Yes Vote, Salvation or Doom for MCI?

[Bob Owens]

Mechanics at MCI have been told that if they do not vote yes for these massive prolonged concessions that the company would close the base. The company reportedly did not say that a yes vote would keep it open only that if they voted NO it would be closed. One thing we have to wonder is would a Yes vote actually help the company close the base? If AA actually intended on closing the base why did they not do so already? Could it be that under the agreement that is in place it would be difficult to do so? Right now we have system protection from March 1, 2001and prior. Per the contract article 15, the company must layoff by seniority. While the MCI employees are not covered or entitled to the $12500 they would certainly have grounds to grieve if there are workers with less seniority not getting laid off. With the fact that in cities like NY and LAX these guys get 25% seniority, the protected employees in those stations in effect protect MCI. As long as those workers are on payroll, and they cant be put out on the street, what would the company do with the MCI guys if they closed the base? If the company lays them off they file a grievance under Article 15. If this contract is voted in and the date is moved back three years it wipes out anyone in MCI with less than 20years. .25 x 20 =5. Past precidence has people from the OH bases going to the line stations in the event of a layoff. With the new agreement the company can lay off the system proteced worker in NY or LAX back to 1998 and anyone with 20 years or less in MCI. I have not yet reviewed the Kasher decision but unless it says anything different it appears that if MCI votes yes they are enabling the company to close MCI and get rid of any worker with 20 years or less. Most workers with more than 20 years are not likely to transfer to NY where a small home runs in the neighborhood of $350,000 with around $7000/yr in taxes.

MCI workers may want to look into this before they vote.

 

[Bob Owens]

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On 4/12/2003 8:39:32 AM mojo13 wrote:

Do you really think we like this piece of crap TA? Do you really think that there is a better deal out there? Do you really think that you would do better under bankruptcy?
You know as well as I do that former TWA employees have no system protection, period, no matter where they work, base or line station. You know that a NO vote will eliminate our jobs. Outsourcing all heavy maintenance would not hurt the line operation would it? This is coming down to a base vs. line station vote. You would like to see a no vote so that MCI and AFW go away and you can build your empire.
I tried to keep emotion out of this, but as I see it, trying to persuade the MCI mechanics to vote no is asking them to eliminate themselves from AA, and that is what you really want, isn't it?

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I suggest you read your contract. System protected or not, how could they lay off a senior person before a Junior person?If the person below you cant be laid off then how can you?

I have no malice towards the bases. I do get fustrated in that they fail to be aware or care that we can not live where we live on what they are willing to accept. There should be some sort of regional difference .

Outsourcing all heavy Maint? What is stopping them now?
A few years back we were shipping all our A-300 engines to Europe for OH. The company found that in the long run it was cheaper to bring it back.

As long as this contract is in place and the company CAN NOT put anyone with a 3/1/01 Occ date on the street it indirectly secures your guys. Once that is gone, so are you.

Did the company say that if this gets voted in that they would keep the base or did everyone just assume that was what they meant?

If this gets voted in I see the company going BK anyway. Throwing the blame on the DIP and doing as they please. If you were stupid enough to believe them now why wouldnt you believe them when they tell you "they tried"? They may even bust the TWU entirely by offering the line guys rstoration and getting rid of OH and Fleet.Maybe they will even contract out Line maint too. If this passes it really doesnt make much difference. WE WILL BE MAKING LESS IN ACTUAL DOLLARS IN 2009 THAN WE ARE NOW!!! Could you blame the line guys if they took it? We are willing to fight alongside you guys but if this is forced upon us without a fight because you guys are scared to fight then why should we not accept the offer? This proposal is a career killer. We can not survive here on those rates.In the past we had unlimited overtime and most of worked two or three jobs to get by. We have had enough.
Some times you have to act like you have a pair.

That herd of Buffalo out in Missouri is rapidly approching the edge of the cliff!

 

[bagsmasher]

The most junior AMT from MCIE that I have talked to had 18 years. The most senior one I have talked to now has about 52 years. There are a lot over there with 30 plus years. I keep hearing that many of them say they are voting "NO". I guess they are not scared of Carty''s threats to close the base.

 

[mojo13]

Do you really think we like this piece of crap TA? Do you really think that there is a better deal out there? Do you really think that you would do better under bankruptcy?
You know as well as I do that former TWA employees have no system protection, period, no matter where they work, base or line station. You know that a NO vote will eliminate our jobs. Outsourcing all heavy maintenance would not hurt the line operation would it? This is coming down to a base vs. line station vote. You would like to see a no vote so that MCI and AFW go away and you can build your empire.
I tried to keep emotion out of this, but as I see it, trying to persuade the MCI mechanics to vote no is asking them to eliminate themselves from AA, and that is what you really want, isn''t it?

