Is Bankrupcty a better option?

[Bob Owens]

UAL777;
You are either lying or misinformed. In oder to have the contracts abrogated the company must first try to negotiate with the union. This does not mean take it or leave it. The companies proposal must be reasnonable and be rejected before the judge throws it out. 6 years is unreasonable. Check you facts first, I have .


11 U.S.C. 1113 permits a debtor/employer(ER) who has entered into a collective bargaining agreement (CBA) to have provisions of that CBA modified or rejected under very specific circumstances. The proceedure is breifly outlined as follows;
1. The ER must first make a proposal for modification of employee benefits and protections to the Union. This proposal must be made BEFORE the ER makes an application to the Court for rejection.The proposed changes must be necessary modifications which will permit reorginazation of the debtor and to permit all affected parties to be treated fairly.
2. The Er must provide the Union with relevant information necessary for the Unions evaluation of the proposal.
3. The debtor or the bankruptcy trustee must meet with the Union in good faith, to negotiate mutually satisfactory modifications, from the period between submission of the proposal by the ER, until a hearing on the ER's motion for rejection of the CBA is held.
4. The court may approve the ER's application for rejection ONLY IF; (1) the debtor or trustee made the proposal prior to the hearing, (2) the union has refused to accept the proposal without good cause and (3) the balance of the equities clearly favors rejection.

This is how rejection works;
1. The Judge can permit the Debtor to reject the entire CBA- the ER can behave as though the CBA does not exist, but only after going through the steps outlined above.

2. The right to permit rejection is given in the bankruptcy code at 11 U.S.C 1113.

3. The judge cannot dictate new terms-the court will simply permit the rejection or the parties can agree to modifications.

4. If the court permits rejection, the rejection stands for as long as the CBA is in effect.

5. Because the CBA is treated as though it does not exist, the workers are free to strike, just as they would be if there had never been a CBA.

6. With regard to the changes, the most significant change to the bankruptcy code was this provision. Prior to this rule's implementation, the ER could reject the CBA without a proposal to the Union. Under the old rule, the automatic stay would stop a union from bringing any action against the employer as soon as the ER filed for C-11. Now 11 U.S.C. 1113 (f) has been interpreted by the courts to prevent an ER from using the automatic stay to unilaterally void CBAs because the section does not allow any provision of the bankruptcy code (including 362-The Automatic Stay) to be interpreted as permitting a trustee to unilaterally terminate/alter the provisions of a CBA without going through the steps for rejection.

To sum it up, after going into C-11 the company has to meet with the union and negotiate in good faith. The concessions must be necissary. There is no way , given the history of this industry that it can be argued that a SIX year contract is necissary. Its completely unreasonable. Most contracts throughout the industries history have been for three years or less. In the early nineties the airlines were hurting and many Unions gave long term concessions only to find that the industry made an extremely strong recovery while its employees still languished under terms that were negotiated in the bad times. Given the current proposal the judge most likely will not reject the agreement. The company would have to modify it to make it less onerous upon the workers first.

 

[aircraft_artificer]

United had how long to try to turn the course? They had how long to trim the upper echelon fat? They had the single best opportunity to have the best employee relation around, what did they do? Now to come and say Open your wallet or else! What kind of reaction did you really expect? You are not talking hypothetical situations here. You are talking about people that have ben pounded on relentlessly by their management for three years running. You are talking about people that have seen over 2800 of their friends that were as close a family laid off all the while knowing there was plenty of work for them, it was just shipped somewhere else, in direct violation of the contract I might add. What did management say when this point was brought up? That will be determined in arbitration. Gee I really want to help that mentality. These people just spent eight years not looking at the quality of meat at the grocery only the price per pound. Now you say do it again, to what gain. Do the pilots help? No they gleefully fly the planes to the chop shops then complain when the pucker factor makes them have to remove the seat cushion from you know where. Do the F/A's help? No they just thank their luckly stars that they were able to put the fire out in the 767 galley that smoked because the chop shop drilled through the wire bundle(this was proven). Does the FAA help? No they allow the chop shops and company to self disclose. Man are you barking up the wrong tree. There are 10,000 very pissed off mechs tired of being pissed on, and thats just at United. Are you starting to get the full screen view yet? Out of those 2800 a good 60-80% of them are leaving the industry for totally. The skill levels are constantly being lowered by the FAA and the corporations. This combined with the ever increasing complexity of the aircraft is creating a very dangerous situation. You want forward looking, look forward to that. Alaska started down this road, it was management(supervisors) people that lost their licenses NOT regular mechs. United is heading towards the same road. BTW Thats only the very tip of the iceberg.

