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On 1/17/2003 8
00 PM chipmunn wrote:
Some posters seem to believe that the pilot pension issue will be resolved, but I can tell you this. There is no employee who cares more for this company, wants the airline to succeed, and has communicated more than myself; however, my comments are falling on deaf years to many pilots I talk with who are acting on emotion.
What's important to recognize is that the Treasury Department is a voting member of the ATSB, the Treasury Department sits on the PBGC, and the PBGC is a voting member of the unsecured creditor’s committee.
After holding multiple discussions with the ATSB and PBGC, who both have seen the company’s restructuring business plan, who both have Treasury Department representatives, Dave Siegel came to the MEC shortly before filing the Plan of Reorganization (POR) on December 20, and told the MEC the PBGC would reject the company’s initial pension restoration plan.
The company then provided ALPA with the second pension cut proposal and the MEC ratified the modified restructuring agreement instead of holding membership ratification because of the importance of filing the POR on schedule. Interestingly, in the company’s December 20 POR Special Bulletin, the company said RSA and the unsecured creditor’s committee (which the PBGC is a member) were expected to endorse the Confirmation Statement on before the January 16 Omnibus Hearing; however, s strange thing happened.
Low and behold the PBGC then rejected US Airways restoration plan. At this point ALPA engaged the US Airways congressional delegation and the MEC believes the company has been indifferent in saving the pilot pension plan because from a financial perspective, “the company would be off the hook to meet its moral obligation to fund our pension”, a MEC member told me.
ALPA has made traction with US Airways congressional delegation as indicated by Senator Santorum introducing S.119 on the Senate floor, Senator Specter holding a Senate Appropriations Subcommittee hearing, and Senator Grassley agreeing to hold a hearing before the end of the month.
However, to date these efforts have not been enough to save the retirement plan and ALPA has no interest in a third major concession and the “gutting” if its pension. Roy Freundlich’s comments to the Pittsburgh Post-Gazette today accurately portray the MEC’s sentiment and I am absolutely stunned at the level of pilot anger over what one MEC member told me a Tuesday’s Senate hearing that Dave Siegel “torpedoed” the MEC’s effort to obtain a legislative solution.
What’s even more concerning is that the pilots are very distracted by these events and are not focusing on flying, which the FAA understands with their blanket policy to increase air carrier inspections during bankruptcy, but the pilot distraction is the worst I have seen in my career. Everybody is “steaming hot” and the only topic of conversation is the pension plan issue and Siegel’s memo to the pilots fueled the fire. My concern is if both pilot’s in a ****pit are distracted the chances of an accident dramatically increase and war more likely and US Airways cash position dwindling, what would an accident do to the company’s formal reorganization?
I believe Siegel needs to obtain legislative solution now or the airline could be liquidated. However, before it is liquidated according to Siegel he said "if the legislative relief fails, we will be forced to file a distress termination of the existing plan."
In my opinion, this would transition the restructuring to labor unfriendly. Previously Siegel has said that two things he knows: You don't fight with your spouse and you don't fight with your employees.
Well, from what I am hearing do not be surprised if the pilots "fly safe" and we see the operational performance like in December 1997 when Sabre was implemented or similar to the United pilots summer of 2000.
If this occurs in February, how would this effect the creditor's vote on the Confirmation Statement, the interest of the ATSB, RSA, or GECAS?
Today Judge Mitchell set forth the bankruptcy exit timeline that includes a confirmation hearing on the reorganization plan for March 18 to 20, with a March 31 target for emergence from Chapter 11.
If US Airways operation comes to a grinding halt due to emotion, what would happen to revenue, how would employees like their job, and would the company receive a court order to exit bankruptcy or could the airline be forced to liquidate?
Today I spent a signficant amount time in the DCA and CLT crew rooms, as well as receiving 78 email messages and the emotion is significant. What's most concerning to me is that pilots are clearly distracted from their job and not focused on flying, which is just another reason why Siegel needs to be singularly focused on obtaining legislative relief.
Chip
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Chip, Have you listened to Daves weekly message this week? He said "Terminating the currently pilots pension plan will NOT have a financial windfall for the company" Because they will have to replace the pension plan with another plan where the financial obligations are the same, but the payment plan would probably be more favorable to the company. That what is sounds like to me. No one looses anything???
