Open Letter to the MEC:
US Airways "bankruptcy business model" is alive and well and permeating into all the legacies. I watched DELTA and NW take their dance into BK today to get their "free pass". Yup, I called this one folks.
I told Siegel late in August,2002, he would not be able to enjoy these low costs from labor for very long, as all other legacies would catch on and the courts and judges would be filled with BK chapter 11 filings. The legacies would have no choice but to follow the pattern of BK. Heck, NW AMFA mechanics are already on strike.
Siegel argued in an e-mail with me that my theory was incorrect. That airlines would consolidate which was needed in our industry. That was BEFORE United's dance into BK on Dec. 9 2002. Siegel had insisted that U had no choice because of mismanagement and having the highest labor costs in the industry that these cuts were necessary....and that was BEFORE concession #2 and BK #2. But hey, Siegel is at Gate Gourmet destroying that company with his same BK model used at U.
What a track record.
So where does it end? The LCC will no longer continue to have the advantage or edge and neither will AWA or U, and for SW you can not hedge for infinity at one price. And you can't hedge in BK with no cash on hand accept to operate day to day.
The BK wave is just the beginning.
Once all legacies get their wages BELOW US Airways and AWA, and the LCC, then what?
There will be no profits during this race to the bottom in costs, and then the consolidation will continue until there will be liquidation of carriers. No choice.
Who will survive?
For those MEC members that were not on the MEC in 2002, Local 40 predicted this on Aug. 29, 2002 and wrote it out to he entire Senior management team.
Subject on E-mail: "Domino Effect Commences".
Pandora's box is now open...and we will be able to keep the union busters employed for a longer period.
AWA seniority is a small problem compared to where this industry is about to go. AWA f/a contract is still open and I can almost predict concession #4.
Prediction: There will be liquidation. When? Anybody's guess. To help save the jobs in this industry is not to put them at poverty wages; but rather REGULATE THIS INDUSTRY! Otherwise, bk will cost billions and billions to all industries and higher interest rates and pricing will and must happen for all to absorb.
Hold on to your seat belts, we are in for another ride on this "merry-go-round".
PS: Just wonder how the American working people can continue to pay billions for a war in IRAQ, the catastrophy and rebuilding of MSY, baby boomers retiring with SS and Medicare with the future of jobs outsourced and millions of misplaced workers with Corporate America upside down?
U employees went pretty peacefully, even though morale is still at rock bottom. they didn't know what hit them.
I predict anarchy.
Regards,
Teddy
LEC, Local 40 PIT
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