Management Not So Sure They Own The Judge

[OldpropGuy]

If management is so sure that Judge Stephen Mitchell of U.S. Bankruptcy Court will agree with their request to dissolve any union contracts that has not been voluntarily restructured, those being the CWA and IAM, why did US Airways ask the court to postpone the request until Sept. 23? Would it not have been to Dave''s advantage to quickly cancel the contracts Tuesday, as originally threatened, and reap the benefits of all the savings for the company? It''s been said that the judge would not allow a strike. Why is another vote from the IAM necessary, after they already voted NO? Could management be a little worried that a contract can not be so easily abrogated under current laws?
Just some things to think about.

 

[pitguy]

I feel as if some of these people that post on here truly wanted the company to do well and if they truly believe what they say about the judge going to hit the mechanics hard if the mechanics vote this down should be wanting the mechanics to vote this down so the company could save even more money in the courts. If you really believe the judge will do that then you should be saying for the mechanics to vote no.

I am still voting no. It is just my gut feeling and I feel I can not trust much of anyone at this point.

 

[chipmunn]

As we have discussed before, Dave Siegel is not the hammer and Employee Relations is working through the process imposed on the company by financiers and the government. The gross concession amount was established to obtain a 7 percent profit margin in 6.5 years to obtain a projected Fitch B credit rating.

The credit rating has been established by the ATSB as the minimum required to obtain the loan guarantee or the government will not place the taxpayers money at risk, which now appears critical especially with airline industry financials further deteriorating.

The company developed a business plan with the percentage of cuts based on total employee group labor expense and the anticipated cost reductions that could be obtained from other stakeholders such as vendors, creditors, and lessors.

In regard to employees, the 85 percent cuts were demanded by TPG who was adamant certain employees groups reach accords before they would agree to the DIP financing, emergence financing, and loan guarantee agreements. For example, per the Legal Brief filed with the Bankruptcy Court the DIP financing agreement has four tranches of which one has been received. The second tranche requires ratified restructuring agreements from ALPA, AFA, & both IAM units before the company can gain access to $175 million in DIP financing. The third and fourth tranches require all employees share in the restructuring concessions before the final DIP payments can be received.

Nobody want to go through the ugliness of a S.1113 hearing with the company's solvency in jeopardy, but if any employee group does not reach a consensual accord, that union will force the company to obtain court-ordered relief.

Simply put, Dave will have no choice but to obtain court-ordered cuts or the company will not have access to the capital markets to continue to operate during the formal restructuring and could liquidate, which will result in the loss of 36,000 jobs, no severance pay, and no benefits.

Therefore, to try and be “labor friendlyâ€￾ one more time, the company asked the court to delay the S.1113 hearing in hopes consensual accords can be reached, instead of having to go through a very ugly process.

Chip

 

[oldiebutgoody]

Maybe they wish to avoid more infighting/poor morale and general ugliness. No one is sure just what would happen if this goes to a judge, but one thing is clear. U could wind up liquidated if major labor problems occur at this delicate stage in their restructuring. Coming up with something agreeable is in EVERYONE'S best interest (everyone that wants U to survive that is).

 

[insp89]

Oldiebutgoodie, I agree with you, It would be in everyones best interest to stay out of Judge Mitchell's courtroom...All I can tell you for sure is how one voter will be voting, Me...I'm sure that you are aware this is the same proposal that was already voted down on 8-28..This proposal simply has too much baggage with it,,, Things that have no business being in a concessionary proposal..For Example,,,,The company expects the membership to vote away grievances that they KNOW ought to be handled through the proper channels..One of these grievances is called FORCE MAJEURE,,, this is just a fancy term that the company felt gave them the right to furlough around 200 or so mechanics out of seniority due to Sept. 11, 2001...While I could understand doing this for the 3 days that the airline was shut down,, Some guys, including myself,, were out of work for around 30 days or more !! Mr. Siegle expects me to vote away a grievance that personally affects me BIG TIME..He will NOT get my vote until he withdraws this from the proposal. I have not personally talked to all the other mechanics that were affected by this, But I'm willing to guess the vast majority just might vote the other way if this is withdrawn. If not,, I will AGAIN vote NO and let Judge Mitchell decide..

 

[UAL777flyer]

In order to understand why US Airways requested more time, you'd have to accept that Siegel is truthful when he says that he wants to make this as labor-friendly as possible. But many people refuse to believe that, so of course they cannot understand why he'd request more time. The man is not foolish. While he certainly realizes that changes to pay/benefits/work rules are necessary if US Airways is to lower their costs and successfully restructure, he also realizes that abrogating contracts should be the last resort. He wants a bit more time in hopes that the CWA T/A and the second IAM vote on the company's last offer both pass. If one or both fail, it'll give him a few more days to negotiate before the company seeks to throw out your labor agreements. The bottom line is that nobody knows for sure what the judge will do. But if you look at past airline bankruptcy precedent, as well as examine the facts of US Airways situation (having the highest labor costs in the industry), I think it's more likely the judge will either toss out your contract completely or dramatically altar portions of it. Because to honor your labor agreements in full, or to cut into them less severely than the company has proposed already, would mean that there is no hope for a successful restructure of your airline, so you might as well start auctioning off assets to the highest bidder and close the doors. It is a huge gamble where you will have no control. I hope for the sake of all US Airways employees that common sense prevails over emotion and agreements are ratified before going before the judge.

