Shared Sacrifice

Aug 20, 2002
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www.usaviation.com
To All Employees ... Please Post ... Special Bulletin

US Airways will file with the U.S. Bankruptcy Court today the details of
reductions in compensation, benefits and workforce for its management
and non-union employees as part of their participation in the company
Transformation Plan. In a letter to the affected employees, CEO Bruce
Lakefield said most employees and functions in these groups are paid near market
rates for their respective jobs and duties. Compared to the low-cost carriers,
however, US Airways has historically had a generous program in other parts of
our compensation package, including health care coverage, vacation/sick
leave policies, and pension and retirement programs that have been eclipsed
by market changes, he said.

The overall annual target for participation by management/non-union
employees, including all officers, is $45 million (or more than 20 percent of
total 2004 payroll costs). To meet the target, US Airways is taking the following
actions that will have a direct effect on all management and non-union
employees. These savings will be obtained through a combination of pay, pension and benefit changes that will be apportioned in the following way and are
consistent with our projected status as a successful low-cost carrier:

Senior Officer team (including the company's 10 most seniors officers
--executive vice presidents and senior vice presidents)
--The company?s senior officers will take the largest cuts in keeping
with the commitment to lead the way and transform the compensation of our
executives to be similar to that at the LCCs. Effective Oct. 11, additional cuts will
be made to the senior officers? cash compensation. The total cuts to these
senior officers? W-2s will range from 15 percent to 20 percent and average 17
percent, consisting of a 10 percent salary reduction and a 25 percent reduction
in the contributions to their existing retirement plans. Earlier this year,
all officers, including the senior officers, waived their rights to a pay
raise that had been approved in our previous plan of reorganization and was
consistent with pay raises that both union and non-contract employees received.
Along with cancelled pay raises, the total W-2 cuts for senior officers on average
will exceed 20 percent.

Vice Presidents and Managing Directors
--Effective October 11, all officers and managing directors will take a
pay cut of 7.5 percent.
Vice presidents have also foregone their pay raise this year. In addition, the total number of company officers has been reduced by 25 percent, from 35 to 26.

All other management/non-union employees:
--Effective Oct. 11, other non-union employees will take a 5 percent
pay cut.


Modification to Pension Plans
--Effective with the payroll cycle beginning Oct. 11, US Airways will
modify its defined contribution retirement plans for non-contract and management
employees. Contributions to the Employee Pension Plan, known as the Base Account, will be set at 3 percent of salary for all employees regardless of age.
Employee contributions to the 401(k) plan will not be affected, but the company
match will be eliminated. Current vested balances will remain in place and
unvested balances will continue to vest according to the Plan schedule.
Investment options for both the 401(k) and Base Accounts will remain unchanged.

Workforce Reduction
--We will reduce headcount by more than 10 percent from the total
number of employees who were in place at the beginning of the year. Among the
ways we have and will continue to reduce the workforce are not filling open and
budgeted positions, outsourcing of work where appropriate, elimination and
consolidation of positions, and in certain cases, outright reorganization of entire
departments. We have already started this process and will have it
completed by the end of October.

Paid Time Off (PTO) system
--Effective Jan. 1, 2005, the current sick and vacation accrual system
for management and non-union employees, including all officers, will be
converted to a PTO system. All leave will be accrued under a single category and
the number of paid holidays will be reduced. A summary of the new PTO system is presented below.
Service Paid Time Off Holidays Total
1 ? 5 years 15 days 8 23
6 ? 11 years 20 days 8 28
12 plus years 25 days 8 33

Holidays observed will be New Year?s Day, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day, Christmas Day and two floating holidays.
Additional details regarding the conversion from the current system to PTO will be
available on theHub shortly.

Modification to Retiree Benefits
--Effective Jan. 1, 2005, US Airways will make changes to retiree medical, dental, and life insurance benefits. Complete details regarding these
changes will be forwarded to those who could be impacted and will be available
on theHub.

Hiring Moratorium
--Effective immediately, we will implement a hiring moratorium covering
management, administrative, and crew scheduling employees. Only those
positions deemed critical to the success of the Transformation Plan will be
filled. All other open positions will be eliminated. Further replacements will be
considered for backfill only after a complete justification has been approved by
the senior officer team. No new positions will be created without an exception
from the Chief Executive Officer. If we need to fill an approved position, we
will focus our efforts on internal candidates. External hires will be permitted
only if there are no fully qualified internal candidates.

Profit sharing
--All employees will be offered an opportunity to participate in the
profit sharing plan previously announced, subject to various approvals
required by the bankruptcy process. We are also examining the possibility of providing some form of equity for employees who participate in the Transformation Plan. More details will become available as we move through the bankruptcy process and actively work toward emergence.

End of Special Bulletin for Monday, Oct. 4, 2004
 
This is not shared sacrifice.

They are not eliminating positons, they are just not hiring externally.

They said Senior VP went from 35 to 26...ah, the 35 was in 2002. We were at 25 this year, and then they hired an "outside" guy to make 26.

WE WANT MANAGMENT CONSOLIDATION ESPECIALLY IN THE SENIOR RANKS.

