Latest at USAirways

[dlredline]

Late last night, the USAir MEC voted not to send the latest company proposal out to the membership for a vote. The vote was roll called by the PHL and PIT reps, since they represent the majority of pilots on the property.

Red

 

[On Your Six]

Late last night, the USAir MEC voted not to send the latest company proposal out to the membership for a vote. The vote was roll called by the PHL and PIT reps, since they represent the majority of pilots on the property.

Red

What's the implication? Does this mean that the MEC is still working on the details? Is this a good/bad sign to you?

 

[dlredline]

What's the implication? Does this mean that the MEC is still working on the details? Is this a good/bad sign to you?

The meeting adjourned with no further action. From my take, one of two things may happen:

1. The negotiating committee can continue to meet with the company in hopes of procuring a more favorable deal to present to the MEC. Perhaps unlikely in the time frame necessary for USAirways to meet the Sept. 30th ATSB loan covenants. It would also require a major move toward the pilots position by the company, also unlikely. And the negotiating committee would need to actually reach a tentative agreement. What was presented to the MEC last night was a profer for the pilots to simply vote on the last company offer, circumventing the negotiating process, and this, perhaps, was one reason the PHL and PIT reps blocked it. There is still no reason why the NC can't continue meeting with the company at this point, with hopes of a quick settlement arising, and soon.

2. USAirways and the pilots will fail to reach any agreement that can be passed by the MEC and subsequently ratified by the pilots in time for the Sept. 30th deadline. Since the company has not had a single meaningful discussion with any other employee group, they run up to the end of September without a reduced cost structure in place, and no business plan to present to the ATSB, and the $750 million loan guarantee by the ATSB is "called". At that point, it's "Katie bar the door", 'cause every creditor who has placed their "dibs" on USAirways' cash position will start seeking cash for their investment, and a dominoe spiral will occur. The ATSB could give them a mulligan and extend the deadline, but it will be interesting to see what the RSA and GECAS, the major creditors of U, will do in response.

In any event, the ball now is squarely in the company's court. If something isn't agreed to within the next 10-14 days, there's simply not enough time to get it out and ratified prior to the 30th. Absent an agreement, it's all up the ATSB. If they pull out, USAirways will file for Chapter 11 within a day. Then it's up to whether or not DIP financing will be available to fund their operation in a 2nd bankruptcy.

I really do wish the news was better.

Red

 

[On Your Six]

The meeting adjourned with no further action. From my take, one of two things may happen:

1. The negotiating committee can continue to meet with the company in hopes of procuring a more favorable deal to present to the MEC. Perhaps unlikely in the time frame necessary for USAirways to meet the Sept. 30th ATSB loan covenants. It would also require a major move toward the pilots position by the company, also unlikely. And the negotiating committee would need to actually reach a tentative agreement. What was presented to the MEC last night was a profer for the pilots to simply vote on the last company offer, circumventing the negotiating process, and this, perhaps, was one reason the PHL and PIT reps blocked it. There is still no reason why the NC can't continue meeting with the company at this point, with hopes of a quick settlement arising, and soon.

2. USAirways and the pilots will fail to reach any agreement that can be passed by the MEC and subsequently ratified by the pilots in time for the Sept. 30th deadline. Since the company has not had a single meaningful discussion with any other employee group, they run up to the end of September without a reduced cost structure in place, and no business plan to present to the ATSB, and the $750 million loan guarantee by the ATSB is "called". At that point, it's "Katie bar the door", 'cause every creditor who has placed their "dibs" on USAirways' cash position will start seeking cash for their investment, and a dominoe spiral will occur. The ATSB could give them a mulligan and extend the deadline, but it will be interesting to see what the RSA and GECAS, the major creditors of U, will do in response.

In any event, the ball now is squarely in the company's court. If something isn't agreed to within the next 10-14 days, there's simply not enough time to get it out and ratified prior to the 30th. Absent an agreement, it's all up the ATSB. If they pull out, USAirways will file for Chapter 11 within a day. Then it's up to whether or not DIP financing will be available to fund their operation in a 2nd bankruptcy.

I really do wish the news was better.

Red

What's the likelihood that the MEC will "cave" and just give the company what it wants (to the detriment of all airlines everywhere given the new super-low salary/benefits bar) at the 11th hour in the event that nothing is reached until then? I am predicting there will be a lot of posturing and brinksmanship... Difficult situation because that guy from BAMA has got you by the ball$...

 

[Boeingman]

Personally I find the actions of the U MEC very insulting and extremely hypocritical.

In 1983, the members of the USAir and Piedmont MEC's were some of the most vocal and critical pilots (before our strike) practically ostracizing anyone who was not in agreement in striking against Lorenzo. He was doing the same type of gutting to our contract and making draconian demands on our pilots. They were so afraid of the effect on his possible success at gutting the contract would have on their CBA's they were willing to tell us to hit the streets in a heartbeat and not give in once. How many concessions has there already been made to date by the USAIR pilots? I see no difference in Frank Lorenzo compared to the current management at USAIR.

So now they are in the same situation as us in 83 yet they continue to even entertain ridiculous demands that lower the bar in this industry even further?
They wanted us to fall on our swords (we did) and now it doesn't seem like a real palatable situation now they that they are living under the terror incompetent management that can only make the books balance by sucking the lifeblood out of the employees.

