Let''s Talk Facts About Bankruptcy

[RV4]

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On 4/6/2003 7:08:20 PM AAviator wrote:




You poor thing, you're the most petrified poster I've ever seen on this board

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I am not in denial about my fears.

I have lived life on the premise that I learn from my mistakes. The most costly mistakes of my life have been decisions made based on fear and I have leraned to not make decisions in that manner.

I can assure that if my decision on this T/A is to be based on fear and fear alone, my vote would be NO.

It is my belief that a massive disgruntled workforce because of such drastic pay/benefit reductions will not produce and the company will suffer devastating results. The union, who protects the already pathetic producers that I work with, will only continue that pratice and the company will face Chapter 11 anyway. We have more problems than our pay/benefit package and a major emotional event is the only likely cure.

I think a headcount reduction and downsizing of ALL Airline Capacity is the only thing that will ease my fears.

I am NOT in denial about my fears in life. I simply wish to have other facts to base my decisions on.

BTW, your post reminded me of being on the playground of a school yard with kids that have nothing more to do than call each other names, and for a minute there my cares of adult life vanished. Thanks for the short fantasy reprieve!

Funny how we still have ZERO facts about Bankruptcy and how we would be worse off?

 

[Bob Owens]

Dear Fellow Members;
The company has given the “Union†a demand for concessions or they would file bankruptcy. As a result, there is a tremendous amount of information circulating concerning this issue. Unfortunately, as a result of this information it seems that the membership is “impaled on the horns of this [bankruptcy] dilemma.†Consistent with our legal obligation to our members, we are offering this information so you can vote intelligently.
Calculating for the loss of vacation, holiday, and sick time, this ratification will immediately lower our present earnings by more than 20%. Moreover, the decline for the next six years will result in our real earnings being approximately 40% lower than it is today.
Specifically, What will voting yes provide?
-An immediate 17.5% pay cut.
-Loss of one- week vacation.
-Loss of the accrual of 7 sick days; a ½ pay for the first two sick days used per occurrence.
-Elimination of shift premiums; longevity pay.
-Elimination of OT for training beyond regular shift (training can now be assigned on your day off at straight time, even for four hours).
-Elimination of paid lunch; elimination of penalty hour; elimination of OT meal allowance. - Elimination of five holidays with remainder paid at time and ½ instead of double time and ½, elimination of the Pilot cap on Medical benefits -this is the only measure that keeps our health insurance costs in check.
-Elimination of the $12,500 in the event of a layoff.
-Elimination of 70 days from IOD bank.
Other changes to the contract language are still being determined. That’s right, the company and the “union†are still making changes. Voting yes will ensure that none of these issues will be addressed for many years and your income will likely be reduced by around 40% or more by the time the next round of “negotiations†commence.
Voting Yes will not ensure that the company will not go bankrupt
Voting Yes will not protect you job.
Voting Yes will not improve your life.
Voting yes eliminates the possibility that your earnings or lifestyle will not be negatively affected for many years into the future.

What will happen if you vote NO ?
Voting No means that our contract will remain in effect until 2004. But if the company files bankruptcy they have the ability to motion the court to reject all or part of our agreement. A bankruptcy judge may grant the company’s request to reject portions or all of the agreement after considering a number of factors. It is not a guarantee that just because the company files for bankruptcy protection that the court will abrogate our agreement. Even if the judge grants the company’s request; would that request be worse than the concessionary demand? That’s debatable, but with the magnitude of the demand it would seem unlikely. The threat being put forth is that if we do not agree to these cuts the company will declare bankruptcy and seek to get its “Vermont†plan implemented. The truth is that the majority of what the company is seeking in the “Vermont†plan is incorporated in the proposal that has been put forward to you.

Voting No means that we are not sacrificing over $128,000 to American Airlines or its stockholders.
Voting No means we keep open the possibility of a better future.


-(over)-

The graph above shows how our income has performed against the CPI (Consumer Price Index), a measurement of inflation, since 1983. Since numbers are not available for future rates we used the 30 year average of 3% for illustration purposes. It could be less or much more. Also factored in are the costs of Lost Holidays, Vacation, etc. (It includes the annual 1 ½% raises). When you look at the graph consider that prior to 2001 our pay lagged inflation by nearly seven dollars an hour whereas by the end of this proposal it will lag by nearly double that. For an easy way to consider the impact: multiply $13.75 x 40hrs and subtract that from today’s current top rate of $1400/ week. Do you want to live on the equivalent of $43,000/year in today’s dollars in 2009? Do you want to guarantee that your financial situation will be worse for the next six years than it is now?