 

[RV4]

From the Pilots Defending the Profession Website: [url="http://www.apapdp.org/"]http://www.apapdp.org/[/URL]



An Independent Bankruptcy Lawyer's Opinion

[This was written by a bankruptcy lawyer in response to the LeBoeuf, Lamb, Greene & MacRae letter to APA dated 7 April 2003. Interesting, thoughtful analysis of our current situation and the impact (or lack thereof) of our TA vote on the overall picture at AA. The lawyer was specifically asked if the bankruptcy judge would look on a labor group favorably if they agreed to pre-bankruptcy concessions. - Ed.]

New York lawyers are such a pain. OK - here is my "take" on things...I also spoke with one of the partners in my working group who has a lot of experience with bigger cases (KMart, Service Merchandise, etc.).

1. American is going to file some time - their debt structure is just too enormous to be able to get by with just concessions from the pilots, etc. What they need to do is cut overhead across the board - reduce routes, sell planes, you name it. I know this doesn't sound good, but it is just one of those times when it is better to take the medicine now. I think that even if the concessions come now, they are going to file and come back for more concessions. Given the inevitability of filing, it is pretty clear that jobs are going to be cut - I am guessing that this is where your main concern lies b/c I don't know how much seniority you have.
   
   
   If they just go ahead and file now while they are still healthy, I think they have a better chance of coming out of bankruptcy OK. US Air is a good example - they filed right away, and the chances of a successful reorganization are good. United waited, went through a couple rounds of concessions, and I really don't think they are going to make it out of Chapter 11.
   
   
   Procedurally speaking, this guy from LeBouf has all the basics covered, but it is obvious that he has an agenda - to scare you all into signing the concessions - and I think that he has painted the bleakest picture possible - but, if American goes ahead and gets in while they still have some upside and now that they have gotten that loan guarantee, I think they can secure the necessary debtor-in-possession (dip) financing to pull through - if they wait until the guarantee runs out, that might not be the case.
   
   
   American has hired one of the two premier law firms to be its debtor's counsel - Weil Gotschal. Weil is going to charge them an arm and a leg, but they will get the job done and get the airline on its feet. United hired a bunch of idiots who acted surprised that they didn't get a loan guarantee, and now they are paying for it.
   
   
   As far as the judge looking favorably on the union for making pre-bankruptcy concessions - or looking disfavorably on them if they don't - I think that's a load of crap. Either way, the secured creditors and the unsecured creditors' committee is going to have priority over the employees, and they are going to get what they want out of the reorganization. Furthermore, the public is going to blame this on the union regardless, so making the concessions is not going to help the union out as far as public relations anyway... there will be more concessions demanded - it will just be a matter of when they file.
   
   
   The debtor has the ability to do a lot of things in Chapter 11. Section 1110 of the Code gives the debtor a lot of flexibility, and given the fact that American has a good law firm and can reject executory contracts and leases (as described by the guy from NY), I think that there is a good chance that if American goes in sooner rather than later, they might have a chance.

I think that the airline industry has to face facts - these huge international airlines are not the wave of the future - why do you think Southwest is doing so well? They have low overhead, don't carry a lot of debt and run themselves like a bus service - and people put up with it b/c the tickets are reasonable. Commuter airlines with short routes and not a lot of frills are it.

As far as what you should do specifically - hmmm... Like I said, the filing is inevitable, so it is just a matter of whether the union pushes them in now (which I think is the best thing) or waits it out. American is going to blow through that guarantee before the end of the summer, and then there isn't going to be any money to be had, and there is going to be a filing and a second round of concessions. I don't know how long you have been at American, but if you are as worried as you seem to be, my guess is that you are on the lower end of the seniority pole and see layoff as a possibility. As much as it stinks to say it - you are probably right. If it were me, I would try to get as much as I can right now, encourage others to say no to the concessions, and hope that American goes in quick, gets the dip financing, and gets out quick. There will be layoffs, but the sooner they go in, the better their chance of coming out, and then they won't be so debt-leveraged and might actually be able to consider re-hiring. I just don't see any way around them filing for bankruptcy - and the longer they wait, the worse I think it is going to be.​

 

[mojo13]

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On 4/12/2003 1057 AM Bob Owens wrote:


Why does everyone act like the company has us by the short hairs?

