Mesaba's race to the Bottom

[bomberbubba]

With the 50% increase in costs of our health benifits.......I wish i could seek out the cheapest doctor! Too bad they dont advertise their costs! This place sucks!

 

[schmitty340]

just out...mesaba is imposing 20% paycuts to all non union employees. effective April 1. I bet the csa's wish they had voted yes on that last union vote. source is mymesaba.com

schmitty

 

[schmitty340]

oh ya, I forgot... This excludes managment... this is one classy airline. how many people do you think will quit before the holidays? This should be a fun x-mas in DTW.

 

[bomberbubba]

Memo says all salary and non-union folks get 20% paycut effective April 1st. What an April fools joke!

This would include management the way i read it.

 

[xjlifer]

So lets see Foley is right at 1.3 million...so 20% from that.....o never mind

 

[millhouse21]

Memo says all salary and non-union folks get 20% paycut effective April 1st. What an April fools joke!

This would include management the way i read it.

I don't work there but I suspect that mgmnt will read it in such a way as to exclude themselves.

 

[schmitty340]

I should have been more clear. The "Senior leadership Team" will not be taking 20%. I agree with bomberbubba, the day to day managers will be affected.


The funny thing is that our SLT really are only mid level managers for big brother NWA. there only real job is to control cost. All other decisions are made for them.

 

[schmitty340]

Nice comment from FOOLEY in the paper today. and this was in reference to pilots and flight attendants!

But Foley said that lower wages are a reality in the airline industry. "There are more than enough people willing to work at the work rules and wage rates that Mesaba has proposed," Foley said.


This next part is encouraging . I think mesaba and MAIR may have bit off more then they can chew. Go get em Tom !!!

Meanwhile, the creditors committee in the Mesaba bankruptcy wants to probe financial connections between Mesaba and its parent, MAIR Holdings, which is not in bankruptcy. The key creditors, including aviation companies and Mesaba pilots and flight attendants unions, have asked the judge to let them subpoena Foley and other top MAIR executives.
"For years, the Mesaba pilots have been extremely concerned about the uplifting of cash from our company to a separate suite of executives" at Minneapolis-based MAIR, said Tom Wychor, chairman of the Mesaba branch of the Air Line Pilots Association (ALPA).
Now the creditors have united in seeking more information about the financial relationship between MAIR and Mesaba. Minnesota Twins owner Carl Pohlad serves as chairman of the MAIR board of directors. All of MAIR's profit has been generated by its main subsidiary, Mesaba, because tiny Big Sky Airlines, its other subsidiary, has lost money since it was acquired in 2002, Wychor said.


Here is the entire artical:

