The Tulsa Forum by TulsaNow

AP is reporting AA is filing bankruptcy protection-
http://finance.yahoo.com/news/american-airlines-parent-seeks-ch-130619018.html

Ed?

It will be better in the long run.....No short term problems either.....

Yep.  Going bankrupt is always better.  For the CEO and top officers.  They will be writing themselves some nice big bonus checks for the truly inspired way they took the company through the rocky shoals of reorganization and emerged on the other side a better, leaner, slimmed down company ready to do battle with the forces of evil!  (Other airlines.)

Let's not forget - the phrase "so it never happens again" must be worked into the dialogue somewhere.

This whole thing makes me sad, honestly.  According to most reports, the money problems stem from an outdated fleet that uses too much fuel and "extravagant" labor contracts.  AMR has already made a huge fleet order, so that end of things will be addressed in time.  Chapter 11 will allow them to restructure their labor deals (read: cut pay and bennies) to make things more affordable.  Reportedly, the AMR unions have already negotiated pay cuts of over $1B to help the company stay afloat, but will now be asked to give more.  (This also follows Chapter 11 declarations by most of the other big airlines -- United, Continental, etc -- who used the opportunity to hollow out their labor agreements, too).

I understand the give and take, that employees are asked to make these sacrifices in tough times, but it makes me sad because it's part of a much larger picture in our country, where labor -- regular working folks -- are the ones who reap the whirlwind when the company fails. 

And I don't think anyone knows to what extent it will affect Tulsa.  Since the AMR workforce here is mostly unionized, it's a good bet that they'll bear the brunt of whatever wage/workforce reductions that have to happen.

At least we can rest easy in the knowledge that the top officers at least won't be hurt, and will in fact get large, reduced tax bonuses! 

Is it a matter of mis-management or do airlines simply worry too much about emphasizing market share over value to the passenger which forces them to make stupid fare cuts in the face of rising fuel prices?

Sure, many people are price-driven, but there are also plenty of people who will look for the best value when shopping which doesn't always equate to a lower fare.  Airlines have increasingly reduced on-board extras and even tacked on plenty of new charges, like fees for checked baggage in order to flaunt lower fares.  I'd like to see one of the airlines break from price pressure to create a better value for the passenger, like more on-time arrivals, no extra fees, and bringing back in-cabin amenities like snacks, full size blankets, free use of headphones (At least United is doing that now), etc.

I read somewhere in the last year or two that the history of the airline business in the U.S. has been a net loss over the last 100 years.  Not sure if the stat is true or not, but essentially there have been enough years of loss to offset profitable years that the end result has been break-even to a loss.

I doubt the Tulsa workforce faces job cuts, and considering concessions already made by the unions, I suspect there won't be any new major wage cuts, but like most all industries, I think they are going to want employees to start funding more of their own retirement.  Pensions are going the way of the doe-doe bird because they are simply too costly to provide anymore with a workforce which is living much longer past retirement age.

For my travel needs, Southwest has achieved the best value/price point.  Not because they are always the cheapest (most of the time yes, but not always), nor do they have on board services - I don't care about that stuff.  Baggage fees are a huge irritation to me - even beyond the real expense of the thing.  Don't care about headphones, pillows, blankets or meals or snacks - if I get cold, I put on my jacket.  But I never get cold.  Of all the trips I have taken over the last 30+ years, I am seldom surprised when we leave/arrive on time or close to on time (less than 20 minutes difference).  All the other airlines are a very big surprise to me when we leave/arrive on time or close to on time.

Have a co-worker who feels exactly the same way about Delta - they provide him with exactly what he wants for travel (and I really dislike Delta), so there is obviously a wide range of needs from the traveling public.

Pension elimination was just another cash grab opportunity for CEO's.  A pension cost to a company was one of those "total compensation" items that is hidden and never shows up on the paycheck.  NOW, the pension expense is gone, and the 'extra expense' that was previously touted as part of your compensation never did show up on the paycheck either.  And in addition, the farce of the 401K plan is an ADDED expense, taking even more actual cash out of your paycheck.  So the net difference is huge - a huge expense to YOU.  And a huge windfall to the company!