We have a contract in place. Despite the rhetoric from the company/union these are not easliy abrogated as they imply.

Our contract is by no means "onerous". Especially the Title I & II contracts where the company has been allowed to take away our work and esentially have us bid on our own work. The only thing that we have is system proitection. This was given in exchange for many things that the company still enjoys such as the 8.5 hr day, cross utilization, long progressions and more pro company work rules than its competitors.

Right now the company can not lay off beyond 3/1/01.  They are stuck.

If they threaten to abrogate we inform the judge that we will utilize self help. So we are at a standoff. A judge is well aware of the fact that self help means liquidation and huge losses for the creditors so he would try to head it off by not abrogating the deal and encouraging a settlement, this is not EAL with 7% of the market, its AA with much more than double that. Its larger than the UAL that Bush said could not be allowed to cease operations due to a strike because of the broader economic impact.This is a big deal. Are the risks real, hell yea, but like I said before, if you are going to be in this game of trying to get what you desrve instead of what they feel they can get away with you got to have a pair.

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I am in retreat to absorb all of this. I believe you have made some valid points and perhaps fear has clouded my judgement.

 

[mojo13]

Is anyone up there signing cards to get rid of the problem?

I wouldn''t know that, and even if they were, what good would it do?

 

[mojo13]

I suggest you read your contract. System protected or not, how could they lay off a senior person before a Junior person?

Yes, we could bump the system and immediately lose our 100% seniority once we left MCI or STL. So now where does that put us?

I have no malice towards the bases. I do get fustrated in that they fail to be aware or care that we can not live where we live on what they are willing to accept. There should be some sort of regional difference .

I agree that there should be a regional difference for cost of living.

Outsourcing all heavy Maint? What is stopping them now?
A few years back we were shipping all our A-300 engines to Europe for OH. The company found that in the long run it was cheaper to bring it back.

Closing the bases would mean that they would be sold and reopened as a FBO, then they could get their planes done cheaper.

As long as this contract is in place and the company CAN NOT put anyone with a 3/1/01 Occ date on the street it indirectly secures your guys. Once that is gone, so are you.

Once we are in bankruptcy and they abrogate the contract that 3/1/01 Occ date doesn''t mean squat.

Did the company say that if this gets voted in that they would keep the base or did everyone just assume that was what they meant?

What Carty said is that if it gets rejected, capacity will be reduced 70 to 80 airplanes and he would retreat to Tulsa.

 

[Hopeful]

Market share is one thing, but with too much capacity out there, a major carrier going out of business may be just what the doctor ordered.

 

[RV4]

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On 4/12/2003 8:39:32 AM mojo13 wrote:

Do you really think we like this piece of crap TA? Do you really think that there is a better deal out there? Do you really think that you would do better under bankruptcy?
You know as well as I do that former TWA employees have no system protection, period, no matter where they work, base or line station. You know that a NO vote will eliminate our jobs. Outsourcing all heavy maintenance would not hurt the line operation would it? This is coming down to a base vs. line station vote. You would like to see a no vote so that MCI and AFW go away and you can build your empire.
I tried to keep emotion out of this, but as I see it, trying to persuade the MCI mechanics to vote no is asking them to eliminate themselves from AA, and that is what you really want, isn't it?

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mojo,

With all due respect, you should listen to those that have worked for AA and the TWU management team longer than you have.

Bob was clear, voting yes makes it much easier to shutdown MCI than a NO vote. Regardless of that, the fact is, AFW and MCI will both be shut down or AA will go out of business trying to keep a huge albatross airline flying with an old and outdated structure and business model. CAPACITY is the problem and a massive reduction thereof is the only way to survive. This excersie is nothing more than a prep for things to come so that when we end up emerging from Chapter 11, the employees feel like they gained somewhere but who knows what that will be.

It is clear that FEAR rules, it is clear that everyone is afraid, it is clear that AA will file Bankruptcy regardless of these concessions.

If you are content on trusting AA and the TWU management team and learning the the hard way. So be it.

For those of us that have already learned the hard way. We will try our best not to tell you "I TOLD YOU SO" when you are struck with reality.

 

[RV4]

mojo13,

Is anyone up there signing cards to get rid of the problem?

 

[Bob Owens]

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On 4/12/2003 9:13:43 AM mojo13 wrote:

I suggest you read your contract. System protected or not, how could they lay off a senior person before a Junior person?

