There is no doubt that things are happening behind the scenes. Did anyone notice that even our Star partners have piped up? I think that was the first time I've seen them mention the i word. Who knows, we might just pull this off.
Also, did you guys get to see Tilton's response to the Trib article. I've got say, we finally have a guy with some b@lls (sorry, had to say that). It's been a long time coming.
Below is the reprint of Tilton's Op-Ed piece in Today's Chicago Tribune.
Sumsonic, I echo your remarks. The more I hear from Tilton, the more I'm convinced he's the type of leader to turn UA around. I also think Pete's promotion is great for United. He is well-respected throughout the company.
A Tribune editorial on Wednesday said it was time to force change at United. What it overlooked, however, were the major strides that United has already made -- and the changes it continues to make -- in reforming its operations. I can assure you that nobody understands and embraces the need for change more completely than the management and employees of this airline.
Last week, United reached an unprecedented and far-reaching agreement with its unions to reduce operating expenses. The Tribune failed to note, however, that financial changes have been underway at United for many months. We have made significant progress in bringing costs in line with revenues, while maintaining our high standards for reliability, safety and service, by taking a number of critical steps, including:
* Deferring delivery of 45 aircraft, saving approximately 2 billion dollars;
* Cutting our schedule and capacity by 23 percent since the tragic events of Sept. 11, 2001;
* Furloughing 20,000 employees;
* Retiring 99 Boeing 727 and 737-200 aircraft, resulting in reduced maintenance and training costs;
* Achieving 500 million dollars in savings by reducing sales costs, automating refunds, reducing discretionary spending, eliminating base commissions for travel agents and winning concessions from our vendors;
* Moving to 100 percent electronic ticketing;
* Entering into a code-sharing partnership with US Airways that we expect will generate more than 200 million dollars a year; and
* Completely restructuring our schedule to increase flights to more profitable markets, including the significant actions taken on Monday and Wednesday of this week.
But while we have already done a lot to make United stronger, we recognize that these changes are not enough, given the state of the industry and the issues facing our company in this post-9/11 environment. Since Labor Day, we have seen unprecedented cooperation between
United and its unions -- and among the unions themselves to -- find major new savings. And, last week, we reached a groundbreaking agreement on a framework for an additional 5.8 billion dollars in labor cost reductions.
As already noted, this week United presented the Air Transportation Stabilization Board, the agency that oversees federal loan guarantees, with an updated business plan that includes not just the breakthrough savings on labor costs but as much as 1.8 billion dollars in non-labor profit improvements and other cost savings as well. This proposal demonstrates more forcefully than ever that everyone at United shares a sincere commitment to resolving the problems confronting the company. The agreement also helps ensure that United will have the resources available to repay any emergency loans, one of the ATSB's main criteria for approving its guarantees.
We believe it is in the best interests of all concerned to resolve the issues facing United outside of the bankruptcy process. Your editorial suggests that bankruptcy court is a panacea to the major financial challenges facing the company -- a notion that is pure folly.
A Chapter 11 filing for United Airlines would be painful for the citizens of Chicago, for Chicago's business community and for the employees of our company. I find it disheartening, to say the least, that the Chicago Tribune thinks it is an acceptable outcome for an enterprise so important to our region - and, frankly, to the world. We may ultimately need to pursue this option, but rest assured -- it will be our last resort.
Today, the competitive spirit of United's employees is focused on a much better solution --restoring the profitability of a great airline that consistently sets new standards for on-time performance and customer satisfaction.
I wouldn't be surprised. All the majors have been lobbying hard behind the scenes to not allow UA an ATSB loan guarantee. But that's how things are done in this industry. I'm sure we would do the same thing if the shoe were on the other foot.
It's nice to see we finally have a CEO with fight in him. I, for one, am sick and tired of the Tribune's obvious anti-UA slanted viewpoint. While many of our problems are of our own making, I was amazed at how the Tribune so openly advocated UA not getting a loan. The ramifications of a UA bankruptcy to the local Chicagoland economy are enormous.
Here you go. I can't remember the last time a CEO for UA actually did something like this. Oh, by the way, there has been a rumor going around that NW and AA were behind the original article. Way to go Glenn.
EMPLOYEE SUPPORT NEEDED FOR CRITICAL FEDERAL LOAN GUARANTEE
United announced on Wednesday that the company has filed an updated business plan with the Air Transportation Stabilization Board (ATSB). As you know, United has applied to the ATSB for a federal loan guarantee of $1.8 billion for the $2 billion in private financing the company is seeking to meet its current liquidity needs.
The updated business plan includes labor cost reductions of $5.8 billion over the next five and one half years, which are the result of the historic agreement between management and the coalition of six United labor unions. This unprecedented cooperation between management and the union coalition has allowed United to significantly reduce our cost structure and will allow United to compete effectively with our lower-cost competitors. By significantly reducing our cost structure, we have not only repositioned ourselves as a more competitive airline but we have also fixed a fundamental flaw in our original application to the ATSB.
Our updated business plan combines labor cost reductions with strategic revenue enhancements. It is the business plan of an airline that will be able to compete vigorously in the changed marketplace; it is the business plan of an airline that will be able to repay a $2 billion loan in five years; and it is the business plan of an airline that will be alive and kicking in 20 years. It is exactly the type of business plan that should persuade the ATSB to approve our application for a federal loan guarantee.