Sorry, but this situation really pisses me off to no end.

 

[LearLove]

Personally I find the actions of the U MEC very insulting and extremely hypocritical.

In 1983, the members of the USAir and Piedmont MEC's were some of the most vocal and critical pilots (before our strike) practically ostracizing anyone who was not in agreement in striking against Lorenzo. He was doing the same type of gutting to our contract and making draconian demands on our pilots. They were so afraid of the effect on his possible success at gutting the contract would have on their CBA's they were willing to tell us to hit the streets in a heartbeat and not give in once. How many concessions has there already been made to date by the USAIR pilots? I see no difference in Frank Lorenzo compared to the current management at USAIR.

So now they are in the same situation as us in 83 yet they continue to even entertain ridiculous demands that lower the bar in this industry even further?
They wanted us to fall on our swords (we did) and now it doesn't seem like a real palatable situation now they that they are living under the terror incompetent management that can only make the books balance by sucking the lifeblood out of the employees.

Sorry, but this situation really pisses me off to no end.

While I fully agree with you on the above, might you consider that that was over 20 years ago and maybe some of or many or most of the "hardliners" are retired are gone from the system by now.

 

[dlredline]

What's the likelihood that the MEC will "cave" and just give the company what it wants (to the detriment of all airlines everywhere given the new super-low salary/benefits bar) at the 11th hour in the event that nothing is reached until then? I am predicting there will be a lot of posturing and brinksmanship... Difficult situation because that guy from BAMA has got you by the ball$...

This from the CBS Market Watch:
"As early as Sept. 15, the airline risks running afoul of financial covenants tied to a federal government loan in addition to a creditor's agreement for new regional jets.
US Airways could be forced to file for Chapter 11 bankruptcy again or liquidate its assets.
"We are profoundly disappointed that the actions of a few prevent our pilots from making their own decisions," US Airways spokesman David Castelveter said. "Nevertheless, we remain firmly committed to reaching an agreement that is responsive to our pilot's needs, but also meets our required financial target."
To avoid violating loan covenants, US Airways must maintain an unrestricted cash level of at least $725 million. Its cash stood at $975 million at June 30.
Vaughn Cordle, chief analyst at AirlineForecasts, an independent research boutique that specializes in airlines, said US Airways is stretched too thin.
"With the pilots officially saying no, I would not be surprised to see US Airways file for bankruptcy very soon," he said."


If they go Ch11/Ch7, Bear Bryant couldn't save the RSA and USAirways management at this point. Expect the unexpected from the MEC group who lost the vote last night. This will get uglier.

Red

 

[Space Wrangler]

"The ATSB could give them a mulligan and extend the deadline, but it will be interesting to see what the RSA and GECAS, the major creditors of U, will do in response."



As I've written in other threads, I just don't see how the White House will let UAIR go tango uniform less than forty-five days before the election; Pennsylvania and North Carolina are huge battle-ground states, not to mention the fact that the latest employment numbers already suck hind t!t. If no agreements are reached by the employee groups, then the ATSB is going to give them some sort of relief -- time, whatever that may be -- but they're not going to allow all of those employees to go to the bread line until after the election.

You read it here first.

Furthermore, I think that UAIR mgmt has probably something up their sleeve that's going to be pulled at the twelfth hour, and they're just doing all they can to suck the employee groups dry. They sure have been paying cash for lots of CRJs lately -- makes it look like things are worse than they really are.

My God, I hope I'm right on one of these points;I dred the thought of looking for yet another job.

Red, thoughts?

 

[LearLove]

"As I've written in other threads, I just don't see how the White House will let UAIR go tango uniform less than forty-five days before the election; Pennsylvania and North Carolina are huge battle-ground states, not to mention the fact that the latest employment numbers already suck hind t!t. If no agreements are reached by the employee groups, then the ATSB is going to give them some sort of relief -- time, whatever that may be -- but they're not going to allow all of those employees to go to the bread line until after the election."


I've been thinking and saying the same thing for months now. Bush needs PA big time so there is no way he'll let the second biggest employer in the state go under before the election. However I've been wrong before. Just my thoughts.

 

[Space Wrangler]

Borrowed from another web site:

Let's get one thing straight. The financial situation at US Airways is not good. We all know this. Employees know this. You know this. I know this.
But last week, a huge commotion ensued, after it was reported that a "financial review" of the airline, completed by an analyst hired by the airline's own pilot union, stated that the airline was in such dire straits a return trip to bankruptcy was a given. Not only that, but this return trip would probably occur no later than the middle of September.

You folks heard the level of noise. It was a virtual media feeding frenzy, as many articles I read made the assumption that if an analyst for the union believed this to be the case, employees, particularly pilots, now had no choice but to believe this really was the case. Michael Boyd, for instance, was quoted as saying, "To have an outside entity working for the pilots that tends to validate what management is saying should bring both sides together." He then added, "It should bring some trust there."

Uh-huh.

Well, with shares of the airline's stock trading wildly Friday, and emails coming in left and right, my simple question about this "financial review" was this -- who is Michael Glanzer and why should anyone, much less an employee at the airline, jump after reading his report?

