Bad news for NWA pilots and pilots in general

B

BR549

[FONT=verdana, arial, helvetica]NWA aims to end scope clause restrictions on large RJs in new pilot contract
Friday October 14, 2005
Northwest Airlines wants permission from its pilots, represented by the Air Line Pilots Assn., to create a new feeder carrier separate from the mainline that will operate aircraft seating up to 100 passengers in the Northwest Airlink program with "no numerical or use restrictions."The scope clause in the existing pilot contract sets a maximum size limit of 69 seats and a numerical limit of 54 RJs with 50-69 seats.

The information is contained in the company's Section 1113(c) proposal filed on Wednesday (ATWOnline, Oct. 13) and provided to ALPA. If NWA is unable to reach agreement consensually, it will ask the bankruptcy court to impose the changes. It is seeking $358 million in new savings from its pilots in addition to $250 million they contributed last year. Reductions in hourly pay account for 62% of the new savings goal.

The proposed airline--dubbed "Newco" in the filing--would be the exclusive operator of Airlink aircraft seating between 77 and 100 passengers. Pilots would be represented by ALPA but would not be on the NWA pilot seniority list and would be paid at "Regional airline industry average pilot labor costs." Their contract would include a no-strike/no-lockout clause, with wage disagreements subject to "binding expedited interest arbitration" and the arbitrator required "to apply a Regional airline industry average pilot labor cost standard."

NWA also wants authority to codeshare with feeder airlines operating aircraft seating up to 76 passengers with no numerical or use restrictions. It wants "no restrictions on domestic codesharing agreements with other domestic airlines," and the right to wet-lease up to 10% of scheduled block hours of international passenger flying.

Also in the contract, top pay for a 747-400 captain would fall from $232.18 per hour to $178.91, which, according to NWA, is the same scale used by United Airlines for its 777 captains. At the other end, a DC-9 first officer's top pay would drop from $110.51 to $61.11. The weighted average decrease is 28.4%.

by Perry Flint
[/FONT]
 

General Lee

Well-known member
Joined
Aug 24, 2002
Posts
20,442
Total Time
A lot
I believe most of the Newco pilots would be furloughed NW pilots, which really aren't on the mainline seniority list after they are furloughed. (they still have a NW number, though) Still, not a good precident.

Bye Bye--General Lee
 

ThisistheDream

Well-known member
Joined
Jun 18, 2004
Posts
293
Total Time
99
WOW a DC-9 FO at 60 some bucks an hour!!!!!!! that would put a NWA pilot at less than truck drivers make!!!!!!!!!!!!
 

Fly4hire

Well-known member
Joined
Mar 6, 2005
Posts
861
Total Time
lots
General Lee said:
I believe most of the Newco pilots would be furloughed NW pilots, which really aren't on the mainline seniority list after they are furloughed. (they still have a NW number, though) Still, not a good precident.

Bye Bye--General Lee

Yawn....

This is the same stuff NWA has been putting out for since early this year. Nothing new in this "wish list". I'll be very suprised if they get this, even in BK, when the same flying can be done in-house, with a modified CBA for less than this proposal, and all the secondary costs with starting a whole new airline.
 

PropsR4Boats

Well-known member
Joined
Mar 23, 2005
Posts
121
Total Time
4gs
Uh…don’t the 9’s already have 100 seats? Why can’t the NWA guys fly the new 9s no matter who makes them? I was watching court TV today; it seems bus drivers make enough to do cocaine (he crashed under the influence). At least we could afford to snuff our pain away!
 

Green

Well-known member
Joined
Mar 1, 2005
Posts
1,108
Total Time
10,000
General Lee said:
I believe most of the Newco pilots would be furloughed NW pilots, which really aren't on the mainline seniority list after they are furloughed. (they still have a NW number, though) Still, not a good precident.

Bye Bye--General Lee


Yeah that sure worked out real well for the Mid Atlantic guys didn't it? They're now Sh#t out of luck with the merger. I wouldn't be surprised if NWA sold Newco to Ornstein shortly after forming the new carrier.

Does any Nwa pilot on this board think any of those proposals have a chance of being implemented? That's about as rough a deal as the mechanics are up against.
 

dbrownie

Well-known member
Joined
Nov 13, 2004
Posts
261
Total Time
17,000
Green said:
Does any Nwa pilot on this board think any of those proposals have a chance of being implemented? That's about as rough a deal as the mechanics are up against.

