US Air my stop operations next week

[d328pilot]

US Air might stop operations next week

Just FYI guys...I dont like the looks of it....This is what the CWA said happened on monday.

Ultimatum from management: “Accept our demands by Friday, or we will close US Airways before Christmas.”

CWA Representatives met with US Airways executives on Monday, 12/16, and received the following information and ultimatum:


CWA, and all other US Airways unions, must accept management’s demands as written, no changes, no discussion, by Friday. Management wants only a “Yes” or “No” answer;
If any Union does not accept the demands as written, by Friday, US Airways will close down before Christmas (next Wednesday);
Even if all unions accept the demands, executives refuse to allow the normal time for employee ratification votes (If we accepted on Friday, CWA member ratification vote would normally be counted on January 13). Executives said that the airline would close if the ratification votes can’t be crammed into a timetable before the end of the year;
Friday, December 20, is the day management submits a new reorganization plan to the bankruptcy judge, and if they don’t have the union agreements by then, they will close the airline;
Monday, December 23, is a back-up day in bankruptcy court for RSA: if there are no agreements by Friday, and management has not taken steps to shut down the airline, RSA will submit its own plan to the judge on Monday to shut down the airline.

 

[crosscut]

Ultimatum from management: “Accept our demands by Friday, or we will close US Airways before Christmas.”

Ultimatum??? This management is playing with fire. No way no how they'll "close" the airline. Too much has gone into trying to keep it alive to just pull the plug. May be, a new threat technique?

 

[El Cid Av8or]

You know, just once I would like to see someone in a management/executive position take a pay cut and/or meet an ultimatum.

I know of a hospital that was having employee retention problems largely (like >80%) due to wages and the new president got a $50k annual bonus. Something in that equation just doesn't add up.

I remember something similar in a telecommunications company I used to work for.

Maybe I just haven't heard of an instance yet, but it always sounds like management/executives expect everybody but them to suffer. It's like they expect the world to revolve their heads only. Wall Street doesn't seem to help out much with the problem either and then you throw the media in.

soapbox = off

 

[328dude]

d328, give me a break man. Where did you get this crap?

Geeesh.

 

[d328pilot]

someone else posted it on local 61...i think they got it from usaviation.com or something like that....i hope it is crap

 

[dkwid]

What you may be refering to was a statement from the issuers of the DIP financing. I don't know all the ins and outs here but what they (I'm not sure who they are...sorry) said was basically you (meaning USAIR management) need to show us 200 million in additional employee concessions or we (those poeple) will liquidate the assets that they now hold in collateral for the DIP moneys USAIR has borrowed.

Truly this is a significant statement. If they () were to act upon these statements USAIR may indeed be finished.

 

[Andy Neill]

El Cid Av8or said:

You know, just once I would like to see someone in a management/executive position take a pay cut and/or meet an ultimatum.

How about twice?
http://forums.flightinfo.com/showthread.php?s=&threadid=12472&highlight=management

 

[El Cid Av8or]

Andy: Did it really happen? Did they really cut 8 top management positions? The 11% cut over 5.5 years is nothing. An executive making $500,000 will only have a cut of $55,000 at the end of that period and one making $250,000 will have a $27,500 cut. That equates to chicken feed, not $60,000,000.

I'm not trying to be mean, negative or start bashing anyone but "Show me the money."

 

[Chi Town]

My wife works at united in the "management" group which simply means she is non-union, not a manager. She has taken a 5% pay cut effective last week. This may not seem like much but if you compare her salary to her peers at other company's in similar marketing positions she makes less than the industry average. United has to make appropriate pay cuts based in industry averages. The Machinists and pilots make more than the industry average so they will have to give back more. As for upper management I have no comment on how much they are paid.....

 

[j41driver]

My girlfriend's dad works for USAirways on the ground at PIT and was told today that the airline was shutting down effective 12/26. Hopefully something will change for the positive between now and then.

 

[Andy Neill]

El Cid Av8or,

OK. How much was the cut if not $60 million?
How many VPs were cut (if any) if not 8?
Cite your source please.

I thought you said your have never seen management take a pay cut. I thought this was a valid example. I am not arguing that it was not a large enough cut to meet your expectations but is was a cut of positions and quantity. If you know otherwise, I am prepared to be enlightened.

Then again, if you want to sing the "management sucks - the little guy always gets the shaft" refrain, I understand.

 

[Timebuilder]

A few weeks ago, the same question about the cost of management came up in a thread that was devoted to the government panel's refusal to grant loan guarantees to UAL. Some may have missed this.

