Rise & Fall of ALPA

[Rvrrat]

The other day radio commentator Dave Ross was speaking on the absurdity of United Airlines financial woes given the fact that said airline is majority owned by....it's own employees, of which the pilot group is the largest class. He ended by stating that it would indeed be an event when a company folded because if its own employee/owners.

In other threads, there is discussion of ALPA's "agenda".

I submit that since the pilots of United are quite tied up with ALPA, ALPA will ultimately dictate what is to become of the airline, and with it, the future of ALPA itself.

When he died in 1902, Lord Acton was considered one of the most learned people of his age, unmatched for the breadth, depth, and humanity of his knowledge. He has become famous to succeeding generations for his observation -- learned through many years of study and first-hand experience -- that "power tends to corrupt, and absolute power corrupts absolutely." & "Liberty is the prevention of control by others."

 

[flydog]

I think its important to remember that United's woes are not due to the pilots, mechanics, flight attendants, etc. Although they are owners on paper and have seats on the board they do not set long term strategy and fiscal policy, run the day-to-day operations and make management decisions. This is the job of the CEO, Chairman and the upper echelons of management. To say that the employees are responsible for the current problems and ultimate demise of United is irresponsible and not factually correct.

I think the bottom line is the employees as shareholders have to balance out their personal obligations to their families, their own creditors, and their dependents before they commit to saving an airline that may or may not survive. How easy do you really think it is taking a pay cut from $150,000 a year down to $100,000 if you have a mortgage to pay, kids in college, car payments, etc. Would you risk personal bankrupcty to save your job?

From a business and economic perspective the best way to save a company is to reorganize in such a way as to maximize profit and cut losses. This requires layoffs. Cutting 30% of your revenue and keeping 100% of your workforce wont fix the problem wether they take a 10%, 20%, or even 50% pay cut.

The employee owners know this and so does Wall Street. Its time for United to face the facts and get some competent management at the helm to save this company instead of spreading propaganda about how the employees are killing the airline.

 

[RJFlyer]

Would you risk personal bankrupcty to save your job?

This statement is exactly what is wrong with the thinking of the pilot groups at the majors. Can you not see the absurdity of this statement?

How easy do you really think it is taking a pay cut from $150,000 a year down to $100,000 if you have a mortgage to pay, kids in college, car payments, etc. Would you risk personal bankrupcty to save your job?

If you do not take the risk to save your job, you will be UNEMPLOYED. How far away is bankruptcy when you have no job?

Last time I checked, a job paying $100,000 per year is a bit better than no job paying $0. Maybe you need to move into a more affordable house. Maybe you need to drive a Toyota instead of a Lexus. Maybe your kid needs to go to a state university instead of that expensive private school. Maybe your current wife needs to go get a job. But $100,000 a year is not exactly chump change, and certainly shouldn't precipitate bankruptcy.

This requires layoffs. Cutting 30% of your revenue and keeping 100% of your workforce wont fix the problem wether they take a 10%, 20%, or even 50% pay cut.

Let's see. You're saying that to save a certain amount of money, the only way to do that is through furloughs? There is no way to save the same amount of money through pay concessions? That is absolutely ridiculous. You'd rather keep your fat paycheck and see several thousand junior guys on the street (and driven to bankruptcy?), than give up a little and let everyone keep their jobs?

I think you need to get a better grip on fiscal realities.

 

[B1900DFO]

I think what flydog was trying to say is that the ual pilots, flight attendants, mechanics, etc. are not responsible for United's current condition and pay concessions will not return United to a dominate position in the industry. I think everybody would agree that united is suffering from a terrible lack of vision when management pisses away close to a billion dollars in a year over ventures such as avolar, failed merger, mypoints.com, etc. For several months after 9/11 Ual's daily cash burn rate exceeded their payroll. Ual pilots have no guarantee that giving up 20-30% of their payroll will do absolutely anything to improve the company's prospects. Look at Us airways whose pilots gave up 30% in pay as well as furlough protection to secure the ATSB loans and the company still went chapter 11. What I'm trying to say is that I don't think the issue is as black and white as you make it out to be.

Also Rvrrat what in the world does Alpa national have to do with Ual's future? Any agreement made between the pilots and management will be formulated by ual's own mec. Alpa national is merely a bunch of overworked elected reps from varying airlines who have no say over what Ual's pilots agree to.