How is it that the co. will fulough, but still maintain these execs....

This porposal sucks.

We need an appointed trustee, and get rid of all these bums.
 
Makes for an interesting arguement in front of a judge....Let's see I cut the Shift Mgr @ 5%, but I need 23% from the Unionized workers...

A Trustee is in dire need at the top
 
Only a suggestion---but what if----the unions got together in front of the Judge on Thursday and collectably agree on concessions with contingencies on certain managements positions replaced or eliminated. And more importantly, that management share in the same wage percentage cut, with no back credit. The focus being---with more sacrifices, the unions also need a voice in their future, meaning a creditable management team-who truely lead by example---.
 
Well the good thing, the judge is the judge. He alone will decide what is fair. Then who do you try to convince? At some point you gotta move on and stop blaming management for every single thing. Are they perfect, NOPE! But they are also not the demon that so many make them out to be. Its in the hands of an impartial judge, who makes a call based of facts, relaity, and the law.
 
Impartial judge? Yea, right!

Interesting argument before the judge...and highly suspect!

Any "token" paycut or cut in workforce for management matters not to the peons of this company. They could give up 90% of their salaries but, it is not going to help the employees one bit. They will still get the same deep paycuts, lose vacation and sick time, have jobs outsourced, less paid health benefits and it won't bring back pensions.

This is just another concocted charade to try and sway the judge.
 
usfliboi said:
Well the good thing, the judge is the judge. He alone will decide what is fair. Then who do you try to convince? At some point you gotta move on and stop blaming management for every single thing. Are they perfect, NOPE! But they are also not the demon that so many make them out to be. Its in the hands of an impartial judge, who makes a call based of facts, relaity, and the law.
[post="187831"][/post]​
Your reality is a sad thing fly child.

It's beyond sad when one can go and get themselves a job that has better benefits at Wal*Mart. This being *reality* this management team "still" wants to make it even worse. This is why employees are indignant, outraged and all kinds of other modifiers being reasonable and very sane people, unlike some posters such as you and a few others who think communist China is a swell place and has great and fair leaders.
 
A shift manager is already paid similarly to the LCC's so why should they take more of a paycut and be paid less than a similar position at a LCC? That's not being asked of union members so why the double standard?
 
Dont call me Shirley said:
In a letter to the affected employees, CEO Bruce
Lakefield said most employees and functions in these groups are paid near market
rates for their respective jobs and duties.

The "Market Rate" logic went out the window when they asked for the "cheapest synthetic" contract from all the workgroups, and whined about having to reduce seniority (because, even at "market rates", pay at B6, HP, and LUV was still too high).
 
The sad thing here is, what he said is true, yet your bitterness blinds you. No body like any of this .. NOBODY! But reality in the industry dictates it. The difference between some and myself is, I hate is much however i see its reality. Im mean come on guys, the train is a moving, full steam ahead.
 
expressedndepressed said:
Only a suggestion---but what if----the unions got together in front of the Judge on Thursday and collectably agree on concessions with contingencies on certain managements positions replaced or eliminated.
[post="187826"][/post]​

First off, the judge will more than likely have no interest in mediating a negotiating session--which, in effect, is what you are proposing. He may order the parties to negotiate, but he will expect them to do that on their own time, outside the courtroom, and come back to him with the results.

And, for the umpteenth time...
The judge does not rule on nor does he care about the inherent fairness or unfairness of motions brought before the court. His only job as a bankruptcy judge is to protect the interests of the creditors--neither the company nor the employees are creditors at this point. At this point, the company management is still in the driver's seat. They put motions--such as the 1113E--before the court. The judge hears arguments from interested parties, and then rules up or down on the motions.

The judge's concerns will be...
1. Is the motion consistent with bankruptcy law?
2. Does it protect the interests of the creditors?

I don't know if the employees have standing at this point to even introduce motions--such as, appointment of a trustee. Appointment of a trustee would be an "alternate reorganization plan"--as would a petition to convert to Ch7--and the judge has not yet terminated the company's exclusive period to formulate their own reorg plan. As I understand the process, not even the creditors can petition the court for a trustee unless the judge denies exclusivity to the company--which is a petty standard gimme this early in the process.

The company's sword of Damocles is the fact that they filed BK1 so recently. The judge may decide that they made the courts look bad by squandering the opportunities granted to them last time. How good does it look for a company to say "We need AB&C in order to become a viable company" then come back less than 2 years later and say "Do over. Do over. In addition to AB&C, we really need DE&F then we will be a viable company"?

Unless the judge is some politician's idiot child, he shouldn't buy the argument that the company could not have foreseen the LCC competition or the enormous increase in jet fuel costs. The LCC issue was just a matter of time, and the fuel costs, though not exactly predictable, affect ALL airlines including the LCCs.
 
I agree the troops are angry....it just seems so unfair....DL gave everyone a 10% pay reduction across the board....amazing what US can come up with....
 
I wonder if the "Judge" is really impartial, or is he one of the chosen 800 or so individuals that get positive space first class seats for friends and family at their whim ????

We'll never know...the gap seems to be widening between ....The Palace and the servants.....

I know according to others that it's just fair market value....BS