Liz Fedor, Star Tribune Last update: December 8, 2005 at 8:22 PM


Bankrupt Mesaba Airlines is attempting to slash its labor costs by 19 percent, the head of Mesaba's parent company said Thursday during an airline conference in New York.
Paul Foley, CEO of MAIR Holdings, said Mesaba must reduce its labor rates to continue providing regional flight service for Northwest, which filed for bankruptcy in September. But he stressed that Mesaba also must have a competitive cost structure to attract flying business beyond Northwest.
Meanwhile, the creditors committee in the Mesaba bankruptcy wants to probe financial connections between Mesaba and its parent, MAIR Holdings, which is not in bankruptcy. The key creditors, including aviation companies and Mesaba pilots and flight attendants unions, have asked the judge to let them subpoena Foley and other top MAIR executives.
"For years, the Mesaba pilots have been extremely concerned about the uplifting of cash from our company to a separate suite of executives" at Minneapolis-based MAIR, said Tom Wychor, chairman of the Mesaba branch of the Air Line Pilots Association (ALPA).
Now the creditors have united in seeking more information about the financial relationship between MAIR and Mesaba. Minnesota Twins owner Carl Pohlad serves as chairman of the MAIR board of directors. All of MAIR's profit has been generated by its main subsidiary, Mesaba, because tiny Big Sky Airlines, its other subsidiary, has lost money since it was acquired in 2002, Wychor said.
Foley, during an investors conference, said MAIR has "over $115 million in cash and investments" and "minimal long-term debt." He emphasized that MAIR did not file for bankruptcy but has offered to provide up to $35 million of debtor-in-possession financing to Mesaba.
Wychor argues that MAIR and Mesaba are for all practical purposes one entity, and that the MAIR executives are "playing a shell game."
The Mesaba creditors committee, which wants to recover payments from Mesaba, has formally asked the court to compel MAIR to turn over a massive array of MAIR documents. A hearing on the creditors' motion is scheduled for Jan. 10.
"We will certainly comply with any direction from the court," MAIR spokesman Jon Austin said Thursday. "I think we'd certainly participate in the discussion on the motion, so the creditors committee gets the information it needs without imposing an undue hardship on the company."
Pay cuts looming
Mesaba employees are worried about financial hardships heading their way.
Pilots who fly Mesaba's three plane types are being asked to take 13 to 19 percent pay cuts. Wychor said he has not seen any financial data to justify any level of cutbacks for pilots or other Mesaba employees.
But Foley said that lower wages are a reality in the airline industry. "There are more than enough people willing to work at the work rules and wage rates that Mesaba has proposed," Foley said.
Union negotiators have been told that Mesaba wants to negotiate concessionary agreements by Dec. 19, Wychor said. If that goal is not reached, Wychor said the company is expected to file a motion in bankruptcy court seeking to abrogate its labor contracts.
The other unions at Mesaba are the Association of Flight Attendants, the Aircraft Mechanics Fraternal Association and the Transport Workers Union.
"All employees will bear their share of the burden," Mesaba spokeswoman Elizabeth Costello said.
"The keys for a successful Mesaba reorganization are securing our core business with Northwest, making Mesaba an attractive partner to Northwest for growth opportunities -- whether that is a 50- or 70-seat regional jet -- and a cost structure that allows us to diversify," Costello said.
On Thursday, Foley broached the subject of MAIR or Mesaba acquiring airplanes for non-Northwest flying, but he didn't provide specifics.
Currently, he said, "Northwest is dictating to us what the fleet will be." Northwest has taken nine Avro jets out of Mesaba's schedule and 10 Saab turboprops are expected to be removed next month.

Liz Fedor • 612-673-7709

 

[YourPilotFriend]

Haha you made the guy a millionaire for all your hard work and he insults you. Even dogs dont bite the hand that feeds them, what dumba$$. Doug stealin said the same thing to us a while back. Yeah go find you 300TT hr pilots and let them fly your airline for free, just make sure you tell the public what your doing.

 

[fieldinsight]

just out...mesaba is imposing 20% paycuts to all non union employees. effective April 1. I bet the csa's wish they had voted yes on that last union vote. source is mymesaba.com

schmitty

If your source is mymesaba, then you are being intentionally misleading. It's not pretty, but it's not exactly a 20% PAYcut either. Here's the entire memo:

December 8, 2005

Dear Fellow Employees:

As you know, Mesaba’s financial condition has worsened dramatically over the past few months, and the purpose of our bankruptcy is to bring our expenses in line with our revenues. We’re looking at all areas of the Company to do this. For example, we’ve negotiated new contracts with a number of vendors to achieve savings and we’re implementing process assessments and improvements such as:
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An Operations Performance Team to evaluate on a corporate-wide basis how we can achieve improved on-time performance
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Project Superstar to determine the current state of the ground operations in order to provide key best practices and recommendations for improvement in quality, cost, delivery, and safety.

In addition, we have begun discussions with our union leadership at AFA, ALPA, AMFA and TWU for concessions. At the same time, we are finalizing all salaried and non-contract hourly employee costs – the results will include an adjustment to compensation and benefits.

We have analyzed market forces for each employee group while considering the need to be fair and equitable. Based on this information and the Company’s business plan going forward,changes to compensation will vary for different employee groups. Each employee group, however, will realize the same cost reduction total of 19.4 percent. This total will be drawn from payroll, benefits and productivity. At this time, we are projecting an average 7.6 percent reduction in pay for CSAs (individual CSA percentages will be determined by demographics and the individual’s rank on the pay scale) and a 10 percent reduction in pay for all salaried and remaining non-contract hourly employees. These changes will be effective April 1, 2006.

Without fail, we have the smartest and best employees in this industry so it is with deep regret that we must implement these compensation changes. However, the Company’s new businessplan compels us to modify all costs in order to ensure a successful future. Again, please know the changes are based on the most reliable financial and business planning information available – and all of us will bear our share of the burden.

Thank you for your continued professionalism and support during this most difficult time in our Company’s history.

Sincerely,
John Spanjers
President & COO

People who shouldn't be taking the hit will be. ALPA is on the creditors committee, Wychor needs to make sure the pain is felt all the way to jinglepants himself. ​