The Company is maintaining that it is losing $5 million/day. The company has demanded $1.8 billion in concessions from its unionized workforce. $5 million X 365days per year -$1.825 Billion. In other words the company plans to change nothing in its business plan other than slashing wages. This is a cyclical industry and it is obvious that we are in the trough of the business cycle. Demanding that we consent to carry the entire burden, and commit to continue to work under such a burden for a long period of time is unreasonable. We already sacrificed for 6 years while the company enjoyed record profits.
Ratification does not provide ANY positive guarantees. It simply says that they will “try†not to go bankrupt or come back for more. If we ratify the agreement it will cost a mechanic at least $128000 in lost earnings. This is the equivalent of working for free for two years.

The Local Executive Board urges our members not to be intimidated into ruining their careers by accepting this Union busting agreement. We urge you to leave open the possibility that once the economy improves we too can share in the benefits of a good economy, something that we missed as a result of the last six-year proposal we accepted.
The proposed Equity stake and profit sharing could never come close to making up the difference of the definite losses these concessions would impose.

We urge you to save your career and reject this proposal. Our recommendation is;

VOTE NO!!
Fraternally;
The Executive Board of Local 562

 

[flyhigh]

Well, I''ll give it the old college try to get through your skull. Facts are not apparently what you want. What you seem to really want are crystal ball readings of exactly what will happen to you as an AA employee if the company is forced in to bankruptcy.

Here we go:
Why was TWA forced in to bankruptcy?
Part of the reason was to void Karabou. This move was applauded by many throughout the financial world. To add to that benefit, it also allowed AA to get out of aircraft leases it didn''t want. For example, AA was not interested in the 717''s. They negotiated short term leases with boeing for them. Same thing with many M80''s TWA had. On top of that, TWA was paying lease rates based on their credit rating. AA, through bankruptcy, was able to lower the rates (the rates AA would pay if it files and emerges from bankruptcy). It also allowed for AA to consolodate airport gate leases and make amendments to labor contracts.

As for being opposed to a turnaround...no I''m not opposed to turning things around, growth, or profit. As I stated, however, your chances are slim to nil of doing so and slim is heading for the door. It''s a fact that only 2 carriers have turned around...are those the odds you want to work with???

You asked why not park the 80-100 aircraft now today? Well, it''s been answered, but I''ll say it again...you can''t. It simply costs too much. You''re still responsible. The problem with filing bankruptcy is that you don''t necessarily get to decide which aircraft you get to keep. AA has over 300 M80''s. In bankruptcy, leaseholders could decide to take back to the newest (least costly to AA) ones and find another airline to put them with. Does that put you or AA in a better position???

Why not get rid of the assetts Carty speaks of now instead of in bankruptcy you ask?
Well, what''s your definition of an assett? It''s a very real possibility that creditors could say that you don''t need 3 overhaul bases...matter of fact, you don''t need any. Southwest doesn''t use ''em, UA is closing one, close three and sell the ASSETTS in them! That would mean lets get rid of them there jobs (which could be abbrogated through an 1113). How''s it sounding so far?

Sorry we don''t have crystal ball readings to give you, but the path is filled of the realities of what happens in bankruptcy. Failure to heed the lessons learned from carriers past, well, that''s just foolish...

 

[Buck]

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On 4/6/2003 655 PM MiAAmi wrote:

OK lets post the entire business plan here on the web. But tell all the competitors not to read it. The Union negotiators had to sign a confidentiality clause because the info was sensitive. Sometimes you have to trust the people you elect to look out for your best interest. We will probably never know the crap that the company came at them with. Lets face it the company has a gun to our head and you can say shoot or heres what you want. I just hope if you say shoot that you realize you are saying shoot all of us.

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Maybe the Justice Department would sign a confidentiality statement also?

I have grown tired of trusting the TWU. Every contract since 1983 has been concessionary

It is called the Vermont Letter

 

[PORKCHOP]

Rv4 You are obviously in the wrong profession. You should have been a fictional writer.

 

[stlslim]

The bottom line is, "You can''t fix stupid."

