Will AA declare bankruptcy?

[eolesen]

Eagle has nothing to do with this -- AMR could file along with AA at any time they wanted to. The debt is already AMR's, and they don't necessarily have to put the Eagle subsidiary into bankruptcy...

 

[wcs]

It helps if they want to get rid of the Embraers

 

[Bob Owens]

Just out of curiousity Bob, in your opinion if what you say is true then why doesn't the TWU Leadership create DVD's containing facts that back up your claims and do a mass distribution amongst the membership instead of making political yard signs, slogans, and fear mongering data? I think I know my answer or opinion on this, but would be much interested to hear your take on it.

Your YouTube video served it's purpose in the given time but why not mass distribution of a DVD to the membership?

In my work area, everyone is just starving for information, and nobody believes a damn thing the Local Leaders say, if you have something to share, then stop bothering with this forum which cannot be reaching more than hundred or two, and create a mass distribution DVD.

I regularly put stuff out to our members, much of which is not supported by the International. While I put out how the company has increased revenues by up to $5 billion a year while eliminating up to 40,000 jobs and shedding 200 airplanes the International sends out oil price reports and tells us the company may file bankruptcy because of a billion dollar pension payment coming due.(It turned out to be half that and the reason it was that much was because they contributed nothing the previous year.) and cites how we are the only carrier that still does OH and that the company has the highest labor costs. When the company tells us that they will have all these "white spaces" in OH and will need need to cut 1200 jobs by 2012 if they cant fill those spaces with 3P work and I question the credibility of those projections the International insists those projections are Gospell. When I say that there is a coming shortage of A&Ps and that the company will need up to 500 new mechanics every year just to maintain headcount the International insists that the number is closer to 100, only to be rebuked by the company when they claim the reason why they could not offer the VBR to the line was because they were losing around 400 to 500 mechanics already and they could not afford to lose more. I have little faith in anything put out by the Economist they hired as well. When we asked him for a cost out for our table position he said it would be $1.1 billion, after I challenged several of his assumptions it was knocked down to around $800 million. I've asked questions about AA finances in the past and I have not recieved answers. Maybe we can do one locally if we get the time. Needless to say that I feel that the challenge that I've faced over the last two and a half years isnt so much negotiating with the company but negotiating with the ATD and those who follow every word they say.

 

[WorldTraveler]

Bob,
you're a smart guy but the reason you fail to convince so many people of your position is because you disregard what others have to say - including the company's position - as nothing but lies and attempts to mislead.
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As we all know, there are lots of opinions of what the problems are at AA and what it takes to fix them. There could be lots of combinations of solutions and there could be a range of expected benefits just as there are ranges of the costs of each of AA's problems. It doesn't make anyone inaccurate in their assessment if they can't tell you w/ certainty exactly the cost of each problem or the benefit if change X or Y is made... you can extrapolate some things between AA's history and now and between other carriers but there are unique aspects of AA as well as changes in the business and industry that make coming up w/ exact answers impossible.
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Other people - some of whom get upset if their names are used in posts - get upset when they accurately note that AA's revenues have grown - but so have their costs. It is just plain factual, Bob, to acknowledge that AA's costs have risen FASTER than their revenues. It doesn't take a super close scrutiny of AA's books to figure that out.
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I have never claimed that AA's problem is REVENUE ONLY.... but in recent years, AA's historic revenue premium to the industry has begun to erode and I submit that it will continue to erode, esp. if the company succeeds in outsourcing domestic flying in key markets, including working from the philosophy that if we can't make it work, we'll outsource to someone who can make money.
It is NO surprise that other carriers, esp. low fare carriers, figure out how to make the biggest, highest yielding markets work, skimming off the best revenue and leaving the network carriers to serve the 200 additional cities that low fare carriers will never touch.
All the praise for low fare carriers omits the reality that they come nowhere close to providing the nationwide and worldwide networks that network carriers provide.
My assertion is that AA MUST figure out how to compete in its most important domestic markets, which is all the more important given that the Cornerstone Plan is built on AA serving the biggest revenue markets in the country. They cannot succeed if they continue to turn key markets over to low fare carriers or to allow aggressive low fare carriers to set up "light housekeeping" where AA flies.
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My perspective is about revenue... others focus more on productivity... you focus esp. on maintenance and overhaul.
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All of those are valid pieces of the puzzle that must be considered....
but I can assure you that dismissing very obvious facts because they don't directly support your thesis do nothing to help convince people that you have a valid solution to AA's problems.
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The reality is working from a diminishing revenue/lower than average productivity (companywide), higher than average maintenance cost perspective.
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Your solutions MUST reflect those realities.
And, I might add, so must everyone else's... which is part of why I said AA labor needs to be careful when company solutions fail to acknowledge and address all of the problems; my concern is that AA has yet to acknowledge its revenue production problem or come up w/ solutions to address it.

