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$6M exec bonuses irk US Airways workers

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Jan 23, 2002
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By Barbara De Lollis, USA TODAY

US Airways employees are fuming about $6 million in 2001 bonuses that the company will start paying midlevel and senior executives in October.

US Airways filed for bankruptcy-court protection two weeks ago and is overhauling the airline by cutting flights, reducing the number of jets it flies, laying off employees and reducing the pay of those who stay.

"That's just unbelievable," says Debby Rater, who cleans airplanes at US Airways' Charlotte hub and is married to US Airways mechanic Ron Rater. "It's like they're taking everything from us to supplement their income. We're trying to figure out if we can afford to stay in our home."

The Raters will vote Wednesday on concessions that would cut their pay by at least 8%. The $6 million, she says, makes them want to vote down the proposal and take their chances with a bankruptcy judge.

But US Airways executives say the money is being paid for two reasons: It's owed, and it will help retain employees who are vital to running the airline.

About 500 current employees — including lawyers, financial analysts and marketing staff — will share the money based on the company's performance in 2001, when US Airways lost nearly $2 billion.

The airline says Chairman Stephen Wolf and former CEO Rakesh Gangwal are not on the list of recipients. Monthly payments range from $620 to $13,000. That's $7,440 to $156,000 a year in additional pay.

CEO David Siegel approved the bonuses last spring, shortly after taking the job, then postponed them. But he thinks it's critical to pay the money.

US Airways' turnover rate has tripled among key managers, as headhunters circle "like vultures," says spokesman Chris Chiames. Under this arrangement, employees would collect as long as they stay.

"Bankruptcy estates have to struggle to keep people on staff. If a company wants to retain them, one of the ways to do that," is to offer incentives, says bankruptcy lawyer John McDonald. "It's always hard to understand when you're a union employee."

Wednesday, 13,000 members of the machinists' union will vote on management's proposal, which includes a promise not to seek further cuts.

Union officials say they're repeatedly explaining the bonus payments to members in meetings leading up to the vote.

"It does not look good when they're giving $6 million in bonuses to certain people and asking others to take significant wage reductions at the same time," says machinists' union spokesman Joe Tiberi. "But if the entire upper management were to quit ... the company could not operate."
 
Why pay $6 million in retention bonuses to the very management team that ran US Airways into the ground? Instead of rewarding this incompetent bunch they should be cancelling bonuses and sending them on their merry way. I could only imagine the state of the industry if line pilots performed as poorly as senior management.
 
They're seeking pay concessions from all employee groups while at the same time giving themselves 6 mil. in bonuses........and they are in bankruptcy ............makes sense to me :eek:
 
Unbelievable.

Seems things really havn't changed at all at US, other then management now having "ripped off" all of their employees and vendors with the chapter 11. Sad.

I wonder what impact these bonuses will have on US aquiring the still needed federal loan?
 
Bonuses to RETAIN people?!

I can't beleive they use the excuse, "We are giving bonuses to retain people vital to the airline".

I just have to ask, where in the hell are these people going to go in the current job market?! If they quit, they will be unemployed and broke because there are no jobs out there!!!


:mad:
 
Bonus

This subject has been discussed adnuasium by Dave Siegel.

Most reasonable people agree this is the right course of action.

The emiotional response on this board is a result of CLA (clear lack of understanding).
 
I hope you're kidding. By the way wouldn't you call it CLU, not CLA (clear lack of understanding)?

According to your logic it would be unwise to force pay concessions on the express operators. I know that at pdt and Alg fo's are leaving in droves to the likes of ACA and Comair because they are not thrilled with the prospect of taking a 20%+ pay cut. With each resignation the company is forced to spend thousands to send a furloughee to Flight Safety to get qualified on the dash 8 and write off the thousands they already spent on the guy leaving. Couldn't an argument be made to a BK judge that we need to give bonuses to Wholly Owned fo's in order to keep them around in light of the company's grim prospects? Have to keep training costs down, right? Were we not also promised our non-concessionary rates in the form of a legally binding contract?

I guess I just don't agree that ex Us Airways managers are hot property and other carriers would be falling all over themselves to steal these talented individuals.

As John Mcdonald stated "It's always hard to understand when you're a union employee." I guess I'm guilty as charged. He must be one of those "reasonable people."
 

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