 

[Rvrrat]

Uncle Duane signs the bottom line; the Mecs might concoct the language and specifics but they don't have the legal ability to make it official. If ALPA wants things a certain way at UAL which may not be the prudent thing any other owner would do, the pilots (who are the largest class of employee-owners) will either choose as an owner would or follow the dictates of their union. It has already been demonstrated that the choice the pilots make is followed along with by the machinists & flight attendants.

I could well be wrong in my premise & supposition and hope that I am; yet the fact remains.

As a precursor to my next statement, I admit that I have not read UALs documents of corporation and do not know if the stock shares the employee-owners hold are voting shares or not. I will continue to be crass enough to presume they (the employee-owners shares) are votable.

Should UAL go into bankruptcy and fail to recover, any class of owner cannot be held blameless; the voting owners ultimately control the board who in turn sets long term policy and goals for the executive management team to carry out. In the case of UAL this is further enhanced due to that fact that both the pilot class of employee-owners & the machinist class of employee owners have two of the twelve board seats with a third seat occupied by the management/salaried class of employee-owners. This has been the case since 1994; I will grant that top-down initiated change takes time however, eight years is sufficient to have noticed a trend...

 

[MetroSheriff]

How easy do you really think it is taking a pay cut from $150,000 a year down to $100,000 if you have a mortgage to pay, kids in college, car payments, etc. Would you risk personal bankrupcty to save your job?

If you can't make a go of it on 100K, then you a in serious need of some financial advice. Try living within your means instead of leveraging everything to the hilt. Especially in this industry, put some aside for a rainy day.

 

[furloboy]

----------------------------------------------------------------------------------
"If you can't make a go of it on 100K, then you a in serious need of some financial advice. Try living within your means instead of leveraging everything to the hilt. Especially in this industry, put some aside for a rainy day."
-----------------------------------------------------------------------------------

I know what you're getting at but this sort of statement is tiresome. Why 100K? Why not 80K? Some folks will say the same thing about 50K. If I wanted, I could move to Nebraska or some other of the more affordable states (not necessarily a bad thing) and live on my miliary retirement and still pay for food and electricity. But I want more.

I want more to do more and to give more. If my current income was cut to 100K I wouldn't be able to do what I do--for myself or for others. I get tired of reading blanket statements from folks that in effect make 100K look like the end-all in terms of income.

It ain't. Still you're right--folks should live within their means. And for some folks that is 20K. For others it is much more.

 

[328dude]

How many people growing up were very aware of what some airline pilots made back then. How many dreamed of oneday flying heavy iron and getting the big bucks.

Haven't we all dreamed that dream before? Seems pointless in todays industry, but non the less, you still dream the dream.

Flame away.

 

[Rick1128]

What a lot of people are missing is that the employees of UAL have been there, done that and got the #@%!!!!! T-shirt before. They and employees of other airlines have given 'give-backs' before. And it got them exactly NOTHING. There were still forloughs and lay offs, equipment sales, etc. And the management still tried all sorts of things with the 'give-back' money. I believe that the UAL employees are looking at US Airways and the past and saying 'We want to see the real books and need to see a real plan before we do anything."

Blaming ALPA National for UAL's problems is like sticking your head into the sand. It is counter productive. To quote J. Dawson Ransome the former owner of Ransome Airlines 'When an employee group unionizes, it is managment's fault.' I have been a member of ALPA, airline Teamsters and a couple of inhouse unions. I found that we got much more for our money with ALPA than any other union.

One other thing, there is much more to ALPA than just higher pay. Many of the regulations we operate under were instigated by ALPA and its safety people.

 

[publisher]

thread

this thread speaks more to what is wrong with this situation than to any solution. As I have said before, companies do not exist to employ, they employ to produce profits for the shareholders or owners.

If the employees are paid over what management can produce in terms of revenue as a percentage of cost, most companies shut down or hire different employees.

 

[JetPilot500]

People who "Get it"
Publisher
Metrosheriff
Rvrrat
RJFlyer (btw: Great Reply)



People who "DON'T Get it"
Rick1128
furloboy
B1900DFO
flydog


Just remember, "A little bit of something is better than a whole lot of nothing!"