 

[Bob Owens]

My perspective is about revenue... others focus more on productivity... you focus esp. on maintenance and overhaul.
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All of those are valid pieces of the puzzle that must be considered....
but I can assure you that dismissing very obvious facts because they don't directly support your thesis do nothing to help convince people that you have a valid solution to AA's problems.
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The reality is working from a diminishing revenue/lower than average productivity (companywide), higher than average maintenance cost perspective.
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Your solutions MUST reflect those realities.

Wrong, the only problem that I need to address is Maintenence and Stores. I do not run the company, I have no say in the markets they choose to serve, the prices they charge for tickets, they equipment they buy and I can not save this company from bankruptcy or force it to show a profit, thats the job of the people who are paid vast sums of money by the shareholders of AMR. I'm paid to try and get us the best deal we can get, they really dont care what we have to say as far as providing solutions. We have asked the company why they say they need what they need, how it will help the bottom line, their answers have been vauge and evasive, they ignore our needs completely. They still think this is 2003. When we've moved towards them they pick up the ball and move it further away. They are demanding terms that would leave us financially worse off than we were in 2008, let alone 2002.

 

[WorldTraveler]

and, Bob, I will tell you that is why labor cannot get what it wants anymore.. because there are precious few labor leaders who are able to understand the business and create solutions that meet the needs of both labor and management.
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You and others talk about how well WN employees are paid... you might want to consider that WN has outstanding labor relations in an industry that is chalk full of labor problems BECAUSE labor understands what it takes for the company to succeed AND vice versa and the two largely work together to achieve that end.

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AA's labor relations are horrendous in part because there is no desire to work together, no desire to recognize that there are multiple pieces to the puzzle to be solved, other groups that need to be satisfied as well.
I don't think anyone believes that labor alone should sacrifice or that maintenance or all of the TWU should bear the brunt of AA's cuts... but everyone DOES recognize that if the situation remains as broken as it is and you are unable to obtain a win- win solution for all, it will be to the detriment of the TWU AND the members that you are supposed to represent.
Yes, I think it is very true that AA is not negotiating fairly with you (TWU) while they may be more honest with the APA because they can steamroll the TWU workgroups - but they will whether you negotiate or not.
By honestly understanding the environment in which the company must work, you stand a far better chance of succeeding at getting the deal the TWU and AA both need.

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By arguing that AA's revenues have increased and so should your pay, you accomplish nothing other than to diminish your own credibility by failing to recognize that their costs have gone up far faster - principally driven by fuel, an expense over which AA and other companies - and individuals - have little control.
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[Lloyd Grey]

I just hope they spin off overhaul so the line can earn a market rate.

 

[Birdman]

I just hope they spin off overhaul so the line can earn a market rate.

And I wished I could work on one of WN's heavy 737 lines instead of one of AA's. I suggest neither of us hold our breaths.

 

[Bob Owens]

and, Bob, I will tell you that is why labor cannot get what it wants anymore.. because there are precious few labor leaders who are able to understand the business and create solutions that meet the needs of both labor and management.
You and others talk about how well WN employees are paid... you might want to consider that WN has outstanding labor relations in an industry that is chalk full of labor problems BECAUSE labor understands what it takes for the company to succeed AND vice versa and the two largely work together to achieve that end.

SWA management doesnt ask their employees or unions to take responsibility for the decisions of management or run the company, they ask each group to do their jobs to the best of their ability and they pay them a fair wage for their efforts. They dont give themselves bonuses and say things like 'Shared sacrifice is not equal sacrifice".