 

[pitguy]

Some feel he is not mechanic friendly. Unfair equals a no vote. Should have thought about that before. I hear the words friendly being said, but I don't see it.

 

[Meriel]

As I understand the motion, it wasn't simply USAirways asking for more time, it was an assented motion. Not being able to actually read the motion itself, I can't be sure, but that's what I've heard. So, while U may have been the actual moving party (since it was their motion to set the original date), it's really more as if U, the IAM, and the CWA all asked for more time.

I highly doubt U has the Judge Mitchell in its pocket because the reality is that this is a high-profile bankruptcy which has the potential to set precedent. Mitchell is not going to want to run the risk of an embarrassing -- and potentially career damaging -- reversal on appeal. And so far, he looks to be doing his best to encourage cooperative solutions among parties.

 

[chipmunn]

Pitguy:

Pitguy said: Some feel he is not mechanic friendly. Unfair equals a no vote. Should have thought about that before. I hear the words friendly being said, but I don't see it.

Chip comments: Pitguy, it real terms nothing about this is fair and nobody likes this situation. In real terms is any concession friendly? Probably not, but expenses are greater than receipts, the company cannot pay its bills, and before anybody will loan us any more money there must be an IAM-M concession, one way or another because TPG and the ATSB say the cuts are required. Specifically, TPG (along with CSFB & BOA) said that ALPA, AFA, and both IAM units must reach a restructuring agreement or they will not provide the company any more capital.

Without the IAM-M reaching a consensual accord or a court-ordered contract cancellation, how will the company obtain the DIP financing necessary to operate?

Chip

 

[chipmunn]

Meriel, I agree with you. Never before in the history of airline labor has an employee group refused to take concessions; therefore, the court system has never held a S.1113 hearing. In most court cases the Judge prefers for the parties to reach a settlement, instead of the court having to make a decision. With that said, US will not have access to the capital markets and the next credit facility unless the IAM-M 85 percent cost reduction is obtained and the third and fourth credit facility tranches unless the CWA concession is obtained.

Therefore, if a S.1113 hearing is held, Judge Mitchell will have a choice. He can either keep a union contract intact for a bankrupt company, knowing that this would void the DIP financing, emergence financing, and loan guarantee, which would likely force the company to liquidate.

Or he can cancel the agreement and allow the company to impose its own pay and benefit terms on the union(s), which would allow the company to gain access to the capital markets.

These are the only two options for the court if the parties do not reach a consensual accord. The question is if the S.1113 hearing is held, which option will Judge Mitchell choose?

Chip

 

[pitguy]

Some people feel we are treated terrible. That tends to make you feel cold after so many years. Should have thought about that before.

 

[oldiebutgoody]

[blockquote]
----------------
On 9/11/2002 955 PM pitguy wrote:

Some people feel we are treated terrible. That tends to make you feel cold after so many years. Should have thought about that before.
----------------
[/blockquote]
Wait until the bank reposesses your home, cancels your credit cards and takes back your cars. You think you're treated bad now, just wait until the reality of being unemployed finally sinks in....then you'll wish that you could be treated this poorly again! I suggest you start looking for new employment NOW! I AM! All the respect, poor treatment, and past injustices all of your type are willing to fall on your swords for won't put food on the table! In a way, I hope this gets to a judge, just so that you can see just how wrong you are; but then I realize that putting this issue before the court just puts U closer to the point of no-return.

 

[airknocker]

If you want to take the time go to the District 141-m IAM website and peruse the company proposal you'll find not only money concessions (If parity kicks in on Oct. 11, we're talking a 20% giveback) but a raft of work rules and grieviences given back that have no relation to a BK situation. There is no labor friendliness in Dave's take it or leave it proposal and his approach to maint. employees demonstrates little or no finesse.

 

[sabre]

In order to believe a NO vote is unthinkable there are those on this board [YOU ?Dave probably is one least at and management are several assume must][BR]

 

[ITRADE]

[P]
[BLOCKQUOTE][BR]----------------[BR]On 9/11/2002 8:36:58 PM Meriel wrote:
[P]I highly doubt U has the Judge Mitchell in its pocket because the reality is that this is a high-profile bankruptcy which has the potential to set precedent.  Mitchell is not going to want to run the risk of an embarrassing -- and potentially career damaging -- reversal on appeal.  And so far, he looks to be doing his best to encourage cooperative solutions among parties.[BR]----------------[/P][/BLOCKQUOTE]
[P]Judges are really not that concerned about being overruled all the time. And, remember, the Federal court of appeals that encompasses the E.D. Va. is the 4th Circuit - certainly one of the more conservative circuits in the country - and only that one would likely guess to be corporate friendly.[/P]
[P]I'm sure that if Mtchell tossed the contract, IAM or CWA could file for a write of mandamus. However, I don't know how willing the 4th Circuit will be to hear a motion of that nature. [/P]