Oranges have an effect on the cost of Apples. If they were able to achieve a certain cost for Apples by substituting Oranges then that has to part of our recipie as well to achieve the same labor Casms.
* The company testified that A-320s maintenance be done at market rates and when speaking as to how they would expand regional service and right gauge the fleet they said they would replace MD-80s with large RJs and also described three ways of reaching their goal aquiring more regional feed;
1-Existing Aircraft and contracts in the market
2-Buy Aircraft and keep on the books
and;
3-Buy aircraft but keep them off the books and assign them to regional feed.
I read this as when the MD-80s go away we will not see A-320s being OH by TWU, As they go away more jobs go away, which explains why they want to get rid of System Protection even on the April 26th proposal.
Interestingly enough the company argued to introduce into evidence what they offered on April 26th, the Judge allowed it despite the fact on several occasions he admonished the Union that the only thing that mattered was the Mar 22 Term sheet. Dont bring up the past or the future. He didnt want to hear what happened in the past or how the terms would affect us going forward but he accepted into evidence for him to review what the company offered on April 26th. In a sense it was like the company was saying "let us punish them for not submitting". Throughout the hearing the Judge gave wide lattitude to the company but very little to the Unions. He allowed the company to do a little bit of propagandizing by giving an hour long dissertation about Allegheny-Mohawk and how the workers from the BK carrier in mergers get screwed as far as seniority, I guess there are two ways of reading this;
A) The Judge had his mind made up, he was just waiting for the company to say the right things so he could plug them into his written decision and grant the motion. It was clear that he only took notes when the company was speaking.
or
B) The Judge wanted to make sure that he gave the company every opportunity to say whatever they wanted to thwart any chance of an appeal by the company when he rules against the motion.
We were told that every case is different and that the odds for rejecting the companys motion are slim (although a Judge recently denied Hostess) but if granted we have a great case to present to the public to explain why we have resorted to lawlessness and left thousands of passengers stranded at airports across the country.
-Its only lawless when Airline workers do it, every other group is free to strike under similar conditions
-AA came into this with over $4 billion, AA isnt broke and they have 500 new airplnes on order
-We are at the bottom of the industry and they want to push us even lower-many people can relate to that.
-We offered to make changes on the terms where what we had was not what others had, but we needed it to go the other way around as well.
-The company admitted the proposal was "Riduculously bad"
-The company admitted that if they got what they wanted that AA would be a "Very Healthy Airline" (has such a thing ever existed?)
-AA is demanding $990 million from its unions not so it can survive or compete but because they are looking to make $3billion a year in profits. In other words if they left all our contracts as is they would still be the most profitable carrier ever under their secret BP.
This is corporate greed run amuck.
We will find out June 22. Well if it goes bad at least its good weather for walking a picket line!