AA's Parker, he's REALLY against profit sharing. Article

[General Lee]

American CEO to airlines: Stop sharing profits

December 16, 2014 Reuters



By Trebor Banstetter, Corporate Communications

Despite pressure from his employees to implement a profit-sharing program, American Airlines CEO Doug Parker said Monday that profit sharing is outdated.

In an interview with Reuters, Parker suggested that all airlines should stop sharing profits with employees. "We should move back to what normal industrial companies do, which is pay people [what] they earn" without profit-sharing, Parker said.

American's unions have been pushing the company to share profits "which are expected to be at record levels this year" with employees. The lack of profit sharing was cited by many flight attendants when they voted down a tentative contract agreement last month. Pilots also have been calling for the company to share its record profits with employees.

Profit-sharing gives workers "a feeling of being valued," said Leslie Mayo, a spokeswoman for the Association of Professional Flight Attendants, which represents workers at American, told Reuters.

Parker wasn't always opposed to sharing profits. In 2007, when US Airways distributed profit-sharing checks to employees Parker said in a press release that "I'm delighted that today our employees will share in this success through our profit sharing program." He was the airline's CEO at the time.

Reuters reported that the Allied Pilots Association, which represents American's pilots, said a recent contract offer still leaves its members far behind their counterparts at Delta because of profit-sharing.

Delta is expected to pay more than $1 billion in profit sharing to employees for 2014, the highest payout in the industry. Total 2014 profit sharing for Delta employees will average nearly two months' salary.

According to Delta's latest competitive review of compensation, Delta people will earn on average 26 percent more total pay in 2014 than their American Airlines counterparts.

Southwest Airlines, United Airlines and Alaska Airlines also have profit-sharing programs.





The APA recently estimated and stated that DL would give out profit sharing worth 19% of the W2 (2014's W2) for 2015. (Feb 14th, although 5% was already given in October, so 14% in Feb). That's in addition to the higher rates. Plus, that profit sharing check (s) also has an additional 15% DC fund tagged onto it. So, a $20K check (pre tax) would have an additional $3K put into the DC fund as well. It's a great deal.


What will the APA settle for? What will Parker do?



Bye Bye---General Lee

 

[gutshotdraw]

Funny. Our d-bag CEO wants to move us TOWARD a "profit-sharing" scheme instead of legitimate salary increases. Problem is, the benchmarks, caveats, and conditions would guarantee that we would NEVER see a nickel.

I'll take REAL salary and benefits thankyouverymuch.

 

[General Lee]

Thanks to Consolidation, the big 3 have become a lot more profitable and stable. Debt is being paid off, fuel is declining, bag fees and change fees seem accepted by the public, etc. Things are looking good right now. Of course Parker wants to avoid doling it out, and I'm sure he will take a huge piece of profit sharing himself. He sure isn't helping his "team" get motivated...

As far as an increase in salary goes, that is good, but to replace profit sharing (about 19% of W2 for 2015's payout (14% on Feb 14th due to other 5% paid early in OCT), it would have to be a huge raise (Capts or FOs making more than $250k this year will get an additional $47K+), and I don't think Wall St likes when employee groups get huge raises. (It doesn't bother me, though)

So, sneaking in profit sharing may be a good thing for everyone.



Bye Bye---General Lee

 

[Bringupthebird]

Parker thinks the pie is only so big and any whipped cream has to come at the expense of less pie. A company has myriad ways to manipulate profit. Most of them have nothing to do with the work pilots do. Companies can lose money on hedges, or auction rate securities or bad PR due to shortsighted corporate decisions or many other things (all things AWA/US did by the way).

Unions should negotiate the best deal (short and long term) possible and then make sure it is scrupulously enforced. If folks want to share in profits, go buy stock.

AA's issues are deeper than employee negotiations. They have jettisoned almost every vestige of the AWA culture which formed the basis for the success that US and later AA relied on for resuscitation. AA has not become a more nimble competitor, just a larger and more entrenched version of itself, which does well in good times, but may suffer far more than the rest when (not if) fortunes reverse.

