US/UA merger?

[UAL777flyer]

Argento,

I wouldn't necessarily categorize it as losing faith in Tilton. I wasn't particularly pleased when he was hired. I just think this is the worst possible time to bring in an industry neophyte to run UA. They need a proven leader who understands this industry and what it will take to change UA and turn it around. However, that probably speaks to the fact that the IAM and ALPA have veto power over who is chosen for CEO. So it makes sense that UA would bring in a conciliatory leader who is viewed as labor friendly. However, after having researched Tilton's background a bit, I figured he might be able to fix this company. But it would be a wait and see type of thing. He's said all the right things since arriving. But NOTHING has been done. And almost NOTHING is being communicated about what is going on.

Dave Siegel came into US Airways and got right down to business. He knew the industry. And he knew what needed to be done to put US in a position to succeed. Tilton may have an idea about how to change the culture at UA and start valuing employees and instituting actual leadership in the management ranks, but he doesn't have the first clue about what is needed to structurally change the core airline business. And that is EXTREMELY troubling at the most critical time in the company's history. There still isn't any concrete plan to fix the problems. Time is running out and we continue to proceed as at a snail's pace. I think we only have about 4 more weeks max before being forced to file for bankruptcy. Considering that any labor T/A's will have to be ratified, that means that something has to be finalized in the next 10 days or so. Considering that, I'm not very optimistic.

 

[DCAflyer]

UAL777said:

Time is running out and we continue to proceed as at a snail's pace. I think we only have about 4 more weeks max before being forced to file for bankruptcy. Considering that any labor T/A's will have to be ratified, that means that something has to be finalized in the next 10 days or so. Considering that, I'm not very optimistic.

DCAflyer asks:

UAL777, do you think it's likely that the labor representation on the BOD will go along with a voluntary C11 filing? I ask this because I would hate to see creditors force a filing upon you. It labor representation is still holding out, it could be catastrophic, and I think the industry buzzards might begin to circle WHQ as they were CCY not too long ago. Believe me, it is very demoralizing when that happens. You would think that we should all be weathering this storm together, but there are people in this industry who are looking to take advantage of every weakness they find in another carrier. Carty and Mullen come to mind.

 

[chipmunn]

DCAflyer:

DCAflyer said: You would think that we should all be weathering this storm together, but there are people in this industry who are looking to take advantage of every weakness they find in another carrier. Carty and Mullen come to mind.

Chip comments: DCAFlyer, no truer words have been ever spoken on this message board. I have seen presentations that have unequivocally shown the huge business opportunity benefits of combining the UA & US networks. Management has repeatedly tried to convince labor of the revenue and growth opportunities the two airlines would create, which would be unparalleled in the industry. As I have said before, the UA unions may find out what a critical mistake it was to do everything within their power to prevent a combination unless they were generously paid or bypassed the national seniority integration policy.

By the way, what baffles me about our new code share partner is that there apparently has been no movement in one week between management and labor since the UA coalition provided their letter to Glenn Tilton and the news media. Rome is burning, where is the urgency? Does AON Fiduciaries know something?

Chip

 

[cltvff]

[P]
[BLOCKQUOTE][BR]----------------[BR]On 10/2/2002 3:57:44 PM argentomaranello wrote:
[P][BR]For all the UAL (seniority?) supporters out there who just don't want to confront the reality of the great carrier's current sad plight, nor even consider the possibility their domestic route network WILL become a casualty of a Ch.11 filed too late (and with too little liquidity on hand), [/P]
[P]----------------[/P][/BLOCKQUOTE]
[P]Argento,[/P]
[P]I truly enjoy the perspective you share on this board. Care to speculate on the point at which UAL no longer has sufficient liquidity to emerge from BK intact?[/P]
[P]Dave[/P]

 

[Bear96]

As I have said before, the UA unions may find out what a critical mistake it was to do everything within their power to prevent a combination unless they were generously paid or bypassed the national seniority integration policy.

Chip you can't be serious!

Whether a US/UA hook-up of some sort (you know, the unique corporate transaction that there is reason to believe that sources / reports indicate is inevitable; or simply the code-share agreement) would be beneficial now is debatable. But certainly you can't think that had UA and US merged in 2000/2001 that that entity would even still be around today?

And how come Wall St. doesn't seem very excited by the news?. UAL closed up only slightly (about a penny and a half) today while UAWGQ actually closed down slightly.