I have a copy of the "financial review" that Glanzer prepared. Or, at least I have a copy of the document that was distributed to pilots at the airline last week. To say it is a complete document would be misleading as many key figures and assumptions in the document have been removed -- it's kind of like reading a report from the Pentagon after the guys with the black markers have been in there.

The document was apparently first given to the airline's ALPA MEC in July.

But there is still more than enough verbiage and the occasional chart left for me to come to this conclusion: using the term "financial review" to describe this effort is a stretch.

As with any financial analysis, the content of this document is only as good as the credibility the author of such an analysis brings to the table.

It is for this reason that the first thing I did when I received a copy of the document was to research just who Michael Glanzer is. Touted in various places as a "financial analyst", and an "investement banker", I could find no substantial information online about Mr. Glanzer, other than the fact he had been hired by the pilots' union at the airline prior to the airline's first bankruptcy to provide a "financial review" of the airline at that time.

Okay, but who is this guy?

I then checked the Bloomberg database of those in the financial service industry and neither his firm nor he is listed. And hey, even the folks who work as Brown Bag analysts here at PBB are listed there -- including our resident US Airways' expert. Bloomberg's directory is the most comprehensive out there.

I then asked a couple of my Wall Street friends who he was. One institutional investor I know who follows the airline industry responded, "I think he's published a few articles in the academic world, but other than that, I am not aware of him or his company -- except for the fact he apparently works for the US Airways' pilot union."

Or does he?

You guys know the drill here. It's always a good thing to find out who pays the one doing the "analysis." No matter what the subject matter is.

There is this little matter of "disclosure."

So, I start digging around with some of my US Airways' pals, and guess, what? The more I dug, the more interesting this story became.

It appears that yes, the pilot group at US Airways hired Glanzer prior to the first bankruptcy. Glanzer was to provide financial advice to the group.

But, the pilot group did not pay Glanzer for his services.

Rather, the airline itself agreed to pay for Glanzer's services. But, and this is a very big but, the airline would only pay for his services if the pilot group agreed to concessions.

Now, I don't know about you -- but this sends red flags up for me.

Because, what this arrangement did, from what I can gather, is set up a situation where, if the pilots agreed to company concessions, Glanzer would be paid a one-time fee. It is also my understanding that this fee was in the neighborhood of $1 million.

I know. I found this hard to believe, but the information was confirmed by more than one source.

However, if Glanzer did the report and the airline's pilots refused to go along with concessions -- the agreement stipulated that Glanzer would then be paid on an hourly basis.

The company then opened the doors for Glanzer to come in for two months. Following his extended stay at the Crystal Palace, Glanzer issued a long report ("long on length, short on substance," as one subscriber dubbed it) and the rest, is, as they say, history.

The pilots agreed to the concessions that the company wanted, Glanzer had a considerably fatter bank account, and that was that.

Until recently-- when Glanzer once again was asked by the pilot union to prepare a "financial review" of the airline's financial condition.

I could not confirm what Mr. Glanzer's fee was for this most recent effort; however, I was forwarded copies of language that indicate that he is indeed once again being paid by US Airways, not the airline's pilot union. And I quote, "the company will pay the fees and expenses incurred by the Association (ALPA) in connection with the review, design, negotiation, approval, ratification, and implementation of the Transformation Agreement, including the customary fees, the expenses of outside legal, invesment banking and other advisors, offset by any payments made to the Association during the Transformation negotiations for such purposes."

Now, you might ask, why was it that I felt compelled to dig around so much?

Because, to be honest, this report is astonishingly poor.

In fact, if someone had shoved a copy under my nose, and told me to read it, I would have assumed that management at the airline had prepared it.

Why?

Because the entire way the document is constructed merely mirrors the current arguments that management at the airline has made. It does not aggressively question any of the assumptions the airline currently makes.

This document, at least to me, is not a third party analysis. Rather, it reads like a thinly-veiled corporate rubber stamp of what the airline feels it needs to have.

Again, is the airline in deep financial trouble? Yes.

But the pilots at the airline deserve better than this -- especially when it is being touted as an "independent review completed at the behest of their own union."

There are a number of things I could take issue with that are said in the report, but I'll focus on just one. In the report the comment is made that the review included a "limited review" of lease rates. According to Glanzer, "We were not able to find evidence to establish a case that additional savings might be generated there in light of current market conditions." Glanzer then went on to say that his due diligence in this area consisted of talking to analysts "who follow the area" and reviewing certain proprietary research reports.

He sums up by saying two things. One, the "low-hanging fruit" has already been harvested in terms of leasing concessions. Two, he says that it would be hard for the airline to seek further leasing concessions from the lessors, because the airline could be forced to look at lessors for potential equity contributions, as part of an alternative financing scenario. This scenario could be set up if the airline's ATSB financing has to be replaced.

At least he admitted the due diligence was limited.

I'd say it was limited. Did he not think it might be a good idea to talk to some of the airline's larger lessors? Perhaps he could have compared lease rates that United Airlines has now negotiated with some of its lessors, versus what US Airways negotiated previously?

Or perhaps lessors would be more willing to take further cuts in leasing rates, in return for an additional equity position.

To be continued...............

 

[Space Wrangler]

.......continued



The problem is, Mr. Glanzer doesn't know because he didn't talk to them. Rather, his surface treatment of the lessor issue is not much more than a rehash of the position the company is currently taking, as it tries to obtain further employee concessions.