Yes, we could bump the system and immediately lose our 100% seniority once we left MCI or STL. So now where does that put us?

What would you rather lose 75% of your seniority or 40% of your pay? Again, if they cant lay off that Junior guy in JFK or LAX because of system protection how could they lay you off? What would they do just stick all 1300 of you in JFK and LAX? They are better off leaving you guys to keep doing your C-checks where yoou are. The last thing they want to do is expose 1300 of you guys to us. Arpey reportedly called JFK "The epicenter of discontent".

I have no malice towards the bases. I do get fustrated in that they fail to be aware or care that we can not live where we live on what they are willing to accept. There should be some sort of regional difference .

I agree that there should be a regional difference for cost of living.

Outsourcing all heavy Maint? What is stopping them now?
A few years back we were shipping all our A-300 engines to Europe for OH. The company found that in the long run it was cheaper to bring it back.

Closing the bases would mean that they would be sold and reopened as a FBO, then they could get their planes done cheaper.

Ok, WHAT IS STOPPING THEM NOW?

As long as this contract is in place and the company CAN NOT put anyone with a 3/1/01 Occ date on the street it indirectly secures your guys. Once that is gone, so are you.

Once we are in bankruptcy and they abrogate the contract that 3/1/01 Occ date doesn''t mean squat.

UAL has been in BK for 5 months. The Judge has not abrogated their contract yet. Its not quite as simple and automatic as they make it sound. There are also a lot of factors that come into play here. Plus Politcal pressure from communities that could lose services and jobs will put pressure for a reasonable settlement. If worse comes to worst we could always see how much the company saves in BK and then come to an agreement but once we are in BK we are not going to have to eat the whole $1.8 billion. UAL said they were losing 12 million a day, AA said 5million. 5x365=1.8 billion. Its doubtful that the court would consider it fair and equitable that AA should maintain its business plan intact and expect the employees to absorb all the costs of reorganization and continue to absorb those costs long into the future, even after the need may be gone.

Did the company say that if this gets voted in that they would keep the base or did everyone just assume that was what they meant?

What Carty said is that if it gets rejected, capacity will be reduced 70 to 80 airplanes and he would retreat to Tulsa.

Ok, what I figured. He did not say that if you vote YES that he would keep the base open though. Am I right?







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[Bob Owens]

mojo13;
Are you one of the guys I had the pleasure of meeting yesterday when I was over in KC?

 

[Bob Owens]

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On 4/12/2003 10:18:05 AM Hopeful wrote:

Market share is one thing, but with too much capacity out there, a major carrier going out of business may be just what the doctor ordered.

----------------
​

Over capacity is not a new developement. It existed prior to 9-11. Remember the total on all four aircraft only equaled about 1 full airplane, in other words they were only at 25% full then. Shortly after 9-11 capacity was cut and 20,000 workers were laid off. The "overcapacity" problem still existed when Bush said that UAL could not go on strike, so all this bull about capacity reduction is a scare tactic too. The fact remains that despite the overcapacity that exists, for many communities the service is essential. If any large carrier liquidates many communities would not see one of the survivors step in. A permanent reduction in capacity could also hinder or reverse economic recovery. The airlines that survived might make out better on the competative routes but the smaller markets could be wiped out. It would be like ripping down a powerplant when the demand was low. Its not that easy to just build a new one come summertime.

 

[Bob Owens]

Why does everyone act like the company has us by the short hairs?

We have a contract in place. Despite the rhetoric from the company/union these are not easliy abrogated as they imply.

Our contract is by no means "onerous". Especially the Title I & II contracts where the company has been allowed to take away our work and esentially have us bid on our own work. The only thing that we have is system proitection. This was given in exchange for many things that the company still enjoys such as the 8.5 hr day, cross utilization, long progressions and more pro company work rules than its competitors.

Right now the company can not lay off beyond 3/1/01. They are stuck.

If they threaten to abrogate we inform the judge that we will utilize self help. So we are at a standoff. A judge is well aware of the fact that self help means liquidation and huge losses for the creditors so he would try to head it off by not abrogating the deal and encouraging a settlement, this is not EAL with 7% of the market, its AA with much more than double that. Its larger than the UAL that Bush said could not be allowed to cease operations due to a strike because of the broader economic impact.This is a big deal. Are the risks real, hell yea, but like I said before, if you are going to be in this game of trying to get what you desrve instead of what they feel they can get away with you got to have a pair.