 

[Bob Owens]

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On 4/6/2003 655 PM MiAAmi wrote:

OK lets post the entire business plan here on the web. But tell all the competitors not to read it. The Union negotiators had to sign a confidentiality clause because the info was sensitive. Sometimes you have to trust the people you elect to look out for your best interest. We will probably never know the crap that the company came at them with. Lets face it the company has a gun to our head and you can say shoot or heres what you want. I just hope if you say shoot that you realize you are saying shoot all of us.

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Should we trust someone who is holding a gun to our heads?
The companys plan is such a secret that they dont even know about it. As far as I know, with the mechanics, those that were elected by mechanics with the exception of St Louis are against the agreement. Those who are for it, Randy McDonald-not elected as President, assumed position when Burchette left, and Little -appointed by Sonny hall, Gless and Yinst-appointed by Little are not accountable to the members. If they are the ones with all this priviledged info then why are they already distancing themselves from the agreement by saying that "the Presidents Council came up with this deal not us" ?

As far as blaming us if the company shoots us all, dont blame us. The company has set the terms, they are free to change them. We will vote NO.

 

[Bob Owens]

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On 4/6/2003 1022 PM flyhigh wrote:


Why was TWA forced in to bankruptcy?
Part of the reason was to void Karabou. This move was applauded by many throughout the financial world. To add to that benefit, it also allowed AA to get out of aircraft leases it didn''t want. For example, AA was not interested in the 717''s. They negotiated short term leases with boeing for them. Same thing with many M80''s TWA had. On top of that, TWA was paying lease rates based on their credit rating. AA, through bankruptcy, was able to lower the rates (the rates AA would pay if it files and emerges from bankruptcy). It also allowed for AA to consolodate airport gate leases and make amendments to labor contracts.

As for being opposed to a turnaround...no I''m not opposed to turning things around, growth, or profit. As I stated, however, your chances are slim to nil of doing so and slim is heading for the door. It''s a fact that only 2 carriers have turned around...are those the odds you want to work with???

You asked why not park the 80-100 aircraft now today? Well, it''s been answered, but I''ll say it again...you can''t. It simply costs too much. You''re still responsible. The problem with filing bankruptcy is that you don''t necessarily get to decide which aircraft you get to keep. AA has over 300 M80''s. In bankruptcy, leaseholders could decide to take back to the newest (least costly to AA) ones and find another airline to put them with. Does that put you or AA in a better position???

Why not get rid of the assetts Carty speaks of now instead of in bankruptcy you ask?
Well, what''s your definition of an assett? It''s a very real possibility that creditors could say that you don''t need 3 overhaul bases...matter of fact, you don''t need any. Southwest doesn''t use ''em, UA is closing one, close three and sell the ASSETTS in them! That would mean lets get rid of them there jobs (which could be abbrogated through an 1113). How''s it sounding so far?

Sorry we don''t have crystal ball readings to give you, but the path is filled of the realities of what happens in bankruptcy. Failure to heed the lessons learned from carriers past, well, that''s just foolish...

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You seem to contradict yourself here. On the one hand you say that TWAs bankruptcy was a strategic move to get out of Karabou and aircraft leases but then say that we cant get rid of aircraft because we are still responsible for them. If thats the case then bankruptcy makes sense for us too. The story about how the lessors will lease their better aircraft to other carriers does not make sense, neither does your suggestion that the airlines sell the bases and all the equipement. Who would by them? A bank maybe and lease them back to AA? Where is that powerhouse airline that is going to pick up all these airplanes and OH facilities? As for SWA not having OH, slowly but surely, the way SWA always does it they are doing more and more work in house. Maybe SWA is the airline that is going to buy those OH facilities? If thats the case then they are better off. Who would not want SWA to buy them?
Since deregulation over 120 airlines have gone out of business. So what? How big were those airlines and how much of an economic impact did they have? No airline the size of UAL or AA has ever liquidated. Like you guys have been saying, this time is different. Years ago the government used to allow airline workers to strike for better wages. Now they say we cant strike because it will hurt the economy. Well dont you think that liquidation of a carrier the size of UAL and AA will have a huge economic impact beyond the over 150,000 employees that would become unemployed? Come on this whole thing is bull. Why is UAL still going? Five months into BK and the judge still has not abrogated their agreements. Why? I say we shut the whole thing down once the first contract is abrogated and tell the government that their experiment in airline deregulation has joined that of the S&Ls, Electricity, Commercial Banks etc as a failure. We will not accept the burden of subsidizing cheap airfares with our labor.