Quote:

- Yesterday, in the Jack Welch interview on PBS, this question came up (Of course it came up. The news area of PBS is just as liberal as the programming) and was ably addressed.

Jack pointed out that if you want to hire a new CEO for a UAL or an Enron, you are asking someone who already has a good job somewhere else to leave that job and step into a spotlight in a high stress environment where they will be watched with a microscope by both friends and foes. In order to get people to do this, which is a choice they have to make both personally and professionally, you have to offer some really good compensation.

Let's say that you don't hire a well know, successful CEO, or in this case a vice president of Chevron, and instead happen to hire an accountant from a middle management background, and offer him $300,000? What happens? People see the inexperienced, unknown CEO and jump ship, break contracts, refuse financing....any number of things that would virtually guarantee the failure of the company, instead of its recovery.

While you and I see this level of compensation as exorbitant, it is the cost associated with hiring a CEO for a troubled company. Just as anything that gets attached to an airplane costs ten times what it would cost if it was attached to a car, it costs a lot of money to have the proper individual, as judged by the business community, attached to you company.


In other words, as far as US Air is concerned, the current management need to be motivated to remain in place because they have recent experience with the company, and may have already come up with ideas about how to help the company survive. Most would have little trouble finding a new job, and forcing a $60k or $80k pay cut for them could remove whatever interest that key members would have in staying.

So, if further management pay cuts are forced, as some here have said, what would be the result?

An auction.

 

[tarp]

This is all part of the same sabre rattling that this RSA (Retirement Systems of Alabama) director has been saying since last month. Yes, they hold $800M total debt of USAirways and $200M is that "debt-in-lieu" stuff which means he could say on Dec 26, I want all of the collateral (planes, desks, property) that is held in lieu transferred to RSA today. Will they close the doors? Well only if RSA can stand to lose $600M!

Here's the press - see yahoo news for more - there was a good article two weeks ago in the Sunday Washington Post.....

Saturday, December 14, Reuters

The Retirement Systems of Alabama, US Airways' primary bankruptcy financing partner, stepped up the pressure on workers last week, stating that it could refuse to fund the airline if it didn't secure another $200 million in labor cost-cuts to help it meet requirements for its financing.

Monday, December 16, Reuters

NEW YORK (Reuters) - US Airways Group (OTC BB:UAWGQ.OB - News) on Monday moved ahead in talks with labor unions after its pilots approved concessions late last week that covered half the extra $200 million the airline says it needs to restructure its bankrupt business.

US Airways, the No. 6 U.S. air carrier, sat down again Monday with its mechanics and passenger service workers in an attempt to bring its annual cost-cutting total up to at least $1.6 billion.
The airline's flight attendants still refused to start talks over the latest round of cuts until other unions reached agreements and US Airways management extended their own wage and bonus cuts over the 6-1/2 years covered by labor contracts.

US Airways has already secured $1.3 billion in annual cost cuts, with about $850 million of that coming from its employees. But the airline has fallen short of key revenue targets since September and its performance has called into question its bankruptcy financing and the conditional approval of its request for $900 million in government loan guarantees.

To secure final approval for the federal aid and adhere to its plans to emerge from bankruptcy in March, US Airways has asked to dip into its workers' pockets again.

The airline has said it hopes to file its plan to reorganize under bankruptcy protection by Dec. 20. It won approval from a federal judge last week to extend the deadline by which it can file the plan without interference from other parties until Jan. 31, but company officials said the airline still aims to file the plan this month.

The carrier's pilots union ratified $100 million in annual cuts late on Friday, on top of the $465 million they had approved earlier.

The International Association of Machinists (IAM) and the Communications Workers of America (CWA) continued talks with the Arlington, Virginia-based airline on Monday.
Reservation agents and other passenger service workers, represented by the CWA, continued talks with the airline after nearing tentative agreements last week on certain issues.
The CWA said in a bulletin to its members that it was close to agreeing with US Airways on a plan to defer temporarily 5 percent of workers' salaries if the United States goes to war with Iraq, an event that could devastate the already-unstable airline industry.

The IAM, which represents two groups of active US Airways mechanics and related workers totaling about 11,500, said there had been no agreement yet on terms for the union's participation in the latest round of cost-cutting.