But hey, that's the real benefit to electing Ronald Reagan - "pension reform" - as in, reform it out of existence.

But since everyone out there working today is eminently qualified as a financial planner, well the 401k is just the ticket....

On the CBS news last night they said that since 1950 US Airlines have lost a combined $54 billion. That would be on top of all the public money that goes into air travel. Makes rail look maybe not so bad.

But then yesterday on NPR they were taking about the high speed rail line between LA and the Bay Area costing $100 billion. How on earth could HSR cost that much?

If American outsources a good chunk of their maintenance, where would they outsource it?  I've heard that American has by far the biggest in-house maintenance dept. which is killing them with high wages and pensions.  

Some say they could close the Tulsa base completely wiping out 7,000 jobs, and others say nothing will happen.  Who knows at this point but very scary for the city regardless. 

If I had a big plane of my own, I would certainly bring it here for service just due to what I know about some friends that work there.  They are exactly the kind of people I would want working on it for me.

Would be a huge shame to lose that here.  Any outsourcing elsewhere would be a step down.

But AMR has been run stupid for a long, long time....

Puff puff pass....!

Isn't American the only legacy carrier that hasn't filed for Ch. 11 since 9/11?

That has to put them at a huge disadvantage, cost-wise.

This has been inevitable for a long time, IMO.


Well their planes will still need maintenance, will they not?  The airline isn't liquidating, it's going through the same financial restructuring that all other legacy carriers have gone through.

One possible option would be to spin-off their maintenance division as a separate company.  Kind of like what Boeing did with Spirit Aerosystems.

As long as AA has planes in the air, they're going to need the maintenance facilities in Tulsa.

It was the only one to not have ever filed for bankruptcy, not just since 9/11, although they were also the only one who didn't get bought or go BK since 9/11.
Pre-9/11, I believe Delta had also never gone bankrupt. I'm pretty sure all the others had been in BK at least once previously.

How far back makes a legacy carrier?

1971 would seem to me to get the legacy designation.  Especially since so many of the others have morphed so much through bankruptcy.

From what I've heard from a few friends that work out there in management have said that Lufthansa is interested in buying the maintenance base and so is some investors from the Emirates. Basically it would be turned into a large contracted based maintenance for different airlines. Supposedly American has been looking into spinning it off that way as well and looking at doing maintenance work for other airlines in order to help pay for the costs to run the base. All I know is it will be interesting to see what happens with this, hopefully it doesn't involve mass layoffs.

They've actually been marketing MRO services to other airlines and the military for, I believe, 10 years or so.  There's a friend of mine who was involved in that very activity.  I've not talked to him in awhile so not sure if they still have very many contracts.  But as I recall they were doing component work like wheel and brakes or panels, I believe.

I think the wheel and brake work is done at the old Builder's Square at 244 and Memorial...might be wrong.

The big dog in this is the pilot's union.  They're the largest in dollar terms.  I don't know how the flight attendants compare to the mechanics and fleet service, but I suspect they're a more expensive group too.  TWU represents the mechanics and fleet service.  I'm a member. 

The bankruptcy hearing will be on Dec 22.  We'll know more then.  But there are several ways this can play out.  AA could retain the maintenance base in Tulsa with AA employees.  We'd expect to take another wage cut and probably lose benefits.  They could outsource all the work, and we'd be out of jobs.  Or another company could buy the facility, like Spirit taking over from Boeing, and we'd all have to re-apply for our jobs.

 

Just curious... Given a choice between reduced wages and benefits with AA or a buyout,  what would most of the workers prefer?  Any possibility that the buyout might result in something better than staying with AA for those re-hired?

Second question - no.

Spirit didn't improve things for people.  This won't either.  At least for the worker bees in the place.
Competent management able to run a successful airline would have been the best for all.

I would have to agree with that.  There's probably a little blame to spread all over though.

If it plays out like this, it could end up being a good thing for the facility and workforce.

Having multiple airline customers with many different types of airplanes could mean expansion, instead of being at the mercy of one financially strapped airline all the time.

Do you or did you actually work for Spirit, Rockwell, Douglas, or Boeing?

