More Labor Cost Cuts

Hello? What planet are y'all on? The message from Horton is no different than it was from Campbell, Beer, Arpey, Carty, or anyone else who has held the CFO position during the past two decades.

FM, they are all the same. Might I ask a general question for anyone to answer?

"When is enough enough?"

Horton, and AA, want lower costs? THEN SHRINK THE AIRLINE! We compete against low cost carriers yet are a completely different organism! Whenever AA sends management into SAN to "talk" about changes we need to make/take they NEVER have an answer when I point out that if we are to be compared to a Southwest/Jetblue we should throw a dart at a board with ALL our aircraft fleets on it. Where ever the dart lands we will fly that aircraft... and that aircraft only. THEN talk to us about being like a low cost carrier.

If Horton, and AA, come asking for more money from me he can listen VERY carefully because it will be then that HORTON HEARS A WHO!
 
FM, they are all the same. Might I ask a general question for anyone to answer?

"When is enough enough?"

Horton, and AA, want lower costs? THEN SHRINK THE AIRLINE! We compete against low cost carriers yet are a completely different organism! Whenever AA sends management into SAN to "talk" about changes we need to make/take they NEVER have an answer when I point out that if we are to be compared to a Southwest/Jetblue we should throw a dart at a board with ALL our aircraft fleets on it. Where ever the dart lands we will fly that aircraft... and that aircraft only. THEN talk to us about being like a low cost carrier.

If Horton, and AA, come asking for more money from me he can listen VERY carefully because it will be then that HORTON HEARS A WHO!

How about shrink his salary. Someone on another board was wondering how much of a pay cut he supposedly took to come back to AA. You know how they are always telling us that other Fortune 500 companies (when we aren't F500 anymore) make more than we do and we should pay our executives more.

I think it is time for the execs at this company to take a reality break. If we have no money and we aren't making a profit than for execs to make 600G's a year and a 600G bonus is a little counterproductive for our bottom line. Let's see -10 + -6 = $600,000. Yeah, sounds like a plan. Let's make labor take another cut and we'll make it sound great because it will be a productivity cut and not a salary cut.

I'd love to say it ain't happening but I have to face my own reality check here. My union is made up of less than intelligent minds who seemingly have a neverending need for charitable giving of the APFA membership's funds and work rules.

I'm sure the dotted line is being debated over right now. Should we vote yes now, or should we send out a vote to the membership that we can change to a yes? Oh, decisions, decisions. :rolleyes:
 
..JetBlue has more than one fleet type, as does AirTran, as does Spirit and all of their costs are lower. Finding ways to avoid facing reality are not the solution. Customers don't care that you have 2, 5, or 10 fleet types. it's just a seat to them. Additionally, he isn't just referring to Southwest. He's referring to being higher than United & Continental and with Delta & NW in ch 11, you can expect them to be lower as well. Then what's your excuse? Bankruptcy laws are too lax? Well, that's reality, deal with it. The company is inefficient. When you look at where they are inefficient, it's labor and the associated costs.

The solution is in not only operating more efficiently operating, but possibly in compensating people commensurate with the rest of the industry. Horton will make $600,000 this year...a lot less than he made at AT&T. He is now paid commensurate with CFO's in the airline industry, not what a CFO could make elsewhere...
 
How about shrink his salary. Someone on another board was wondering how much of a pay cut he supposedly took to come back to AA. You know how they are always telling us that other Fortune 500 companies (when we aren't F500 anymore) make more than we do and we should pay our executives more.

His position was eliminated as a result of the AT&T/SBC merger. Horton says that Arpey called him and convinced him to come back. That's bargaining power - having the CEO call you and basically say "What'll it take to get you back in your old office?" B)

Like it or not, his skill set is a little less common than yours. And that gives him the ability to charge a lot for his time.

FWIW, Beer is making more money at Symantec. Horton probably could have made more at other companies had he tried.
 
Why dont you try posting the whole article instead of just a out of context snippet.Here it is.Im not defending anybody but lets post the whole story or a link to it. Im pretty sure that company knows that the wage concession well is dry. :shock:

AMR Financial Chief: Labor Costs Must Fall
Wednesday April 5, 9:56 pm ET
By David Koenig, AP Business Writer
AMR Financial Chief Says Labor Costs Must Fall Before It Can Consider Updating Its Jet Fleet
FORT WORTH, Texas (AP) -- The new chief financial officer of American Airlines' parent says the nation's biggest carrier must cut labor costs and reduce debt before it can consider updating its jet fleet.