 

[AAflyer]

JetPilot500,

What a classy post!!!!!!!! Once again, people state their opinion, and you can now judge them, Kudos.....

AAflyer

 

[JetPilot500]

AA Flyer,

Chill dude!

My point was to basically point out that I agree with some of these people. I too believe that the unions had better start playing ball here, especially at UAL. They can bury their heads in the sand as long as they like, but the fact remains that UAL is in serious trouble....no matter who's fault it is. By saying, "It's not my fault, therefore I will not help management solvle this problem," is not gonna fix a darn thing.

It doesn't matter who was/is right and who was/is wrong. If the employees of this company (Unions) do not start helping out, UAL will go by the way Eastern and Pan Am. I sure hope that doesn't happen, because A LOT of people will be affected, not just the UAL employees.

Yeah, who wouldn't like to make $150,000 per year? But $100,000 per year sounds a lot better than that Unemployment Check!

Airline Pilots are Highly Educated people. It is time to start acting like "Educated Professionals" and start leading by example. If the pilots don't set the example, the FA's and Mechanics are unlikely to follow...then NOBODY wins. Why not try being the employee group who "Saved the Company!"

He who dies being right, is still dead!
JetPilot500

 

[RJFlyer]

I know what you're getting at but this sort of statement is tiresome. Why 100K? Why not 80K? Some folks will say the same thing about 50K. If I wanted, I could move to Nebraska or some other of the more affordable states (not necessarily a bad thing) and live on my miliary retirement and still pay for food and electricity. But I want more.

The number $100k was thrown out there by flydog, I just used his example. Using a number is better than speaking about money in the abstract. You can want more until you're blue in the face, but if the company doesn't have more to give, you may just get nothing.

I want more to do more and to give more. If my current income was cut to 100K I wouldn't be able to do what I do--for myself or for others. I get tired of reading blanket statements from folks that in effect make 100K look like the end-all in terms of income.

So you'd rather keep making your $150k (or $200k or whatever it might be) until the company folds so you can keep "doing what you do" than give up some and make the necessary adjustments, so you'd continue to have a job past today? Good luck with that plan.

It ain't. Still you're right--folks should live within their means. And for some folks that is 20K. For others it is much more.

And if all that's coming in is $50k, there are adjustments you can make in order to survive. See my original post for some examples.

My point is that if your company is struggling to survive and the single best way to cut costs is through labor, is it not better for everyone to make a little less and everyone keep their jobs, than everyone keep making their fat checks and the junior guys (who make considerably less anyway, so more need to go) get canned? I agree that poor management is largely to blame, but looking back and pointing fingers doesn't solve today's problems.

 

[FlyDeltasJets]

UAL will go by the way Eastern and Pan Am.

Wait a minute. EAL and PAA can't be gone. Their pilots gave tons of concessions. After all, that's all it takes, isn't it? That's why TWA is currently the industry powerhouse.

Don't get me wrong, there are examples when employee concessions are necessary. This may be, and probably is, one of those occasions. However, we cannot, and should not, just give mgt a blank check to squander as they see fit. I have seen it too many times in my life (dad at EAL and me at TWA before DAL). Concessions without a business plan changes nothing except the size of our wallets. They are not the magic elixer that everyone seems to think that they are.

I think that ALPA has always been a pretty responsible union, and is usually (unfortunately?) the first employee group to agree to concessions. In my experience, I have found the IAM to be a different story (the following is merely an opinion based on personal experience dealing with certain inefficient and burdensome workrules at TWA, as well as the EAL debacle). That is not to say that their method is wrong, sometimes I wish ALPA was more tough.

I would suggest that we give ALPA a little more credit, based on their track record of agreeing to help at countless airlines in the past. I have no doubt that, even as I type, the UAL MEC is very hard at work determining how to best serve their pilots and their airline. They know that one cannot exist without the other. They also know that giving a blank check to a lame duck CEO without a business plan is not in anyone's best interest.

I assure you that their goal is not to kill the airline as some seem to suggest. Do you really think that they are that stupid? Can you name me a single airline that has ever failed due to pilots making above industry standard wages?


PS
May I also add that once again I am disappointed at the amount of pilots on this board (and throughout the industry) who have such a low opinion of their own worth as pilots.

