Buffett Bites Back at NetJets Pilot Complaints

[T-1GUY]

NetJets can't even hire and train enough pilots to keep up with current attrition and demand. No way they can train up pilots fast enough to break a strike. Even with massive lift availability, the customers would revolt. Why would they be willing to pay NetJets prices for charter they don't want? They wouldn't put up with sell off after sell off unless it was comped of severely discounted and then NetJets just hemorages money even faster. No way management really wants a strike to try to break us- but it looks great on news releases in our battle against them. I have a hard time believing we would ever get released anyway, though I personally relish a strike ASAP to get this thing settled quickly. I am financially prepared now to go all in, even if we STMFD. I began preparing when the furloughs were announced, though at the time it wasn't a strike fund- just a fund in case furloughs went deeper. I honestly would prefer to STMFD and start over than accept a POSTA.

What he said !!!!

 

[PCL_128]

Well, let's just connect some dots....I bet you can come up with others, but I can think of these right off the top of my head.

. Hansell is still the accidental CEO after two years. His only expertise is in labor law. There's been plenty of time to replace him since Sokol's departure, but he hasn't been replaced. It is reasonable to think that B-H wants his expertise in place.

. Hansell could have extended the present contract for virtually "no cost" and ensured a stable work force for several more years. He didn't. Not because he wanted to give us more, but because he wants us to have less.

. None of the unions at NetJets have gotten a contract despite years of effort. Hansell has not made a single significant concession to organized labor. He has stuck with his "pillars". It is reasonable to think that he will stick with them to the end of the negotiating process.

. Hansell's "pillars" will not even be passed onto the membership by the union. Hansell knows this. No one expects labor to accept concessions during times of profit. Labor is faced with "take it, or go to self help". For Hansell, self-help = lockout.

. Even though NetJets can handle a lot of flights without sell-offs, there are light days where there are lots of sell-offs. Because NetJets is hiring, there is no restriction on sell-offs and we're seeing a large number. NetJets is lining up and fattening "alternate lift" for a time when needed.

. The NetJets customers are being "accustomed" to non-NetJets operators operating their flights through the large number of sell-offs.

. Notice how many ACP's are floating around all of a sudden? Ever wonder why these useless individuals are at all the hubs instead of in cockpits helping with our pilot shortage? Hansell's team is hoping these individuals will be "management pilots" during the strike/lockout.

Okay, I have no idea how this will play out, but it sure looks like Hansell is going to do his best to bust organized labor. If I'm wrong and we get a juicy contract, I'm happy. However, if I'm right and we are not mentally, financially, strategically prepared for a lockout, we don't have a chance.

Let's hope for the best, but be prepared for the worst.

How do we plan for a lockout?

Sticking our heads in the sand and saying "it can't happen" isn't a plan.

On an individual basis, get your financial house in order, shop for alternative health insurance and get those job applications out there. You don't want to be the last guy in line for a "new job".

You're over thinking this. I'm sure his strategy is really quite simple, and one used frequently in RLA bargaining:

1. Make demands for concessions that he knows the pilots won't agree to, but will nevertheless appear very reasonable to the NMB.

2. Bargaining will drag on for years as a result of the NMB considering the company's proposals reasonable, and the pilots unwilling to entertain them. No release will be available.

3. Wait until the market takes a downturn and profits inevitably dip, then threaten bankruptcy if the pilots don't accept the concessions. Pilots will get scared (I'm sure you'll say that they won't, but they will), and concessions will be agreed to.

This is a tried and true approach to labor negotiations under the RLA. It's not flashy, it's not new, but it works wonders. He doesn't want a lockout.

 

[amaineiac]

I do not agree.

Throw a rock into a bush....fifteen "qualified" pilots will jump out ready to take your job....and Hansell will give it to them when he locks us out.

You bring up some valid points in this thread, but I have to disagree with you.

In the current market, I have a hard time believing that it will be so easy to hire 1000+ pilots willing to cross a picket line and forever have their names on a scab list.

Our hiring department isn't exactly firing on all cylinders right now. We had a guy show up to class that was very well qualified, but didn't have an ATP, which is a requirement. I just read on another message board that some people's apps were deleted because we switched website vendors. The applicants didn't learn about this from NJA, but from someone posting on a message board.

I believe that in the contract with the owners, it states our pilots will have 2500 hrs minimum. So grabbing 300 hr guys fresh out of school that may not understand the ramifications of crossing a picket line are out.

