USAir's pay negotiations

[Space Wrangler]

"A vice president for the machinists union said his union would help the carrier save money, short of reopening contracts."
--MSN Financial Website

"Negotiations have been slow, and in the case of the machinists, nonexistent. The only group close to an agreement is the pilots union, holed up this week with management negotiators in Arlington, Va., where the airline is based."
--Post-Gazette Article (8.18)


At least this time they won't be able to blame the pilots -- looks like the mechanics are the ones who don't want to play ball.




As I'm posting this (16:50 EDT), CNBC is announcing that Bruce Lakefield has issued statement to employees saying that UAIR is in no "imminent" danger of a shutdown, interruption of service, liquidation (7), and that any such rumors are "simply not true."

 

[stb]

The rumors at USAirways vary from...

Ch.7 to growing the route structure with FLL as a focus city for South American travel.

Place your bets.

??????? what next??????

 

[Coffee]

Time to move on or take a stand

The reason pay is the way it is today is simple, from Eastern on, Pilots have been willing to take pay cut after cut. We as a group are responsible with more people's lives than an other industry and look forward to unemplyment as a pay increase should things go from bad to worse. I know I am going to get flack for saying this, but, we need to stand our ground and say no more cuts; while executives are taking our pensions. My God, is this Braniff all over again? My best friend went to bat for them three different times and has only a broken down
Stearman to show for it.

 

[dlredline]

. . . Where it will get really sticky is with the other unions whose workers are not paid as much. . . .

Here's an interesting response from IAM:

US Airways' Machinists Union Won't Discuss More Givebacks

Thursday August 19, 3:44 PM EDT

CHICAGO (Dow Jones)--The machinists union at US Airways Inc. (UAIR) won't discuss further contract concessions despite comments from the company's chief executive that the airline could be liquidated.

"We will meet with the company on Aug. 31," said Joe Tiberi, of the International Association of Machinists and Aerospace Workers.

The union continues to believe the burden is on management to cut operating costs, he said. "We can show them how to save $80 to $100 million by operating more efficiently," he said, but that won't include cuts in machinists' wages or benefits.

US Airways' Chairman David Bronner said in interviews Wednesday that the financially-strapped airline faces bankruptcy or liquidation if employees don't agree to wage and benefit cuts of $800 million within 30 days. That would include givebacks of $263 million from the machinists.

Four unions, representing 28,000 employees at the nation's sixth-largest airline, made $1 billion in concessions last year. That allowed US Airways, then in Chapter 11 bankruptcy, to reorganize its finances.

The Air Line Pilots Association and the Association of Flight Attendants unions now are in talks with the airline for another round of cuts. But the IAM and the Communications Workers of America, representing other ground workers, have been reluctant to talk about concessions.

"I think there's going to be a lot of saber-rattling before Sept. 30," said Bill Warlick, an airline analyst in Chicago with Fitch Ratings. That's the date when US Airways must pay $720 million in federal loan guarantees.

The airline is seeking to defer about half of a $130 million pension contribution payment due on Sept. 15.

Analyst Ray Neidl at Blaylock & Partners said he now sees a more than 50% chance that US Airways will return to bankruptcy court. "Time is running very short," he said.

Without additional financing, the airline won't be able to make the Sept. 30 payment. Retirement Systems of Alabama, a state pension fund headed by Bronner, took a $240 million controlling stake in US Airways to help it emerge from Chapter 11 in 2003. But Bronner said the fund won't contribute more money now to bail out the airline unless the unions make concessions.

With cost-cutting in place, the airline should be able to attract new investors, Neidl said. But US Airways must show that it can compete with successful low-cost rivals.

Warlick said it is likely that, once the pilots settle on a new contract, the other work groups will follow suit.

But Tiberi, from the machinists' union, said his group isn't concerned with the position of other unions. "We are listening to our members," he said. In fact, the IAM, which has lost members to the Aircraft Mechanics Fraternal Association, a rival union, is flexing its muscles for members, analysts said.

Analyst Warlick said he isn't worried that the airline faces liquidation any time soon. "The company had $975 million in cash and short-term investments at the end of June. That's about 15% of their total revenues," Warlick said, not enough money to avoid bankruptcy, but adequate to support a lengthy stay in Chapter 11.

Analysts said the competitive landscape won't change much if US Airways goes into Chapter 11. "It probably wouldn't have much effect on the market unless US Airways made dramatic cuts in its operations," Neidl said.

A spokesman from US Airways couldn't immediately be reached for comment on this story.

-By Ann Keeton, Dow Jones Newswires; 312-750-4120; [email protected]

Corrected August 19, 2004 15:53 ET (19:53 GMT)

David Bronner is chairman of US Airways Group Inc. (UAIR).

(In an item timed 3:44 p.m. EDT, Bronner was incorrectly identified as the company's chief executive.)