If it was me, I'd go to the source.

No, this is not information you can get easily, but it is there if you know how to find it.

While I don't disagree entirely with his premise, I see no questioning here of the company line. Rather, I see evidence being given over and over in the report that supports the company position.

There is a big difference.

Actually there was one little tidbit in the report that I found intriguing. And I quote, "the Company also proposed to refresh its product offering by installing [text omitted]. It has generated cost estimates for such modifications to the current fleet based on reasonable intelligence, but we are not aware of any airline that has modified its planes in such manner. [Text omitted.]

Are they suggesting they retrofit their aircraft with seatback entertainment systems?

To sum up, yes, US Airways is in serious financial trouble. But that is no excuse for such a suspect document as this to be issued, much less under the guise of an "independent" effort.

Pilots at US Airways: You deserve better.

Finally, we could not leave our visit to US Airways without a quick trip to Alabama.

This week, US Airways' Chairman David Bronner was talking about airlines to the Mobile Register. You can access the article by clicking here.

You know Mr. Bronner is one of my faves -- and this week he did not disappoint. I'll just let you enjoy the quotes.

"Nobody wants to lose a quarter of a billion dollars. But what'll hurt me more is knowing how beneficial this thing could be for our state. It really is unique both as an investment and as a promotional tool. Forget my ego. Think of the missed opportunities for Alabama."





​

Oh, gee, I forgot the real reason for the US Airways' investment -- a WPA project for the state of Alabama.

"We had a good plan to start with. What we did not anticipate was the low-cost carriers becoming the darlings of Wall Street. Before, they were like gnats on an elephant. JetBlue, for instance, had 36 planes. We had 350. I mean, who cares! But while all the big airlines were losing money, Wall Street looked at the discount guys and said, 'Hey, you're good,' and opened its purses."





​

Uh-huh.

"Even in a worst-case scenario -- a complete liquidation of the airline's assets -- RSA's [Retirement Systems of Alabama] investment has paid dividends in Alabama, Bronner said. US Airways sent about a dozen of its Airbus jets to Mobile's Brookley Field for $10 million worth of heavy maintenance work at ST Mobile Aerospace Engineering Inc.



In-flight videos promoting Alabama tourism are seen daily by more than 225,000 US Airways passengers, and Bronner has had brochures for his Robert Trent Jones Golf Trail mailed to passengers who check golf clubs as baggage. The company in May brought its annual meeting to The Legends at Capitol Hill, an RSA-owned resort in Prattville.

But Bronner's bigger plans, at least for now, are on hold. US Airways is squeezing every nickel to survive, he said. Still, the airline last year spent $7.5 billion on everything from planes to peanuts. "Just think about the number of services and products that a company of this size buys in an average year. It's huge," he said. "There's tons of things that, if we can just stabilize it and get it into the black, we can introduce Alabama companies to and say, 'OK, you're gonna have to bid for it, but if you can give us a comparable product at a comparable price, then you'll get a shot,'" he said.

Bronner openly expressed a desire to move airline operations, including call centers and other back-office work, to Alabama and suggested that US Airways or one of its regional offices would make a fine anchor tenant in his RSA Tower now under construction in downtown Mobile. There's also a chance he could sway Bombardier Inc., a Montreal-based aircraft manufacturer, into building airplanes in Alabama. The world's third-largest maker of civil aircraft counts US Airways as its biggest customer and recently announced that it was evaluating global sites for a new assembly plant. "When you own a major airline in this country, people answer your phone calls," Bronner said. "It's opened doors that never would have existed for us otherwise, and it absolutely has made us a lot of new friends around the world."



​

If we had only known this was a WPA project going into the process, and not an effort to constructively restructure the airline.




Finally, in a scene right out of legendary Alabama Coach Bear Bryant's playbook, the interview concludes,

"I love," he said, taking a last deep draw on his cigar and rocking forward in his chair, "to win."





​

Roll Tide."

 

[dlredline]

As I've written in other threads, I just don't see how the White House will let UAIR go tango uniform less than forty-five days before the election; Pennsylvania and North Carolina are huge battle-ground states, not to mention the fact that the latest employment numbers already suck hind t!t. If no agreements are reached by the employee groups, then the ATSB is going to give them some sort of relief -- time, whatever that may be -- but they're not going to allow all of those employees to go to the bread line until after the election.

You read it here first.

Furthermore, I think that UAIR mgmt has probably something up their sleeve that's going to be pulled at the twelfth hour, and they're just doing all they can to suck the employee groups dry. They sure have been paying cash for lots of CRJs lately -- makes it look like things are worse than they really are.

My God, I hope I'm right on one of these points;I dred the thought of looking for yet another job.

Red, thoughts?

Good points all. And you may end up being correct that they won't let a PA/NC based company fail just before the election. On the other hand, the ATSB is a government entity, and they have $750 million in tax payers funds committed to this adventure (through gov. backed loans). If USAirways management files Ch.11 protection (the government doesn't have a say in that decision, it's simply a function of their cash position), and can't find DIP financing to support their reorganization under that protection, the ATSB could argue that they are "protecting" tax payer monies by pulling the loan before the risk gets deeper. The banks and institutions that used the governments' backing to loan USAirways millions would be on the "tic" for their losses, and you and I and average tax-payer Joe would be stuck with the bill.

