Union coalition plan

[DB Cooper]

September 14, 2002
UAL unions craft rescue plan




A union rescue plan for United Airlines, which labor is aiming to present to the company later this week, is likely to call for a reduction in headquarters jobs and further changes in top management, as well as a significant overhaul of the company''s operations to reduce costs.
There will be sizable concessions, but labor is striving for an alternative to the company''s call for $9 billion in wage cuts, benefit reductions and work rule changes over six years in order to qualify for a federal loan guarantee and avoid bankruptcy.
There is recognition that United needs immediate cash. But there are other places to find cash flow other than immediate access to employees'' paychecks, says a union source, referring to United''s top-heavy workforce, hub-and-spoke system and traditional focus on the business traveler.
Late last Friday, United''s union leaders signed a letter to Chairman and CEO Glenn Tilton, saying they would present a plan by approximately Sept. 19.
A spokesman for UAL Corp., United''s Elk Grove Township-based holding company, declined comment.
Crains Chicago Business 9/14/02

 

[gatemech]

[blockquote]
----------------
A union rescue plan for United Airlines, which labor is aiming to present to the company later this week, is likely to call for a reduction in headquarters jobs and further changes in top management, as well as a significant overhaul of the company's operations to reduce costs.
----------------
[/blockquote]
It's going to be interesting to see what the unions come up with. What will be amazing is if the proposal doesn't go from one hand to the trashcan. Anything that dictates what will happen at WHQ will not be taken lightly. In the concession package presented to the IAM there was language to change the size of a lead group. Now that doesn't bother me. There would a reduction of a few leads none would go out the door. If that were to happen then we would have foremen for every lead group. A little top heavy. I you have a supervisor that knows the job then only 1 per 50 - 75 employees is needed if even that. Some places they trip over each other. Then what will happen to all those VP positions? Those are the ones in the GOOD OLE BOYS CLUB. They will not allow anything to wreck their gravy train.

I'm looking forward to reading the proposal. I just hope it's not a fairy tale.

I'll bet it has language for 10-hour days. Had to pinch myself. I fell asleep again. I was deamin.

 

[kcabpilot]

I you have a supervisor that knows the job then only 1 per 50 - 75 employees is needed if even that.

gatemech - take a real good look at the current, pervertedly bloated pool of foreman and even if you dropped the bar to say a supervisor that knows ANYTHING about the job you'd be hard pressed to meet that quota.

In my opinion foreman should not be management. They should be union mechanics and they should have to work their way to that position by learning the ropes first. The only management supervisor needed would be the OM. In the current situation the foreman are nothing but hall monitors. Most of them are 6 month wonders and don't know Jack about aircraft or aircraft maintenance. I'd give an apt description of how they got their positions but on this board it would just come out as a bunch of asteriks ***

On the line it's not quite as bad, but it could still be better.

 

[gatemech]

kcabpilot,

Can't argue. Your right.

 

[UAL777flyer]

If any news seaps out today, it probably won't be until late this afternoon or early evening. I would not be at all surprised if Greenwald is involved in the additional outside investor piece of this proposal. Just prior to Tilton being named CEO, supposedly Greenwald was close to being named Chairman of the BOD and he had floated a proposal to help buy out the non-employee owned shares of UA and make the company 100% employee-owned. But supposedly the BOD passed on the deal.

 

[UnitedChicago]

Any news yet? I wonder if Greenwald is somehow attached to the plan.

 

[The Ronin]

It is hard to fathom that anything less than substantial fixed cost reductions will be accepted. With the advent of USAirways significant concessionary agreements, why would any lender or the ATSB backing such loans accept anything less? Everybody wants a known in today’s turbulent aviation industry. Since fuel and passenger revenue are fluctuating, especially with the aspect of war looming, lenders and government oversight demand that the airlines implement know fixed costs, i.e., concessionary contracts so they can better ascertain risks and inevitable profits on their behalf’s. Who here is buying airline stock? But as you now know, there is a counter bid for USAirways from an Alabama retirement fund against Texas Pacific Group. They are doing something that no one is doing in this industry. They are competing for an airline. Why, because of the known fixed costs all those employees agreed to. If anyone at United thinks you are going to dodge the big bullet you are deluding yourself. The company and industry are going to throw out as much of the pay and provision rules in the United pilot contract as they can, and they can. They will probably pay the mechanics rate, but at huge number reductions on the level of SW or FEDEX/UPS, about 2000 or so. Flight attendants? Management will take whatever cuts are brought upon, but I assume to assuage the unions, there will be some reductions.

