Reason No. 3. During the negotiations, the Company communicated clearly and expressly to the ALPA negotiators that the two lump sum payments were being offered in lieu of any other post amendable date automatic pay increases.
The Company communicated through its proposals at the bargaining table and in discussions at the bargaining table expressly on this subject.
The Company's negotiator, Bruce Ashby, will testify that he made that point clear in response to questions from an ALPA negotiator at the negotiation table.
He expressly stated that the future increases and all the terms called for in the then existing Collective Bargaining Agreement would no longer be applicable.
He stated that instead of any of those increases past the amendable date, the only commitment the Company could make would be to the $35 million lump sum payments in January of 2010 and 2011.
And in fact, he said that's all the Company could afford, all the Company could afford to commit to on or after the amendable date.
Now, the absence of post amendable date pay increases is also evident from the Company's proposals. And our witnesses will walk you through the bargaining history of Letter 93.
We're going to see that the parties worked very hard to come up with a combination of wage cuts, productivity improvements, and changes to benefits that would amount to the necessary $300 million in annual cost reductions asked of the pilots.
Some of the Company's proposals, during that period, included wage increases in later years of the agreement or even after the amendable date.
But with those proposals were made, such as the one proposal we saw already for a 5 percent increase on the amendable date, they were expressly stated in the proposals. They were described in the accompanying valuations, the spreadsheets, and they were acknowledged by both pair of parties.
And when those proposals were withdrawn in lieu of the lump some obligation, that was communicated as well.
This was not a silent negotiation. This was not a well, everybody understood discussion.
This was an express discussion about what would or would not happen on or after the amendable date, and it's reflected in the proposals.
The valuations of the Company's proposals also tell the story.
Our evidence is going to show that when the Company made proposals in the latter part of the process, it included valuation sheets to indicate the cost of the proposals being made.
Those valuation sheets were through the amendable date of 2009, but they also had a column that indicated what would happened afterwards.
And when the Company proposed a pay increase at one point, the 5 percent on the amendable date, the valuation sheet showed that.
When they withdrew the proposal and did not include that, the valuation sheet showed that.
At no time in those valuation sheets was it ever indicated in the column after amendable date that there was an automatic 40 percent plus wage increase to be mandated by this agreement.
It wasn't there because that wasn't the agreement. And ALPA knew it, and everyone knew it throughout the process.
The final valuation sheets, which we'll enter into evidence, indicates a series of zeros for
six years after 2005. Indicating an 18 percent pay cut and indicating no increases through 2011.
And the reason there were valuations that ran through 2011 is because the Company's business model ran through that period, and the ATSB loan ran through that period. So the parties were talking about financial analysis data through that period.
You could search every single one of these documents. Not a single one ever, ever indicated plus 40 percent on 1-1-2010.
They indicated zero because the parties had agreed that that would be subject to the negotiation process under Section 6 of the Railway Labor Act.