Unfortunately, our competitors are already trying to influence the ATSB to reject our loan guarantee application. Our competitors are arguing to anyone who will listen that a federal loan guarantee would somehow give an unfair advantage to United. They argue that we have not made the drastic cuts that are necessary to survive. They argue that bankruptcy, which means less service and fewer jobs, is the best solution for United. They are dead wrong but people are nonetheless listening to their arguments.
This is why we need your help. The ATSB and the White House need to hear from United employees that a federal loan guarantee is important to the future of United and to United employees. The ATSB and the White House need to know that the $5.8 billion in labor cost savings represent real sacrifices from real people. The ATSB and the White House need to know that United has already made many tough decisions to reposition itself as a competitive airline in todayâ€™s marketplace and that each tough decision has a real impact on people like you!
Call to Action:
Write a letter to the three Board members of the ATSB and to President Bush and send the letter to DCAGV via fax (202) 296-2873 or co-mail. Attached is a sample letter to use as a guide.
DCAGV will collect all the letters and deliver them in bulk to the ATSB Board members and to the White House. The ATSB does not have a specific timetable for reviewing our updated application â€“ they can make their decision by the end of the month or by the end of the week. We need to assume that the ATSB will make their decision sooner rather than later so we need letters to be delivered by Monday, October 28, 2002.
If you have any questions or need more information, please contact your UGN Activator or call Colleen Corr at u-296-2710.
The Honorable George W. Bush
United States of America
1600 Pennsylvania Avenue, NW
The Honorable Peter R. Fischer
Under Secretary for Domestic Finance
U.S. Department of Treasury
The Honorable Edward M. Gramlich
Board of Governors
Federal Reserve Board
The Honorable Kirk van Tine
U.S. Department of Transportation
The Honorable David M. Walker
Controller General of the United States
General Accounting Office
I am a United Airlines employee and I strongly urge you to approve United Airlinesâ€™ application for a federal loan guarantee as soon as possible.
United Airlines has filed an updated business plan with the Air Transportation Stabilization Board (ATSB). The updated business plan includes $5.8 billion in labor cost reductions over the next five and one half years, $1.4 billion in revenue enhancements annually, and further reductions in capacity and capital expenditures. Unprecedented cooperation between management and a coalition of six labor groups at United made this updated business plan possible.
The updated business plan greatly strengthens Unitedâ€™s application for a federal loan guarantee. Since September 11, 2001, United has had difficulty accessing the private financing market. It is clear that United fits the criteria established by Congress for the loan guarantee program. The business plan now also makes it clear that United, with its reduced cost structure, will be a viable competitor in the todayâ€™s marketplace and will be able to repay the loan.
We at United Airlines recognize that aviation industry has changed dramatically. We have made many tough decisions in order to reduce costs, adjust supply with demand, and adapt to the new marketplace. Yet, it is undeniable that the terrorist attacks of September 11, 2001, continue to have a lasting impact on the viability of our business.
The ATSB was established to help stabilize the aviation industry in the aftermath of the devastating September 11th terrorist attacks. The ATSB must do the job it was assigned by Congress and approve Unitedâ€™s federal loan guarantee application.
I have done my part to make United viable in todayâ€™s marketplace. Each tough decision that has been made â€“ the furloughs, the reductions in service, the labor cost savings â€“ has had a direct impact on me and my family. Now, it is time for the ATSB to do its part.
Thank you for your time and attention. Approval of Unitedâ€™s loan guarantee application is critical to the future of the airline. More importantly, it is critical to my future as a United employee.
[P]The Mayor of Denver is also pushing for the ATSB loan to be approved: [A href=http://denver.bizjournals.com/denver/stories/2002/10/21/daily55.html]http://denver.bizjournals.com/denver/stories/2002/10/21/daily55.html[/A][/P]
[P]Any bit helps....[/P]
[P]I have to join in expressing my admiration for Mr. Tilton. I think it's called [STRONG][EM]leadership. [/EM][/STRONG]I must also say that I'm very impressed with the suggested letter from the IAM that DB Cooper posted. Despite my past criticism, right is right, and the IAM appears to be putting their best foot foward. [/P]
[P]I will also add that I am going to jump on the bandwagon and fire off a modified version of the letter myself, changing it to be from a United customer and proud United States citizen. I will forward a copy to the addressees, and United as they have requested of the employees, and I will also send it to my two US Senators, Feinstein and Boxer, both from United's hub in San Francisco. [/P]
[P]If anyone here is in a position to take a suggestion to the right place in management, I would also suggest that an email be sent to United's frequent flyers requesting that they do likewise. I have received emails from United on more than one occasion discussing their difficulties. They have been willing to talk about their problems to their customers. I see no shame in asking their customers for a little help and support. I think the reservior of goodwill out there is deeper than they might guess. And in hometown hubs like SFO and ORD, most everybody knows someone who works for United.[/P]
[P]It is heartwarming to see in the depth of crisis, people putting their best foot forward.[/P]
[P]My very best wishes to all at United.[/P]