Sun Country Tells Workers It May Shut Down Dec. 1

Green Banana

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Sun Country Airlines has indicated the possibility that the carrier may have no other alternative than to shut down or furlough some employees as soon as December.

In an e-mail sent to employees by Sun Country vice president and general council John Fredericksen, the company warned of potentially serious repercussions due to their current "financial crisis."

According to the e-mail, the company has been considering the possibility that they will be unable to secure loans or obtain relief from their creditors in short order.

In the event they are unable, some or all employees could be temporarily furloughed as early as Dec. 1.

In response to inquires about the e-mail, Sun Country released a statement saying that "customers have nothing to worry about if they have purchased a ticket on the airline."

The company also said the e-mail was sent to employees Wednesday night because federal law requires 60 days notice in the event of a shutdown or a major layoff.

Earlier this week, the company announced a pay deferral of 50 percent for all employees through the end of the year. Sun Country said Thursday that "over the past week we have made progress in negotiating with vendors and identifying additional sources of revenue."

Sources said Sun Country CEO Stan Gadek was going around town Wednesday trying to secure loans from local businesses and banks.

"We are actively seeking solutions to this crisis and are confident that we will find ways to get through this," read the e-mail to employees. "However, there are obviously risks that no solution will be found."

On Sept. 24, federal agents raided Sun Country parent company Petters Group Worldwide headquarters in Minnetonka and Chairman and CEO Tom Petters' home in Wayzata to collect evidence for a potential fraud prosecution.


Sun Country lost $47 million on $251 million in operating revenue for the 12 months ended in June. Petters had provided about $25 million to subsidize operating losses at Sun Country over the past year.

"Sun Country is doing, and will continue to do, everything within our power to solve our current financial crisis," Fredericksen wrote in his notice to employees.

http://wcco.com/local/sun.country.employees.2.831215.html
 

The Victors

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That's total mgmt B.S. Typical "take the pay cut we are stuffing down you're throat or we MAY have to shut down".
 

HalinTexas

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Don't take the paycut!

If Sun Country is truly on the ropes, you'll need that extra money to put into the bank and get ready for unemployment.

Paycuts to save airlines is utter BS.

I can't believe how frequently revenue is left out of the equation.
 

Draginass

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Management's moto is not "full pay to the last day, " it's "take everyone's pay to the last day."
 

HalinTexas

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Where in that press release say management was going to take any paycut? They have the money, let them invest their own in exchange for equity to save the company.

I've lived it. Vote no! If it dies, then the bandaid was pulled off quick!
 

Draginass

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Believe me, when the place implodes, management will take your vacation pay, sick time and EVERYTHING THEY CAN STEAL FROM YOU.

Been there, except I quit before the place shutdown. Cash-out and get everything you can before you show up for work and the doors are locked and the cash is in the trunks of the senior execs.
 

Lebowski

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Where in that press release say management was going to take any paycut? They have the money, let them invest their own in exchange for equity to save the company.

I've lived it. Vote no! If it dies, then the bandaid was pulled off quick!
Where does the article say there's going to be a vote? It said the company announced a 50% pay "deferral."
 
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goodgig

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Where does the article say there's going to be a vote? It said the company announced a 50% pay "deferral."
In which case you should think seriously about a work "deferral".

Sucks. Good luck to all.
 

schafjet

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Just filed Chapter 11 bankruptcy this morning 10/6/08
 

filejw

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This isn't your normal mismanagement. The owner of the company is in jail and most of his assets are frozen. The management of the airline went to the owners parent company for the loan they need for the normal slow period and there is no $$$$. Of course no bank is loaning $$$$ either..so good luck to the Sun Country folks as this is a bad deal all round.
 

ultrarunner

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It is interesting. The cooperating witness saw the writing on the wall, and smartly came forward.

Without a doubt, the FBI would not have figured out this scheme for quite a long time had this person not gone to the FBI.

Given how stupid these greedy bastards are, this witness will likely live long enough to testify.

However, if the investigation finds that it goes deep into the mob, this person better be deep underground by now....

good stuff....
 

macdu

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Just curious, whats the latest? As of today, there is a month left before the threatened shut down date.
 

1031Guy

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Just to clarify, they never "threatened" to shut down. For legality reasons based on the rapid events from the Petters fallout, they had to inform the employees per the Warren Act(?) that there was a possibility that the company would not survive based on recent events. Actually, filing for bk and not being at the mercy of a receivership was the best move so far. I heard a number of the objectives they needed to accomplish to make it through the year have been done. The 50% mandatory paycut has been reduced to 30% and they even paid out accrued vacation to the furloughed pilots! Look for more positive news during the next month or so...
 
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Peardc10

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Latest News on SCA

We are still here! Sounds like investors have been coming in and looking at the organization, some old and some new. Possible influx of money soon, at least I've heard through the gossip trail.

Most of our venders have helped us out with restructuring of payments and lease costs. Our winter scheduled looks really good and as long as oil stays below $105 we are positioned to make money in 2009.....we hope!

2009 will be very interesting with SWA coming to town, Alaska Airlines are flying two trips to SEA out of MSP, and the last I've heard is that Aero Mexico is coming to MSP this winter. Competition is heating up in MSP.

Mr. Petters is still behind bars awaiting trial and probably wont see the light of day again....my opionion of course.


More news should be coming soon............
 

SpauldingSmails

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Any green planes this winter?
 
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