Delusional? All we have to do it look at what our peers got in round one. I know you are going to cite OH, but one thing that you conviently leave out, or are ignorant of, is that AA had something in OH that none of their competitors had, OSMs. This lowered the average hourly rate in OH to around $27/hr. There was no way competing carriers could take their $37/hr mechanics in the shops in places like SFO and expect to get anything out of them if they knocked them down to AAs OSM rates. So they shipped it out in order to try and narrow the gap. Indications are that it did not work, their costs went up but because they were able to shed huge amounts of paper debt they did it anyway.
"Their costs went up" as a result of outsourcing? SFO is the one place where UA is still overhauling engines. Even if AA dumps heavy airframe overhaul, I suspect that AA will keep some of the higher-value activities like engine overhaul; like WT says, even DL does that high-profit overhaul for itself and other airlines.
And higher labor costs dont necessarily equate to a competative disadvantage. In fact if AA were to match labor costs they would have a huge advantage over all their competitors, even SWA, who lowered their labor costs through outsourcing.
Earlier, you mentioned costs increasing because of outsourcing. In this paragraph, you talk about lowering costs thru outsourcing. Which is it?
Labor is not bought and paid for by ASMs, it is sold per hour. Comparing labor costs per ASM is not a valid comparasion but one that people like you dreamed up and created to support a weak and misleading arguement. Workers have almost zero control over the ASMs produced per hour of work. The fact is that SWA mechanics do not work differently than AA mechanics. They posess the same skills and carry the same qualifications and liablity as mechanics from AA, if anything they have a more limited skill base because they are only qualified to work one fleet type yet their hourly rates are much higher.
I agree about measuring labor per ASM. You're the one who brought it up in post #64, not me. I only responded to your claim that AA and WN were "pretty close" when there's a $461 million advantage to WN, despite having the highest wages. Labor per ASM is one method of measuring productivity. There are many other ways.
You claimed AA would have imposed steeper concessions, not me. The fact is we gave more than our peers without going BK. As you have often cited, there's more to labor costs than the hourly wage. We gave up more Vacation, Holidays, Sick Time and IOD time than out peers who went BK.
Overall, the employees at US are paid substantially less than employees at AA. If AA had US' labor costs, AA would save $2.2 billion per year. That's a result of their two bankruptcies. I have no idea how much lower your total comp would be if AA had filed, but to argue that AA would have gotten less in Ch 11 in 2003 (had it filed) is nonsensical. If AA had DL's labor costs, AA's 2010 wage costs would have been over $900 million less than they were.
One thing we will be able to measure is how much worse AA's bankruptcy concessions will be compared to the 2010 TA, which was full of concessions to help pay for the meager wage rate increases.
The four Folkers are but one example of the excessive waste that this company has continued to fund with our concessions. Surely you as the brilliant intellectual can understand the concept of "death by a thousand cuts". Did the four folkers lead to the billions in losses by themselves, no, but they contributed to it. How many years has it been since they have flown Folkers, or had a hub in RDU, or BNA? When is the last time they pulled a plane in MCI? And those 20 MD-80s and those 757s and 767s that are sitting in the desert. Then add in how they have been wasting money all over the place putting in the most expensive flooring they can find in terminals that may be headed towards demolition, so they can spend the money again. Then add in the new terminals, etc etc.
The choice was to fly those old airplanes or park them. Filing Ch 11 to rid AA of that tiny expense would not have been worth it, IMO. Cheaper to save the lawyer, accountant, consultant and all other professional fees and just eat a little rent.
Hindsight is 20/20. Its easier to say what happened than what will happen. However I still think that had we gone BK in 2003 we would be better off today because even though the company did not go BK the workers did. Who got saved? People like the owners of those Folkers and various Aiports who were paid money by AA for equipment and facilities AA no longer used. Our concessions in 2003 set the standard, both in cuts and duration. We gave more in real time concessions than our peers in order to keep things that would pay off in the long term. I didnt agree then and I dont today. Agreeing to give up $160,000 and counting in order to save a pension thats still to this day 15 years away for the average worker is not a good deal. If they had gone BK they may have been able to dump the Pension, but our peers who went through that got a 410K match. Thats cash the employer has to lay out in real time. AA saved money there because we lobbied to get AA an extension on fully funding their pension. Sure our pensions continued to build, but we funded that through less Vacation, Holidays and sick time, among other things. If we had gone BK then how likely is it that any carrier would have walked out of BK with long term contracts? Sure we could have ended up in a situation where everyone was under imposed contracts, and that would be the perfect setup for a General Strike. Once we settled on 2008 the others followed with long term deals. We all would have already gone through the process and would have started rebuilding 5 or six years ago instead of seeing the process start up again. Call me paranoid but I see this as bigger than AMR. If AMR can use BK to hold the line on wages, as usual, then their competitors will also benefit which in turn means more revenue to dispense to the banks,other financial institutions, government and other corporations that already get larger pieces of the ever growing pie while our portion continues to be less than what we used to get, both proportionately and by volume.
I would still like to hear what you say the company would have taken in BK other than "steeper".
I don't know the specific contract items in the worthless union's M&E contract that would have been steeper, but I couldn't care less about those specifics. All I know is that every airline that filed for bankruptcy came out of bankruptcy with lower labor costs than AA. I realize that you have a vested interest in continuing to insist that the worthless union caused bigger pay and benefit cuts outside Ch 11 than had AA filed, but that's old news. AA has now filed Ch 11 and I suspect that the pay and benefit cuts in the coming weeks/months will be painful. Given that Arpey appeared to be inhouse overhaul's biggest supporter, TULE will likely get a lot less populated.
I'd be happy if the worthless union could figure out how to leverage that into a $50/hr pay rate for you guys in the high-cost cities (like I've posted dozens and dozens of times), but you've posted that your nonbankruptcy table position wasn't even seeking $50/hr, so I suspect it won't happen now that AA is in bankruptcy.