 

[Rick1128]

Jetpilot,

I take umberage at your posting of who got it and who didn't. I did get it. Maybe you didn't. There is a lot more going on behind the scenes than the public will ever know.

You talk about leadership. Unfortunately, there is no real leadership within the company managment either. The UAL pilot group looks at the past. Groups like US Airways, TWA, Eastern, Braniff, Pan Am and Continental. They also look into their own company's past. They see a lot of give backs. They also see the management not giving up anything. They also see managment wasting money on all sorts of schemes.
The pilot group in the past has and to my knowledge continues to suggest efficencies to the company. And offering 'side-bars' to the current contract to help the company. These 'side-bars' can be and are situation specific. These can save significiant amounts of money. But the company in the past have thrown them back at the pilot group.

You guys talk about a 33% pay cut and peoples' pay being cut by $50,000. To the UAL pilot group, it isn't really about the money. It is about the CONTRACT. They have sweated blood, sweat and tears over that contract. They have gone on strike and walked the picket line over the contract. Before they or any other pilot group agrees to 'give-backs' they are will want to see the real books, not the Arthur Andersen books. They are going to want to see a real plan, not pipe dreams and management fantasies. They will want to see what management is willing to give up.

Like in 1978, the industry is going through many gut wrenching changes. But to blame one group or another for a company's problems is not the solution. Industries are either capitial intensive or labor intensive. The airline industry is one of a very few that is both. And being so makes it slow and difficult to change course. But making one side of the coin do all the changing is counter productive. Both sides need to change and do so in unison and concert.

 

[1900laker]

____________________________________________________People who "Get it"
Publisher
Metrosheriff
Rvrrat
RJFlyer (btw: Great Reply)



People who "DON'T Get it"
Rick1128
furloboy
B1900DFO
flydog


____________________________________________________


Hey, can you put me down on your "DON'T Get it" list. Thanks

 

[furloboy]

-----------------------------------------------------------------
"So you'd rather keep making your $150k (or $200k or whatever it might be) until the company folds so you can keep "doing what you do" than give up some and make the necessary adjustments, so you'd continue to have a job past today? Good luck with that plan."
------------------------------------------------------------------

Okay, I didn't explain myself very well. I am furloughed. I still make what some folks would consider a butt-load of money. What wears me out is the guy with half a mouth of teeth and an eighth grade education who thinks that anyone who makes $100K ought not to want for more if he can get (earn) it (regardless of the job). I can and I do.

I do not think that employees ought to kill their companies with greed. That is stupid. Neither should companies treat their employees unfairly.

Personally, I have, do and will make necessary adjustments every day in every aspect of my life--thank you very much.

Good luck.

Hey, will somebody send me a PM and tell me how to pull quotes?

 

[banned username 2]

Hey, will somebody send me a PM and tell me how to pull quotes?

Um..... Perhaps you should try the "Quote" button....

 

[Ualexpress]

As a precursor to my next statement, I admit that I have not read UALs documents of corporation and do not know if the stock shares the employee-owners hold are voting shares or not. I will continue to be crass enough to presume they (the employee-owners shares) are votable

The 55% of stock the employees own of UAL are non-voting stock, therefore the employees do not vote on management decisions. That 55% gets the employees a WHOLE two members on the board out of twelve total board member.

 

[JetPilot500]

***** UPDATED LIST *****



People who "Get it"
Publisher
Metrosheriff
Rvrrat
RJFlyer (btw: another Great Reply)



People who "DON'T Get it"
Rick1128
furloboy
B1900DFO
flydog
1900laker
Rick1128

 

[JetPilot500]

Wait a minute. EAL and PAA can't be gone. Their pilots gave tons of concessions. After all, that's all it takes, isn't it? That's why TWA is currently the industry powerhouse.

Eastern, Pan Am, TWA, US Air and all of the others that got concessions, woulda been gone much sooner if they didn't get those concessions.

There is only so much money a company has to work with. When it dries up the Game is Over. The bigger the expenses (payroll), the faster the Cash Burn.

I'm not saying this is the only thing that will solve the problems, but it is definately a good start.

