Latest at USAirways

[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.

 

[dlredline]

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.

And that noise will be deafening. Rumors already abound about legal action against the PHL/PIT reps. However, it appears they were correctly following bylaws that required them to only send a "tentative agreement" (TA) out to the pilots, not simply a "proposal" from the company. In addition, the MEC voted unanimously 2 weeks ago against a proposal (better than the one last week) stating it was "unacceptable". And this current proposal went against a charging resolution to the negotiating committee (again, unanimously approved by the same MEC) directing that, amoung other things, any agreement protect the existing Defined Contribution plan and not include addtional furloughs (the last "proposal" would have cut the DC plan by up to 50% and allowed 775 addtional furloughs).

It means that even the MEC members are at each others throats and at odds over what they should do...

Understatement of the year! Irregardless of politics, this MEC should, at the very least, remain consistant with their message. This past Spring, they unanimously voted "no confidence" in then CEO Dave Siegal, then 2 days later reentered negotiations with him. They told the pilots they wouldn't send a TA out that included a further eroding of their already devestated retirement plan or additional furloughs, then tried to do exactly that with an end-around manuever to pass a proposal, effectively neutering the Negotiating Committee. The conflicting message from this MEC only deepens the mistrust of the whole process.

The 1113, 1113(E) letter protection that the DCA/LGA reps say would have prevented the company from coming back after the pilots during bankruptcy would only provide 60 days of protection, and would be void after Nov. 12, 2004. At this point, it appears a majority of pilots would rather take their chances through the judicial system. It can then be argued that the pilot group has already contributed their entire DB plan and almost 40% in wages/benefits to assist in the restructuring of USAirways. At some point, Bronner and Lakefield have to figure out how to run an airline, and a BK judge will require them to produce their "Transformation Plan", something they haven't done (or don't have) to date.

Interesting, too, that the company pushed the pilots hard to approve a $295 million/year concession package by this week, a group who already gave up their DB retirement plan to help "save" USAirways, in time for a Sept. 15th required pension obligation of about $115 million to fund the Defined Benefit plan of the employee groups who still have a retirement plan. And keep in mind, the additional sacrifice asked of these 3500 pilots, $295 million/year, in simplistic terms, equates to an additional $84,285/year per pilot (in wages and benefits). That still blows my mind!

I think think the future course of USAirways may be determined within the next week.

Red

 

[halfmoon]

S&P CCC- for UAIR

bad news

 

[dlredline]

S&P CCC- for UAIR

bad news

That no doubt now makes them in default of the loan provisions with GECAS for financing of the E170 purchases. Uh,oh.

 

[On Your Six]

Hurry up and get those E170 type ratings/experience so that you can jump to JetBlue!!!!!! Not a good situation.

 

[xdashdriver]

S&P CCC- for UAIR

bad news

Old news...they made that change on 8/20/04.

 

[halfmoon]

actually they were CCC+ before 8/20/04 then got downgraded to CCC. 2 days ago got further downgraded to CCC-.

hope for the best but plan for the worst!

 

[Dizel8]

Duanes pay,annual compensation and total payments made!
Duane Woerth...$423,705...$536,255...Air Line Pilots

 

[100LL... Again!]

http://www.nytimes.com/2004/09/10/business/10airways.html?ei=5006&en=2c9ee10fb94f099c&ex=1095393600&partner=ALTAVISTA1&pagewanted=print&position=

From the NYT.

 

[dlredline]

September 10, 2004

US Airways Seen as Likely to Declare Bankruptcy

[size=-1]By MICHELINE MAYNARD[/size]


http://graphics8.nytimes.com/images/dropcap/b.gifarring a last-minute change of heart by its recalcitrant unions, US Airways appears all but certain to seek bankruptcy protection on Sunday, people briefed on the situation said yesterday.

In that event, the airline is considering a bankruptcy filing without debtor-in-possession financing, a standard feature of most Chapter 11 cases. Instead, it would rely on cash on hand to finance its operations and would explore whether it needed additional financing in the future, these people said.. . .

...US Airways ended the second quarter with $925 million in cash, about $200 million more than it is required to have on hand under the terms of its federally backed loans and more than it had when it filed for bankruptcy protection last time.
But that floor will quickly loom if US Airways makes a $110 million contribution to its employee pension funds, due Wednesday, a move that seems unlikely because that would leave it with little surplus cash.

It cannot seek outside financing because its collateral is pledged to secure its remaining $700 million in federally backed loans. In fact, US Airways pledged assets worth $1.4 billion, or two times the value of the guarantees. The stabilization board also received a 10 percent stake in the airline. So in the event it defaults on its loan package, the board would essentially have the right to claim US Airways' cash, as well as aircraft, gates, routes and other assets.


Folks, this is a risky proposition at best. Remember, without DIP financing during a judicial restructuring, and no way to tap into the credit markets, a company in BK must use it's cash to maintain it's daily operations. That means they pay salaries, leases, fuel, et al with cash. You don't need a calculator to figure how long (not very) they can continue operations until they go below the $700 million floor required by the ATSB. Will a BK judge grant emergency relief for USAirways from a government backed loan guarantee? Uncharted territory at this stage. If so, they live to fight another day. If not, and the ATSB stakes claim to U assets, you and I and all taxpayers would then own the remaining assets of USAirways.

Red

 

[Erlanger]

Just was watching CNN at 7am Eastern, and they also report that the word they got was that U.S. Air was probably going to file for Chapter 11 this coming Sunday the 12th.