More Corporate Fear Tactics

Bob Owens

Sep 9, 2002
April 1, 2003

TO: AA Members Locals 501-590

On March 30, 2003, the Company presented the TWU with the term sheets describing the concessions it would seek from us in the event we could not reach consensual agreements, and the Company files for bankruptcy. These demands would be made of us in accordance with 11 U.S.C. 1113 which requires that, subsequent to filing a petition for bankruptcy, the debtor must make a proposal for those necessary modifications in the employee''s benefits and protections that are necessary to permit the reorganization of the debtor and assures that all creditors, the debtor, and all affected parties are treated fairly and equitably. All other unions on the property were presented with similar proposals which the Company called the Vermont plan.

The Vermont plan is similar to concessions which have already been imposed or which the Company is demanding that the Court impose on UAL employees. When concessions such as these are demanded in bankruptcy, the Union cannot reject them without good cause. Good cause in the context of bankruptcy means that the modifications are not required for the reorganization of the Company. If a union does not have good cause for rejecting a Company''s demands in bankruptcy, its entire contract will be rejected.

Sincerely & fraternally,

James C. Little

Director Air Transport Division


I don’t know what one would expect from the company other than an ultimatum at the midnight hour of their choosing. It’s disturbing to see the blatant lack of leadership or resistance that our International has shown. The fact that the Union allowed the negotiations to take place on Company property, in a room that may have been bugged by the company reveals at best a lack of judgment, at worst complicity. A list of what they will demand means nothing. They can ask for the moon. It does not mean that they will get it. To date, other than the 14% emergency cut that the Judge has imposed upon UAL mechanics their contract remains intact. They are 5 months into the process.

The law states that “all affected parties are treated fairly and equitably†However as you can see on JETNET management are not taking the same cuts as we are. Management is not being told to accept a “Six Year†deal. It’s very possible that management’s salaries could be fully restored by next year while we are locked into a six-year deal. Unless ALL of managements compensation is tied to ours, and unless they are tied for the entire Six-year period equitable treatment does not exist.

Jim Little and the Internationals failure to seek out inform and argue the merits of the many points that support rejection is a betrayal of his position and obligation to the members. A leader should not stand by and forward the company’s propaganda unchallenged. Jim Little previously maintained “ Not on my watch†the concept of a six-year deal.

The term of six years in an industry that usually recovers in less than two is unreasonable. Having experienced the unnecessary hardship that a six year deal imposed on us through the 90s it would be foolish to allow ourselves to be fooled into accepting another one. One thing that Little and the International have left out is that the Airlines are considered an essential industry. So in addition to consideration that an abrogation of the contract could result in a strike or other actions that would cause harm to the value of the creditors assets the Judge must take into consideration the effect of a strike on the economy as a whole. This point has been completely omitted from any correspondence from the union. So we are not completely without clout, just leadership. We have a situation referred to as MAD- Mutually Assured Destruction. It kept world peace for 50 years.

The International Union has agreed to unreasonably onerous terms for an excessively long period of time. It is up to us to protect our future by rejecting this agreement, informing all interested parties that we are agreeable to reasonable changes and that if that fails to materialize we will strike to protect our interests.