TMC just unionized, so I doubt they'll be available for excess lift.

I'm not saying it's going to be easy to get a good contract with the current EMT, but I think we have a bit more leverage than you think.

 

[msculley6905]

Well, let's just connect some dots....I bet you can come up with others, but I can think of these right off the top of my head.

. Hansell is still the accidental CEO after two years. His only expertise is in labor law. There's been plenty of time to replace him since Sokol's departure, but he hasn't been replaced. It is reasonable to think that B-H wants his expertise in place.

. Hansell could have extended the present contract for virtually "no cost" and ensured a stable work force for several more years. He didn't. Not because he wanted to give us more, but because he wants us to have less

I really wish you guys and the union would stop talking about this point. It would only be a valid point if all you were asking for was to keep your current "sub-standard" contract, because clearly aome are not happy with it. Fighting for dramatic improvements in every area is hardly the status quo.

Disclaimer: i do not think asking for concessions are appropriate...in 2010, perhaps, but not now.

 

[Willy21]

I really wish you guys and the union would stop talking about this point. It would only be a valid point if all you were asking for was to keep your current "sub-standard" contract, because clearly aome are not happy with it. Fighting for dramatic improvements in every area is hardly the status quo.

Disclaimer: i do not think asking for concessions are appropriate...in 2010, perhaps, but not now.

The contract must have significant gains or pilots will go elsewhere. Even if we were to get everything we could dream of I am one phone call from being gone because my opportunities at NetJets pale in comparison to a legacy job. Management has their head in the sand. Attrition isn't a big issue today, but the day is coming when a lot of airplanes will be parked due to lack of crews.

 

[pilotyip]

the day is coming when a lot of airplanes will be parked due to lack of crews.

NJ is still interviewing and rejecting qualified pilots, they will fill those empty posts within the limitations of the training system, to absorb new pilots. NJ is still a much better job for many pilots.

 

[Diesel]

I really wish you guys and the union would stop talking about this point. It would only be a valid point if all you were asking for was to keep your current "sub-standard" contract, because clearly aome are not happy with it. Fighting for dramatic improvements in every area is hardly the status quo.

Disclaimer: i do not think asking for concessions are appropriate...in 2010, perhaps, but not now.

So we should just live on our knees? We're pilots we fight to the end. We're trained that there is no emeregency we can't tackle.

Look around you it's not some that aren't happy with it it's all of us that aren't happy with it.

Concessions was a joke in 2010. They took from the other non union groups and have they gotten that back after record profits? Nope. They never do.

 

[Diesel]

NJ is still interviewing and rejecting qualified pilots, they will fill those empty posts within the limitations of the training system, to absorb new pilots. NJ is still a much better job for many pilots.

And pilots are still not showing up for class, and initials are being cancelled.

 

[Diesel]

The contract must have significant gains or pilots will go elsewhere. Even if we were to get everything we could dream of I am one phone call from being gone because my opportunities at NetJets pale in comparison to a legacy job. Management has their head in the sand. Attrition isn't a big issue today, but the day is coming when a lot of airplanes will be parked due to lack of crews.

You know it's bad when 15 to 20 year crews have their info out there.

 

[BlueNose]

You're over thinking this. I'm sure his strategy is really quite simple, and one used frequently in RLA bargaining:

1. Make demands for concessions that he knows the pilots won't agree to, but will nevertheless appear very reasonable to the NMB.

2. Bargaining will drag on for years as a result of the NMB considering the company's proposals reasonable, and the pilots unwilling to entertain them. No release will be available.

3. Wait until the market takes a downturn and profits inevitably dip, then threaten bankruptcy if the pilots don't accept the concessions. Pilots will get scared (I'm sure you'll say that they won't, but they will), and concessions will be agreed to.

This is a tried and true approach to labor negotiations under the RLA. It's not flashy, it's not new, but it works wonders. He doesn't want a lockout.

In your airline world this makes perfect sense, but not here. NJ is not an airline, it's a Frac, and your #3 bullet is not a viable business strategy in the Frax market. First off, they're a Berkshire subsidiary, and the cost to the BRK stock due to loss of confidence if one of their companies declared bankruptcy would outweigh any labor savings. Secondly, any Frac that declares bankruptcy would be toast in the market, which is all about confidence from their customers. The customers own most of the assets, and they need confidence that they won't be screwed when they buy a multi-million dollar share of an airplane. A Frac can't win back customers by offering $99 fares to Orlando. Customer service does matter here, and I can think of 2 good examples of CEO's who've almost ruined a company by trying to run it like an airline. Options had the first, now it looks like NJ has another.