 

[stlslim]

I say we shut the whole thing down once the first contract is abrogated and tell the government that their experiment in airline deregulation has joined that of the S&Ls, Electricity, Commercial Banks etc as a failure. We will not accept the burden of subsidizing cheap airfares with our labor.


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Damn the torpedoes, full speed ahead.

 

[RV4]

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On 4/6/2003 10:32:26 PM PORKCHOP wrote:

Rv4 You are obviously in the wrong profession. You should have been a fictional writer.

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Do you have anymore important data to add to this conversation?

 

[AAviator]

I do. Since 1982 these companies filed bankruptcy. Only 2 are still here. (not counting Usairways) They emerged into the biggest bull market known. The fares charged duiring this time frame were higher than todays fares. All others failed.


1982 Braniff
1983 Continental
1984 Air Florida
1986 Frontier
1989 Braniff
1989 Eastern
1990 Continental
1991 America West
1991 Midway
1991 Pan Am
1992 TWA
1995 TWA
2000 Fine Air
2000 Kitty Hawk
2000 Tower
2001 Midway
2001 TWA
2002 US Airways emerged 3/31/03
2002/3 United

 

[Resman1]

I think bankruptcy is the worse option, however, I will say
to all of you who are represented by unions vote your conscience. If you truthfully feel a no vote is best, vote no. I will say one thing, no matter what happens, nothing is going to change until AMR and the industry as a whole
restructures pricing. I get no response except laughter when I quote a full fare coach rate to customers. Do we really expect anyone to walk up and pay 2000.00 roundtrip
DFW-LGA, even in great economic times? Most customers now who pay full fare Y or F work for companies that we give discounts up to 53 percent!! Concessions won''t matter until AA and other carriers make our product a reasonably priced option to video conferencing.

 

[KCFlyer]

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On 4/7/2003 9:48:59 AM RV4 wrote:

Looks like a damn good case for re-regulation instead of worker hacking.
Hacking at workers will only make this list rise.

Can you provide us information from the above list about how many hacked their workers pay/benefits and still failed? I believe a case could be made that hacking the pay/benefit of workers is the WRONG thing to do!

FULL PAY TO THE LAST DAY!

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You are missing one big point RV4 - any reregulation would involve reregulating current companies to get their costs to the level of the Southwest''s, Airtrans, and Jetblue''s...and not reregulating to bring those carriers up to AMR cost levels. It''d hurt just as bad, if not more, than what you''re being asked to take to avoid bankruptcy.

PS - I have another definition for you -

BRAVADO - 1.) Arrogant behavior 2.) A pretense of courage.

 

[Workingman]

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On 4/7/2003 8:55:39 AM AAviator wrote:

I do. Since 1982 these companies filed bankruptcy. Only 2 are still here. (not counting Usairways) They emerged into the biggest bull market known. The fares charged duiring this time frame were higher than todays fares. All others failed.


1982 Braniff
1983 Continental
1984 Air Florida
1986 Frontier
1989 Braniff
1989 Eastern
1990 Continental
1991 America West
1991 Midway
1991 Pan Am
1992 TWA
1995 TWA
2000 Fine Air
2000 Kitty Hawk
2000 Tower
2001 Midway
2001 TWA
2002 US Airways emerged 3/31/03
2002/3 United


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Good post but you left out all the cargo airlines that were bought out or went belly up. Also who were the CEOs of these airlines and the odds are the same ones for several past airlines. Think for a minute it will not matter if we vote yes or no as the people at the top of any company will do what they want to in the end. They only care about themselves they DO NOT CARE ABOUT ANY PERSON UNDER THEM. They have BUY OUT CONTRACTS. They will live well the rest of there life. Their morals are not any different then the top people at ENRON. The top people of any company that goes BK will just go on to another and do the same thing.

 

[RV4]

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On 4/7/2003 9:57:30 AM KCFlyer wrote:




You are missing one big point RV4 - any reregulation would involve reregulating current companies to get their costs to the level of the Southwest''s, Airtrans, and Jetblue''s...and not reregulating to bring those carriers up to AMR cost levels. It''d hurt just as bad, if not more, than what you''re being asked to take to avoid bankruptcy.

PS - I have another definition for you -

BRAVADO - 1.) Arrogant behavior 2.) A pretense of courage.

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And you belong to what union? And what is your current pay stucture and give your portion of the shared sacrifice, I mean minus Eagle Targeted Sacrifice?