The news about USAirways has been grim for years now. Hopefully the public hasn't become de-sensitized to their plight. But in reality, if they go Ch7, will there be surprise and outrage from the media and public? I'd hope so, but after hearing them constantly referred to as "Financially Troubled USAirways" for the better part of 12 years, who knows. I honestly don't know which is a worse hickey on the administration, the potential lost jobs or the potential lost millions of tax payer funds. Tough choice in an election year.

As far as this management team "having something up their sleeve", well, you graciously give them a lot more credit than I would (after having worked there for 15 years).

Best to ya,

Red

 

[Boeingman]

While I fully agree with you on the above, might you consider that that was over 20 years ago and maybe some of or many or most of the "hardliners" are retired are gone from the system by now.

True from an individual point of view, but the lessons are the same.

It never ceases to amaze me how two faced ALPA can be depending on the circumstances. What would the hue and cry sound like if some non ALPA airline was proposing this level of contractual pay and benefits for the same type of equipment?

What is happening here is no different than what Frank did to CAL, or what Mesa has done for the regional folks today. The silence is deafening from ALPA about this U situation.

 

[dlredline]

. . . The silence is deafening from ALPA about this U situation.

I couldn't agree more. Where was Duane Worthe when this ball (elimination/reduction of retirement benefits) started rolling (U, UAL, CAL, DAL). Remember, he signed off on the USAirways' MEC termination of the Defined Benefit plan, signed off on MidAtlantic deal that will essentially became a mainline replacement vehicle for a GECAS financed deal for several hundred regional aircraft, signed off on the "soft-landing" that now haunts current (and future) USAirways furloughees.

Duane has gladly fiddled (with his $200,000+/year salary) while the USAirways pilot careers continue to burn down. Talk on the ALPA message boards is growing with regard to kicking ALPA off the property at U. What has happened at USAirways is on par with Enron, MCI/Worldcom, etc. Where is the outrage from the union many of these pilots have been financing for so many years, the news conferences, the press releases, the informational picketing, anything. ALPA is quickly becoming irrelevant in representing their core constituency, and at a time when they financially can ill afford the loss of 3500 more dues paying members. The camel is bending over, and they keep throwing more straws on its back.

Red

 

[yaks]

"In 1983, the members of the USAir and Piedmont MEC's were some of the most vocal and critical pilots (before our strike) practically ostracizing anyone who was not in agreement in striking against Lorenzo. He was doing the same type of gutting to our contract and making draconian demands on our pilots. They were so afraid of the effect on his possible success at gutting the contract would have on their CBA's they were willing to tell us to hit the streets in a heartbeat and not give in once. How many concessions has there already been made to date by the USAIR pilots? I see no difference in Frank Lorenzo compared to the current management at USAIR."


If you really believe this then it is sad that you've had what seems to be a long career in aviation and never really learned anything about the industry.

 

[enigma]

Duane has gladly fiddled (with his $200,000+/year salary)
Red

According to a Readers Digest article printed last year, Woerthless makes over 400Large per year.

I'm happy to give my 2%, NOT.

enigma

 

[LearLove]

According to a Readers Digest article printed last year, Woerthless makes over 400Large per year.

I'm happy to give my 2%, NOT.

enigma

Yeah I was under the same inpression that his pay was more like 400 G's. And if I'm not mistaken he gave himself a raise post 911. Thats real class right there.

 

[Boeingman]

If you really believe this then it is sad that you've had what seems to be a long career in aviation and never really learned anything about the industry.

It is easy to believe in something when you attend various meetings at strike centers with representatives from said airlines pushing their personal agendas while trying to "help". Not to mention conversations with various individuals out on the line or during drill weekend.

If anything sounds to me like the U ALPA boys and girls haven't learned anything watching this goatrope taking place.

Where were you in 83? Did I strike a little to close to home with the comment?

 

[Boeingman]

Yeah I was under the same inpression that his pay was more like 400 G's. And if I'm not mistaken he gave himself a raise post 911. Thats real class right there.

I believe his salary is $450K per year. No further comment needed about that figure.

 

[dlredline]

I believe his salary is $450K per year. No further comment needed about that figure.

You're right, I'm speechless . . .

 

[LearLove]

MEC CODE-A-PHONE UPDATE
​

September 8, 2004
​

This is Jack Stephan with a US Airways MEC update for Wednesday, September 8th, with one new item.



In a statement to the media yesterday, MEC Chairman Bill Pollock offered the following:



“I am disappointed that our pilots were not given the opportunity to vote on the latest proposal before the MEC. I believe that only minor changes in the final proposals could have been exchanged at this time and that those changes would not have altered the economics of the proposal that was before the MEC. I also believe that the proposal contained protections that may not be available at a later time.



“While ALPA has been committed since February of this year to engage in a plan to restore our airline to profitability, the negotiations with US Airways management are in recess, and it is unknown at this time whether and when talks will resume.”



This afternoon Captain Pollock will be preparing a webcast that will be available soon on the pilots only home page. In this broadcast, Capt. Pollock discusses the recent MEC meeting and the roll call vote that prevented the latest Company proposal from going to the membership for a vote. He also discusses the ramifications of not having an agreement should the Company file for bankruptcy, including losing the protections that were available in the Company’s last proposal. In response to recent Company statements and media reports concerning the hiring of bankruptcy counsel by US Airways, we will be providing you with further bankruptcy information shortly on the pilots only home page.