It is up to the judge, doesn't look good.

Newco will hurt Nwa as well as the redtail guys.

Dave B
 

Ty Webb

Hostage to Fortune
Joined
Dec 10, 2001
Posts
6,525
Total Time
11000+
Don't worry, guys.

I am sure some of those tough-talking NWA pilots who like to give our pilots a ration of grief when they ask for a jumpseat ride would never take a deal like this. . . . why, this would have them working for much less than AirTran pilots!

No, this will never pass . . . . hhmmmmmf.
 

mnboyev

Well-known member
Joined
Dec 6, 2001
Posts
550
Total Time
71717
I never get a ration, just a ration of pretzels and half a diet pepsi. Northwest Pilots have been very good to me.... I commute twice a month on NWA, they have always been courteous and professional.

I appreciate the ride. Had several NWA fellas on our bird and all nice folks from the North Country... Some from DTW... I guess they were ok too...

NewCo... Who the Hell dreamed that crap up ? When will it end. 20 to go.
 

MJG

Well-known member
Joined
Jun 2, 2003
Posts
580
Total Time
7000+
BR549 said:
[FONT=verdana, arial, helvetica]Pilots would be represented by ALPA but would not be on the NWA pilot seniority list and would be paid at "Regional airline industry average pilot labor costs." Their contract would include a no-strike/no-lockout clause, with wage disagreements subject to "binding expedited interest arbitration" and the arbitrator required "to apply a Regional airline industry average pilot labor cost standard."[/FONT]

Well in bk I suppose that just about anything is possible, and that's what really scares me.
 

RampTower

Ol 366PX, the ditch b!tch
Joined
Apr 6, 2005
Posts
172
Total Time
10,000
Meanwhile, the NWA executives begin to deploy their golden parachutes....

http://www.wsws.org/articles/2005/sep2005/nwa-s19.shtml
Northwest and Delta executives to make millions from bankruptcies

By Jerry Isaacs
19 September 2005

Over the last several years the top corporate executives at Northwest and Delta airlines negotiated retirement packages guaranteeing them millions in the event the companies declared bankruptcy and defaulted on their pension payments to employees. Both companies filed for Chapter 11 bankruptcy protection last Wednesday, in large measure to escape their pension obligations and seek the bankruptcy court’s backing for sweeping cuts in airline workers’ jobs, wages and benefits.

Since 2000, Delta has lost $10 billion, slashed 23,000 jobs and cut pay for pilots, managers and other employees. Three years ago the company spent more than $44 million setting up trusts to protect executives’ pension benefits from creditors in case of bankruptcy, saying the perk was needed to retain executives in hard times. Because transferring money to bankruptcy-proof trusts typically triggers big tax bills for the executives, Delta inflated the amounts to compensate for the extra taxes.

Retiring CEO Leo Mullin, who was paid $13 million in compensation in 2001, was given 22 years of instant seniority—although he worked for Delta for only five-and-half years—boosting his retirement package to $16 million. While incoming CEO Gerald Grinstein took a ceremonial pay reduction to bolster the company’s demands for sweeping employee wage and pension cuts, behind the scenes other executives were cashing in on the benefits of their golden parachutes.

Former CEO Ronald Allen, who was forced out in 1997, continued to draw $500,000 a year from Delta for consulting services up until 2005, although neither the company nor Allen would say whether he ever provided any such services. Allen’s exit package also included a $4.5 million cash severance payment and a $765,000-a-year pension that continues. He also got 10 years’ worth of perks, such as a 2,090-square-foot Buckhead, Georgia office, a car and club memberships provided by Delta.

When Northwest Airlines CEO Richard Anderson left the company last year, he took his pension in a lump-sum payment of $3,028,700. Anderson’s check covered three separate pensions he received from Northwest: the regular pension plan, his excess pension plan and his supplemental executive retirement plan, or SERP. Other top executives at Northwest, including current CEO Doug Steenland, also were guaranteed three pensions.