Thomas W. Horton said Wednesday that labor costs could be reduced partly through better productivity. He avoided endorsing new layoffs or wage cuts, the mere suggestion of which would anger the airline's labor unions.[/i][/b]
AMR Corp. has lost $8.12 billion in the last five years, and its debt has swelled to $20 billion. It paid down $1.1 billion in debt last year.

"Our debt is too high, and we need to keep working on that," Horton said.

Horton said American Airlines must return to profitability before it can invest in its fleet, such as replacing gas-guzzling MD-80s on many domestic routes -- the estimated cost is $10 billion -- or adding newer wide-body planes on international routes.

Horton added that the company won't chase unprofitable growth.

"We are focused on making this company as profitable and as successful as it can be, and I don't think that's about market share," he said.

In Horton, AMR hired a familiar face. He was CFO from 2000 until 2002, when he left for the same job at AT&T, only to be stranded when AT&T was bought by the former SBC Communications Inc.

AMR needed a CFO after James Beer joined software company Symantec Corp. Horton was fishing in the Bahamas when Chief Executive Gerard Arpey called him to offer his old job, plus the additional duties of overseeing planning at Fort Worth-based AMR.

Horton will get a base salary of $600,000 -- more than Arpey's salary last year of $518,837 -- plus a bonus of $650,000.

Arpey said Horton's experience at AT&T gave him experience at plotting strategy, a skill that AMR could use.

Horton said Arpey gave him a short list of tasks.

"They were all the kinds of stuff you would expect to be on my to-do list," Horton said, "except No. 6, which said `AMR unprofitable. Please fix.'"

"It's going to be tough," said Ray Neidl, an airline analyst at Calyon Securities. "He's got to keep good labor relations, but they've got to cut more in the labor area."

AMR's unions were split badly by wage and benefit concessions that workers narrowly approved in 2003. Since then, management has tried to build relations with union officials.

Horton declined interview requests after being named to the job last week. On Wednesday, he met with reporters in a conference room near Arpey's office.

By stressing the need to reduce debt and keep cutting costs, Horton sounded very much like Beer, the man he replaced. Horton said the company's financial condition is looking up except for the high cost of fuel -- the fuel bill in 2005 was $1.7 billion higher than the year before. On the plus side, planes are flying fuller, and other costs are down on a per-passenger basis.

Sorry,Charlie,but you posted an entrirely different article[AP story] here that I was talking about.You might try reading the correct[Reuters] article that I referenced.Different reporters hear and report statements differently.
No bait and switch here.
 
His position was eliminated as a result of the AT&T/SBC merger. Horton says that Arpey called him and convinced him to come back. That's bargaining power - having the CEO call you and basically say "What'll it take to get you back in your old office?" B)

Like it or not, his skill set is a little less common than yours. And that gives him the ability to charge a lot for his time.

FWIW, Beer is making more money at Symantec. Horton probably could have made more at other companies had he tried.


The money train is over. Management at AA are going to have to realize that they aren't equivalent to other corporations that turn profits. We don't.

If they don't like it they can leave. If it is going to take bankruptcy to cut our costs than that is what it is going to have to be because I highly doubt they will get their money or productivity any other way. Too bad, so sad.
 
The money train is over. Management at AA are going to have to realize that they aren't equivalent to other corporations that turn profits. We don't.

If they don't like it they can leave. If it is going to take bankruptcy to cut our costs than that is what it is going to have to be because I highly doubt they will get their money or productivity any other way. Too bad, so sad.
Good thing the F/A's left the twu because they're in the process of handing over another $90 million without a vote again.
 
Good thing the F/A's left the twu because they're in the process of handing over another $90 million without a vote again.
:( :blink:

Where are you reading this? I had heard something with that figure in passing today and the person couldn't remember where they saw it.

My union officers are turning out to be as useless as my senators today.
 
:( :blink:

Where are you reading this? I had heard something with that figure in passing today and the person couldn't remember where they saw it.

My union officers are turning out to be as useless as my senators today.
http://www.twu562.org/Presidents%20letter.doc

http://www.local564.org/564%20Updates%20Fo...nts-3-28-06.pdf

3-28-06

TALKING POINTS FROM LINE MAINTENANCE TWU/AA MEETING IN DFW

The scheduled two-day meeting concluded today at roughly 5:00 p.m. central standard time. Further discussions will take place tomorrow between representatives from both the union and company.