 

[DCT JVL]

[blockquote]
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On 11/26/2002 711 PM atabuy wrote:


I cannot believe the lack of intelligence you are representing here. Looks like the emotional side has won out.

I guess hindsight will be your 20/20 in the near future.

I wish you all would have researched what BK can mean to you. Too bad.


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[/blockquote]

What is so unfortunate about the attitude espoused in this thread is that there already is PLENTY of hindsight and history to look back upon. EAL being the most glaring example. This idiotic weld the doors shut mentality will get us all nowhere but the unemployment line.

My first job in the airline industry was with PAA. I remember having the exact same discussions with PA employees then as I am having with UA employees now. I clearly remember people saying, oh, there is no way the goverment will let the largest international carrier in the US go under. We can all see where that attitude got them. All I ask is that people remember the PAs and EAs of the world and the lessons they have taught us. Let's not be so shortsighted. The ERP is our last, best chance to control our own destiny. Vote yes!

Also, as far as the force majeure clauses that go along with the ERP are concerned, I would encourage the naysayers to check their contracts again. Force majeure is in place now in all the union contracts. Voting no won't change our prospects in the event of a war.

 

[GGpillow]

The bottom line is, this is the most probable chance we have of averting ch 11. Bitterness aside. This is quite probably the last agreement you will get to VOTE on. Mr Owens speaks quite eloquently of the conditions needed to abrogate our contracts. In reality, those conditions will be easily met. Any doubts, simply look at U. The judge in their case, if you can believe Chip, has approved EVERY single company reccomendation.
In ch 11 the Judge will, much to some peoples disbelief, NOT care about ESOP, our last contract fiasco, AMFA, Goodwin, Wolfe, USair mergers, or Avolar. He will also NOT care about your right to a livable wage. He will NOT care about schedual rotations, vacation time, or quality of life. He will NOT care about what % YOU take in cuts as compared to someone else. He will also NOT care when someone else got their last raise as opposed to you, or if/when they got their retro. He will most difinately NOT care how much AA, WN, NW, DL, U, employees make. In fact, if someone dares mention the words industry leading he may well hold them in contempt, IF he can stop laughing that is.
The Judge WILL give a yes/no on company proposals. His interests will be to recover as much money as possible for creditors. This he will take VERY seriously. If the company makes a proposal that will enable UAL to recover additional revenue for their screwed creditors, he WILL approve it.
DOes this suck? Yes!
But it is reality.
It's obvious how I shall vote. I will not beg anyone to vote as I am. I have made my decisions on my own, by doing a lot of research, and reading up on Bankruptcy code and statutes.
Everyone should of course vote as they see fit. My only hope, is that everyone who will be voting do so only after informing themselves of the consequences of their vote.
Voting on emotion is no more intelligent then acting on it.

 

[UAL777flyer]

Does anyone know when the IAM ERP vote results will be announced? I'd expect it'll be late this evening.

 

[UAL777flyer]

BobOwens,

Is AA now paying its' employees to go to the UA message board to try to convince their employees to sabotage restructuring efforts? Do you get an extra week's vacation for doing so? Maybe you ought to start facing up to the fact that your employer will very shortly be forced to travel down the same paycut road that we're currently on. Enjoy the ride!

I apologize for my post about abrogating contracts being misleading. That was not my intent. I was summarizing without stating specifics. I do realize that the company is required to first negotiate with the union(s) in question to make changes to the contracts that are needed and that the union must show just cause for not agreeing to such changes. Trust me, I'm aware of the process, I've been through it twice before. But thanks for pointing it out. By the way, what's Don Carty's take on paycuts these days?

