More Cuts Wanted

Robc98

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Aug 20, 2002
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Yesterday company told unions that more concessions will be needed in near future...short term turnaround plan is now medium to long term...still losing money everyday....Midatlantic negotiations for CWA put on hold...company deferring purchasing RJ''s for now....the carnage is still not over .............
 
Could we please have the source when posting information like this? Otherwise, it's nothing more than a big RUMOR.
 
Yea read that from the meeting with our new investors who are going to help us emerge from BK. So the company might be asking for more concessions. Am I surprised??? NO. Will I be as willing to lend a helping hand to basically the same management in CCY that brought us Biz select and MetroBust??? Think my answer is no. Have been promised to see changes in managements style in regards to the employees and have yet to see it in my department. Amazing how the company will take any reason to ask for concessions. WE all know the reason why they needed concessions is because the 18 months that Wolf and Gangwal did not RUN the airline trying to make us look like we are going to fail. Granted all airlines are hurting due to 9/11 and we did need to get our costs under control which IMO we have. I am begining to believe that if there was a heat wave in the Arctic the company would find some way to use that event to ask for more. I for one gave once and I will not give again. Perhaps a more substantial cut for upper management would do the trick instead of this 2 year deal if memory serves me correct.
 
To Usairboya330.....check with your union officials...it was a union/company meeting....no secret nor rumour here........
 
Don't worry he will sacrifice the wholly owned now.....maybe sell them off ...
 
Like I said on the 'more station cuts' post, I was told that ground personnel [CWA,IAM] might be asked to take an additional $2. This info was as fresh as yesterday and I believe it to be rock solid. Go ahead and check with your union reps first before you say this is BS.
I'm sure what David wants is probably closer to $1.50 hour but he has to let the members think that their unions fought off $2.

To package this will be the interesting part. If we look at the TWA model it suggest that the spin will be something like this,

It's your choice, either take more cuts or we will have deeper layoffs and downsizing or cease to exist altogether.

This manufacturing has proven to work time and time again with workers, as long as the unions stay as company advocates and neutralize themselves.
Without union leadership, the membership is disorganized and likely to pass further pay cuts out of fear and misinformation. And of course, with the hope of 'trusting' david...which is a recipe for destruction. Like trusting wall street.
 
Once again, I am taking this all with a grain of salt considering the sources, or lack thereof (like the IAM loves to share info with us). That being said, there is an old customer service adage which states, Underpromise, overdeliver. This can be easily applied to management, as in, prepare for the worst, hope for the best. I too, have a hard time believing that Dave and the beancounters at the ATSB have not taken into account what is going on. If you look the earnings released this week, for the most part, they have beaten estimates even with how dismal the results are. I have faith in Dave being able to creatively adapt a solution to our problems. The down side we are facing right now is it hard to project revenues when we have only seen cost cuts, and the additional revenue opportunities a not a short term fix. The code share and increased RJs will take time to benefit the bottom line. The issue is making it through the winter without burning through the cash supply. It actually behooves us to emergence from Chapter 11 as quickly as possible, so we can access the addtional liquidity from the ATSB loan.

Another key I feel is increasing the RJ fleet as much as possible by the second quarter, which would enhance our best quarter from a revenue standpoint. Another key question is how will the government react to the crisis the whole industry is in. Granted another cash layout is not in the cards, or most likely warranted, but when can the airlines be alliviated from the increased security costs that are truly national security questions? This will be the death knell of all of us (Southwest included) if it cannot be answered in a time efficient manner.
 
I find it hard to believe that this management team didnt see a potential attack as well as a bad economy in the works? Are we to believe that they are working only 2 weeks or so out????? I supported dave from the beginning, but if they come to us for yet more cuts hell have an explaination why they werent prepared for the future. Do i expect our guys to have a crystal ball? NO ! I do expect there to be some forward looking goin on in ccy...Since 9/11 it is obvious we are and will be vunerable to attacks... since 9/11 we were told we were going after those guys? Dont blame fuel prices.... did we hedge at all????? Since 9/11 our econ has been in the tubes.... do i expect miracles? NOT ..... The relief we got from the leases alone were way way more than we ever thought or were told during negotiations that we would get ... Add the savings... lease payment savings, employee cuts, and not to mention the cutbacks in service and closings of many airports served by mainline etc and now add the losses we currently are incurring? Somebody give me a figure based on todays bad economy ie losses per day and see where we are in loss profits numbers? If we cant make it with the courts protection and the MASSIVE cuts we have put into place , do we evern need to be in this buisness?
 