Below are some of the talking points:
• On day one AA CEO Gerard Arpey and Senior Vice-President Bob Reding addressed those present and discussed the effort to take a different path than the Traditional Carriers to keep maintenance work “in-house,†as well as securing future third-party work, wherever possible. It is well recognized that we are with a disadvantage as compared to other carriers but feel we can close the gap.
• Discussed AA is faced with a $22.6 million dollar budget challenge in 2006 for Line Maintenance. Cost saving suggestions/ideas were discussed.
• Overall, AA M&E (Overhaul, Line Mtc., QA, etc.) is faced with a $90 million budget challenge.• At the end of today’s meeting, there were no finalized decisions made.
• Joint teams were established to research and explore ideas of interest
• Gerard Arpey addressed the management compensation (PUP) issue. As of this writing, the arbitrator has not rendered a decision on the grievance filed on behalf of the three union-represented work groups (TWU, APA, APFA).
• Discussed alternative savings in order to avoid any possible future station closures, such as reviewing overtime disbursement, Stand-in-Stead, etc.
• By mid-April, some decisions may be reached. There should be a better understanding of the direction we will be heading in order to get to the $22.6 million.• It was mentioned WARN letters would be going out as precautionary in order to give people notice the potentiality for layoffs exists.

In closing, the last two days presented an opportunity for open discussions between union and management employees. There is a lot of work ahead for all of us.

For purposes of rumor control, at no time during the two-day meetings was there any discussion held on the likelihood of any specific station being closed. If you hear something contrary the aforementioned sentence, it would be inaccurate information.
 
The money train is over. Management at AA are going to have to realize that they aren't equivalent to other corporations that turn profits. We don't.

If they don't like it they can leave. If it is going to take bankruptcy to cut our costs than that is what it is going to have to be because I highly doubt they will get their money or productivity any other way. Too bad, so sad.

Yeah, you say that now, but just a little while ago you said:

I'd love to say it ain't happening but I have to face my own reality check here. My union is made up of less than intelligent minds who seemingly have a neverending need for charitable giving of the APFA membership's funds and work rules.

So, which is it?

As for obtaining productivity enhancements - that's easy. In case you haven't noticed, the stock's somewhat valuable again. Everyone has a price, including the TWU, the APA and, yes, the APFA. For enough shares of AMR, my money is on easy ratification of some work rule changes that get AA where it wants to be. Your intelligent co-workers will see the light. Just like last time.

I've said it before, but here it is again: Over at UAL, that incompetent management team got 8% of the new stock in the company (estimated to be worth $400 million) for their bankruptcy performance. AA's a lot larger than UAL, so if AMR went thru Ch 11, AA's management might easily clear $600 million or more for their efforts. And you're whining about Horton's piddly $600,000 of salary and an equivalent bonus? You ain't seen nothing.
 
Yeah, you say that now, but just a little while ago you said:
So, which is it?

As for obtaining productivity enhancements - that's easy. In case you haven't noticed, the stock's somewhat valuable again. Everyone has a price, including the TWU, the APA and, yes, the APFA. For enough shares of AMR, my money is on easy ratification of some work rule changes that get AA where it wants to be. Your intelligent co-workers will see the light. Just like last time.

I've said it before, but here it is again: Over at UAL, that incompetent management team got 8% of the new stock in the company (estimated to be worth $400 million) for their bankruptcy performance. AA's a lot larger than UAL, so if AMR went thru Ch 11, AA's management might easily clear $600 million or more for their efforts. And you're whining about Horton's piddly $600,000 of salary and an equivalent bonus? You ain't seen nothing.



You know why I was saying it? Because management bonuses weren't in the cards. (as far as I knew) And because I figured that my union was going to wind up selling me out anyway so I wanted them to figure out what it would be and not let the company decide because there was a feeling of desperation.

Add that to the fact that we were in a worse financial position than we are now and that I am human and allowed to change my mind.

I am not willingly voting yes to anything further coming out of my check. They are making changes daily to my work life by taking away non-contractual items that we have no control of. If they want concessions they are going to have to keep doing it that way. My vote will be no to anything that takes anything more out of the tiny contract I have left.

Maybe they should have made their move when we were in a more amenable frame of mind. I think their opportunity officially jumped the couch.
 
His position was eliminated as a result of the AT&T/SBC merger. Horton says that Arpey called him and convinced him to come back. That's bargaining power - having the CEO call you and basically say "What'll it take to get you back in your old office?" B)

Like it or not, his skill set is a little less common than yours. And that gives him the ability to charge a lot for his time.

FWIW, Beer is making more money at Symantec. Horton probably could have made more at other companies had he tried.


News articles already pointed out that Horton was a close friend of Arpeys, "who you know" is more of a bargaining tool than what you know.

This country turns out more MBAs than A&Ps. If A&P mechanics were sitting on both sides of the table then our wages would be exhorbitant too. There is no way these guys are worth what they are getting. The fact of the matter is that when executives go to the table the guy doing the hiring has no incentive to get a bargain since it lowers the going for him if he does.