Rockwell.  Friends and neighbors at AA, Boeing, Rockwell, Douglas (manufacturing).  Only one left at Spirit and he seems to like it pretty well.  Hasn't left, anyway.

Correct location, excellent facility.

IIRC, the unions have agreed to many cuts over the past few years. TBH, what would have helped more than competent airline management would have been AA's competitors not going BK and instead raising fares enough to cover costs. Because the airlines collectively refuse to charge enough to pay for running an airline, they keep going through this cycle of BK after BK. Southwest, JetBlue, and other discounters manage a profit only because they're still young enough to not have a lot of the expenses the other airlines have.

Southwest is 40.  That's plenty old to have the bad-management-ripple-through if it was gonna happen.

Look how many major transitions Continental made in that same time - eliminating all its so-called "past baggage" 3 times along the way (during the 2 bankruptcies and the merger).

It's not like the airlines do not want and have not tried to raise prices.  Unfortunately for them, ticket price elasticity prevents the attempted increases from sticking.  Selling seats below cost is better than flying with empty seats.  Long term, airlines have to get their cost structures in line with their revenues.  Many of AA's competitors lowered costs (often through bankruptcy) and that put AA at a disadvantage.

Yes, selling a seat at below cost is better than not selling it because the marginal cost of carrying a passenger is so low. However, at some point, they have to take a hard line and change expectations as to the price of a seat. When they sell at too low a price, they condition passengers to expect unsustainably low prices. Until the airlines figure this out, they'll continue to barely hang on. They're mostly just backdooring the necessary fare increases through baggage fees and the like. This lack of transparency is harmful to the market as a whole.

I compare baggage fees to parking fees. (I don't like either of them.  They both nickel and dime you to death.)

Not exactly endearing the public's sympathy.


Passengers say AA flight attendant overreacted when booting actor

Alec Baldwin issued an apology Wednesday to fellow passengers on an American Airlines​ flight that was delayed by his refusal to stop playing a cellphone game—but stopped short of apologizing to the airline or the flight attendant he later mocked on Twitter.
The plane was already delayed half an hour at the gate when Alec was playing 'Words with Friends'

In the tweets that have since been removed, Baldwin mocked American Airlines as a company "where Catholic school gym teachers from the 1950's find jobs as flight attendants."
Baldwin noted the financial struggles of airlines, saying the result is that air travel has devolved into an inelegant experience, akin to riding a Greyhound bus.
Boxing great Oscar De La Hoya, who was on the same flight, tweeted that he thought the flight attendant overreacted.
http://www.denverpost.com/breakingnews/ci_19487113

Over reacted?  A passenger refused to turn off an electronic device and then locked himself in the lavatory just before takeoff.  Had it been one of us, we'd be in custody.

Alec Baldwin is an actor.  He tried to play a real person once without much success.

There are rules when riding an airline. Alec knows them (or should by now) and needs to comply or suffer the consequences.

So it looks like Oklahomans are getting all proactive-y. 


Newly Formed Coalition Hopes to Save Jobs at American Airlines (http://www.ktul.com/story/16437506/newly-formed-coaltion-hopes-to-save-jobs-at-american-airlines)
 


This suggests to me that some highly placed people are starting to get panicked. Or they know something we don't.  Or both.

Corporate welfare sure doesn't draw the flies at TNF like helping the poor does.....

The difference between the poor and corporations in regards to welfare: leverage, pure and simple. 

The poor have nothing, can give you nothing.  Even if they become productive citizens they can only do so much.  Corporations, on the other hand, can offer a myriad of things -- cash, resources, jobs, etc -- and even more if functioning properly.

I'm not arguing in favor of either here.  This is just the reality of the situation. 

Gotcha. How much moolah has the taxpayer forked over to AA or for that matter how much has AA received in relief from government incentives? I am merely pointing out the irony of Corporatepersonhood....

Were there funds for AA in 2025?

Its not the reality of the situation that draws ire. Its the hypocrisy. So many people around here criticize the last two presidents for bailing out auto and financial industries. They see it as a corruption of the free market and creeping socialism.