 

[Willy21]

NJ is still interviewing and rejecting qualified pilots, they will fill those empty posts within the limitations of the training system, to absorb new pilots. NJ is still a much better job for many pilots.

From what I'm seeing this won't happen. Over the last 15 years the majority of NetJets new hires have come from, Comair (most left during their strike), Midway (went out of business), Emery (went out of business), early-out/retired legacy and regional F/o's that were tired of waiting on an upgrade and commuting. Unless there is another large block of pilots coming from an airline shutdown NetJets has seen and sifted through the largest stack of resumes they will see.

As for training, they are going to have to drop their 121 program to even have a chance to catch up. It is a great concept with poor implementation and zero contingency planning. Add to that a fleet renewal program that will see 10-20% of the current pilot force going through initials every year going forward and you can see how perfectly good aircraft will sit idle.

If I were to be "CEO for a day" my first order of business would be to repair my relationship with my internal/external customers and vendors. NetJets needs to stop the trend of customers and employees leaving. We need every one of them.

You are right, NetJets isn't the worst job out there, but I have always been a person that believes striving to be the best is the only way to live my life. At one point in my career NetJets had a good future for me. That time has come and gone. NetJets has proven to be a dead end and it's time to move on irregardless of how good the next contact is.

 

[FamilyGuy]

In your airline world this makes perfect sense, but not here. NJ is not an airline, it's a Frac, and your #3 bullet is not a viable business strategy in the Frax market. First off, they're a Berkshire subsidiary, and the cost to the BRK stock due to loss of confidence if one of their companies declared bankruptcy would outweigh any labor savings. Secondly, any Frac that declares bankruptcy would be toast in the market, which is all about confidence from their customers. The customers own most of the assets, and they need confidence that they won't be screwed when they buy a multi-million dollar share of an airplane. A Frac can't win back customers by offering $99 fares to Orlando. Customer service does matter here, and I can think of 2 good examples of CEO's who've almost ruined a company by trying to run it like an airline. Options had the first, now it looks like NJ has another.

While I agree with most of your post, the comment about a BRK company declaring bankruptcy and resulting in a loss of confidence is off the mark.

The very namesake of Berkshire Hathaway was a textile mill that Buffett bought back in the 1960's and went out of business in 1985. That bankruptcy had zero impact on the trust and confidence in Berkshire Hathaway, Warren Buffett, or the BRK stock price.

I could see your point if a major company like Geico or BNSF went out of business under the Berkshire watch, but a small niche player like NJ would have zero impact. Buffett would simply chalk it up as one of his mistakes and move on.

 

[BlueNose]

While I agree with most of your post, the comment about a BRK company declaring bankruptcy and resulting in a loss of confidence is off the mark.

The very namesake of Berkshire Hathaway was a textile mill that Buffett bought back in the 1960's and went out of business in 1985. That bankruptcy had zero impact on the trust and confidence in Berkshire Hathaway, Warren Buffett, or the BRK stock price.

I could see your point if a major company like Geico or BNSF went out of business under the Berkshire watch, but a small niche player like NJ would have zero impact. Buffett would simply chalk it up as one of his mistakes and move on.

That was Berkshire Hathaway (the holding company) shutting down one of its plants, not a separately-held subsidiary company declaring bankruptcy. I agree that WB will not hesitate to shut down or sell off a business once he decides it's not profitable and not likely to be, and there are further examples of that. And I think we agree that it's foolish to think that he would never sell off or shut down NJ (wasn't a thread topic sometime back?).

But PCL talked about the airline tactic of threatening a structured bankruptcy to shed debt and annul labor contracts. BRK letting a subsidiary declare its insolvency and inability to pay its financial obligations, I don't think WB would let that happen. As a subsidiary of BRK, is NJA separately filing for bankruptcy even an option?

 

[FamilyGuy]

But PCL talked about the airline tactic of threatening a structured bankruptcy to shed debt and annul labor contracts. BRK letting a subsidiary declare its insolvency and inability to pay its financial obligations, I don't think WB would let that happen. As a subsidiary of BRK, is NJA separately filing for bankruptcy even an option?

