The following information
is provided by Rich Delaney,
District Lodge 141
March 2nd 2003
Limited discussions between IAM representatives and United Airlines took place last week. Financial and legal consultants met with Company representatives to talk about the differences each side has regarding the cost value of individual changes in the contracts. This is a necessary issue to resolve and reach some common ground on prior to going forward and talking about complete settlement of contractual issues. These commonly recognized dollar figures will be used by the IAM to evaluate and counter proposals already made by United.
Talks have progressed on most issues except the Company planned Low Cost Carrier. The IAM has been waiting for the Company''s defined plan for this new operation to evaluate whether or not to continue discussions over this proposal or join the other unions who have rejected the idea without knowing exactly what it''s intentions are. District 141 has taken the position that the basic concept of the LCC may allow IAM members continued employment with the new carrier and also provide a way for currently furloughed members, who lost their jobs as their stations closed and their work was turned over to other airlines, to return to work and reestablish their benefits. The idea of finding ways to keep people working is much more attractive to the IAM than the reality of permanently losing more jobs through the shifting of work to Express carriers.
One of the investment groups that is trying to attract the support of the Unions, Texas Pacific, has said they would shrink the airline by an additional 25% but reject the idea of an LCC. In other words, they would give one out of every four trips to an outside airline and reduce costs by getting rid of all of the employees connected with those trips.
The debate continues over whether an LCC is viable. Adding more fuel to the fire, Midwest Express (itself a small regional carrier) announced it will create a low cost airline, too. They claim they cannot attract the newest style of passenger - the leisure traveler - without starting a completely separate airline.
The AFA presented a comprehensive settlement offer to United last week despite complaining that the Company had not provided complete financial information necessary to evaluate the Company''s proposed recovery plan. Included in the AFA offer is an extension of the 9% wage cut along with the cancellation of all scheduled increases and lump sum payments. In addition, they propose to eliminate the me too provision of their vacation language that provided them the same improvement in vacation accrual the IAM negotiated in the recent agreement. Future pension benefits would be based on the reduced earnings rather than book rates. The AFA proposal also calls for employee payment of insurance costs and reduce the number of paid holidays. The proposal, although it agrees to make concessions in many significant areas, is valued at about half of what United has said they need. Future discussions between the AFA and United will presumably be based on the differences between the two plans.
A law suit was filed late last week against members of the ESOP Committee claiming they should have sold stock from the ESOP starting in July, 2001, more than a year before the Company first said bankruptcy was a possibility. The suit was filed by 3 747 Captains, 2 of whom are now retired, claiming that the Committee members should have violated the ESOP rules and sold United stock in advance of the bankruptcy filing and in advance of 9/11. As part of their rationalization for their suit the pilots quote several analysts and newspaper articles from that time period (pre-9/11). They claim these articles clearly show United was losing money and the ESOP Committee should have immediately begun to sell shares. It is interesting to read the articles submitted in this suit since most of them clearly identify the financial problems of United as stemming from the pilots strategy during the Summer from Hell and the subsequent inflated contract agreed to after that. Also pointed out in the court filing was the fact that one of the complaining pilots retired before 9/11 and had the right to sell his own stock at that time.
United has asked Judge Wedoff to force the government to repay the Company for overpayment of taxes and refunds of taxes they are entitled to. The Company is looking for $388 Million in rebates that would help offset the expected losses that will occur once the war starts. The government has frozen these payments claiming the Company owes between $5 - $50 Million in pre-bankruptcy costs. United is hoping to recover money paid in taxes between 1988 and 1990.
United has set the date for their court filing for abrogation of contracts as March 17, 2003. In its original request to the court of imposing the 14% wage reduction on the IAM, United said they would file on March 15th if new agreements have not been put in place by that date. Someone finally looked at a calendar and discovered that 3/15 is a Saturday and the court would not be in session. March 17th is the first day the court is available after 3/15.
