Star-Telegram: Delta'S Vote Against Unionizing Should Make American Airlines Stop And Think

[WorldTraveler]

Chances are it won't.

You guys are looking at it thru the lens of an AMR employee. What looks bad to you isn't always quite so bad when you're looking at it from another perspective, e.g. as an outsider watching the industry, or another CEO comparing it to their own company's operations.

For example, you guys think you got royally screwed in 2003. You got an unwanted pat on the butt when compared to the cornholing your peers elsewhere took, or the gang rape the TWA folks experienced under Icahn.

While no one can doubt that other airline employees suffered under bankruptcy at their respective carriers, many of those carriers have returned to profitability and their employees are receiving profit sharing - even after receiving settlements as part of their bankruptcies. So while the process was painful, those employees are already regainig alot of what they lost. And while some would want to argue that pensions were the biggest hit for many airline employees, the vast majority of the airline employees had benefits that were fully protected by the PBGC. Pilots were one of the few groups who will not be made whole by the PBGC but not even all pilot groups fared so bad.... NW's pilot pensions are frozen, not terminated. DL's pilot group had lump sum payouts in which they received much of their benefits before BK and the pilots still received the largest amount of stock after the fact - and then proceeded to turn around and sell it.

The reality is that AMR's stock price is 1/3 that of UAL and 1/4 that of DAL despite AMR generating about 2/3 the amount of revenue of DAL and UAL. The BOD of AMR should very much be demanding that AMR fix the company and bring it in line with its peers.

 

[eolesen]

WT, profit sharing would need to be on the order of 15% of salary to be a meaningful substitute for the average pay cuts imposed in court, and the first dollar programs simply aren't paying out anything near that.

They also do noting to ease the pain for those who lost their jobs to outsourcing (thus never even receiving profit sharing), were downgraded along the way, or had to move (some multiple times) to keep their job at an ever shrinking company.

I'm all in favor of variable compensation. Let those who want the risk/reward take it, but for most it will never be a substitute for a fair yet sustainable wage.
Maybe it is group hugs and lollipops at DL now that the union drives are defeated, but that isn't the case at UA or US. Talking to friends at both carriers, they're still ready to erupt on the slightest of tremors...

Lastly, focusing on stock price does nothing for me. Its an indicator of where investors see possible earnings growth, but that's about it. Its not an indicator of profitability. If it were, WN would be trading twice or three times its current value. Instead, it languishes from year to year.

 

[Boomer]

Chances are it won't.

You guys are looking at it thru the lens of an AMR employee. What looks bad to you isn't always quite so bad when you're looking at it from another perspective, e.g. as an outsider watching the industry, or another CEO comparing it to their own company's operations.

For example, you guys think you got royally screwed in 2003. You got an unwanted pat on the butt when compared to the cornholing your peers elsewhere took, or the gang rape the TWA folks experienced under Icahn.

This sounds a lot like a defense lawyer of an individual accused of rape defending his client based on the defense that the claimed rape performed by his client was far more gentle than other rapes that other rape defendants have been accused of: the defending lawyer never claims that his client did not rape the victim, just that his clients rape of the victim was not really a crime because it was not as horrific.

AMR and the TWU performed a home invasion of every TWU represented Union Member: the TWU was the wheel man, pointing the individual address of each and every TWU Union Member; the CompAANy broke down the door and placed a weapon against the head of the wage earner and told them that their financial future or their signature would be splattered on the papers presented.

Delta went through their BK filing without terrorizing their employees and with the CEO refusing his bonus in favor of creating a fund that would help transitioning employees learn new skills: AMR spent $360,000,000.00 in bonuses.

You can count the violence of the rape by the immediate damage done, or, you can count it in the number of homes split by:
1) a parent working a base that results in a 6-10 commute;
2) the families forced to leave a career occupation they loved, but were no longer able to financially subsidize;
3) the families split by a parent that maintains their home and family in one place but keeps a flop house in another place;
4) the families not strong enough to weather the dislocation;
5) the families not strong enough to weather the commute;
6) the families not strong enough to weather the financial loss;
7) the individuals that were already close to the rope.