Should the status of negotiations change, we will inform you immediately via the code a phone, pilots only home page, and ALPA Fastread.



Please remember we have 1,879 pilots on furlough.



Thank you for listening.

 

[RUhiring?]

September 8, 2004

To the Pilots of Pittsburgh,

I realize that the pilots of the Council are anxious concerning the events
that have taken place over the past 2 weeks. I will try and lay out a
timeline, while at the same time explain the actions and decisions that we
made. Fred and I have heard from the pilots of this council, and we
appreciate those of you who have whole-heartedly supported us, and hope that
those of you who have some doubts will please read the following letter,
stay informed and contact us if you have questions or concerns.

Membership Ratification

Your PIT and PHL representatives have consistently advocated membership
ratification of any Letters of Agreement or changes to the collective
bargaining agreement that affect our pay, job security, working conditions
or retirement. We will never vote for or amend the policy manual to allow
for anything other than membership ratification of tentative agreements.

In the past week the MEC Chairman, Officers and Communication Committee have
been misleading and misrepresenting the facts concerning the Negotiating
Committee and Company proposals. The MEC policy manual clearly states
“….upon the presentation of an acceptable tentative agreement to the MEC by
the Negotiating Committee. Membership ratification shall be mandatory….” The
pilots of this airline will get a vote, if and when the company and the
negotiating committee reach an agreement that is acceptable to the majority
of the members of the MEC. Our manual calls for a three-step process;

1. The Negotiating Committee and Company reach an agreement.
2. The MEC reviews the agreement for a minimum of 7 days, and
a. accepts the agreement
b. rejects the agreement
3. The pilot group only gets to vote on an agreement if the MEC accepts it.

What the Officers and Communications Chairman of this MEC are trying to
convince this pilot group, is that the PIT and PHL representatives are not
allowing you to vote on your future, this is a LIE and they know it.

This is a completely different scenario than what happened during the loss
of the Pilots Defined Benefit Plan. The MEC accepted a tentative agreement
that eliminated the Defined Benefit Plan and then voted (Brookman voted not
to amend) by 2/3rds to override the Policy Manual requirement of membership
ratification and did not send it out for a vote to the pilot group.

If we get an acceptable tentative agreement – you will get to vote. The
pilot group is the last and final authority.

Expense of Special Meeting called on August 25, 2004

The MEC Chairman, Bill Pollock, called a special meeting which began on
Wednesday, August 25, 2004 and adjourned Monday September 6, 2004. The MEC
was in continuous session to the call of the Chairman. However, from Tuesday
August 31, until Monday September 6, no meetings where held, no phone calls
were received, and no negotiating committee reports were given. Bill Pollock
did not even update the members of the MEC as to the dates and times of
negotiations. Your representatives where listening to the code-a-phone just
as you were to receive information. The MEC did absolutely nothing except
rack up huge expenses. Here is a breakdown of expenses incurred during this
MEC meeting.

1. Flight pay loss of 5 hours per day/ per MEC member, officer, invited
committee members - $15,000/day
2. Hotel and meeting rooms - $5,000/day
3. Meals and incidentals - $2,000/day (minimum)

At a very minimum this MEC Chairman spent over $110,000 for 6 days when
absolutely no work was being conducted.

This from an MEC that ALPA National has been rightfully scrutinizing the
expenditures of. We have ongoing, serious financial concerns and, as a
result, have been placed on a flight pay loss matrix, we are currently under
the control of ALPA National.

Company’s proposal of September 6, 2004

After being in recess for 6 days at the call of the MEC Chairman, the MEC
went into session at 3:30 on Monday, September 6. The Negotiating Committee
gave an update of their past weeks worth of work, which took approximately 2
hours. We broke for about an hour while the Company sent over their next
proposal. After the Negotiating Committee reviewed the latest Company
positions, they discussed the provisions with the MEC. First Officer Garland
Jones (BOS) asked for a 5 minute recess while he passed out a resolution
that would send this company proposal out for membership ratification. The
motion was seconded by First Officer Ray Belz (LGA). I then made a point of
order that the resolution was not valid. The US Airways policy manual
clearly states that tentative agreements are sent to the pilot group for
membership ratification, not proposals. Not surprisingly, after much debate
between the advisors and Chairman Pollock, my point of order was overruled.
I then challenged the chair; this would allow the MEC members to vote on the
point of order. However, once again, Chairman Pollock then made the decision
that a challenge of the chair was not in order. Should we be surprised? The
same parliamentary procedures where used by Chris Beebe, as MEC Chairman, to
prevent the MEC from allowing this pilot group the ability to vote when a
Tentative Agreement was reached and the MEC (I voted NO) surrendered of our
Defined Benefit Plan.

After approximately 1 hour of discussion concerning the resolution, we
voted. I immediately called for a roll call. PIT and PHL voted NO,
BOS, LGA, CLT, DCA voted, YES.