 

[El Cid Av8or]

Andy,

Woa! Hang on there a minute. I'm not trying to start a "management sucks" thing here and I have not clue what percent of United was cut. Managers are needed just as much as "worker bees" are and I, and I can probably speak for a lot of folks, prefer managers that are not "too big" to take a cut and ones that "chip in their fair share" to help out. What I am trying to say is that I have really never seen/heard of management (referring mainly to upper management) take a major cut. Your examples are very valid and they are good examples as well. What is said and what really happens is usually two different things though. All I was asking in my second post was if they really did it or not. All I have heard on the news is about pilots and union folks getting laid off/furloughed.

Your post in the other thread referred to 8 executive positions (36 down from 44) being cut and the remainder taking an average 11% cut over 5.5 years. Now if 8 managers are making a total of $45 million (I'll put $15 million in the pay cut category), that's a lot of cash -- average $5.63 million each. That is the way I understand your post in the other thread.

Take Chi Town's example. A 5% cut is probably pretty significant and it will have a much greater effect on his family's finances/lifestyle than the same 5% cut taken by an executive or upper level manager. I honestly hope that he and his wife will make it through this well.

After some deep thought, I recall a company in the northeast (I can't recall the name or the CEO's name) that made some high-tech fabric (American made). The factory burned to the ground and then after rebuilding, the cost to make it was too high compared to the competitors that sent the business overseas. The CEO took a major personal cut to make sure that his employees were taken care of during the crisis'. I don't know if the company still exists to day (I certainly hope it does) but that is the kind of manager I'd like to have. One that takes care of his/her employees because of the hard work and dedication that those employees give on a day-to-day basis.

While it is not my life's dream to fly for an airline, I have many friends that work for the airline industry - pilots, ramp folks, ticketing/scheduling, flight attendants. I sincerely hope and pray that all airlines will make it through this slump, especially United and US Air. US Air saved my honeymoon earlier this year. When the original airline cancelled a full flight the evening before we were supposed leave (I don't know how they can say they make money like that), we got put on US Air and I must say that it was one of the best flights (both legs) I have ever been on (and I've been on quite a few airline flights). I did write the customer service a thank you letter too. On the way back we were on the original airline (partner of it on the first leg) and frankly, it sucked. Even in first class.

Once again, I am not saying that "management sucks, the little guy/gal always gets the shaft." Management is needed at all levels, just as the non-management workers. What I do have a problem with though is when they (upper management) expect everything to happen without them having to take an equal hit.

 

[El Cid Av8or]

Timebuilder:

Thank you for posting that as it puts an interesting perspective on things. I agree that most of the current management probably needs to stay in place because the cost it would take to replace them without the company(ies) folding outweighs keeping them on. In this economy, I don't understand why a person in that position would want to jump ship and try to find another job instead of taking a pay cut that was more equal to the people working for him/her. If the common employee leaves, what the heck do you need the managers for then? How about if the customer leaves? I think we're already seeing that picture and it's the one that really makes me sick.

I remember something I learned years ago in high school JROTC. Standing in the mess line (I was acting CO - Commanding Officer that day) an instructor told me that a good CO will not eat until all his/her troops have eaten. I've lived by that (and many other things) since.

Bottom line: Everybody has to adapt, improvise, and overcome. I guarantee you that the unions would have more respect for the management (not saying that they don't, it's just that it seems like the two sides are always in a pi--ing match) if the management took a significant cut with them. I may be totally wrong on all of this. The management may be taking an equal (or reasonable) cut. That's not what's published though. Of course, I don't believe everything I read or hear in the media either.

 

[d328pilot]

CWA and TWA reach agreements today.....

http://www.usairways.com/about/press/nw_02_1218.htm http://www.usairways.com/about/press/nw_02_1218a.htm

 

[Publishers]

obligation

The control of much of this is no longer in managements hands. y of The Alabama Retirement System was, and rightly so, deeply concerned about the ability of US to survive a UAL bankruptcy due to pressure from several places.

Unlike much of airline managment and airline union management, these people have an obligation to protect their constituancy and liquidation may well be an attractive option to them.

These people have no "airline" blood. They will not be caught up in the usual bull and to them it is as cold a decision as it gets.

 

[NYRANGERS]

CWA and TWA reach agreements today.....

http://www.usairways.com/about/press/nw_02_1218.htm http://www.usairways.com/about/press/nw_02_1218a.htm

I think the worry is with the mechanics and flight attendants. I wish you guys luck.

 

[Timebuilder]

I find the agreement to be very encouraging.

Perhaps a stronger, more healthy US Airways will mean that fewer WO pilots will be displaced by "J4J" programs.