JetPilot500

 

[MetroSheriff]

I know what you're getting at but this sort of statement is tiresome. Why 100K? Why not 80K? Some folks will say the same thing about 50K. If I wanted, I could move to Nebraska or some other of the more affordable states (not necessarily a bad thing) and live on my miliary retirement and still pay for food and electricity. But I want more.

I want more to do more and to give more. If my current income was cut to 100K I wouldn't be able to do what I do--for myself or for others. I get tired of reading blanket statements from folks that in effect make 100K look like the end-all in terms of income.

It ain't. Still you're right--folks should live within their means. And for some folks that is 20K. For others it is much more.

Furloboy,

The 100k was an arbitrary number that I took from a post by Flydog:

How easy do you really think it is taking a pay cut from $150,000 a year down to $100,000 if you have a mortgage to pay, kids in college, car payments, etc. Would you risk personal bankrupcty to save your job?

According to the most recent census data, if you earn 100k +, your are in the top 5% of the population for income. My point was simple, if you cant make a go of it on 100k, you need to rethink how you spend your money. That is not to say that you don't want to earn more. I don't fault you for wanting more. But if you can't live confortably by MOST folks definition, you need some remedial financial management training. As for taking a pay cut from 150 to 100, well it sucks but thats how this business works. If you haven't figured out that things can be risky in aviation by the time you acheive employment with that level of income, you haven't been paying attention. I don't feel sorry for you. With that kind of salary, you ought to be able to put a few benjies in the bank and have something saved for a rainy day. If you don't, that's your fault and I'm not gonna play any violins for you. I left a management position with a great part 135 freight/corporate charter operator to go to ASA. The paycut was BIG, like 70%. We saved our money and I left for the regionals. Guess what, the cr@ppy first year pay was NO SURPRISE. Don't take the job and then cry in your beer cause the pay sucks. Make adjustments for changes you want to make, or may HAVE to make in your life. I was hoping for less than a two year upgrade, guess what, 9/11 happened and the upgrade may take 3 1/2 or 4 years. Those are the breaks.

Aviation is a fickle b1tch. She giveth and she taketh away. Play the game for a while and you learn to expect some hiccups. Plan accordingly. If you can't afford a pay cut then you are living hand to mouth and have no one to blame but yourself. The principle is the same whether you make 20k or 200k. Don't spend more than you make. Don't drive a car you can't afford just because you "really, really wanted it". Don't buy more house than you can afford because "You'll be making more in a couple years anyway". And as I keep saying put something away for a rainy day.

As I have said before, everything you really need to know, you should have learned in kindergarten (or maybe gradeschool).

As for employee concessions. It is an unfortunate situation in which a bad economy, a tragic terroristst act, and years of p1ss poor management, have completed the nasty Trifecta that has left some carriers in heaps of financial trouble. If they say they need concessions to survive, then it is probably true. That is not to say that payroll is what got them there. It is not. That is not to say that concessions guarantee their future liquidity or very survival. They won't. They are part of a plan. Whether or not the plan will work? Time will tell.

I am not to say what any of you should do regarding voting for or against the concessions. I don't have a dog in that fight, and quite frankly my opinion doesn't matter. Only those of you unfortunate enough to have to decide, must decide for yourselves what you think it best.

Hypothetically, I would support concessions if I felt it would help the company survive. More importantly, if I felt to not do so, would help to sound the funeral bell for my employer.

Industry +1% is neat. Fabulous bennies and million $ retirement packages are super. Big 'ol fat paychecks are swell.

But 100% of nothin'.......is nothin'.

 

[MetroSheriff]

Everyone,

There have been some great points made against the idea of concessions. I should have been more clear with my post. My thoughts assume that there is a realistic, feasible, multi faceted business plan, of which employee givebacks are a part.

Contracts are too hard fought to be shredded because outside influence put a company in jeopardy. They should be insituted with a CONTRACTUAL plan to return the concessions when times improve. FDJ said concessions are not an elixer. True. There is no magic bullet to combat the threat of insolvency. It takes good leadereship, management, and a solid PLAN to re-achieve success and stability.

Any management that asks for concessions without meeting those criteria should be told to get bent.