Why we voted against sending out a proposal to the pilot group

1. We did not have a tentative agreement, as required by the policy manual,
just a proposal from the Company that did not address any of the financial
needs, returns, and job security of our pilot group.
2. What was stated over and over as the sole reason for this MEC to accept
the Company’s proposal of September 6, 2004 and send it out for membership
ratification was; to obtain Chapter 1113, 1113(E), 1114, 1114(h) protection
if the Company entered bankruptcy. This protection would prevent the company
from asking the judge for further concessions from the pilot group. However,
the one important element that all other representatives, (PIT & PHL
excluded), the MEC Chairman and Communications Committee are failing to tell
the pilot group is: The protection the company was offering dropped dead
after 60 days in bankruptcy. The proposal states “neither the company nor
any affiliated debtor shall, on or before November 12, 2004, file or
otherwise support any motion … seeking rejection of or modification of or
relief or interim relief from, the Pilot Agreement.” Under federal
bankruptcy laws; the Company is required to negotiate with us for 60 days.
Folks, they offered us the sleeves off their vests! It is our opinion that
the Company will be back for MORE, the 60 days gives them the ability to
take advantage of our massive concessions, go after all the other unions,
and then come back after us. Make no mistake, as Arnold say’s “I’ll be
BACK”, history does repeat itself. The ink is never dry before they are
stealing more.
3. None of the provisions that were required by the MEC Charging Resolutions
had been fulfilled. The charging resolutions were passed by unanimous vote
of this MEC. PIT and PHL are the only representatives who are living up to
their commitments to this pilot group.
4. No meaningful returns. The company’s own documents state that any profit
sharing is unlikely to survive a bankruptcy filing.
5. No furlough protection – up to 775 potential furloughs
6. Elimination of retiree medical benefits. This will cost each pilot (in
today’s dollars) approximately $2,000/month. They offered to offset it by a
maximum of $462.50/month, only if you are fortunate enough to have a full
sick bank at retirement.
7. Complete elimination of retiree dental coverage (access and subsidy) – we
can’t even buy it!!
8. Eliminate all medical and dental coverage for all current and future
retirees over age 65.
9. Eliminate all drug coverage for current and future retirees.
10. Elimination of the Pilot Disability Plan – a pilot would only be able to
collect disability for a maximum of 2 years. All pilots would have to pay
for 25% of disability premiums. Ladies and gentlemen, we have reached an all
time low when we attack the old and crippled. The company would not even
indemnify the Association against laws suits that are sure to arise from the
elimination of retirement and insurance benefits.
11. 23% pay cut, 50% reduction in Defined Contributions – ALPA’s first
proposal for a 12 ½ % pay cut, and minor work rule changes = $220 million.
We are very well informed and the numbers just do not add up!! The company
constantly values our contributions well below what they are worth. Our
Negotiating Committee has been chasing a moving target for the past 3
months. Until now, no other MEC has ever held the Company’s feet to the
fire.
12. 106 seat jet aircraft at express carriers – correct me if I am wrong, I
think we have those parked in the desert!!

Please read the Company’s proposal dated September 6, 2004. I tried to
outline a dozen items; it is a 30 page document and grows more onerous with
turn of each page.

What is unbelievable to me is that the other 8 members of the MEC could
actually accept this.

 

[RUhiring?]

Communication Committee


It is the opinion of your Pittsburgh Representatives that the communications
that have been released by the MEC Chairman, Officers and Communication
Committee Chairman, Jack Stephan, have been a concerted effort designed to
create doubt and uncertainty as to the intentions of your elected
representatives. He has intentionally misled and misinformed the pilots of
US Airways. Jack Stephan has acted in a manor which has caused and fostered
a contentious and divisive atmosphere designed to effectuate an outcome
contrary to the best interest of this pilot group. He has actively
encouraged and participated in divisive activities. He has censored
communications between the Negotiating Committee and the pilot group. The
actions of the Communication Committee Chairman have jeopardized the
creditability of the US Airways MEC and the relationship between the elected
representatives and their constituents.


Where do we go from here?


Your representatives will continue to work toward attaining the stated goal
of transforming the airline, and making us competitive with the low cost
carriers. We know we can meet this objective without surrendering our entire
working agreement, and we will fight hard to preserve the benefits for all
pilots on the seniority list and for those pilots who left us this airline
and career in our hands.

The Negotiating Committee is ready to engage the Company, and has a
negotiating charge unanimously passed by the MEC on August 30, 2004.

Please stay informed, question everyone, and call us with your questions and
comments.

Fraternally,

John M. Brookman
First Officer Representative, Council 94

 

[On Your Six]

Can someone boil the previous message down for me? I don't have a strong attention span - what does it mean?????? What are the implications for the pilot group?

Thanks!

 

[Boeingman]

September 8, 2004


Expense of Special Meeting called on August 25, 2004

The MEC Chairman, Bill Pollock, called a special meeting which began on
Wednesday, August 25, 2004 and adjourned Monday September 6, 2004. The MEC
was in continuous session to the call of the Chairman. However, from Tuesday
August 31, until Monday September 6, no meetings where held, no phone calls
were received, and no negotiating committee reports were given. Bill Pollock
did not even update the members of the MEC as to the dates and times of
negotiations. Your representatives where listening to the code-a-phone just
as you were to receive information. The MEC did absolutely nothing except
rack up huge expenses. Here is a breakdown of expenses incurred during this
MEC meeting.