 

[gutshotdraw]

So, sneaking in profit sharing may be a good thing for everyone.



Bye Bye---General Lee

For you, my friends at Delta, SWA, and potentially at AA, that may be true. For us, NOT so good. So please don't say "everyone."

Our clueless, tone-deaf, union-busting lawyer CEO wants to use the carrot of "profit sharing" to weasel out of any improvements during our contract fight. He has NO intention of paying us a nickel. In fact, he wants to REDUCE overall compensation by 5% over 5 years.

 

[Flopgut]

Where do you work?

 

[gutshotdraw]

That bastion of the rich and shameless.

NJA

 

[Flopgut]

Ok, well I hope things go well over there. I really do. But I think GL is talking to airline guys. We're going to have to put together some serious calculus and methodologies to get our $ back. I'm talking multiple levels of outside the box thinking. So that's where the profit sharing thinking is coming from. May not work for you, but last time I checked, you guys didn't lose a pension and didn't get your wages rolled back 50%, is that right? Have you been in a BK type contract at all in the last decade?

 

[Flopgut]

Unions should negotiate the best deal (short and long term) possible and then make sure it is scrupulously enforced. If folks want to share in profits, go .

I agree with what you're saying about negotiating. But if PS is there to be captured, get it. Give nothing for it. Don't figure it as part of compensation but make sure it's covered if a profit is made. So many of the non contract employee groups do get it, and it's almost like a corporate PR kind of consideration.

You know it's kind of like what you thought about age 65. That wasn't a contract thing, but you sure wanted the potential $ the extra 5 years would get you. Think of PS in the same way. (Except this won't "stain ur blade")

 

[Bringupthebird]

No, it's nothing like Age 65. If pilot groups wanted to buy an Age 60 retirement in contract negotiations they could, but obviously none have. For all the hew and cry, it would never pass.

Profit sharing is never going to be handed out as a "gimmee" to labor. They will get it in lieu of book rates and its an inconsistent bargain. If you "give nothing for it" then by definition it is worthless and certainly not worth gambling on an arbitration ruling that has all downside risk (sound familiar USAPA?).

Age 65 made sense in light of pilot longevity. Congress was not going to negotiate an early retirement for pilots by retaining an outdated law. Pilot unions undermined their credibility by opposing it on the basis of safety. The water has passed under that bridge and not worth arguing over. But to draw an equivalence between Age 65 and Profit Sharing is a non sequitur.

 

[General Lee]

Ok, well I hope things go well over there. I really do. But I think GL is talking to airline guys. We're going to have to put together some serious calculus and methodologies to get our $ back. I'm talking multiple levels of outside the box thinking. So that's where the profit sharing thinking is coming from. May not work for you, but last time I checked, you guys didn't lose a pension and didn't get your wages rolled back 50%, is that right? Have you been in a BK type contract at all in the last decade?

You are correct. Trying to get back all the money at once wouldn't go with Wall St. So, getting short term contracts with fairly good raises each year, while at the same time increasing DC fund contributions and keeping and increasing profit sharing may be a good alternative. Apparently some on Wall St don't approve of a 25% raise in one year. Other creative ways of increasing overall compensation may need to be used.



Bye Bye---General Lee

 

[BILL LUMBERG]

Proving once again....like Smisek, Doogie Parker is in over his head.

There has to be better management out there than these clowns.

 

[gutshotdraw]

Ok, well I hope things go well over there. I really do. But I think GL is talking to airline guys. We're going to have to put together some serious calculus and methodologies to get our $ back. I'm talking multiple levels of outside the box thinking. So that's where the profit sharing thinking is coming from. May not work for you, but last time I checked, you guys didn't lose a pension and didn't get your wages rolled back 50%, is that right? Have you been in a BK type contract at all in the last decade?

A) We don't HAVE a pension. Never did.

B) Our wages are already about 50% of yours so we're already living in BK world.