[P]usfliboi -[/P]
[P]US Airways is still burning cash in Chapter 11 - THAT is bad. If the economy were strong, US Airways would be breaking even or better. Simply put, be prepared for more bad news. I see the fleet going down to 245 first quarter. If US is burning one million a day, then we have less than a year. The government loans won't be dished out until U is out of Chapter 11. It's more than survival mode at this point, it's make or break.[/P]
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I tell you, the end is near. There will be no future with US Airways. There will be no future in the airlines. The knife of lifelong misery hangs over our heads like the blood-caked blade of a guillotine. There is no hope, people. It's just survival mode for the rest of our careers. Hope your shopping carts and cardboard boxes are ready for living under the overpass.

Unless, you're Dave. Then, you're doing just dandy. Wolf and Gangwal are enjoying the fruits of your labor.
 
N513AU:

N513AU said: I tell you, the end is near. There will be no future with US Airways. There will be no future in the airlines. The knife of lifelong misery hangs over our heads like the blood-caked blade of a guillotine. There is no hope, people. It's just survival mode for the rest of our careers. Hope your shopping carts and cardboard boxes are ready for living under the overpass.

Chip comments: N513AU, I understand the frustration and unhappiness at the current macroeconomic environment, but I disagree with your comment above. It is true due to low carrier expansion, which has grown from 3 percent in 1990 to 20 percent of the market in 2002; there is a secular shift in consumer buying patterns. The primary consumers concern is the cost of the ticket and they are seeking the lowest fare. This is no different than you and I going to Sam's Club, Costco, or Wal-Mart and buying a product.

However, the continued terrorist attacks, the double dip recession, oil rising to over $30 per barrel, air fares at 20 year lows, rising security costs, and the pending war with Iraq are the major problems facing US and the industry. All of these problems will subside over time and if we use history as a guide.

This week saw unprecedented losses, major reductions in capacity, and huge employee layoffs. However, like all downturns this is likely to be cyclical and there will be an eventual upswing. The only question is who will make the sacrifices to be in position to benefit when the market does turn around?

According to the International Air Transport Association airline recovery after the 1991 Gulf War was:

25 percent decrease in passenger traffic during the first month of the war.

Traffic recovered to pre-war levels within about one year.

But industry economic recovery took several years; increased fuel prices compounded profitability problems.

International (especially trans-Atlantic) travel was most affected, but made the strongest recovery.

The industry recovery in the current situation depends on US economic recovery and the return of business travel, the geopolitical and military situation, fuel, insurance, and security costs, and passenger confidence and absence of new terrorism.

These are significant hurdles and the challenges are being met. Other airlines are dramatically reducing capacity which will help match the supply and demand equation, low cost airlines are seeing growing pains/their costs rise, and federal government aid is on the way.

It will take time to recover, but I agree with David Bronner that the medium to long-term US business plan is bright. However, to get to that point the airline must survive the short-term to benefit from the eventual recovery that I believe is approximately 18 months away.

Chip
 
Chip, Why do you say that the terrorist threat will deminish in the future? It will only get worse. I spent many years in the air force and dealt with terrorists over seas ...and they are still dealing with it over seas. There are a new set of rules out there and the airlines are not in a position to deal with them. People will not fly, just like they will not go to the store in the D.C. area. Why take the risk or deal with the security hassel? I agree that the economy may turn around and that oil prices will depress; however, I cannot see the terrorist risk going away...EVER.
 
Chip's quote:

All of these problems will subside over time and if we use history as a guide.

IMO this is the crux of U's problem. Do they have enough time to wait till things turn around and get better?

Chip, the points you highlighted in your last post show that U's external environment is very complex and difficult to predict. The fact that it is so complex and multi-dimensional makes the likelihood of recovery even more difficult and less likely.

Siegel, et al. have done about as much as they can for now to try and keep the their ship above the waterline. But there is so much they don't have control over that will most likely decide U's fate. This is definitely not a good position to be in under the current environment.