Yeah, buddy, count us lucky; we'll count the lost, the divorced, the bankruptcies, and the suicides: just keep telling us how non-violent our union sponsored rape was.

 

[737823]

I'm not sure why AA employees can't get over the fact that the RPA was over 7 years ago and you have fared significantly better than your counterparts at other airlines. Could things be better at AA for workers? Sure they could but AA contracts are the envy of the industry. The RPA has provided more for union workers than a bankruptcy court would if given the opportunity to gut your contacts.

Josh

 

[Bob Owens]

Then how is it that the mechanics and FA's over at Delta are making a good living without having to pay dues money and wait for YEARS for your union representatives and company to work out a deal while you sit on the sidelines?

I don't agree with everything in the article but he definitely has a point. I am very sure I'd have a lot more money in my pocket now if it weren't for having to wait around on TWU to do their thing.

You've got it wrong, (as uasual) the RLA is forcing us(TWU) to wait for the company.

 

[Bob Owens]

Chances are it won't.

You guys are looking at it thru the lens of an AMR employee. What looks bad to you isn't always quite so bad when you're looking at it from another perspective, e.g. as an outsider watching the industry, or another CEO comparing it to their own company's operations.

For example, you guys think you got royally screwed in 2003. You got an unwanted pat on the butt when compared to the cornholing your peers elsewhere took, or the gang rape the TWA folks experienced under Icahn.

Well we have a lot of TWA employees here, and after factoring in inflation and what they have to pay for medical most claim they were better off under TWA. Sure they gave up a lot but like you said, from another perspective, they had a lot to give up.

 

[Bob Owens]

WT, profit sharing would need to be on the order of 15% of salary to be a meaningful substitute for the average pay cuts imposed in court, and the first dollar programs simply aren't paying out anything near that.

They also do noting to ease the pain for those who lost their jobs to outsourcing (thus never even receiving profit sharing), were downgraded along the way, or had to move (some multiple times) to keep their job at an ever shrinking company.

The average pay cut imposed by the court werent as much as we gave up without going to court.It took most carriers two rounds to get what AA got without ever going to court. We hav4e 40,000 fewer worker, we have downgraded workers, dislocated workers, some of whom have had to move multiple times and an ever shrinking company. So other than "the pension" what was the difference again?

 

[eolesen]

So other than "the pension" what was the difference again?

The key differences are the pension (all union workgroups), retiree health care (all union workgroups), and scope clauses (APA and TWU).

 

[Duke787]

http://www.wthr.com/story/13532227/aar-looks-to-hire-200-aircraft-mechanics

AAR looks to hire 200 aircraft mechanics

How could this be, guys on this forum say it's cheaper to do OH maintenance in house.................... <_<

 

[WorldTraveler]

E,
Again, your assumption that all retiree benefits were wiped out in BK is incorrect - and thus that there was a loss suffered. DL and NW's BK's were different from UA and US in that DL and NW dumped only the DL pilot plan on the PBGC (because of the unique lump sum payout which could not be removed and which made it impossible to save the plan); other DL and NW employee groups have FROZEN pension benefits which means those employees WILL receive benefits just as the plans promised - but have accrued no new benefits basically since BK. Again, nearly all employees inthe airline industry except for pilots have retirement benefits that were below the maximum guaranteed by the PBGC - so there was no loss. Some airline plans did allow earlier retirement than the PBGC allows so some employees under TERMINATED plans will have to wait... but that doesn't apply to frozen plans.

I don't believe any airline funded their retirement plans during BK so AMR employees did have a benefit other the other 4 carriers in that regard - but that is also part of why at least some of those airlines rec'd lump sum distributions of stock on exit from BK.

You are correct that AA's medical benefits probably might be cheaper than at other carriers right now but given that healthcare costs are rising, if AA is locked into a contracted price for health care that is well below market prices, they have to take the extra cost out somewhere.