You contradicted yourself, you say labor cannot get what it wants anymore then cite WN, WN is the most heavily unionized carrier out there, and they are among the highest paid and most productive. WN never broke a deal or threatened BK as a means of taking stuff away from their workers. Management at WN has earned the trust of all concerned and delivered on what they promised. Its a two way street. We've always given management what they needed, even during negotiations where we lent political support to anti-trust immunity, agreed to make DWH a maintenance base, and eliminate the experience requirement for line maintenance. We opened our contract early and gave them 7 sick days plus half pay for the first two used at each occurance, a week of Vacation, half our paid holidays and reduced the pay if worked to half pay, 17.5% off our chart rates of pay, around $42 million a year out of members pockets in part to subsidize the companys obligation to provide medical to other workgroups and scores of other concessions. We gave so many concessions that the company that had already gone BK had to go back for more. So dont come here and say that labor is being unreasonable and needs to look at managements point of view, they get paid the big bucks , they need to do their jobs and not piss away everything we've already given them and expect more.

 

[Hopeful]

According to some people, merely asking for ANYTHING is being unreasonable!

Unless, of course, you're in upper management!

 

[Buck]

World Traveler - I will tell you that is why labor cannot get what
 it wants anymore..

The labor you speak of, if you mean the Maintenance and Related under the TWU, has not been able to get what it wants since before 1983......

 

[eolesen]

SWA management doesnt ask their employees or unions to take responsibility for the decisions of management or run the company, they ask each group to do their jobs to the best of their ability and they pay them a fair wage for their efforts. They dont give themselves bonuses and say things like 'Shared sacrifice is not equal sacrifice".

I think you're really a bit ignorant as to why WN is successful, Bob...

They don't need to ask the employees to take responsibility because the unions already know they already share that responsibility with management.

Ask anyone there who has been around for more than a few years, and they fully understand that their success is all about costs and productivity. No featherbedding, no arguing over who should pick up a newspaper off the cabin floor, or who should deal with a problem unfolding in front of them.

I've never heard an employee at WN say "it's not my job". I've seen mechanics throw bags. I've seen clerks help change a tire. And I've seen pilots pick up trash.

The employees there understand that no one workgroup or subset of employees can operate in a vacuum.

They understand that keeping the company profitable is their best chance at getting a fair wage.

You guys? Exact opposites in just about every way possible.

You're in it just for your own workgroup, and could give a rat's ass about the impact of what you are asking for on fleet service, flight service, or pilots.

I lost track of how many times I heard "it's not my job" from you in particular, but also from the majority of AA's employees. If it isn't in your job description, you absolve yourself of any responsibility...

So... if you think you really deserve WN's wages, maybe you need to think about why they get paid a decent wage. They're getting rewarded for keeping a collaborative culture.

I don't see how AA will ever come close to replicating that culture. Not without radical change at every level including labor.

 

[WorldTraveler]

SWA management doesnt ask their employees or unions to take responsibility for the decisions of management or run the company, they ask each group to do their jobs to the best of their ability and they pay them a fair wage for their efforts. They dont give themselves bonuses and say things like 'Shared sacrifice is not equal sacrifice".

You contradicted yourself, you say labor cannot get what it wants anymore then cite WN, WN is the most heavily unionized carrier out there, and they are among the highest paid and most productive. WN never broke a deal or threatened BK as a means of taking stuff away from their workers. Management at WN has earned the trust of all concerned and delivered on what they promised. Its a two way street. We've always given management what they needed, even during negotiations where we lent political support to anti-trust immunity, agreed to make DWH a maintenance base, and eliminate the experience requirement for line maintenance. We opened our contract early and gave them 7 sick days plus half pay for the first two used at each occurance, a week of Vacation, half our paid holidays and reduced the pay if worked to half pay, 17.5% off our chart rates of pay, around $42 million a year out of members pockets in part to subsidize the companys obligation to provide medical to other workgroups and scores of other concessions. We gave so many concessions that the company that had already gone BK had to go back for more. So dont come here and say that labor is being unreasonable and needs to look at managements point of view, they get paid the big bucks , they need to do their jobs and not piss away everything we've already given them and expect more.