 

[wts54]

Contract negotiations round 3 and counting.


US Airways Outlines Mechanics' Requests
Wednesday November 27, 12:28 pm ET


NEW YORK (Reuters) - US Airways Group Inc. (OTC BB:UAWGQ.OB - News), which filed for bankruptcy in August, has asked mechanics and fleet service workers to let it outsource certain tasks, raise medical insurance costs, and make other changes in work rules to help save another $200 million each year, union representatives said.

The proposed cuts, announced late on Tuesday, are part of a new push by Arlington, Virginia-based US Airways to slash another $300 million in yearly costs, on top of $1.3 billion in annual wage cuts already secured.

Revenue at the bankrupt air carrier, the nation's sixth-largest, has come in below levels it targeted in its application for $900 million in federal backing on a $1 billion loan.

That application for loan guarantees won conditional approval from the government's Air Transportation Stabilization Board. But US Airways does not expect final approval until it cuts enough costs to make up for the revenue shortfall and emerge from bankruptcy, which it expects to do in March.

The carrier announced on Tuesday that it would furlough 2,500 workers from all areas of its operations in the next three months. It immediately shut down a maintenance facility in Tampa, Florida, which the International Association of Machinists (IAM) said put 500 of its members out of work.

US Airways management met with IAM representatives late on Tuesday and said the airline was looking to save $200 million by changing employee work rules and benefits across its work force, according to a Web bulletin posted by union representatives.

US Airways spokesman David Castelveter would not comment specifically on talks with the IAM, but he said success was crucial in negotiations with all of the airline's labor unions over work rule changes.

It is imperative that we reduce our cost structure by $1.6 billion annually, and in order to do that, we need to continue to work with our employees to find ways to operate more productively, Castelveter said.

IAM Presidents and General Chairmen Randy Canale and Scotty Ford bristled at new requests from the airline.

When IAM members recently ratified modifications to their US Airways agreements, it came with the company's assurance that the revisions were all US Airways needed to successfully emerge from bankruptcy, Canale and Ford said in the letter to union members.

IAM leadership agreed that new changes to the contracts are not acceptable and have not been proven justified, they added.

The IAM was the only labor union to initially vote down its wage concession proposal from US Airways, which called for $160 million in wage cuts and other concessions each year. The union voted again and approved the package in mid-September.

US Airways asked IAM representatives on Tuesday for permission to outsource plant and ground equipment maintenance, aircraft catering, mail and cargo, and other operations. It requested that lower-qualified workers replace the mechanics who receive and push out airplanes and de-ice them.

US Airways also said it wants to eliminate its commitment for a 2-percent match to 401(k) retirement plan contributions for mechanics, and requested that all IAM members double their contributions for medical benefits.

In the case of a war with Iraq, US Airways said it will seek an immediate wage deferral of 5 percent for up to a year and a half, the message to union members said.

In return for workers' cooperation, the air carrier would agree to keep its fleet of aircraft at the current level of 279 or higher to protect jobs.

 

[ual747mech]

Hey Bob,

I disagree with you bud. All our fellow mechanics are voting no for all the wrong reasons. I ask them why no and they think that the Bankruptcy Judge will treat this like the PEB case meaning we will not get anything worse than the other carriers is getting right now. Bankruptcy whether Chapter 7 or Chapter 11 is bad for everybody, including us the mechanics. The same result, if UA files Chapter 11, will happen to us like in Continental and other carriers, meaning less pay and more work rules changes like longer hours. I know all of us are mad but what can we do. Besides, everybody will be sacrificing. As always theres groups that are going to be paid more and paid less than us. Also, UA is bargaining in good faith with us because that's one of the prerequisites if they want to request a rejection of our contract if they file Chapter 11. It's unfortunate we are working for a troubled Company, I wish we were like Southwest but that's how it goes, no matter who's fault it is. I myself will probably start working on getting out of this field and try to find something more stable and better schedule than this. I don't think I can take this roller coaster ride forever. Have a happy thanksgiving and good luck to all of us.