 

[UAL777flyer]

DCAflyer,

That's the $64,000 question. When it comes to UA labor, you can't predict anything. I'm confident UA ALPA would recognize the inevitable need to file for Ch.11 when that time comes. But the IAM is another story altogether. I never have any optimism where they're concerned. However, they should be smart enough to look over at what you folks have gone through and continue to go through to get a template for how it will go if we have to file Ch.11. You can pretty much take it as a given that if UA is forced to file for bankruptcy without having obtained the necessary concession agreements from its work groups, Senior UA Mgmt will do everything in their power to shred those labor contracts. And considering that UA has the highest costs in the industry, chances are the judge would side with the company. Anything less and the chances for a fragmentation of UA assets dramatically increases. The mere fact that UA must obtain labor approval to file for Ch.11 should emphasize the need for the governance of the company to change in order for UA to succeed long-term.

It is amazing how quickly the communication channels have gone dry at UA. Not a peep for the last several days. One would hope that the silence from both sides means that negotiations are intensely ongoing behind closed doors to finalize voluntary agreements. If that is not the case, than one has to wonder just what is going on.

 

[UAL777flyer]

Cosmo,

Sorry about that. My fingers must have edited a portion by mistake. I've corrected it.

To answer your question, yes ALL of the BOD members have a fiduciary responsibility to act in UA's best interests. But let's be realistic, labor's allegiance is to their membership first, best interests of the company second. Sued for breach of contract? Yeah, good luck proving in court that a union BOD member ignored the best interests of the company in favor of voting in favor of his/her union's interests.

As for them blocking a potential Ch.11 filing by UA, I'm not sure how much they could prolong it. I believe that according to company bylaws, the vote to file Ch.11 must be unanimous. I could be wrong.

 

[Cosmo]

[blockquote]
----------------
On 10/3/2002 3:43:52 PM UAL777flyer wrote:

The mere fact that UA must obtain labor approval to file for Ch.11 should emphasize the need for the governqan
----------------
[/blockquote]

I think I know where you were trying to go with this, but what the heck is a governqan???? [img src='http://www.usaviation.com/idealbb/images/smilies/3.gif'] [img src='http://www.usaviation.com/idealbb/images/smilies/10.gif']

More seriously, don't [b]ALL[/b] of the folks on UA's BOD, including the union representatives, have a fiduciary duty to the company to do what is in UA's best interest? And if so, wouldn't that cause any board member to be liable to be sued for breach of that fiduciary duty if they acted only in their union's best interest as opposed to UA's best interest (in circumstances where those interests don't coincide)?

I'm certainly no expert in this area and will thus defer to those who better understand the fiduciary responsibilities of BOD members. But if the answers to these questions are Yes, then it seems to me that if it can clearly be shown that the ALPA and IAM representatives on the BOD blocked a Chapter 11 filing when it was necessary (especially if the company subsequently failed), those BOD members could be personnally liable for significant monetary damages.

For this reason, I'm not so sure that the ALPA and IAM board members would block a potential Chapter 11 filing by UA. JMHO.

 

[Black Wind]

[P]
[BLOCKQUOTE][BR]----------------[BR]On 10/2/2002 3:57:44 PM argentomaranello wrote:
[P][BR]For all the UAL (seniority?) supporters out there who just don't want to confront the reality of the great carrier's current sad plight, nor even consider the possibility their domestic route network WILL become a casualty of a Ch.11 filed too late (and with too little liquidity on hand), it should be noted that there are other carriers out there that would be suitable reception candidates for some of this fragmentation.[/P]
[P]----------------[/P]
[P][STRONG][/STRONG] [/P]
[UL]
[LI][STRONG]It WILL be a Ch.11 casualty? You have that on the authority of who?Chip? Please.[/STRONG][/LI][/UL]
[P][STRONG][/STRONG] [/P]
[UL]
[LI][STRONG]I find it interesting that a carrier that hasnt actually emerged from bankruptcy is touting itself as the saviour of United Airlines.Are those RJ's going to single handedly save the two?Are the U pilots going to try to cram a Jets 4 Jobs down the UAL pilots throats?[/STRONG][/LI][/UL]
[P][STRONG][/STRONG] [/P]
[UL]
[LI][STRONG]You don't know what the unions here will do, despite what Mr.Munn and yourself are convinced of.[/STRONG][/LI][/UL]
[P][STRONG][/STRONG] [/P]
[P][STRONG][/STRONG] [/P][/BLOCKQUOTE]
[P][/P][STRONG][/STRONG]

 

[oldiebutgoody]

[blockquote]
----------------
On 10/3/2002 6:58:51 PM Black Wind wrote:



[BLOCKQUOTE][STRONG][/STRONG]
----------------
On 10/3/2002 12:42:12 PM cltvff wrote:

Argento,

I truly enjoy the perspective you share on this board.  Care to speculate on the point at which UAL no longer has sufficient liquidity to emerge from BK intact?