Bob,
no one is asking labor to take responsibility for the role mgmt is supposed to do; I have spoken far more than anyone about AA mgmt's failure to manage the strategic aspects of the business including its network and the implications that those actions have had on labor.
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There is no contradiction.. I simply have noted that the attitude of "I will get what I need w/ no regard for what you need or how you are going to give it to me" is precisely why labor continues to lose influence in the US.
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There are pro-labor/union people who frequent this board who have an outstanding understanding of how labor and mgmt should work together. You would do well to spend some time talking w/ some of them.
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There are also distinct differences between WN's business model and AA's... WN is a much newer company with a business model that has needed few tweaks... they are making more changes to their business model today - and within the last five years - than they did in the first 35 years.
Most of the changes WN needs today have no impact on labor... and WN has been able to profitably do what it has done for years so the role labor has had to play has been limited.
But WN's labor HAS adapted to the realities of a changing business model... they know that what keeps WN strong is what keeps labor at WN strong.
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But let me bring the circle a little closer to the network carrier segment; I know there are plenty of people who don't like seeing me compare AA to DL.. but there are valid reasons for doing so. I can cite two significant changes in DL's business model that have been made which had significant implications on labor.
1. During bankruptcy, DL made the obviously intentional decision to subcontract out much of its overhaul business, a subject close to your heart. DL mechanics were not unionized, although they have had the opportunity to vote more than once but have said they weren't interested in unions. As such, DL's decisions didn't meet any unified resistance from DL's mechanics but there also doesn't seem to have been a whole lot of concern at what DL did from its mechanics - or at least it wasn't enough of a concern for them to have voted for a union.
While DL has outsourced many overhauls, it has brought in a considerable amount of new business via insourcing, esp. in the form of engine and component overhauls.
Because DL has chosen to outsource alot of its overhaul work which requires alot of physical space, it terminated alot of lease agreements for maintenance facilities throughout the system which has resulted in an even larger concentration of DL maintenance in ATL.
A few people sniped that the recent AeroMexico maintenance deal would result in a loss of jobs, but apparently the majority of DL mechanics do not believe this to be the case - or they have yet to convince enough people that this is a concern.... DL employee related issues usually bubble to the surface fairly quickly even w/o a union. Most DL mechanics see the AM agreement as an opportunity to centralize some of DL's overhaul work to a facility that can also do "the other half of MRO work" that DL doesn't want to do....
I honestly don't know all of the implications of DL's action on the mechanics at DL - and PMNW mechanics - but DL has been able to bring in insourcing revenue pretty close to 25% of what DL spends to maintain its own fleet of 750 or so mainline aircraft - by far one of the highest percentages in the world and certainly the highest percentage if not absolute dollar amounts in the Americas.

2. DL pilots were asked to significantly outsource RJ flying five to seven years ago. DL has long had much larger regional program than other carriers. DL pilots have long understood that DL's business model which is highly dependent on connecting traffic requires the use of regional jets. With the advent of the 70 seat CRJ and even further developments of the 76 seat model in two classes that can fly 3-4 hour segments, DL ALPA has voiced little concern regarding the increased outsourcing. That lack of concern might be in part because DL has dramatically increased its international flying at the same time it asked for concessions on increased larger/longer-haul RJ flying. DL also quickly put the 777LR in service and staffs it with 2 Captains and 2 FOs on 16hr plus flights.
There IS a union representing DL's pilots - and in both the RJ and 77LR cases, the company and union both got what they wanted.
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My question to you is why AA and the TWU can't do the same thing.
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Do you really care if AA does overhauls or that AA mechanics represented by the TWU continue to have jobs - and the TWU continues to have a membership base - that might possibly even grow in the future w/ the airline?

 

[chris perry]

WT,
AA has made a management decision not to do third party work....They never wanted it.... goes way back to FEDX days in
Tulsa. Management simply told FEDX to get their #### out now..... we dont want it here!!! They made a half ass attempt at the Delta hgr,but set it up to fail.... Why is Delta doing it now if its so unprofitable? We have so much talent going to waste here it's almost sickening....

 

[AANOTOK]

I lost track of how many times I heard "it's not my job" from you in particular, but also from the majority of AA's employees. If it isn't in your job description, you absolve yourself of any responsibility...

I would say I have to agree with you E. Just like you hear from our great union "they can do that", I think I have heard just as much if not more "that's not my job". And damn, I'm talking the same workgroup. I have seen an agent ask a clerk to pickup a bag and move it a gate over and the clerk say "that bags not on my sheet". We work with some real winners out here. Thanks, TWU!