The truth that makes men free is for the most part the truth which men prefer not to hear.
Herbert Agar

 

[UnitedChicago]

It would be such a mistake for the employees to buy the 45% outstanding. After all, owning 55% has worked wonderfully?!

As a stock holder (avg purchase price $7.50) I would vote against. I know, I know...at least I would get some money outside of BK.

I think that the proposal will includes some sort of low-fare operation. The union had stated that they wanted to address many problems including the dependance on the biz traveler. Should be interesting.

 

[UnitedChicago]

Just read on A/P that the unions are still working. Looks like this will go into tomorrow and possibly the weekend.

As the Airline Turns

 

[Busdrvr]

[blockquote]
----------------
On 9/19/2002 2:08:04 PM The Ronin wrote:

Who here is buying airline stock?

----------------
[/blockquote]

Me. UALs pilots have bought almost the maximum amount allowed by ESOP with our retirement accounts (limited by the ESOP agreement so we couldn't snake another BOD seat or, EGADS, take over completely). We may be delusional, but we believe in the future of this company.

 

[UAL777flyer]

I think it was a bit too much to hope for that the union proposal would be done by today. They say maybe tomorrow. But it wouldn't surprise me to see it go into next week.

I also agree that it will probably include some low-fare operation proposal, as well as many other interesting items.

 

[Rhino]

Busdrvr, you need to change brokers.

UAL unions will never agree to concessions that are sufficient in WS's eyes.

Ch 11 is almost inevitable.

The more senior folks' ESOP shares will be worthless. At $2, some bought TWA shares. Shortly after they were worth $0.

I hope I'm wrong and that you hit a home run on UAL.

 

[The Ronin]

That is so unfortunate Busdrvr. I'm sure this probably doesn't sit well with anyone connected to the ESOP. Hopefully, you'll see fruit from your investment, but then again, was it very wise to begin with? There probably wasn't much choice at the time. Here is a edited post, I wonder who the dinosaur quote was in reference to.


The House Transportation subcommittee on aviation will hold a hearing Tuesday on airlines' financial plight, including potential effects of a war with Iraq.
Mr. Mica, chairman of the aviation subcommittee, said the U.S. airline industry has lost between $7 billion and $8 billion in the past year.
Mr. Mica cautions against additional government assistance for airlines that are unstable because of poor management. The government provides loan guarantees to airlines damaged by the September 11 attacks that appear capable of regaining solvency.
We can't be feeding dinosaurs, Mr. Mica said. Some may end up folding their tent. It has to be a careful balance.


Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery.
Charles Dickens, David Copperfield, 1849

 

[The Ronin]

I understand that the ideology for the IAM is no wage givebacks, downsize instead. ALPA on the other hand, concessions yes, but maintain fleet size as much as possible. This is quite a contrast, a large divide to cross if true. Any comments from the parties involved?





The meeting of two personalities is like the contact of two chemical substances: if there is any reaction, both are transformed.
Carl Jung (1875 - 1961)

 

[Tim Thorpe]

[blockquote]
----------------
On 9/20/2002 3:40:38 AM The Ronin wrote:

I understand that the ideology for the IAM is no wage givebacks, downsize instead. ALPA on the other hand, concessions yes, but maintain fleet size as much as possible. This is quite a contrast, a large divide to cross if true. Any comments from the parties involved?

At this point I think the only ideology that the IAM has is to keep the dues flowing. It has been the members themselves screaming no give backs. I think reality is setting in though and the screaming is not nearly as loud as it was. In 1994 we traded concessions for job protection and I think that is what you will see again this time. The scope agreement changes the company asked for in their proposal really shocked people. The company wants out of the heavy maintenance buisiness. This would cost thousands of jobs and would be a very bitter pill for all of us in the maintenance division to swallow. In return I expect the union to ask for a reduction in management. Here in Ind the ratio of union to management is way to high. I have no specific numbers but I know it is higher than I have seen it in the last 15 years. That is the question as I see it. Will management accept reductions that are in line with what the union has already experienced. And will continue to experience because our reduction will continue concessions or not. Having said all this the unions proposal will probably be something 180 degrees out from my thoughts.