Union workers at Northwest have a pension plan based on years of service. For mechanics, custodians and cleaners—currently on strike against Northwest’s demands for the elimination of more than half their jobs and the replacement of traditional guaranteed pensions with 401(k) plans—that amounts to $85 a month for every year they work. According to the Aircraft Mechanics Fraternal Association (AMFA), a mechanic who retires at 65, after 40 years at Northwest, will collect about $40,000 a year.

The company’s 2005 proxy statement indicated that CEO Steenland will receive $947,417 a year if he retires at 65. Delta’s “supplemental plan” adds multipliers to boost the pensions of the company’s four top executives, crediting Steenland with 15 years of service for every five he works and paying him pension credits at twice the rate applied to regular salaried workers.

The company’s four top executives—Steenland and executive vice presidents Tim Griffin, Phillip Haan and Andrew Roberts—will receive a total of $2,476,100 in annual pension benefits. This is enough to fund the pensions of 90 flight attendants with comparable years of service.

In addition to their pension benefits, Northwest’s top five executives (the above-mentioned, plus Executive Vice President and General Counsel Barry Simon) have taken in $32,000,721 in compensation since 2002, not including other perks such as lifetime health-care coverage and travel benefits. The five also sold more than $1 million worth of stock in the months leading up to the bankruptcy announcement, as did big investors, like professional financier and former NWA Board of Directors member Al Checchi, who sold 1,650,240 shares from April 23 to May 3, raking in $8,439,884.

The New York Times reported Thursday that the timing of Northwest’s bankruptcy filing allowed the company to protect its assets while executives reneged on a payment of $65 million into the employee pension fund, which is already underfunded by $3.8 billion. If Northwest skipped the payment before filing for bankruptcy, it would have been in violation of federal pension laws, and the government-run Pension Benefit Guaranty Corporation (PBGC) could have placed a lien on the airline’s assets, giving itself a better chance of recovering some of the money.

Instead, the newspaper noted, “ince Northwest filed for bankruptcy first, then skipped the pension contribution, the government has no legal power to place a lien on its assets. It makes the pension guarantor—and the employees and retirees whose interests the government represents—into unsecured creditors for the $65 million. Unsecured creditors generally fare poorly in bankruptcy, recovering just pennies for every dollar they are owed.”
If the PBGC takes over Northwest’s pension plans pilots would suffer the loss of half or more of their pensions because the PBGC caps payments at $45,613 a year for plans canceled in 2005. Other unionized workers could also see drastic reductions.

Northwest also wants to freeze its current defined benefit pension plans and switch to defined contribution plans, such as 401(k)s, which are cheaper for employers but don’t provide workers the guaranteed benefits of traditional pensions.

Delta’s pension funds are in even worse shape. If the company defaults on its obligations it would set a record, surpassing the size of the United Airlines pension collapse earlier this year, and further staggering the overburdened pension guarantee board. According to board officials, Delta’s pension plan has promised benefits worth $17.5 billion, but it only has $6.9 billion in assets. With its bankruptcy filing the company is expected to press for even more drastic cuts than it outlined in its corporate restructuring plan last year, when it announced plans to cut $5 billion and 7,000 jobs by next year.
The looting of airline workers’ pension funds is but one example of how the assets of the major airlines have been squandered over the last several decades to enrich the airline bosses and big investors. It also underscores the widespread parasitism that pervades the boardrooms of corporate America.

The top personnel of the airline industry are chosen—and highly compensated—not because of their ability to manage complex organizations or to lay out a long-term corporate strategy. Instead a definite social type has risen to the top, whose only qualifications are its acuity for slashing tens of thousands of jobs and guaranteeing the quickest and largest payoffs to Wall Street.

Northwest’s CEO Steenland began his career working for the Office of General Counsel for the secretary of the Department of Transportation when the Democratic administration of President Jimmy Carter was preparing the deregulation of the airline industry. He later joined a top law firm in Washington DC, which represented Pan American Air Lines during the merger frenzy that preceded the company’s bankruptcy declaration, and later represented an investor group that organized the leveraged buyout of Northwest Airlines in 1989.

Steenland is particular adept at working the halls of Congress to lift regulations on pension funding and any other restrictions on profit-making, and at making use of the services of the labor bureaucracy to cut labor costs. “Since the biggest input is the wages, salaries, and benefits line, this puts a lot of attention on working with our employees in knowing what we need to do to survive in the long term,” he commented.