The whole issue of subcontracting vs in-house services is a hot issue here but the reality is that no carrier, AA included, is 100% in-house for everything...and the practice of subcontracting is evolving. Part of the benefit of the DL and UA mergers is that they create mass to keep work in-house which might have been sent out before, regardless of whether that be maintenance, reservations, or airports.
Also, when it comes to growing the mainline operation, DL is the only airline in the most recent quarter that shrunk its regional carrier operations and grew its mainline operation, also a product of the merger. Whether the trend continues at DL or if UA picks it up remains to be seen but it is very possible that mergers in the industry might serve to add stability to mainline employment since there are fewer hubs and the ones that remain are larger and stronger, necessitating fewer flights but on larger a/c. Rumors that AA might return to a 100 seat aircraft would accomplish the same thing.

As for whether lollipops and group hugs got DL through the representation process and whether it will allow a very diverse workforce to meld remains to be seen; there is reason to believe there won't be solid hand holding for a while - but hey, lots of companies have employees that manage to get the work done but have no desire to be together, call themselves a family etc. But regardless of whether you like DL or even have any interest in the airline industry, you must admit that DL has accomplished what many said was impossible - merging a heavily unionized airline into DL without taking on unions - assuming that the AFA and IAM do not file appeals or that they also lose the appeals. Given that the DL representation elections were the largest in the US in decades, anyone in business would have to take note of what has happened at DL.

Finally, airline stocks are notoriously cylical but AMR's value has trailed DL since the DL/NW merger closed and AMR has also trailed UAUA before and now UAL. Yes, stock price is a reflection of future expectations for profitability and growth ... and for that reason, DL - the most aggressive network airline in growing its revenue base - has led the US industry in stock valuation. It is noteworthy that at one time, LUV's valuation was more than all of the other network airlines combined but LUV's valuation is now slightly less than DAL.

Even AMR employees recognize that for all involved, sometimes it is LESS painful to take a hit ONE TIME than to continue to suffer at the hands of management that won't or can't turn the company around - in comparison to other airlines that many predicted would not survive BK but are now larger, more nimble, and more aggressive than AMR - and appear committed to taking on AA wherever they can, whether that be DL's expansion into AA's traditional strength markets in LHR, NYC, and MIA and UA's willingness to start LAX-PVG right on top of AA as well as grabbing market share from AA at ORD.

 

[eolesen]

Again, your assumption that all retiree benefits were wiped out in BK is incorrect - and thus that there was a loss suffered. DL and NW's BK's were different from UA and US in that DL and NW dumped only the DL pilot plan on the PBGC (because of the unique lump sum payout which could not be removed and which made it impossible to save the plan); other DL and NW employee groups have FROZEN pension benefits which means those employees WILL receive benefits just as the plans promised - but have accrued no new benefits basically since BK.

Nowhere have I said they lost their benefits, but those benefits *will* be smaller than what some employees were counting on. Replacing with a 401K introduces some degree of risk which wasn't there before, as many of us have seen in our own 401Ks in the past five years. Since my pension was effectively frozen when I left, the difference will be upward of $1500 per month thats no longer there. For me to have a 401K make up the difference, I'd need a balance of over $250K to maintain that same income, assuming I live to 75.

But regardless of whether you like DL or even have any interest in the airline industry, you must admit that DL has accomplished what many said was impossible - merging a heavily unionized airline into DL without taking on unions - assuming that the AFA and IAM do not file appeals or that they also lose the appeals. Given that the DL representation elections were the largest in the US in decades, anyone in business would have to take note of what has happened at DL.

That's about as noteworthy as realizing the Democrats lost the midterms over healthcare. Of course the AFA and IAM lost. They had nothing to show for their existence other than longevity at NWA.

Finally, airline stocks are notoriously cylical but AMR's value has trailed DL since the DL/NW merger closed and AMR has also trailed UAUA before and now UAL. Yes, stock price is a reflection of future expectations for profitability and growth ... and for that reason, DL - the most aggressive network airline in growing its revenue base - has led the US industry in stock valuation. It is noteworthy that at one time, LUV's valuation was more than all of the other network airlines combined but LUV's valuation is now slightly less than DAL.

There's a saying with stocks -- buy with the rumor, and sell on the news. There's been far more rumor about DAL and UAL in the past two years, so of course the stock has sold. People are expecting some huge dividend or appreciation in price, which anyone who watches airline stocks knows is a myth.