Yet, when crunch time comes for Tulsa, then the cry comes out that they are just too big to let fail. Now the Union is our friend, the COC and a Republican Mayor fret about the job losses if we don't all band together and save them. Its different when red state interests are at stake I guess. WWRPD? (What would Ron Paul do?)

I agree, I'm somewhat weary of the constant favors done to kiss AA's donkey, but when they are the largest private employer in the area, it's probably a good investment.  What would Tulsa do if it suddenly lost 7000 to 8000 jobs which are mostly highly specialized trades?  Those aren't jobs or incomes you replace overnight.

I think on some level everyone realizes job development and retention on a large scale costs a community money, but generally there's a pretty good return on it in terms of payroll running through the local economy as well as ancillary industries a maintenance base like AA will support.

I bet we could fit a ton of call centers in their space.

I wonder how Ed W would feel about a call center job?

+1

While I try to be as clear-eyed about the power dynamics as possible, from an ethical/moral standpoint the hypocrisy is, yes, stunning.  I also hate the fact that we're relative hostages to these companies.  The power imbalance -- that amazing leverage a given corp has over a given municipality -- is just maddening. For me, that precisely indicates the place where 1) business becomes bribery and 2) we are at our most undemocratic, where one interest group trumps practically every other. 

It's the American Way!!

And wrong.

We don't have capitalism except on a very small scale - what we have is capitalistic monopolism.  Or the new catch phrase - crony capitalism.  Same thing.  It is all based on the ongoing principal of cheap energy and "slave wages" - which means we must have continued population growth to achieve the economic growth.  It is what we have evolved over the last 400 years and accelerated dramatically in the last 100 years.

What we need is an economic model that works in a steady state set of conditions.

AA hardly provides slave wages.

True enough. And I agree with you that the reality is, AA creates many jobs and losing them creates a huge ripple effect. In fact, I agree that we should do what we feasibly can to keep them here. I just wonder what those who have criticized bailouts now think since it hits home. They will now have their convictions tested.

But what H says has merit. We simply must face the reality that America's free market capitalist system, is a myth and has been for at least a century. Our economic growth has been fueled by industrialism, population growth, war, infrastructure and military spending since the turn of the 20th century. Now that the baby boom is slipping into its last quarter century and industrialism has come and gone, we have to figure out a new model.

Any actual suggestions?  It might warrant a new thread.

No socialists today?  :-X

I wish I were that smart. Surely there are others who have considered these factors and created a way to mesh our love of democracy, capitalism, near-socialism and technology into some kind of sound economic plan. It sure isn't going to come from the ranks of politicians.

WWRPD? He'd let it fail since the gov't shouldn't bail out businesses.

WWRPDTDWTFOHC?

What Would Ron Paul Do To Deal With The Fallout Of His Convictions? 

'Cause the fallout would be:  Tulsa loses 10k high-paying jobs.

Work smarter.

Someone needs to tell those pesky Germans that manufacturing jobs are a no go cause they apparently haven't got the message.  Their exports keep expanding and unempmloyment rate keeps dropping,,, the dummies.

Was listening to something on the radio other day where they were talking about, I believe it might have been South Korea, describing how the whole nation virtually comes to a standstill when its time for their students to take their tests.  People line the roads to cheer the students as they head in to class, then silence. Honking is forbidden that day for fear of bothering the students while taking their tests, teachers wear soft soled shoes, planes are not allowed to fly, etc.   All that "creating a culture where people value education" is a crock of bull if you ask me.  Someone needs them that.

I had expanded to the 10,000 foot view... (try to keep up!!  LOL!)


AA has been good for Tulsa for a long time.  Now, we are suffering - as are the people working there - from the results of a long line of incompetent management.  Couple of people I know who work there wish that Crandall was back.  Apparently he was consulted - asked to come fix things - and one of his ideas was to fire all of the top management.  Needless to say he is not back as CEO.

Yeah...first stop electing people that are in place now.  Then quit electing people who are members of either of the two major political parties today.

Now on to reality...

How to get to a steady state economic model?  Very tough to change to that from what we have without a couple of things - all of which include massive dislocation.  Much more expensive energy.  Much more expensive food costs.  Much smaller population.  All extremely unpalatable.

Economic policy based on war is good place to start to stop.
Less imperialistic voyeurism (part two of the economic policy point).