Last year, in the midst of concession talks with the pilots union, Steenland hired Barry Simon as the company’s executive vice president and general counsel. Simon was a top executive in the Seabury Group, a New York consulting firm whose “restructuring” clients have included Air Canada, US Airways, America West Airlines and Continental.

Simon earned his credentials as an executive at Continental and Eastern airlines, where he served under corporate raider and union-buster Frank Lorenzo. In 1983 Continental filed for bankruptcy—despite the airline’s $60 million in cash reserves—in order to exploit a provision in the Bankruptcy Code allowing Lorenzo to abrogate his contracts with the unions. Simon directed Continental’s legal strategy when it emerged from bankruptcy a second time in 1991.

Simon also played a leading role in the bankruptcy of Eastern Airlines, which stopped flying in 1991 following the bitter strike by unionized mechanics. At the time, Lorenzo and his team stripped the airline of valuable assets and sold them at fire-sale prices to Continental.

The 1980s and 1990s saw the emergence of junk-bond dealers and corporate raiders in the airline industry like Lorenzo and Carl Icahn (who bankrupted Trans World Airlines, among others, and who is now worth $5.8 billion—no. 55 on the list of the world’s richest people).

Today, after nearly a quarter of a century of betrayals by the trade union bureaucracy (from the striking air traffic controllers in 1981 to the present scabbing organized by the airline unions against the striking Northwest mechanics), the corporate executives running the airlines feel even less restraint than their predecessors did when slashing workers’ jobs, wages and benefits and looting company assets to enrich themselves.
 

BFL370

Well-known member
Joined
May 15, 2005
Posts
49
Total Time
Unk
First the Mechs
Now the F/A's
Then the Pilots

Then the MGT of other airlines will say "Hey I have an Idea!"
 

NTS ALL 4

Close the bleeds, please
Joined
Jan 20, 2005
Posts
130
Total Time
10000
dbrownie said:
It is up to the judge, doesn't look good.

Newco will hurt Nwa as well as the redtail guys.

Dave B
I don't think you better be thinking "redtail/greentail". I'd be thinking about your own tail.
 

ultrarunner

Well-known member
Joined
Nov 26, 2001
Posts
4,324
Total Time
10000
ThisistheDream said:
WOW a DC-9 FO at 60 some bucks an hour!!!!!!! that would put a NWA pilot at less than truck drivers make!!!!!!!!!!!!


"....a DC-9 first officer's top pay..."

And that's the TOP of the scale!?

WOW
 

Mr Hat

Well-known member
Joined
Jun 17, 2003
Posts
483
Total Time
6500
Wow, lets watch ALPA screw up for the second time. The first was when they allowed Jets of any kind to be flown at the regionals. The first wave of 50 seat jets diluted pilot wages from the BE1900 to the 747, this second wave should make all pilots paid at the same level as current regional airlines.
 

PCL_128

Well-known member
Joined
Nov 21, 2002
Posts
15,296
Total Time
5000+
Mr Hat said:
Wow, lets watch ALPA screw up for the second time. The first was when they allowed Jets of any kind to be flown at the regionals. The first wave of 50 seat jets diluted pilot wages from the BE1900 to the 747, this second wave should make all pilots paid at the same level as current regional airlines.

How exactly would ALPA be screwing up on this? This will be imposed by a BK judge. How do you propose we stop it? Any constructive ideas, or just more mindless ALPA bashing? :rolleyes:
 

Green

Well-known member
Joined
Mar 1, 2005
Posts
1,108
Total Time
10,000
PCL_128 said:
How exactly would ALPA be screwing up on this? This will be imposed by a BK judge. How do you propose we stop it? Any constructive ideas, or just more mindless ALPA bashing? :rolleyes:



Go on strike......

Duanne has spewed all this rhetoric about enough is enough, time to change course, we've given management all we can, blah blah blah blah. It's enough to make you want to puke. Management finally understands that we are a spineless union that will give into anything in order to keep a few scraps. It's time we collectively stand up and regain some dignity.


The fact that NWA mgt even feels like they have a chance with this proposal tells volumes about how far Alpa has fallen. It is past time to get some new blood in Alpa national.
 
Top