Robert Crandall's response to an AA pilot.

[Citjok]

http://aviationblog.dallasnews.com/...t-about-the-american-airlines-situation.html/

 

[T-1GUY]

http://aviationblog.dallasnews.com/...t-about-the-american-airlines-situation.html/

If American is to succeed in the years ahead, it must pay wages and benefits, and operate using work rules, which produce labor costs equivalent to or – while American gets itself back on track – lower than those of its major competitors. In the long run, no successful service company can offer compensation and working conditions that are materially different than those of its competitors


So is he saying that as long as AA pays Southwest, Fedex, and UPS like wages that the company will do just fine???

 

[pilotyip]

If American is to succeed in the years ahead, it must pay wages and benefits, and operate using work rules, which produce labor costs equivalent to or – while American gets itself back on track – lower than those of its major competitors. In the long run, no successful service company can offer compensation and working conditions that are materially different than those of its competitors


So is he saying that as long as AA pays Southwest, Fedex, and UPS like wages that the company will do just fine???

No this is what he said

The company’s labor costs have been higher than those of its competitors since the major airline bankruptcies early in the last decade. Each of the Company’s major competitors used bankruptcy to achieve lower labor costs than those provided for in the so called consensual agreements – and used their bankruptcy experience to lower many other costs as well. The Company sought – rightly or wrongly – to rectify the cost problem without declaring bankruptcy itself, but was unable to persuade the unions to accept the changes needed to lower labor costs. Moreover, because it did not take bankruptcy action, it suffered other cost disadvantages relative to its competitors. As a consequence, the Company lost money for many years and is now smaller and less well positioned financially than its major competitors.

Then he went on to say

You go on to observe that “the pilots of American are highly skilled, trained professionals directly responsible for the safe operation of over two thousand flights daily. Their contributions merit a plan which includes them as part of a solution to what ails American”. I find nothing in that statement with which I disagree, nor with which Tom Horton or other senior executives would disagree. But I’m not clear about why you think the pilots do not have a major part of the plan going forward. The pilots, as you well know, recently voted down the Company’s LBFO. That proposal, if approved, would have awarded the pilots a generous piece of equity, would have allowed the pilot group a substantial voice in the governance of the new company and did not – so far as I know – impose conditions materially different from those in effect at other major airlines. Thus, I was and remain mystified as to why the pilots – having turned down an agreement materially better than the company’s original proposals, are now angry that alternative proposals are being implemented. Wasn’t that always the clear alternative to approval?

BTW Remember that FedEx and UPS are trucking companies that happen to fly airplanes

 

[Lear70]

Sure, you can use "industry average" rates... So long as CEO's and senior management are paid similarly to other airlines, which include the same "peer group" airlines that the pilots are being compared to, including bankrupt airlines, smaller airlines such as Allegiant and Virgin America, etc., and using total compensation, including stock options, etc.

I have always found it disingenuous for senior management with compensation in the multi-millions of dollars which runs through several BILLION dollars of capital and runs a company that is operating on a bankruptcy-era contract into bankruptcy again themselves, to then ask labor for further reductions when they are not willing to reduce their compensation similarly.

When a CEO gets to walk away from a "successful" bankruptcy reorganization with millions in shares of new stock and labor walks away with pay cuts, it seems clear something is wrong with the system.

 

[Flopgut]

Sure, you can use "industry average" rates... So long as CEO's and senior management are paid similarly to other airlines, which include the same "peer group" airlines that the pilots are being compared to, including bankrupt airlines, smaller airlines such as Allegiant and Virgin America, etc., and using total compensation, including stock options, etc.

I have always found it disingenuous for senior management with compensation in the multi-millions of dollars which runs through several BILLION dollars of capital and runs a company that is operating on a bankruptcy-era contract into bankruptcy again themselves, to then ask labor for further reductions when they are not willing to reduce their compensation similarly.

When a CEO gets to walk away from a "successful" bankruptcy reorganization with millions in shares of new stock and labor walks away with pay cuts, it seems clear something is wrong with the system.

Bingo...

 

[fr8doggie]

FedEx is an airline that has expanded into trucking.

 

[cheapgreek]

Sure, you can use "industry average" rates... So long as CEO's and senior management are paid similarly to other airlines, which include the same "peer group" airlines that the pilots are being compared to, including bankrupt airlines, smaller airlines such as Allegiant and Virgin America, etc., and using total compensation, including stock options, etc.

I have always found it disingenuous for senior management with compensation in the multi-millions of dollars which runs through several BILLION dollars of capital and runs a company that is operating on a bankruptcy-era contract into bankruptcy again themselves, to then ask labor for further reductions when they are not willing to reduce their compensation similarly.

When a CEO gets to walk away from a "successful" bankruptcy reorganization with millions in shares of new stock and labor walks away with pay cuts, it seems clear something is wrong with the system.

This is found in most companies and will not change in the near future, so talking about some practice that is unchangeable is a waste of time and effort. Dave Seigal at airways walked away with 4.5 million for a job NOT well done. This is capitalism, like it or not, its standard practice in big business today and lower employees always get the bad end of the deal.
What the rank and file need to remember is that keeping a job is better than looking for a job. The airline industry will never be what it was back 20,30 years ago, those days are gone for good. Fuel costs, threat of terrorism, weak economy are part of the new normal.
Upper management will always fare better because they write their own contracts and that's just the way it is and no amount of ranting and raving will change it.

 

[Flopgut]

If it's to the point where Crandall has to be pulled out from under a rock to offer a comment? Then AMR mgt is more than likely a very worried group.

 

[Lear70]

This is found in most companies and will not change in the near future, so talking about some practice that is unchangeable is a waste of time and effort. Dave Seigal at airways walked away with 4.5 million for a job NOT well done. This is capitalism, like it or not, its standard practice in big business today and lower employees always get the bad end of the deal.

What the rank and file need to remember is that keeping a job is better than looking for a job. The airline industry will never be what it was back 20,30 years ago, those days are gone for good. Fuel costs, threat of terrorism, weak economy are part of the new normal.

Upper management will always fare better because they write their own contracts and that's just the way it is and no amount of ranting and raving will change it.

Paragraph breaks are helpful.

The above is EXACTLY why this career is in the toilet and will not recover.

Too many people are unwilling to fight the hard fight, a ton of newly-minted Commercial pilots are always ready to take their place, and you people think it's somehow acceptable because "it's capitalism". You people deserve the contracts you get.

Failure to hold your management accountable to "walk the walk" before they "talk the talk" is simply ALLOWING the kind of raping you are referring to. If they TAKE it in bankruptcy, it's one thing. But willingly giving concessions, especially when you're already operating on a bankruptcy-era CBA, without similar commitments from management, in writing, and including their ENTIRE compensation package is weak.

What's that line from Airplane about Airline Management and the FAA?

 

[GogglesPisano]

You guys (except for Yip) have got it all wrong. The first thing they teach you at B-school is that executive compensation is not part of "labor costs."

You see, they (the "job creators," bootstrappers, and "rugged individualists") are a different breed from common labor and need to be compensated on a completely different scale. They are a breed where performance does not factor into compensation, where substandard talent necessitates what would otherwise be seen as obscene "retention" bonuses, and pensions must be insured outside of any government safety net (PBGC -- how quaint.) Golden parachutes and guaranteed bonuses during bankruptcy are a foregone conclusion.

Crandall and Arpey are perfect examples of this mindset. The sooner you (the rabble) start watching CNBC and absorb your daily dose of "The Journal" the sooner you'll come around to the reality of modern America. Shining a light on the story is "class warfare," and, in any event, the battle is already over.