Aaargh.
My reasons, or rather reason, as I believe I've pointed out recently but know I pointed out long ago, shortly before UAL went into BK, is that my wife is a UAL employee. With IAM, as it happens.
And yes, I'm a lawyer (a tax lawyer to be precise), which I know I told you long ago, although at the time you thought I might be a guy who waters the plants at an office. Suffice to say that I've changed jobs, and now water the plants at an office that deals with a different area of tax law.
Sorry but I dont recall any of that. As you can see, ive made many posts. How are the plants doing?
The plants are growing great, actually! (Funny thing, in the new office they did put in some plants a few months ago. A few times when the "plant watering guy" came around, I flashed back to that post from ages ago. Bummer is that at my old job, we had a "plant watering girl" who was pretty cute. Oh well)
Third, as to the RLA and 1113 there is a legitimate legal question as to whether or not the rights for self-help accorded under the RLA will be applicable in a BK case.
And what is it? RLA does not give us the right to strike, it limits our right to strike. A workers right to strike is a given, unless restrictions are put in place by law.
Shocked as you might be to hear this, I
agree with you that I believe they
should be, but I honestly don't know if that's really the case, because (as I also mentioned) I don't really know enough about the laws to have a truly informed opinion. It's more of a labor law issue than a BK issue, and although I know a very good corporate BK attorney, I don't think I know any labor law folks.
Well I do. They say under the RLA if your contract is altered or abrogated, we can strike.
Yes, but there are OTHER labor law attorneys out there, including some who do not have a dog in this or similar fights, who believe there is some question on the law here. I'm keep saying this, and you keep ignoring me, apparently in your continued belief that everyone who has an opinion on this must be biased one way or the other.
You have this tendency to see things with a "'fer us or agin' us" mentality. The world is not so cut and dried, and I think I've pointed out some examples of stupidity from all sides here.
As to the whole "this would be an incentive for any unionized company to go into BK" you must be out of your mind. Clue: the world does not revolve around you and your percetpions about the rights of labor. Companies don't lightly go into BK. Yeah, I know, in the airline industry it happens every other week, it seems, but you're talking about a highly cyclical highly leveraged industry that still hasn't fully come to grips with deregulation (even though that was 20 years ago) and is generally poorly managed (did you hear that? I just denigrated UAL's management. FWIW, the BK attorney I know [who represented and apparently still reperesents a few of UAL's creditors] and the leasing folks at my old job [who leased two planes to UAL] had a poor opinion of UAL's management, as well. Which I know I've mentioned more than once), but is not typical of most industries.
Lorenzo did not take it too seriously, and he used it to his advantage didnt he? I never said the airlines were typical, in fact I've often said that in this industry it can pay to lose money.
Once you're in BK, a lot of things happen which companies don't like. Expenses have to be approved by a committee. Creditors have a disproportionate say in the activites of a company. In short, lots of bad things occur in BK. Not to mention that I don't think you can just decide to go into BK if you're making money hand over fist. Although, don't tell me, the accountants will just lie and say you're really losing money, right? (I'm waiting for the inevitable "just look at Enron and Worldcom, they can cook the books however they like" comment).
Well way back when they started all this talk about deregulation Alfred Kahn(?) pointed out that all the productivity gains that the airlines achieved were going towards the pilots and machinists, it was a pretty blatent attack upon airline workers. Its clear that his idea for deregulation was targeted at airline workers. In the 80s Elizabeth Dole said that the airlines are hurting because their workers are overpaid. In 2001 I sat in on an IRRA conference where every airline and government representative attacked airline workers as being overpaid or having unrealistic expectations, so yes, I do feel that they have conspired to reset wages to what they feel the level should be. What is that level, well for a hint a few years back an executive at AA stated that McDonalds proves you dont have to pay high wages to deliver a quality product. Cook the books, sure they do, ENRON and Worldcom cooked the books to make the stockholders believe the company was worth more than it was, thats illegal, the laws dont take into account that corporations may want to do the opposite. The fact is that even if this industry actually lost as much as they are claiming, it would still be needed, like the subway. So by cooking the books a little during a less than typical down part of the cycle they create a crisis and maximize it to permantly reset labor costs as low as they possibly can. They dont want to shut down the airlines, they just want to lower labor costs so everyone else can cash in.