1. Flight pay loss of 5 hours per day/ per MEC member, officer, invited
committee members - $15,000/day
2. Hotel and meeting rooms - $5,000/day
3. Meals and incidentals - $2,000/day (minimum)

At a very minimum this MEC Chairman spent over $110,000 for 6 days when
absolutely no work was being conducted.

This from an MEC that ALPA National has been rightfully scrutinizing the
expenditures of. We have ongoing, serious financial concerns and, as a
result, have been placed on a flight pay loss matrix, we are currently under
the control of ALPA National.

Sounds like the MEC took a nice labor day vacation at the expense of the memebership. I curious why these guys have not been lynched yet for this and some of the other interesting tidbits that are now leaking from this letter?

It sounds to me that this situation is rapidly spinning out of control with all parties involved.

 

[MJG]

It means that even the MEC members are at each others throats and at odds over what they should do. That's not surprising considering what's at stake here. Unfortunately you can't represent 3500 pilots and the weight of their combined salaries without letting politics get in the way. Sad but true.

I sure hope they can work something out.

 

[njcapt]

It basically means that the gauntlet has been thrown down. Compensation and work rules (particularly retirement benefits) have eroded to the point that a majority of represented pilots would rather risk almost certain bankruptcy than have their contract gutted further. Expect a lot of noise from the U MEC in the next week or so.

 

[MW44]

On your six-

Here are the real nasty parts of the proposal. It is scary to think that this very well might pass-

"4. No meaningful returns. The company’s own documents state that any profit
sharing is unlikely to survive a bankruptcy filing.
5. No furlough protection – up to 775 potential furloughs
6. Elimination of retiree medical benefits. This will cost each pilot (in
today’s dollars) approximately $2,000/month. They offered to offset it by a
maximum of $462.50/month, only if you are fortunate enough to have a full
sick bank at retirement.
7. Complete elimination of retiree dental coverage (access and subsidy) – we
can’t even buy it!!
8. Eliminate all medical and dental coverage for all current and future
retirees over age 65.
9. Eliminate all drug coverage for current and future retirees.
10. Elimination of the Pilot Disability Plan – a pilot would only be able to
collect disability for a maximum of 2 years. All pilots would have to pay
for 25% of disability premiums. Ladies and gentlemen, we have reached an all
time low when we attack the old and crippled. The company would not even
indemnify the Association against laws suits that are sure to arise from the
elimination of retirement and insurance benefits.
11. 23% pay cut, 50% reduction in Defined Contributions – ALPA’s first
proposal for a 12 ½ % pay cut, and minor work rule changes = $220 million.
We are very well informed and the numbers just do not add up!! The company
constantly values our contributions well below what they are worth. Our
Negotiating Committee has been chasing a moving target for the past 3
months. Until now, no other MEC has ever held the Company’s feet to the
fire.
12. 106 seat jet aircraft at express carriers – correct me if I am wrong, I
think we have those parked in the desert!!

Please read the Company’s proposal dated September 6, 2004. I tried to
outline a dozen items; it is a 30 page document and grows more onerous with
turn of each page.

What is unbelievable to me is that the other 8 members of the MEC could
actually accept this." qoute from RUhiring.

 

[Mugs]

Why don't you share with us then Yaks what you were doing in '83 that gives you in insight to prove him wrong?

 

[On Your Six]

On your six-

Here are the real nasty parts of the proposal. It is scary to think that this very well might pass-

"4. No meaningful returns. The company’s own documents state that any profit
sharing is unlikely to survive a bankruptcy filing.
5. No furlough protection – up to 775 potential furloughs
6. Elimination of retiree medical benefits. This will cost each pilot (in
today’s dollars) approximately $2,000/month. They offered to offset it by a
maximum of $462.50/month, only if you are fortunate enough to have a full
sick bank at retirement.
7. Complete elimination of retiree dental coverage (access and subsidy) – we
can’t even buy it!!
8. Eliminate all medical and dental coverage for all current and future
retirees over age 65.
9. Eliminate all drug coverage for current and future retirees.
10. Elimination of the Pilot Disability Plan – a pilot would only be able to
collect disability for a maximum of 2 years. All pilots would have to pay
for 25% of disability premiums. Ladies and gentlemen, we have reached an all
time low when we attack the old and crippled. The company would not even
indemnify the Association against laws suits that are sure to arise from the
elimination of retirement and insurance benefits.
11. 23% pay cut, 50% reduction in Defined Contributions – ALPA’s first
proposal for a 12 ½ % pay cut, and minor work rule changes = $220 million.
We are very well informed and the numbers just do not add up!! The company
constantly values our contributions well below what they are worth. Our
Negotiating Committee has been chasing a moving target for the past 3
months. Until now, no other MEC has ever held the Company’s feet to the
fire.
12. 106 seat jet aircraft at express carriers – correct me if I am wrong, I
think we have those parked in the desert!!

Please read the Company’s proposal dated September 6, 2004. I tried to
outline a dozen items; it is a 30 page document and grows more onerous with
turn of each page.

What is unbelievable to me is that the other 8 members of the MEC could
actually accept this." qoute from RUhiring.

Wow! This is worse than I thought... Seriously, I should have gone to Law School (I could have been paid well to negotiate labor contracts). Our industry is going down hill big time.