Seigel says wants to get new "quick" agreement with Mechanics

To the demise of those who voted in fear, Seigel has been forced to go back to the table with the mechanics.
Seigel just said, "While we continue to work hard to achieve voluntary agreements with all of our labor groups, we now regrettaby must pursue changes to the mechanics contract through the bankruptcy court IF WE ARE UNABLE TO QUICKLY REACH A NEW AGREEMENT."
sounds like Munn was wrong. Look for Seigel to perk up the mechanics contract now since they stuck together.
I'm not so sure Chip was wrong, but understand that this is uncharted territory for both management and labor -- no airline has ever gone thru a S.1113 before.

I think Dave's hope was that US Airways wouldn't be the trailblazer on this, but that seems to be how it will come out. The possibility of both the CWA and IAM-M coming to a fast-track agreement seems a bit low based on the history so far...

The company has scheduled a hearing on September 10 to seek emergency relief from the IAM and possibly the CWA contracts.

It is my understanding the bankruptcy code says before a court can alter the contract, the debtor-in-possession (DIP) must prove to the court the changes are fair and equitable, the DIP provided the court with all of the information necessary to evaluate the proposed changes, the IAM rejected the proposal without good cause, and the balance of the equities favor contractual changes.

After the DIP presents its case, the IAM attorney's will present their defense on why their members rejected the company's terms. If the court finds the proposed changes, likely to be much deeper than originally proposed (for example the company could seek to end mechanic push backs & with the ATSB requiring UAL to give 20 percent cuts the company could argue a new bench mark has been established for deeper cuts), the court can order contract changes with IAM approval.

At this point the only IAM option would be to accept the agreement or strike, which could cause the immediate cessation of operations and liquidation of the airline, clearly a very real risk.

The contract rejection also places the DIP financing and federal loan guarantee at risk.

David Siegel, US Airways chief executive, said in a prepared statement, "We now regrettably must pursue changes to the mechanics' contract through the bankruptcy court if we are unable to quickly reach a new agreement." The company noted it was extremely disappointed by the mechanics' vote.

What the CWA and IAM must realize is there are specific labor concessions required to get the loan guarantee. The ATSB has been very quiet on their demands, but today's article in the USA Today indicates the Board is looking at a 20 percent across-the-board labor cost reduction. In the case of US Airways, Siegel opted for an appraoch that some believe was "socialized" with the pilot group taking a higher than 20 percent cut so other employee groups could take less.

Clearly the company has major leverage in court because the ATSB business plan has a July 1 implementation and the cuts must be retroactive to obtain the loan guarantee and the Texas Pacific MOU, DIP and emergence financing. The court is going to have to decide what's in the best interests of the creditors and it's my understanding the IAM leadership clearly identified the risks of the membership failing to ratify the restructuring agreement.

These are uncharted waters never before navigated by labor and when a party enters a proceeding, nobody usually wins and the results are at best uncertain.

I disagree with your comments and the IAM's decision could lead to a rpaid cessation of operations and liquidation of the company because the creditors committee will now enter the picture. I'm sure those disgruntled creditors who have been stiffed will not be happy with labor, who has further hurt their opportunity for a return of their investment.

It appears the company is going to make one last attempt to negotiate changes, which may need IAM leadership ratification or an immediate vote before September 10.


Eolesen quoted: "I fear that we have awakened a sleeping giant and filled him with a terrible resolve".

Chip comments: At employee road shows Dave Siegel got visibly upset, to the point you could see the veins in hs neck expand, when he talked about the "wholly owned" or other groups not becoming part of what Dave called the "team" by not reaching voluntary restructuring accords.

What's important to note is that the Texas Pacific Group MOU and loan guarantee requires these cuts for the company to obtain the financing to operate. Every labor group but the IAM-M and the CWA have reached their target numbers and the remaining cuts must come from these two groups.

I suspect your comment could be right. Dave and his management team have worked extremely hard to save this airline for it to only go into liquidation. The next 12 days will be interesting if something doesn't immediately break.

