Tom says:
August 14, 2011 at 10:16 am
As a 25 year captain for AA I have to say this piece was spot on.
Mr. Arpey has been a puzzling CEO to say the least. About 2 weeks ago the airplane that we were to use was taken by Mr. Arpey so that he could be on time for his flight to his vacation home to Providenciales, Turks and Caicos. Our passenger were delayed 2 hours and 58 minutes while we waited on a new aircraft, but Mr. Arpey got to vacation house on time.
Later, I spoke to the crew of that flight. Mr. Arpey did not acknowledge, speak to or even look at any flight attendant or passenger on that flight. A strange “leader” indeed.
It’s important to note, Editor, that Arpey was actually the architect of the company’s 2003 restructuring, he along with Jeffery Brundage.
The “Turn-Around Plan” was implemented in 2001, before 9/11, and executed in late 2002 after the company finished compiling date on a low-cost carrier labor comparison AMR did in an effort to align American with Southwest. The strategy behind it was outlined in Gerard Aprey’s 1982 Thesis. In it, Mr. Arpey theorized that the only way to get real concessions from organized employees was to get the unions to promote doom and gloom so that the employees would believe that all would be lost if they didn’t concede immediately. In American’s case, the threat of “imminent bankruptcy” was used to terrorize employees.
In short, court depositions showed that there was no bankruptcy threat; that the unions knew about the bonus plans for executives, but were sworn by letters of confidentiality from telling employees; that the $1.8B demanded from employees annually was nothing more than a plug-and-play figure from that low-cost carrier labor comparison; that the voting mechanism had a security flaw that allowed anyone with a Seniority List and knowledge of the loophole in security to vote for whomever they wanted; and that a senior attorney by the name of Anne McNamara, who resigned from AMR in January of 2003 but was re-retained as a consultant for the months of February-April, joined the Board of the AAA in January of 2003, the balloting company responsible for counting votes cast by employees during the Restructuring.
In closure, Crandall knew how to run a company. All this group knows is how to lie to employees and steal fro them. A house built out of crAAp will always remain crAAp.
http://wewantourmoneyback.net/newsletters/wwomb_rpa_complaint.htm
Editor says:
August 12, 2011 at 11:49 pm
Brian, All of us would love to hear some good news. The announcement that AMR will keep another $2.5 Billion of debt when it spins off American Eagle along with the expected $600 Million or more in losses this year keep us wondering. As analysts we can only look at the facts. There is no question that Mr. Arpey missed a fnatastic opportunity when he took over to bring labor to his side. Instead he continued with the bonus program that led to Mr. Carty’s departure and has failed to negotiate successfully with any of the three major unions from what we can find. If you have anything to contradict that information please share it with us, until then we have to stick to our analysis that AMR is still a “Sell” in our book.
See this article about the AMR Debt if you haven’t heard it. AMR wants eagle to fly at the expense of American is what we see.
http://www.tulsaworld.com/business/article.aspx?
