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New Star Tribune Article: MESABA

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gnx99

Well-known member
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Nov 30, 2001
Posts
556
Here's a new article from the Star Tribune about Mesaba. I cut and pasted because their website is ridiculously slow.
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www.startribune.com said:
Star Tribune
http://www.startribune.com/535/story/453581.html

Mesaba, unions heading for a standoff
Mesaba Airlines and its labor unions appear to be heading for a standoff over the airline's demand for lower labor costs. Despite a bankruptcy judge's ruling, the unions say they won't accept severe cuts.

U.S. Bankruptcy Judge Gregory Kishel is not prone to hyperbole. So when he wrote last week that Mesaba Airlines and its unions must quickly come to grips with the airline's "looming operational insolvency," both sides probably took notice.
But as Mesaba bleeds cash and watches its fleet of planes grow smaller by the month, there's little sign that labor and management are ready to reach deals to save the regional carrier.

Pilot talks are expected to resume next week, but leaders of the pilots, flight attendants and mechanics unions said they will not accept the company's demands for 19.4 percent labor cuts in six-year contracts. The wage cuts and other changes would slash labor costs by $17.1 million.

"We are faced with the Hobson's choice of personal liquidation or corporate liquidation," said Tom Wychor, chairman of the Mesaba pilots union.

"If employees are forced to take 19.4 percent cutbacks over six years, it will initiate the destruction of Mesaba Airlines one way or another," said Kevin Wildermuth, lead negotiator for the Aircraft Mechanics Fraternal Association (AMFA). The carrier's demise could come from a strike or mass resignations, Wildermuth said.

According to the unions, the average salary for a Mesaba flight attendant is $21,000, while the average mechanic salary is $32,000 and a pilot is at $45,000, with starting wages much lower than the averages.

Under the airline's proposal, a first-year Mesaba flight attendant with employee-only health insurance would earn less than $11,000 a year.

"We are not going to allow any unionized employees at Mesaba to make poverty wages," said Tim Evenson, president of the Mesaba branch of the Association of Flight Attendants.

Evenson was among 250 Mesaba employees and family members who gathered Tuesday night outside the Metrodome for a Mesaba Labor Coalition picnic. Evenson said the level of cooperation among the flight attendants, pilots and mechanics has been "unprecedented."

The inability of management to strike a deal with its workers is costing Mesaba cash, and possibly more planes.

"We had hoped to have labor concessions in place by April, and the fact that they're not in place yet is continuing to place pressure on our cash position," Mesaba spokeswoman Elizabeth Costello said Wednesday. The airline declined to release a current cash balance figure.

Without outside financing, Mesaba said it could run out of cash by late August, Kishel noted in his ruling.

Mesaba, which had 100 planes in the fall of 2005, has lost one-fourth of its fleet and the pilots union said 22 Avro jets still in the fleet are scheduled to be removed by Northwest Airlines by year's end. A few days ago, the union notified Mesaba pilots that some Avros will depart Mesaba starting in June and be flown to a carrier in Ireland that is a subsidiary of Air France.

Mesaba flies regional flights exclusively for Northwest and was essentially thrust into bankruptcy shortly after Northwest sought protection from its creditors in September. Last fall, Northwest stopped making flight service payments to Mesaba and notified the regional carrier that it would cut its fleet in half.

Northwest asked for proposals in December for new regional jets. Mesaba and seven other airlines submitted bids in January, but Northwest has not announced its decision.

Lacking a commitment from Northwest, Mesaba management presented its union negotiators with a business plan that is based on the airline operating only 49 Saab turboprops for Northwest.

In a letter to employees, Mesaba President John Spanjers indicated that he believes that the 49-plane business model also can't work without the wage cuts the company seeks. "If we cannot finalize the cost reductions, we cannot secure the core Saab business. If we cannot secure the core Saab business, we cannot compete for jets," he wrote last week.

The airline has been meeting with potential lenders and hopes to finalize debtor-in-possession (DIP) financing in 30 to 45 days, Costello said.

In his recent 98-page ruling that denied the airline's motion to void its labor contracts, Kishel noted that banks are likely to be hesitant to lend to Mesaba until labor terms are resolved. "A failure to reach resolution on labor cost issues might deter any prospective DIP lender from making a commitment" to Mesaba, he wrote.

The unions have argued that Mesaba should develop alternative business models that its negotiators can review. And they've stressed that the new contracts should include rewards for employees if the carrier succeeds in expanding.

Ultimately, the judge could be Mesaba's trump card.

When he considered Mesaba's motion to nullify its contracts, the carrier met most of the criteria that judges must apply. However, it had not provided the unions with a key financial model needed to evaluate its concessionary requests.

In denying the company's request, the judge said that if Mesaba cannot reach new deals he would permit management to "make a renewed motion which would be heard promptly." More important, Kishel wrote that Mesaba had provided sufficient evidence "that it will not survive as an operating airline if it does not get the total reduction of 19.4 percent."

Many employees don't seem to be persuaded, though, and said they are ready to vote with their feet.

Sarah and Jeril Metzger of Eagan might be hurt the worst if Mesaba imposes contract terms or goes out of business. Both are pilots, and their combined income was about $89,000 last year. If Mesaba downsizes to 49 Saabs, Sarah would lose her job and Jeril would drop from captain to first officer. The couple's income from Mesaba would plummet by two-thirds.

"There's an amount of money that we are willing to work for, and an amount we are not willing to work for," Jeril Metzger said, adding he is ready to apply to other airlines. Sarah Metzger said she might leave aviation.

Todd Germain, a Saab captain from St. Paul, said he and many other employees are skeptical about the competence of Mesaba management.

His wife, Melissa, had been planning to be a stay-at-home mother for their son Henry, who was born two weeks after the Mesaba bankruptcy filing. But she quickly returned to work as a substitute English teacher. The couple have slashed expenses, and "saved as much money as we can," Todd said.

If the Mesaba standoff ends badly, Todd has a backup plan: He's thinking about teaching or law enforcement.

Liz Fedor • 612-673-7709

www.startribune.com
 
Go Todd, Sarah, Jeril and the rest of XJ! I've posted other threads on here regarding their professionalism, I've always been floored by their attitude, and their situation is a crucible for ALPA to put up or just die already.

I hope the pink fleet is here to stay, and I'm proud of all of you.
 
Last edited:
arthompson said:
We'll take you guys at Pinnacle. I know it's not the best option, but it's a good alternative to unemployment

Are you serious?? Mesaba may be hurting now, but Pinnacle is next... I'd get as far away from that Red Tail shadow as I could!
 
May the employees do whats best for them and hopefully the union wont destroy another great company :beer:
 
If you read that $11,000 figure the company wants, I guarantee it's not the unions who will destroy the company.
 
gnx99 said:
If you read that $11,000 figure the company wants, I guarantee it's not the unions who will destroy the company.

Amen to that.

Sadly, this reminds me a bit of what happened to us at ACA a few years ago.
 

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