The ERP/Recovery plan for IAM 141

Taipan

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Aug 20, 2002
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bankruptcy proceedings." This is from 141M but ours is said to say the same thing , at least MR Siegel (US) had the compassion to put in that if you agree to this that they will not come after you in bankruptcy court.Here are the facts United management and US Airs management are in COLLUSION with the Bush administration to LOWER drastically the wages of the entire airline industy,and if they can BREAK/damage the unions.I still think there is a good posibility that these two management teams think they can somehow merge these two airlines during this fiasco even though the employee/owners of UAL would be strongly against it.They want 265 mil a year from 141 and I think 187 mil a year from 141M of course times 6 years. The only thing I can say positive is Mr Seigel (US Air) said his plan was firm and he got 80% of what he wanted and 2 unions going to fight him in BK court so we will sit back and watch that play out.Anyway lots of rumors floating around today , new ceo candidates , station closings etc just another day in paradise[:)]
 
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Well I had my 14 yr anniversary today no cakes, no parties, just a little 2 pager from the company, I am not shocked by the greed of this management team at UAL, matter of fact I expected bad but what we got is shocking.The way I undertstand are plan is this, 9.5% percent cut no raises in 2003/2004 if we get the ATSB loan we get a raise one year after the loan (late 2003) of 1.5% and yearly for the next 5 years of 1.5% for a total term of 6 years plus we have to pay 20% of are dental and medical plans, cost to be determined by you guessed it this management team.I just figure out what my total average raises will be from 1993-2008 if we were to get this plan, 1.55% per year from 93-2008 lets see inflation is between 3-4% percent so I will only be able to buy between 25-40% percent less in 2008 [:knockout:] Here is the kicker wording like this "However, nothing in this term sheet or any related negotiations or discussions should be construed to limit in any way the Company''s ability to seek additional or different modifications to the 2000-2005 Mechanics'' and Maintenance Instructors and 2000-2004 Fleet Technical Instructors'' collective bargaining agreements (collectively referred to as the "141M Agreements") between United Air Lines, Inc. (the "Company") and the International Association of Machinists and Aerospace Workers ("IAM" or "Union") that may be appropriate in the event of
 
Taipan:

Taipan said: I still think there is a good possibility that these two management teams think they can somehow merge these two airlines during this fiasco even though the employee/owners of UAL would be strongly against it.

Chip comments: Every day that goes by there seems to be more reason to believe our two company's will be involved in a deeper relationship. We have identical fleets (yes there are some issues), synergistic route networks, the alliance, UA announces changes to their ticketing procedures similar to US changes announced yesterday, the loan guarantee, similar restructuring plans, and bankruptcy.

There are two other points that make me wonder, among some others.

Did Greg Taylor leave US to return to UA to be the key cog is planning the integration? Who would know how to do this better than Taylor?

If UA files for a formal reorganization, the ESOP shares would become essentially worthless and the employee governance could be eliminated. If this occurs, the three employee Board members would likely be replaced and the employees would have no governance say in a corporate transaction.

Could the government have decided the best way for our two companies to fix their problems, would be to integrate to contribute to the industry-wide capacity reduction, create economies of scale, and generate greater synergistic revenues necessary to survive?

The ATSB business plans, new pricing model, alliance, and other issues now seem to indicate some sort of government intervention.

Chip
 
Chip that is an interesting proposition. When the press found out, after the fact ofcourse, they would say what an awful thing they did just to get their merger thru and then congress would pass some law to stop that sort of thing from happening again but we would have all been bored from behind Sans reach around.

The way I read the IAM term sheets is that you must give 185 and 265 respectively but how you get there is up to you. If you select from the menu of items mgt wants to cut and slap enough of them together to get to the $value you won't take any salary cuts. Or you could mix and match smaller salary cut with limited other givebacks to reach the threshold.

The CEO search has reached a crossroads again and noone will be announced for at least another week. We are going to BK cuz thats what these incompetents want.
 
Chip, you are flat wrong on the ESOP and governance in Ch11 proceedings. The judge will have to treat the equity holders just the same as other interested parties. The stock value might go to zero, but you still hold stock equity and board governance. As a matter of fact, ALPA may gain another seat on the board for any significant wage cuts. Didn't Usair pilots get a 19% equity with seat on the board for their concessions!?
 
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On 8/30/2002 2:53:04 AM

Chip that is an interesting proposition. When the press found out, after the fact ofcourse, they would say what an awful thing they did just to get their merger thru and then congress would pass some law to stop that sort of thing from happening again but we would have all been bored from behind Sans reach around.

The way I read the IAM term sheets is that you must give 185 and 265 respectively but how you get there is up to you. If you select from the menu of items mgt wants to cut and slap enough of them together to get to the $value you won't take any salary cuts. Or you could mix and match smaller salary cut with limited other givebacks to reach the threshold.

