Union BOD Seats: Will U be different than UAL?

Steiner

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Aug 21, 2002
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After the claims in the press that the United union BOD seats allowed for the increases in labor costs at that airline, why are union BOD seats at US Airways a good idea? Is a BOD seat just a contract signing perk for the union leaders?
 
I think the other difference is that the UAL folks had a controlling (or at least 50%) interest on the UAL BOD.[BR][BR]The U union folks will not--IIRC, RSA will have voting control of the BOD.
 
i thought i read somewhere that the pilots got a seat and a vote...i also thought the remainder of the coalition got some kind of rotating seat WITHOUT voting rights.is this correct?if it is,what use is a seat on BOD?
 
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On 12/21/2002 1:31:06 PM ClueByFour wrote:

I think the other difference is that the UAL folks had a controlling (or at least 50%) interest on the UAL BOD.

The U union folks will not--IIRC, RSA will have voting control of the BOD.
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This is not accurate. The 3 employee groups at UAL that participated in the ESOP each received 1 seat with a vote. We owned 55% of the company, but had only 3 out of 13 seats on the board. It is a common misconception that UAL employees had control over the company. We, in fact had very little control. We had certain VETO rights if 2 of the 3 employee seats voted together. For example choosing a CEO, purchasing other airlines, selling assets, etc. Other than that, we were just a small voice in the big picture. THIS is probably why it failed. If we had 7 of the 13 seats, maybe things would have been different over the years. But it's all hind-sight now.

The big difference is that at UAL the employees represented on the board payed several BILLIONS of dollars to purchase the seats. I'm not sure why Wall Street will look at U's situation as any different, except that maybe U employees will have no super-majority or veto rights. On a seperate note, I think UAL will be working out a deal to keep employees on the board with some governance rights.
 
The initial US labor agreements provided ALPA and the IAM a board seat; and a third seat for the CWA, three TWU units, and the AFA.

The CWA modified restructuring agreement gives this union a separate board seat; thus the fourth seat will be occupied by the AFA and TWU.

The difference between US & UA employee board representation is that the UA ESOP plan provided board seats where two out of three labor board members had veto power over certain strategic decisions. This will not occur at US where labor will have four out of 15 BOD votes.

Chip