 

[Bob Owens]

DCTJVL;
Obviously you did not learn your lesson at PAA.

 

[Bob Owens]

GGPillow;
How many labor contracts were abrogated at USAIR?
How many Labor contracts have been abrogated since the rule was modified? Contracts with Vendors are handled differently than Contracts with Employees.Maybe you should go back and read it again.
Your right in one respect it will be easy for the company to meet the conditions necissary, all they have to do is make a better offer.
You are misinformed, the judge will either abrogate the agreement or uphold it. If he abrogates it, then the workers are free to strike. Are the creditors likely to benifit in the event of a strike?

 

[Bob Owens]

UAL777 Flyer;
Apology accepted.
No AA does not pay me for this. Does UA pay you for this? If I recall you said that you're an analyst, that means that you probably work a 9 to 5 type schedule. What are you doing on the web at 957am?
Just Cause? No they just have to show good cause. Thats easy. Historically contracts are for two to three years duration. The last time mechanics signed a six year agreement they suffered huge economic losses. While the company prospered they languished. Having just gone through the terrible experience that a long term contract caused they are averse to once again submit to such an agreement. 6 years is excessive. There you have it, is it reasonable? Is it fair? Is it based on legitimate concerns that are the result of past experience? Is the reluctance to enter into a long term concessionary deal intended to harm the company or protect the employee? The answers are; Yes, Yes, Yes and self protection. Everyone has the right to try and look out for their self interests. Do you think that if USAIR had a contract to buy fuel from some oil company and they demanded a huge discount for 6 years that the judge would consider that demand reasonable? The fact is a six year concessionary agreement is excessive by any measure.
Yes I am concerned that if the UAL mechanics give in then we will be next. I've been clear and up front about that. I have not concealed anything about my motives. You on the other hand have not been quite as open.
Once United accepts the cuts it will create a dominno effect. The key is to try and make sure the first dominno doesnt fall. Thats the way things in the industry have always gone. There are some new twists. If the mechanics pass this it will not be as an endorsement to their union, it will be the realization that the union will not lead them. They will resent their Union and more than likely replace the IAM. The savings that the IAM is realizing by eliminating a weeks vacation instead of gaining the savings off salary will end up being spent in a futile drive trying to fend off AMFA.

 

[ual747mech]

Hey Bob,

That's just it, there is no better deal out there. We are dealing with a Company who is bankrupt just like if you were bankrupt you'd file for bankruptcy too. This is not about caving in, it is taking the best you can get and this is it. The IAM did the best they could. Like I said theres always groups that are paid more and paid less depending on what they do. I know we can go on and on, but bankruptcy is no way to go. Sure we can strike but what are we going to get by striking a bankrupt company. I truly believe the Company needs the employees help or else it will file for bankruptcy. I know we don't have a clause that says we will snap back if times gets better but blame that on the ATSB. By the way I am an AMFA supporter just because I would like for us to have a separate union so there's no conflict of interest. I know you got something to throw back at me so I'll be waiting, lol, take care.

 

[Bob Owens]

747mech[blockquote]
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On 11/27/2002 11:39:54 AM ual747mech wrote:

Hey Bob,

I disagree with you bud. All our fellow mechanics are voting no for all the wrong reasons. I ask them why no and they think that the Bankruptcy Judge will treat this like the PEB case meaning we will not get anything worse than the other carriers is getting right now. Bankruptcy whether Chapter 7 or Chapter 11 is bad for everybody, including us the mechanics.

Bad compared to what? Even 6 years of concessions? We are talking Chapter 11, not Chapter 7 here. The reorganization and return to profitability should take less than 2 years yet they want you to give back for 6.

The same result, if UA files Chapter 11, will happen to us like in Continental and other carriers, meaning less pay and more work rules changes like longer hours.

Not so, the first time Continental filed the new rules were not in place. The second time I dont think they had a union or a contract.

I know all of us are mad but what can we do.

Vote No and hold out for a better deal.

Besides, everybody will be sacrificing.

Only if you guys cave first.