The problem is that when you have people who can vote themselves a paycheck from the treasury - like we do with Congress and Corporate America right now, it is tough to dislodge them.  'Cause they just write the laws that perpetuate themselves - again, like we have right now.

Massive worldwide economic total collapse might 'clear out the cobwebs' somewhat, but more likely to create a 'dark ages' kind of scenario, setting civilization back 400 years yet again.

Still talking the economic growth/expansion model.  Think steady state - no big increases year to year.

It would be one small step above being a greeter at W@lM@rt!  A very small step.  But I did a turn as a sewer inspector once, and after that everything is a step up.

I can give you the view from the trenches, but in all honesty, you'll probably hear of any changes just before I do.  I think there are three possible outcomes: We remain AA employees with probably losses of wages and benefits, the maintenance base is sold to another company and we get to re-apply for our jobs (like Spirit Aerospace, for instance), or all the work is outsourced and we all lose our jobs.  Obviously, while one and two aren't especially palatable, they're still preferable to the last one.  There's a possibility of a take over because any kid with a paper route could buy up the stock right now, but the debts are about equal to assets. 

From a personal view point, I'm probably a bit better positioned than some of my co-workers.  I just turned 60 so I'm eligible for retirement, though I'm not ready to do that yet.  The PBGC guarantees retirement pay up to about $50K, and mine wouldn't be that high.  But the medical is most worrisome. She-Who-etc is younger than me and in poor health, so she's my first concern.

But the people in their late 40s or early 50s are between a rock and a hard place.  Most employers hesitate to hire them and given the skill sets of aircraft tech, there could be a glut on the market.  If they stay at AA, they won't accrue any more retirement money, leaving them at the mercy of inflation.

I could take the retirement then look for another job to fill in the gap, and that may yet happen.  I've been looking into writing opportunities that could bring in some extra cash too.  One of them opened up a position for a tech writer recently.  It pays well and I could do most of the work from home or the library.   

The rumors were flying when this story first broke.  Some of it was speculative, some was just hateful as some co-workers tried to use the tension to goad others.  There's been an outbreak of black humor that helps relieve that tension, though it's bound to ratchet upward whenever AA has to meet with the bankruptcy judge.  Eventually they'll reveal our fate.  The waiting is hard.

If anyone has a specific question, I'll try to answer it, though the official corporatespeak line is to refer everything to their officiAAl compAAny spokesmAAn.  I can provide the limited view from the trenches. 

Thanks EW and our thoughts are with all the hard working Union peeps at AA who have been and will remain Tulsa's greatest working asset.

I'm thinking option 3 is out....too much talent and good clean assets for this to take place.

I always try to remember, in deals that go down and life in general, that anything that comes to you should be received as a gift from providence. In my life, the dark negatives sometimes swing open a new entrance into a better world.

It's the American employees that have sacrificed the most over the years and this clown recklessly took  :-[ shots at the politicians....

I guess you're being sarcastic.

Germany has a younger population IIRC. Also a smaller, smarter, more homogeneous population (they are practically all of Germanic descent) living on a smaller land mass with a more socialistic political bent. They also have a heritage of fine craftsmanship. So, are you saying we need to edit and decrease our population, increase our science and technical skills through better education ala South Korea? (Who also has a smaller, more homogeneous population, smaller land mass, and a more socialistic political bent).

Or did I miss something?

Unless the next generations drastically increase their birth rates this steady state model will occur on its own. Unfortunately it will take a quarter century or more to stabilize and it will be painful as we have to accept a 30's era depression outlook on our potential. The choice will be that we accept that we no longer can make this model work or we choose one of the crucial criteria it requires (war, immigration, infrastructure) and pursue it blindly.

Interesting that AA might consider selling off the maintenance base.  MRO services were what was supposed to help turn a cost center into a reliable profit center for AMR.

One of the rumors was that Lufthansa had an interest in purchasing the maintenance base.  Another revolved around some nebulous purchaser from the UAE.  Rumors are basically worthless, though in one remarkable contract negotiation many years ago, the terms were accurately laid out on the men's room wall weeks before the negotiations concluded.  Imagine that.