Once again the RAMP was misled by the IAM. We where told that we had two choices. Accept the offer from the company or deal with the judge. Now we see that since the MECHANICS rejected their offer Dave wants to "quickly reach a new agreement." Excuse me but this is not what the IAM told us. They never said that there was a possibility that if we reject we could renegotiate. This confirms my belief that the IAM is sleeping with the company. Picture this.................................
IAM - Lets take this piece of [edited],(that was not equal to the other groups including mechanics), back to the low lifes because we know that they don't have the rocks to reject it. Once we know they have accepted and the mechanics reject theirs we can RENEGOTIATE a better deal for the mechanics.
USAirways - Ditto! We can also hold back a (better than the RAMP) CWA offer until the ___holes approve theirs. Once they accept TOO LATE!!!!!
IAM - By the way, they fell for that [edited] about us not giving them our advice as to voting or not voting for this offer. They believed that bull about not requesting the negotiations and the company reimbursing us instead of paying for attorneys with union dues! At this point they probably would believe anything!
Do you know what IAM stands for? I AM MECHANIC............
Anyone got any cards to sign?
Well, it looks like the IAM gets a second chance to earn its dues money, possibily it's last chance. Also it seems that Dave&Friends will have to reconsider the value of a skilled workforce that keeps his fleet in the air as opposed to a lump of cash applied to his reconstruction package. This is not rocket science, airplanes break, no fly, no income, I'm sure the creditors have it figured out. Dave, lets talk, IAM wake up, don't blow it.
On 8/29/2002 12:39:05 PM

Ironically enough, among the mechanics the IAM is viewed as a rampers union.
You got to be kidding me. How come the percentages of cuts were less than the rampers? How come we don't have at least a magic number (85)for retirement? I had my 401k with company contribution of 6% to base plus company match. Now I have IAM pension that I don't get credit for until starting Jan.1, 2003!, and the only thing going into my 401k is what I put in. You have a pension and part of what they were putting in your 401k is going to your pension. Yeah right, a rampers union. The mechanics didn't even want us in their union. They were so pissed when the rampers came into the fold that they kicked us out of the local. Now there is 141 and 141M. Remember M in IAM stands for MECHANIC.
One thing I will give the mechanics credit for is that they have a set of rocks, the rampers are woosies!
The mechanics should'nt vote in a new union. From what I see the union is taking care of you better than you can see. I guess that the rampers were fools for thinking that we would get equal treatment that the mechanics get. Not so!
Mark my words the CWA will get a better deal also. I guess the company is still making us pay for being Teamsters all those years instead of voting in their union, the IAM.
For all of you that voted in the IAM. You asked for it.

Anybody got any cards to sign?????????????
Funny thing is the company only wants $5 Million more from the CWA then the FSA folks. CWA has almost 2000 more members then the IAM FSA. Maybe for XMAS the IAM & COmpany an send then FSA some KY jelly.
Unless theis company really wants liquidation then the following must be true.

It will do its best to get all remaining contracts signed.

This isn't about a judge. Even if the judge agrees with US AIRWAYS, the simple fact that there is an 'open' labor situation on the property will cease any new interest for investors. Maybe its tick tack toe and nobody wins and there is a liquidation but I have to hope that Dave will offer a better contract to the mechanics. I just don't think it is logical that he will offer the same thing that was just turned down.

I think you have clearly misunderstood Siegel's remarks. By looking to quickly obtain a new agreement with the mechanics, he is giving the IAM another chance to avoid the inevitable. Basically, he is following through on his promise to keep this process as labor-friendly as possible. Like it or not, this is what is needed for US Airways to get its' ATSB loan guarantees and its' DIP financing and emerge a competitively strong carrier several months from now.

You fail to realize that Siegel holds the leverage here. If you honestly think a bankruptcy judge will keep your contract intact, I think you are in for the surprise of your life. Only then, the changes will be forced upon you instead of being able to negotiate them.

Siegel is doing his job. Both sides will keep working to try to find mutually acceptable middle ground. Basically, it's an attempt at shuffling up all the cards to get to the same dollar figure at the end. But one thing is for sure. If that hearing comes on September 10th with no agreements, US Airways will come at you with both guns blazing. And whether the judge voids all or part of your contract isn't entirely the issue. The larger issue is that it adds a lengthy distraction to the reorganization process and increases the likelihood that liquidation/fragmentation of the company will follow.
Allot of mechanics do not trust the union or the company. Maybe that is why so many AMFA cards have been sent in. I do find it weird how this was going to the judge before if we voted it down to now "let's make a deal". Gee and I wonder why people have some distrust of others. Even though the union did not endorse the mechanic contract, they sure made it obvious of what they wanted you to vote. If the mechanics would have had a fair agreement in the first place it would have gladly went through. All the mechanics I know want to do their FAIR share. If you are truly familiar with the take it or leave it shoved down your throat offer you could understand why it was shot down.