DL's expansion into AA's traditional strength markets in LHR, NYC, and MIA and UA's willingness to start LAX-PVG right on top of AA as well as grabbing market share from AA at ORD.

Yes, and a friend elsewhere pointed out why DL is expanding --- to make up for the shortcomings in the Skyteam network... but that's a discussion for another time and place.

 

[Skymess]

This sounds a lot like a defense lawyer of an individual accused of rape defending his client based on the defense that the claimed rape performed by his client was far more gentle than other rapes that other rape defendants have been accused of: the defending lawyer never claims that his client did not rape the victim, just that his clients rape of the victim was not really a crime because it was not as horrific.

AMR and the TWU performed a home invasion of every TWU represented Union Member: the TWU was the wheel man, pointing the individual address of each and every TWU Union Member;

Yeah, buddy, count us lucky; we'll count the lost, the divorced, the bankruptcies, and the suicides: just keep telling us how non-violent our union sponsored rape was.

Pretty good analogy/summation. I would just like to add that you could include the APFA and APA in there as well.
It's gonna be a long road for all of us because we are not taking anymore concessions and concessions are the only thing being offered to all unions by AA currently. They just don't get it and they don't have to get it because the RLA is a joke and a tool that is always in the company's favor. All three unions will keep voting down the garbage they give us and the company will be laughing all the way to the bank with the million dollars plus a day they save the longer we all don't have contracts.

 

[jersey777]

After reading this entire thread it is nice to know that WorldTraveler gets it! He seems to be the only one on this site who is looking from the outside and sees what the apologists of AMR management don't see. It is a given that the employees see an airline out of whack but finally someone not on the payroll is putting the spotlight on management decisions and calling them up on their poor performance.

 

[Bob Owens]

http://www.wthr.com/story/13532227/aar-looks-to-hire-200-aircraft-mechanics

AAR looks to hire 200 aircraft mechanics

How could this be, guys on this forum say it's cheaper to do OH maintenance in house.................... <_<

Thats their second bite at the apple, they put out a similar notice in the press a month ago. With 15 million unemployed you would think they would have no trouble scrounging up 200 mechanics. (The earlier article cited that they cant retain mechanics, a competitor, the US Government kept hiring people away.) After all some on this forum believe that if we struck the company could scrounge up 3000 mechanics in an instant to keep their line operation going and farm out all their OH to places like AAR that cant fill 200 spots.

This article also mentioned that UAL once employed 3000 people in the very same facility AAR now operates, well where did they all go? I guess they didnt sit around waiting for another Aviation job.

 

[Bob Owens]

The key differences are the pension (all union workgroups), retiree health care (all union workgroups), and scope clauses (APA and TWU).

Well the pension comes out to $1100 per year, the company figures not mine. Of course they can hold off on making payments for a while then make one big payment and claim that the pension cost them a ton of money(like they did this past winter, they paid nothing in 2009 then paid $500 million). Then they can release that figure to the International who will use it to bolster their participation in Arpeys "doom and gloom" campaign.

In negotiations the company admitted that switching to the DC plan they were offering, similar to what competitors have, would cost them more than they are paying now.

Retiree health care is and has been paid for with our current and historically low sick time accrual rate and minimal IOD time. While other carriers were giving 12 days per year AA was only giving 10, then since 2003 only 5. While other carriers provide up to 600 hours of IOD time AA since 2003 only provides 80.

Give me a dollar figure for the TWU scope clause.

As for the reason why the union drives failed, simple, Delta has a form of Seniority and the majority of the Delta workers felt that bringing in the Unions would mean that the NWA workers would be dovetailed. As it was many Delta workers obviously voted yes, just not enough. If NWA was a new company with young workers it would not have been an issue, another factor, as far as the IAM is what did they have to offer? Give is $50/month and we can do for you what we did for UAL, USAIR and NWA? They would be out $50/month and then some. The IBT has a better track record, they should have stepped in and the IAM should, for the sake of the labor movement, stepped aside.