Just pointng out to GL that absolutes and generalities (did you see what I did there? ) are not a great idea when dealing with widely divergent pilot groups.

 

[Bringupthebird]

Proving once again....like Smisek, Doogie Parker is in over his head.

Besides Herb Kelleher, what major airline CEO has been at the helm longer than Parker? He's been there longer than Crandall was CEO of American. Not defending, just sayin'...

Smisek? What's a Smisek?

 

[Flopgut]

A) We don't HAVE a pension. Never did.

B) Our wages are already about 50% of yours so we're already living in BK world.

Just pointng out to GL that absolutes and generalities (did you see what I did there? ) are not a great idea when dealing with widely divergent pilot groups.

You guys made a big jump about 7-8 years ago, and to my knowledge you haven't lost it. Don't compare your situation to what legacy airlines have gone thru. If you make 50% of what we do now (I think you're lowballing me) then accounting for our lost decade that's pbly about where you ought to expect to be. Your case is completely different. Legacy pilots had actual $ that was taken from us, and now our companies are making legit profits.

 

[Flopgut]

No, it's nothing like Age 65. If pilot groups wanted to buy an Age 60 retirement in contract negotiations they could, but obviously none have. For all the hew and cry, it would never pass.

Profit sharing is never going to be handed out as a "gimmee" to labor. They will get it in lieu of book rates and its an inconsistent bargain. If you "give nothing for it" then by definition it is worthless and certainly not worth gambling on an arbitration ruling that has all downside risk (sound familiar USAPA?).

Age 65 made sense in light of pilot longevity. Congress was not going to negotiate an early retirement for pilots by retaining an outdated law. Pilot unions undermined their credibility by opposing it on the basis of safety. The water has passed under that bridge and not worth arguing over. But to draw an equivalence between Age 65 and Profit Sharing is a non sequitur.

Clearly you have yourself barricaded wholly and completely "in the box". You're no more nimble and forward thinking than how you describe your company. Make PS an item that is as far from the contract as you possibly can. Like an HR thing, or a health care personal spending account. Maneuver it into something ALL employees get. That will work better in a Texas corporation than at the other two you've worked for.

Stop thinking the union has to "buy something" from mgt, or "play a card". That is old, failed, and foolish thinking. If you were clever enough to decide 65 was a winner for you, then act the same toward other issues/items that can help ALL your fellow pilots. You owe them that much. The pendulum is moving the other way, supply and demand are lining up in our favor, time to get big changes done that help entire groups.

 

[Bringupthebird]

Yeah, Flop you're right let's forget about negotiating. Let's just demand what we want and hold our breath till we get it.

Are you trying to get USAPA to represent you at United?

 

[Bringupthebird]

If you make 50% of what we do now (I think you're lowballing me) then accounting for our lost decade that's pbly about where you ought to expect to be. Your case is completely different.

You really should attribute Duane Woerthe's quotes rather than making them sound like your own ideas. Your "I Got Mine" and "You don't deserve..." attitude didn't go over any better 12 years ago at AWA.

 

[Flopgut]

Yeah, Flop you're right let's forget about negotiating. Let's just demand what we want and hold our breath till we get it.

Are you trying to get USAPA to represent you at United?

Have you read Art Of War? Mgts have, and they do what it says. We all should too.

 

[Flopgut]

B) Our wages are already about 50% of yours so we're already living in BK world.

^^^^^^^^^^^^^^^^^^^^^

You really should attribute Duane Woerthe's quotes rather than making them sound like your own ideas. Your "I Got Mine" and "You don't deserve..." attitude didn't go over any better 12 years ago at AWA.

Think carefully about what this guy is saying in his post. Because he earns 50% of what we earn now (his estimate), that means he's living in a bk world?! Wtf?! I think it would be great if NJA got another good deal. To do it, they have to sit down and negotiate and look across the table and say "yes, we deserve another 40% raise". That's a tall task in any environment. Now, having said that much about NJA, I don't care to waste another word on them. It could not matter less to airline guys what NJA does.