As always JMHO,

 

[AAflyer]

Metro,

Glad you added your last post. I was getting worried. Now if we can only get the real numbers, if Enron can show a profit, I bet these guys can show massive losses. Before someone fries me, yes I know we are bleeding, I would just like to see if we need a band-aid, or an ambulance to the emergency room.

AAflyer

 

[publisher]

Management

A couple of small points.

At this point, UAL is knocking on the door of the American taxpayer who may about to be a stockholder in UAL. That may be an indicator that the company is not doing well. In short, this means that the company has failed.

Does it really matter then who did what to whom. No.

There will be new management, there will be changes. Does the average taxpayer who is contributing to this care about your hard won contract and work rules. Not really. They want paid back. Perhaps they feel that what you won, good management would not have agreed to. Perhaps they feel if they have to come bail you out, you should be making a major contributon yourself.

Perhaps they are asking why bail you out at all. Just let SWA and AirTran or Jetblue just keep taking over. Would the world come to an end if there was no United or USAir. Let American or Delta fight over the spoils, let some new start up take over.

When Eastern and Pan American and TWA, and Braniff, and or whoever departed, did the world end. No!

I will tell you one thing, there were a good number of their pilots that never flew again.

 

[MetroSheriff]

Yeah, I thought I better clarify that.

My take on the REAL situation?

It's half as bad as they say it is, and twice as bad as they think it is.

I know that things are in the p00per. The bleeding is bad. They probably do need some givebacks to survive. But anyone who beleives management isn't doin' a little gravedancing, is either a fool, or....well....management.

 

[MetroSheriff]

What wears me out is the guy with half a mouth of teeth and an eighth grade education who thinks that anyone who makes $100K ought not to want for more if he can get (earn) it (regardless of the job). I can and I do.

Furloboy,

He may only have a gradeschool education, but he is s sound financial manager. On his limited 16k income, he realizes that he has to prioritize his spending. There he has wisely cut "luxury items" from the budget. First things to go are whimsical items, such as toothpaste and dental care.


TICly,

 

[goldentrout]

While none of us likes to see any pilot on the street, we have to get away from the emotions and look at economic realities.

If the cash flow of a company does not meet its expenses, then it will eventually have to declare bankruptcy.

The major overhead costs for an airline are employees and fuel. Fuel prices and pretty much out of the control of the company. While some tinkering can be done on the edges by eliminating paper tickets, etc., the major drop in overhead has to come from the employee group.

I saw UAL has a new CEO. I guess maybe people think he has some magical idea that the US Airways, Continental, Delta, Northwest, American and former United CEOs couldn't figure out.

My fix?

Baseline salaries have to come done to cover overhead. Then, when the company is profitable again, employees get profit sharing. Share in the good times, but don't bankrupt your company in the bad times.

Easier said than done since I'm not, currently, facing concessions ...but this seems to be the reality of the situation.

 

[Rvrrat]

Since we've gone on a concessions streak

Tuesday September 3, 11:59 am ET

CHICAGO (Reuters) - Credit Suisse First Boston analyst James Higgins Tuesday cut his rating on United Airlines parent UAL Corp. to "sell" from "hold," saying bankruptcy was "almost inevitable."
UAL, the No. 2 U.S. airline, Monday named oil executive Glenn Tilton as chairman, chief executive and president, replacing outgoing chairman and CEO Jack Creighton.

Despite the appointment, a host of problems remain, Higgins said in a research report.

"UAL's unions remain in deep denial about the dire circumstances in which their company finds itself, and we believe it nearly impossible that UAL will gain labor cost savings that will pass muster with the Air Transportation Stabilization Board," Higgins said.

"By comparison, all US Airways unions except for the mechanics have approved labor cost savings that, if applied to United's higher base labor costs, would be nearly $2 billion, far more than the $1.5 billion United is asking of its employees.

Ualexpress,
If indeed the employee-owners shares are not votable, that was a raw deal.


Now, once more, how ALPA ties into this mess.
I assert that ALPA will influence against concessions.
For the sake of argument, let's say UAL is not granted the concessions it seeks, can't pay the bills in November and subsequently goes TU. Result? 8k+ pilots for hire out on the market, ALPA membership reduced by same amount.
Thus begins the implosion of ALPA. I can not see how the organization will maintain its long term bargaining status after the loss of large amounts of membership from UAL and other actions the union is facing.