Rich
is provided by Rich Delaney,
District Lodge 141
March 2nd 2003
Limited discussions between IAM representatives and United Airlines took place last week. Financial and legal consultants met with Company representatives to talk about the differences each side has regarding the cost value of individual changes in the contracts. This is a necessary issue to resolve and reach some common ground on prior to going forward and talking about complete settlement of contractual issues. These commonly recognized dollar figures will be used by the IAM to evaluate and counter proposals already made by United.
Talks have progressed on most issues except the Company planned Low Cost Carrier. The IAM has been waiting for the Company''s defined plan for this new operation to evaluate whether or not to continue discussions over this proposal or join the other unions who have rejected the idea without knowing exactly what it''s intentions are. District 141 has taken the position that the basic concept of the LCC may allow IAM members continued employment with the new carrier and also provide a way for currently furloughed members, who lost their jobs as their stations closed and their work was turned over to other airlines, to return to work and reestablish their benefits. The idea of finding ways to keep people working is much more attractive to the IAM than the reality of permanently losing more jobs through the shifting of work to Express carriers.
One of the investment groups that is trying to attract the support of the Unions, Texas Pacific, has said they would shrink the airline by an additional 25% but reject the idea of an LCC. In other words, they would give one out of every four trips to an outside airline and reduce costs by getting rid of all of the employees connected with those trips.
The debate continues over whether an LCC is viable. Adding more fuel to the fire, Midwest Express (itself a small regional carrier) announced it will create a low cost airline, too. They claim they cannot attract the newest style of passenger - the leisure traveler - without starting a completely separate airline.
The AFA presented a comprehensive settlement offer to United last week despite complaining that the Company had not provided complete financial information necessary to evaluate the Company''s proposed recovery plan. Included in the AFA offer is an extension of the 9% wage cut along with the cancellation of all scheduled increases and lump sum payments. In addition, they propose to eliminate the me too provision of their vacation language that provided them the same improvement in vacation accrual the IAM negotiated in the recent agreement. Future pension benefits would be based on the reduced earnings rather than book rates. The AFA proposal also calls for employee payment of insurance costs and reduce the number of paid holidays. The proposal, although it agrees to make concessions in many significant areas, is valued at about half of what United has said they need. Future discussions between the AFA and United will presumably be based on the differences between the two plans.
A law suit was filed late last week against members of the ESOP Committee claiming they should have sold stock from the ESOP starting in July, 2001, more than a year before the Company first said bankruptcy was a possibility. The suit was filed by 3 747 Captains, 2 of whom are now retired, claiming that the Committee members should have violated the ESOP rules and sold United stock in advance of the bankruptcy filing and in advance of 9/11. As part of their rationalization for their suit the pilots quote several analysts and newspaper articles from that time period (pre-9/11). They claim these articles clearly show United was losing money and the ESOP Committee should have immediately begun to sell shares. It is interesting to read the articles submitted in this suit since most of them clearly identify the financial problems of United as stemming from the pilots strategy during the Summer from Hell and the subsequent inflated contract agreed to after that. Also pointed out in the court filing was the fact that one of the complaining pilots retired before 9/11 and had the right to sell his own stock at that time.
United has asked Judge Wedoff to force the government to repay the Company for overpayment of taxes and refunds of taxes they are entitled to. The Company is looking for $388 Million in rebates that would help offset the expected losses that will occur once the war starts. The government has frozen these payments claiming the Company owes between $5 - $50 Million in pre-bankruptcy costs. United is hoping to recover money paid in taxes between 1988 and 1990.
United has set the date for their court filing for abrogation of contracts as March 17, 2003. In its original request to the court of imposing the 14% wage reduction on the IAM, United said they would file on March 15th if new agreements have not been put in place by that date. Someone finally looked at a calendar and discovered that 3/15 is a Saturday and the court would not be in session. March 17th is the first day the court is available after 3/15.
Rich