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[dlredline]

Seems upper management at U is back-tracking on their "liquidation" comments. This sent out today . . .



August 19, 2004

Dear US Airways Colleague:

I am sure that many employees have seen at least one of the news stories this week quoting our chairman, David Bronner, about the challenges facing our company. In particular, he said bluntly that without new labor agreements providing competitive labor costs, the airline cannot survive long-term, whether or not a Chapter 11 petition is filed.

I have known Dr. Bronner for more than 30 years. And I can say that I have never seen him more frustrated than he is right now. But he is not alone in his frustration. The Board of Directors, the management team, union leaders and probably each and every employee is frustrated right now.

And we are all frustrated by many of the same things. We are frustrated by the fact that even after our successful trip through bankruptcy, the company still is not profitable and we need to do more. We are frustrated by the fact that we are all working harder than ever. We are frustrated by the negotiations process and the fact that it is chronicled in the media for the whole world to see. And we are frustrated by the fact that the airline industry is changing at a dramatic pace and that the additional changes we need to make are painful and enormous.

The discussions about another Chapter 11 filing are grounded in the fact that, given our financial obligations, it is a very real possibility. The financial disclosure laws, SEC regulations and our commitment to full disclosure mean that all of our stakeholders have to have complete information. Admittedly, the results of disclosing information can be disconcerting to employees and customers alike.

While Chapter 11 is a possibility, the talk of an imminent shutdown, a disruption of service, or impending liquidation is simply not true. If Chapter 11 becomes necessary, our survival will remain dependent upon transformation. One way or another, we need new labor agreements.

All legacy carriers face the very real threat of Chapter 11. All legacy carriers must transform to survive. There is simply no way that any company can operate on a continuous cycle of yearly losses and accruing debt. We have an advantage, in that our 2002-2003 restructuring significantly reduced our debt, cleaned up our balance sheet and provided us with market-based lease rates for aircraft and other vendor agreements. But we are still losing money because the industry's revenue pool continues to shrink, and in essence, the revenue problem has resulted in another cost problem.

We are trying hard to avoid another Chapter 11 filing. We can solve our financial challenges with a new cost structure, but that requires the competitive labor costs that you have all heard so much about. Yes, it is painful, and yes, it will require sacrifices. But if we can quickly reach labor agreements, the outcome remains in our hands and we can get through this. A restructured US Airways with low costs, a simplified fare structure, a route network that blankets the eastern U.S., the Caribbean and Latin America where we have strong market positions, and with our great employees, can make us an absolutely fierce competitor.

Chapter 11 protection can be a useful tool, but it provides no guarantee for success. We beat the odds last time with the support of our employees. I would rather not file again. I would prefer that we resolve our issues outside of bankruptcy court, but to do that, we need to complete negotiations quickly. We have a Transformation Plan that will work. We are already seeing our competitors begin to emulate it.

I am reminded every day of your hard work and dedication to our customers and this company. And that point is crystal clear in the minds of every member of the Board and the senior management team. Our efforts remain focused on being successful outside of bankruptcy and not having to file for Chapter 11, thereby moving our airline to a platform of success. The press coverage of the past week has dwelled on the scenarios if we don't succeed, but I hope that each of you will reflect on what we can be if we do succeed. The choice is ours.

Sincerely,

Bruce R. Lakefield

 

[I.P. Freley]

Man, the plot just keeps thickening.

Hope you guys pull it off... Never like seeing fellow aviators lose their jobs.

 

[tittyjet]

Oh, I get it:


Lakefield = Good Cop
Bronner = Bad Cop

 

[Dizel8]

Well, more interesting news, that I saw on another site!

According to that site, the report on the finacial health at U, that Glanzer made for the company, was to be paid by U, however, rumour has it, that if the pilots took concessions, Glanzer would be paid a million, if they did not, then he would receive an hourly wage.

So, how is that for independent, unbiased review!

 

[Old Crow]

Rember USAIR? This company along with United is the perfect example for how not to run an airline.

It is quite evident that the management groups have been mending with quick fixes, and just waiting out the storm. Us Airways is a great airline with great people. Unfortunately they have done everything to foster poor morale which is key to productivity.

I certainly hope the best for all of you. I think at this point I'd say enough is enough. Let management take the cuts.

 

[MW44]

Dizel8Well, more interesting news, that I saw on another site!

According to that site, the report on the finacial health at U, that Glanzer made for the company, was to be paid by U, however, rumour has it, that if the pilots took concessions, Glanzer would be paid a million, if they did not, then he would receive an hourly wage.



Dizel8-
Where did you hear that rumor? If that is true then that needs to be exposed by Alpa or whoever. I've always thought that most of these analysts are extremely biased and are gloating over the demise of our profession but it would be nice to prove it.