I agree, I don't think Buffett would do that.

Buffett will stand behind his debts. He's backstopped NJ in the past and would likely do so again if they ran into trouble. If he believed NJ was a long term money loser he would probably wind down operation ala citation air and just exit the business.

That said, NJ is a good business. It's made money despite its many inefficiencies. Even Jordan in all of his incompetence has managed to turn a profit.

 

[AV8OR]

You bring up some valid points in this thread, but I have to disagree with you.

In the current market, I have a hard time believing that it will be so easy to hire 1000+ pilots willing to cross a picket line and forever have their names on a scab list.

Our hiring department isn't exactly firing on all cylinders right now. We had a guy show up to class that was very well qualified, but didn't have an ATP, which is a requirement. I just read on another message board that some people's apps were deleted because we switched website vendors. The applicants didn't learn about this from NJA, but from someone posting on a message board.

I believe that in the contract with the owners, it states our pilots will have 2500 hrs minimum. So grabbing 300 hr guys fresh out of school that may not understand the ramifications of crossing a picket line are out.

TMC just unionized, so I doubt they'll be available for excess lift.

I'm not saying it's going to be easy to get a good contract with the current EMT, but I think we have a bit more leverage than you think.

The fact that TMC has a union now won't be a player short term for not having extra lift. What WILL be a player in TMC not having extra lift is that TMC is so short crews right now that they can't cover their OWN lift!
Guys are leaving here in DROVES. Had 6 FS training slots... 2 showed. Another 6 scheduled 0 showed. The pool of applicants with the time needed to fly at TMC or Netjets is drying up quickly! It started at the cargo haulers, has now moved to TMC and will eventually affect NetJets. It's a fire burning uphill. I can guarantee if I was a NetJets owner Id be right pissed if my asset had been so poorly managed that I was being flown by random P135. What's the advantage of ownership if my flight is contracted to an "inferior" company?

 

[PCL_128]

But PCL talked about the airline tactic of threatening a structured bankruptcy to shed debt and annul labor contracts. BRK letting a subsidiary declare its insolvency and inability to pay its financial obligations, I don't think WB would let that happen.

That's not what I suggested. I suggested that the mere threat of it would cause most of your pilot group to collapse like a cheap Walmart lawn chair. And it would.

As a subsidiary of BRK, is NJA separately filing for bankruptcy even an option?

Yes.

 

[BobbyBiplane]

I do not care what extra taxes the company has to pay. I will be compensated what my skills and experience are worth.

By definition, you are being compensated for what your skills and experience are worth.

Bob

 

[AV8OR]

By definition, you are being compensated for what your skills and experience are worth.

Bob

And what you negotiate. Your skills and experience could be possibly worth more, but if poorly negotiated, you're working at a discount...and vice versa.

 

[BlueNose]

That's not what I suggested. I suggested that the mere threat of it would cause most of your pilot group to collapse like a cheap Walmart lawn chair. And it would.

You might know the RLA, but you clearly don't know the Frax industry. NJ won't threaten bankruptcy, because everyone but you knows it's an empty threat. So the pilot group might fall down laughing, but they wouldn't "collapse" as you claim. Management will try a number of other tactics to break the pilots' solidarity, but that won't be one.

And I did say you were talking about "the airline tactic of threatening a structured bankruptcy," so that's exactly what you suggested. You could at least read the post before making your rebuttal.

 

[FR8DOG777]

I am constantly astounded by the degradation of working conditions, compensation, respect, and pay disparity for pilots as the demand for qualified dedicated experienced flight crews increases. The demand for experienced pilots are at record levels. Constantly getting emails from rishworth aviation and vor holdings for pilots offering 23k a month with commutable scheduling. Do I think netjet pilots are overpaid, hell no. Do I think flops and tmc pilots are extremely undervalued and underpaid? Hell yes. So let's have a strike. Ha, good luck with that. Solidarity, solidarity, and a little more solidarity. Bring the pressure to bear, that will affect change. Circle the wagons. Us against them. It doesn't get any clearer than that. I want to kick Ricci so hard in the nuts he has to sell six of his houses and take a greyhound bus down to his villa in cabo. Reason and past experience tells me that will not be possible until every one of us says, ******************** it I've had enough. Netjets pilots have my full support and I wish you all the best of luck