Buffett Bites Back at NetJets Pilot Complaints

[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