The CEO search has reached a crossroads again and noone will be announced for at least another week. We are going to BK cuz thats what these incompetents want.
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Man, people just know what they are reading these days...before you get to the "menu" part discussing the trading of rules for wage there is one little problem:

Scope/Job
Security

Delete Article II, Paragraphs D, E, F and G of the Mechanics'
Agreement and modify all cross-references to these provisions.
Delete Article II Paragraph E and F of the Maintenance Instructors’
and Article II, Paragraph E of the Fleet Technical Instructors'
Agreements and modify all cross-references to these provisions.
Modify Letter 94-5 of the Mechanics' Agreement
• Modify Letter 00-141 of the Maintenance Instructors Agreement.
• Modify Article W.G. of the Fleet Technical Instructors' Agreement
to eliminate the requirement for at least one Specialist where FTIs,
EPIs or PSCs are employed.

These areas are NOT negotiable and include:
No protection for maintaining the mtc bases at SFO OAK IND
No farm out protection of anykind, including allowing work at foreign stations
No layoff clause for those that participated in the ESOP (which runs till 2005) etc etc etc

There is no choice because with this there is no job. To sign this is suicide. Hell, we could talk wage and benefits, but this is the whole enchilada my man. Maintenance could and would be wiped out, along with all the engineering and all that management along with it. And everyone see's it as the union stonewalling.
 
Batman,

Are you sure about that? Bankruptcy would wipe out all ESOP equity and give the company the opportunity to change the governance of the airline. While they might give a union a seat on the BOD post-bankruptcy, you can bet they won't give a bunch of union seats such that they can have veto power over strategic decisions going forward.
 
Mastermech,

As much as this pains my soul to say I agree with your last post. I think the management is intentionally setting the bar at such a high level in order to create the impression to the eventual judge in our BK filing that none of us bargained in good faith. If they can establish the lack of good faith bargaining then the judge, Bush appointed, will in all likely hood aborgate our contracts and put something even worse than these proposals in place. This is a kamikazee mission if sign or don't. In BK mgt will farm the vast majority of Maintenance out and they will turn virtually all flying of 737 or less over to Express maybe even Airbus. I have read the term sheet as published on the IAM site and do not read on it the things you mentioned in your last post like SFO,IND,OAK or ESOP furlough protection or outsourcing. I might be missing it so if you would please point me in the right direction I don't see that. Probably true but I would like to read it.
 
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The other thing I forgot to say is we got zero credit for the unemcomberd assests that we have in this term plan, our plan is just as bad as US Airs maybe worse I know they are getting more than a 1.5% percent raise over there per year.
 
Chip's speculation about the ATSB essentially forcing a US/UA merger is a scenario I laid out a couple of months ago. It was universally panned on these boards. John--care to comment? IIRC, you were of the opinion this concept was complete folly.

Marky
 
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On 8/30/2002 10:28:20 AM

Mastermech,

As much as this pains my soul to say I agree with your last post. I think the management is intentionally setting the bar at such a high level in order to create the impression to the eventual judge in our BK filing that none of us bargained in good faith. If they can establish the lack of good faith bargaining then the judge, Bush appointed, will in all likely hood aborgate our contracts and put something even worse than these proposals in place. This is a kamikazee mission if sign or don't. In BK mgt will farm the vast majority of Maintenance out and they will turn virtually all flying of 737 or less over to Express maybe even Airbus. I have read the term sheet as published on the IAM site and do not read on it the things you mentioned in your last post like SFO,IND,OAK or ESOP furlough protection or outsourcing. I might be missing it so if you would please point me in the right direction I don't see that. Probably true but I would like to read it.
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The sections of the contract that master mech refers to are in Art. II Scope of Agreement section of the mechanics 2000-2005 contract book. The letter 94-5 is also in the book and refers to job protection we bought along with the ESOP. I don't know where you can read this online. All mechanics should have been issued a copy and I am sure they would be glad to let you read it. From my point of view it is the heart of our agreement. To give it up would be giving the company permission to get rid of me. They may get rid of me but I will not say that it is OK. The people that I work with have for the most part come to the conclusion that we must do something. We understand that this will cost us money. But they are asking for us to give them permission to get rid of us. This I cannot do. We cannot vote to delete these paragraphs and letters from our contract. It is unreasonable to ask us to do so. It has nothing to do with recovery.
 
MrMarky:

Today USaviation.com released this week's "Chip's Corner" article that looks at the new major airline alliances, their impact on commercial aviation, and more news about a potential UA-US integration. The column can be viewed by selecting Magazine on the tool bar, Airline Commentary, and "A look at the pending airline industry alliances".

Chip
 

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