Dave


[/P]


----------------[/P]


[STRONG]Dave, has the saviour of UAL emerged from BK yet?[/STRONG][/P]


[STRONG]Worry about U before carving up UAL.[/STRONG][/P]


[STRONG][/STRONG] [/P][/BLOCKQUOTE]


[/P]
----------------
[/blockquote]
Folks at U were in deep denial until chapter 11 was filed, just as you are. You can only hope that your new CEO has as much on the ball as Dave Siegel, who has the potential to be the next big hero of the aviation industry, alongside the likes of Juan Trippe, Howard Hughes, and C.R. Smith. Hearing (or reading) the reality of the situation of many airlines is downright painful; the ONLY thing that can spare employees and creditors a lot more pain is for the economy to recover and people to start flying again.

 

[Black Wind]

[P]
[BLOCKQUOTE][STRONG][/STRONG][BR]----------------[BR]On 10/3/2002 12:42:12 PM cltvff wrote:[BR][BR]Argento,[BR][BR]I truly enjoy the perspective you share on this board.  Care to speculate on the point at which UAL no longer has sufficient liquidity to emerge from BK intact?[BR][BR]Dave
[P][/P]
[P]----------------[/P]
[P][STRONG]Dave, has the saviour of UAL emerged from BK yet?[/STRONG][/P]
[P][STRONG]Worry about U before carving up UAL.[/STRONG][/P]
[P][STRONG][/STRONG] [/P][/BLOCKQUOTE]
[P][/P]

 

[JFK Fleet Service]

[BR][BR]
[BLOCKQUOTE][BR]----------------[BR]On 10/3/2002 7:54:03 PM oldiebutgoody wrote:[BR][BR][BR]
[BLOCKQUOTE][BR][/BLOCKQUOTE][BR]You can only hope that your new CEO has as much on the ball as Dave Siegel, who has the potential to be the next big hero of the aviation industry, alongside the likes of Juan Trippe, Howard Hughes, and C.R. Smith[BR][BR][BR][BR]----------------[BR][BR][FONT size=1]Dave has done some amazing things in a short period of time,but I'd stop short of putting him up there in the Legends of Commercial Aviation pantheon.[/FONT][BR][BR][/BLOCKQUOTE][BR][BR]

 

[MrMarky]

[P]
[BLOCKQUOTE]
[P][BR]----------------[BR]On 10/3/2002 4:41:35 PM Cosmo wrote:[/P]
[P] don't ALL of the folks on UA's BOD, including the union representatives, have a fiduciary duty to the company to do what is in UA's best interest?[/P]
[P]----------------[/P][/BLOCKQUOTE]
[P]NO. As I understand it, their primary fudiciary responsibility is to the SHAREHOLDERS, of whom ALPA and IAM own 55 percent.[/P]

 

[Oliver Stone''s Apprentice]

[blockquote]
----------------
On 10/3/2002 5:00:06 PM UAL777flyer wrote:

Cosmo,

Sorry about that. My fingers must have edited a portion by mistake. I've corrected it.

To answer your question, yes ALL of the BOD members have a fiduciary responsibility to act in UA's best interests. But let's be realistic, labor's allegiance is to their membership first, best interests of the company second. Sued for breach of contract? Yeah, good luck proving in court that a union BOD member ignored the best interests of the company in favor of voting in favor of his/her union's interests.

As for them blocking a potential Ch.11 filing by UA, I'm not sure how much they could prolong it. I believe that according to company bylaws, the vote to file Ch.11 must be unanimous. I could be wrong.
----------------
[/blockquote]

Don't forget that the ALPA BOD rep voted -for- the US Airways merger, even though he opposed it as a union president. He had little choice from a fiduciary responsibility standpoint, and stated so to his members.

But don't worry too much. Large creditors whom UAL defaults on can always file an involuntary petition for liquidation.

If that doesn't happen, assuming UAL has debt covenants which require a set amount of liquidity in the form of either cash or securities (remember DL's renegotiating some of its bond covenants last week for this same reason???), I believe bond holders can also declare UAL in default, and force a filing.

Should either of those moves appear emminant, even the IAM and ALPA reps couldn't justify voting against a Ch.11 filing without violating their fiduciary responsibility, since reorganization is still better than liquidation...

 

[Diesel8]

Oldie,

Whatever drugs you are taking, I would love to get my hands on some. Pretty please!!! But really, I think Mr. Siegel and U has a long way to go, before we consider legends. Last industry legend U had was Mr. Wolf, need I say more!

This of course said, with the outmost respect for Mr. Siegel.