You also have this tendency to see things in conspiracy terms. Believe it or not, other parties besides "labor" are losing money big time here, too. Which gets me to the point that I wanted to address...
Now yes, once a company is in BK, they will try to reduce costs wherever they can.
How by starting up new airlines within an airline or by buying new airplanes and building new Billion dollar terminals? How about subcontracting out maintenance and paying more than you would if you would have kept it in house?
And yeah, labor can get screwed in that, especially if they don't have a lot of leverage. I'll note that the more skilled you are, and the more options you have, the more leverage you have as an employee. I think IAM is having some troubles because many of their workers aren't terribly skilled and will have difficulties finding other jobs with similar compensation packages (most of my wife's co-workers don't have college degrees; she is an exception). I think the mechanics skills are generally more portable. The pilots have made considerable concessions because their skills are not as portable, at least for commensurate pay and benefits. And so on.
Anyway, in BK costs get cut. The more options you have, the less able the company will be to cut costs. UAL played hardball with a bunch of their creditors because the market for airplanes stunk, so the creditor's options were limited (they repossess, they'd get pennies on the dollar. So nickels on the dollar was a better deal). well, UAL also played hardball because they seem to be congential rhymes-with-sassmoles, too.
How many of those leases are in effect till 2009?
[post="271653"][/post]
Well, since you asked...
Many creditors sold off their lease interests for pennies on the dollar to assorted hedge funds and other "vulture" funds that specialize in distressed debt. These creditors lost big time, but are figuring that the dollars they get now are more than they are likely to get in BK. Many of these are unsecured creditors.
As to those creditors who kept and renegotiated their agreements with United...
They are renegotiating the EXISTING leases. For THE OVERWHELMING MAJORITY (greater than 80%, if not 90%) these leases go FAR BEYOND 5 years. As in 15 or 20 or, if it was a relatvely new agreement, possibly as many as 30 years (sorry, I don't recall the specifics of the lease agreements my old company had with United, but for the "newer" airplane which was a 777, it was at least 20 years). Also, Mr. "there's-nothing-stopping-them-from-demanding-more-concessions", the same rule holds true with UAL's position towards their creditors. They are prefectly free to approach their creditors at virtually any time in the future to renegotiate better lease terms, be it regarding interest or payment schedules or what have you. In the end, the creditors only recourse is to take back their security interest, and in today's market, you do that with certain airplanes and you're getting almost nothing in value (IIRC, there are still a bunch of airplanes parked out in the desert). In fact, UAL has far more flexibility to "renegotiate" with their creditors than they do with organized labor.
Which is another way of saying that those dastardly "holders of capital" are taking it in the shorts right now, far more than "labor", no matter how much you complain otherwise.
So, yes, Bob, almost all of those leases are in effect 'til 2009, even if UAL makes buckets of money. Many of them will be in effect until after 2020. Feel any better? Many of those creditors are looking at losses well over 50% of their investment in loaning UAL money. Feel any better now?
Look, I know you have this "grass is always greener" attitude, and you're convinced that labor is suffering tremendously and the holders of capital are winning out at your expense. But at least regarding UAL, if all their creditors (heck, even just all their secured creditors) were guaranteed a 15% loss, virtually all (if not "literally all") of them would snatch that up in a heartbeat right now.
None of this means that UAL employees aren't suffering. They are. But to pretend that somehow they're the only ones getting screwed (or that the pilots aren't getting screwed very badly) is ridiculous.
Yeah, I know, all I'm doing is getting you riled up; I'll never convince you of a damn thing. So be it.
-synchronicity
