This might answer your question in your top post.
The following information
is provided by Rich Delaney,
District Lodge 141 AGC
February 23 2003
If there is still any doubt in anyone's mind of the purpose and intent of the bankruptcy judge, Friday's court hearing should end it. Judge Wedoff made two rulings on Friday that are classic examples of what bankruptcy is all about. The first issue was the dispute about CEO Tilton's employment contract. The AFA had protested the terms of Tilton's deal and told the judge he should send a message to United and other corporations that CEOs should not be feeding at the trough while the employees are forced to take cuts and face job loss. Judge Wedoff said he wasn't there to send messages, just determine if the Tilton deal made business sense and aided United to emerge from bankruptcy. He decided that the pay package the Company reached with Tilton didn't hurt their chances to recover from Chapter 11 and he approved it. The second issue concerned the continued sale of ESOP stock. State Street Bank had asked the judge to lift the ban on further sale of UAL stock from the ESOP so that the employees still holding the remaining shares would see some return before bankruptcy made the stock totally worthless. United has said that the sale of ESOP stock would cause a change in ownership of the outstanding shares and prevent the Company from using their current losses, called Net Operating Loss (NOL's) to offset future tax payments. Judge Wedoff again ruled in favor of the Company claiming that the money owed to the employees was insignificant compared to the benefit United will get from the NOL's that will allow them to retain future earnings instead of paying taxes.
It is clear from these two examples that the judge and the court system do not take into consideration the employees' concerns when deciding business issues. Fairness to employees and the concept of shared sacrifice do not impact the courts actions.
Also on Friday a report was published that claimed the unions, including the IAM, were looking for other investors to put money into United and replace Tilton. The IAM immediately denied any such action. Gerry Greenwald, who was named in the report as one of the potential investors, also said the article was inaccurate. The idea that there are other, more attractive lenders available is not likely at this time. First, they would need an extraordinary amount of money now. They would have to buy out the existing DIP lenders at about $1.5 Billion before ever investing a dollar into the operation. The belief that the employees would not be asked to take as big a hit as the current Term Sheet proposes by another investor is not likely, either. In fact, a new investor would almost certainly demand greater cuts from the employees due to the extra money needed to buyout the DIP lenders. What is a strong possibility is that potential investors, like Greewald, would be interested in putting money into United as they emerge from bankruptcy, not before.
Abbreviated talks continued last week, hampered by the winter storms throughout the East which prevented some key members of the negotiating team from arriving in Chicago until later in the week. The discussions still center on the issues of work rules and job assignments, rather than money issues. President Canale reported that although the issues are difficult and the Company has increased the target dollar amount for labor savings, some progress is being made. Whether or not enough progress is made in order to reach an agreement prior to March 15th is still unknown.
Representatives from each union met again last week to review the status of insurance plan proposals. Each union now has a clear understanding of each other's current plan and will use portions of each plan to develop an alternative proposal to United's Term Sheet.
Negotiations are planned to resume again next week. District 141-M has also scheduled talks for next week.
United followed the lead of industry leader ATA (?) and imposed a $3.00 per ticket fuel surcharge early last week. By Friday, the industry had increased the fuel charge to $10.00 each way, which United also implemented. Northwest Airlines finally matched the industry increases after blocking planned ticket price increases for the last year or so. NWA now says they need the revenue improvements this surcharge will bring but are only assessing it to discounted tickets. Since it should not take any more fuel to carry a discounted passenger maybe the airlines are finally realizing that if fares continue to be held at the lowest price in 15 years nobody will make any money and bankruptcies will become a way of life.
United announced some of the changes planned for the April schedule which shows a continued shifting of flights away from mainline trips to regional jets. No station closings were announced at this time. A review of the schedule shows United increasing flying into stations that will take advantage of the USAirways codesharing.