Also, UA is bargaining in good faith with us because that's one of the prerequisites if they want to request a rejection of our contract if they file Chapter 11.

They will have to bargain again in C-11. They have to prove that its necissary to get 6 years of concessions in an industry that historically has gone from its worst ever losses to best ever profits in less than three years.
Good luck in your new career but if your leaving anyway then why vote at all?

 

[atabuy]

[blockquote]
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On 11/27/2002 1:41:19 PM Bob Owens wrote:

GGPillow;
How many labor contracts were abrogated at USAIR?
How many Labor contracts have been abrogated since the rule was modified? Contracts with Vendors are handled differently than Contracts with Employees.Maybe you should go back and read it again.
Your right in one respect it will be easy for the company to meet the conditions necissary, all they have to do is make a better offer.
You are misinformed, the judge will either abrogate the agreement or uphold it. If he abrogates it, then the workers are free to strike. Are the creditors likely to benifit in the event of a strike?
----------------
[/blockquote]
Bob,
Well now it is a moot point and if the concessions are voted in, we will never know. What I do know is you are part of the deluded masses who think BK is the best option.
If it does not pass, why would you think mechanics would settle for any concessions in BK either? So they vote no once again and the judge abrogates the contract and the mechanics strike.
Looks like they play right into the hands of the company. We have enough supervisors to do the work and all heavy maintenance will be contracted out.
These guys will never get back to Ual unless they were good workers before.
US air mechanics voted no until they found out what would happen to them and then they voted again and passed the concessions. That is why there was no contract thrown out.
Let's see this play out. Everyone knows who the fools are here.
I guess 2 years of school wasn't enough. Maybe the school of hard knocks will be the academy of learning for them.

A favorite quote I have always liked is this:
Experience is the best teacher, but a fool learns no other way.

What is amazing is some of the mechanics I talked to were Eastern mechanics.
I don't know where they fit in this quote.

 

[Bob Owens]

atabuy
The whole point was that 6 years of concessions is unreasonable. ual747mechanic says blame it on the ATSB. Well I guess mechanics are as dumb as some here have said. Blame it on the ATSB when they are making huge profits off your givebacks, and you cant do anything about it. When you complain that the concessions are no longer needed you will be told You agreed to it. So go ahead if it makes you feel better and blame it on the ATSB.

USAir mechanics rejected the agreement , when they had to revote on it how many were so fustrated that they did'nt bother voting again? I doubt that many minds were changed, most probably just gave up. Thats how they will probably approach their daily work and many flights will end up being needlessly cancelled, so where is the savings?

If UAL has enough supervisors to do the work then its no wonder the airline is in such bad shape. Farming out all the heavy maintenance? Who keeps their capacity high enough to handle all that work, all at once? Its not a simple as you try to make it sound.

Experience is the best teacher, but a fool learns no other way.

Its ironic that you should use this quote. EAL workers gave and gave, it still was not enough and they still came back for more. Pan Am workers gave and gave until the job was just not worth it anymore and they had trouble hiring people. The poor morale led to ever decreasing productivity and eventually it dissappeared. TWA workers gave and gave but it too failed. USAR workers gave and now they are being hit up again. Uniteds savings will all end up being on paper, but in reality they will be losing more than they are saving. They will scratch their heads wondering why things are not going like they planned. At AA, when the raise went into effect productivity rose dramatically along with On time departures. The raise really didnt cost the company anything. Since mechanics were being paid fairly there was no reason to make OT. The end result; less overtime and better performance. UAL may have been successful at bullying their workers to accept cuts. Many workers may buy into the Crusade like propaganda that the company spews out but probably not the mechanics. They tend to be naturally cynical, its one of the reasons why we have never formed a strong union like the pilots. They will need to make up for their lost earnings. The only way to do that is by fixing them on OT. Why hurry? To make even less? I think that you are looking at the wrong end of the company when you are questioning who fails to learn by experience. Gordon Bethune said it very well in his book.You dont want to get your mechanics mad at you because if you do they will not fix it. They will work on it all night but not fix it. And there isnt much you can do about it.