Two specifics;

Couple of neighbors work in the shops and have said they have taken more than 1 pay/benefit cut in recent years (givebacks).  Are you in that kind of position?

How would you feel about Crandall coming back?  Think it would help, hurt, or non-event?

I read the Dallas aviation blog every day:

http://aviationblog.dallasnews.com/ (http://aviationblog.dallasnews.com/)

It's a good source for information and seems to have about a one day lead on the mainstream press.  The writers have good contacts in the industry.  In particular, look at this piece:

http://aviationblog.dallasnews.com/archives/2012/01/a-reader-asks-why-doesnt-the-a.html (http://aviationblog.dallasnews.com/archives/2012/01/a-reader-asks-why-doesnt-the-a.html)

I think Crandall said that the board should be replaced.  (If I'm wrong would someone please correct me on it.)  But that same board would have to vote him in while knowing he'd put their heads on the chopping block.  Ain't gonna happen.

We lost 20% of our pay back in the 'negotiations' of 2003 when the company threatened to file for bankruptcy unless we agreed.  It was much like having a gun held to your head while the mugger calls it a negotiation.  Yet when we were subsequently challenged to find ways to save about $500 million in maintenance expenses, we did it.  There was a genuine effort to see that the company and union worked together with a common goal of saving the corporation and all those jobs.

Meanwhile, the top executives pocketed bonuses even when we were not making money.  I think if it were added up, the amount in bonuses would match or exceed the amount of pay the TWU gave up.  That was a sore point and will forever be such.  I've been told - and I do not know whether this is true - that the wage and benefit cuts that management personnel took back in 2003 were quietly restored over the next couple of years. 

There's more....but I gotta go to work.  I'm on a middle shift in order to get Number One Son to his new job until he can replace his car.

Ed,
Thanks!  That is a whole lot - pretty much exactly - what the neighbors have been saying.  Your post puts a real world example right here in town to the ranting and raving I have been doing since getting on here.

This is what 'class warfare' in this country is all about - it is real and alive in America - but it is NOT what the RWRE propaganda is proposing.  It is the 1%ers screwing the rest of the population - because they own the clowns making the laws in Washington and many if not most of the states.  And yet we keep voting - as an electorate - for people who are performing actions that are not only directly opposite our best interests, but also against the best interests of the US as a whole.

http://online.wsj.com/article/SB10001424052970204542404577156842920091500.html?mod=googlenews_wsj

(Since we seem to be resurrecting old threads, I thought to update this one.)

TWU is in the process of voting on a consensual agreement with AA that is alleged to save more jobs than the plan the company put before the bankruptcy court.  While that plan is bad, the consensual one is only marginally better.  As one co-worker put it, one's a smile sandwich and the other is a smile sandwich with mustard. 

Neither plan invokes immediate pay cuts.  Instead, they have us pay for a much larger percentage of our medical insurance.  It has the same effect. 

As I understand it, if we vote against this, AA has an almost 100% chance of getting the judge to abrogate our contract in the 1113 hearing.  In other words, it no longer exists.  We can begin negotiations on a new contract just as if we were a newly formed union - starting from zero.  Since the Railway Labor Act doesn't provide any incentive for a company to reach an agreement, we'd be strung along just as we've been for the last 5 years of negotiations. 

Meanwhile, the flight attendants have refused to meet with the company since AA hasn't budged from their initial presentation.  And there's a rumor that the pilots will simply refuse to fly if their contract is dissolved.  That's illegal, of course, but when people no longer have anything to lose, it's kind of a moot point.

Also, the retirees have their own hearing coming up.  That's an 1114 hearing and it's likely they'll lose retirement medical benefits.  Most of us have been prefunding retirement medical since we hired in, and AA will return that money with interest.  If we agree to the consensual plan AND the 1114 turns out in AA's favor, we're supposed to get all that plus the matching funds from the company.  In truth, I'd rather have the retirement medical insurance rather than the cash.

The sweetener in the consensual agreement is some early out incentive pay to retire.  It's about $40K and it requires that we give up all recall rights and seniority.  The fly in the ointment is that AA gets to determine how many can leave and when.  That's not specified in the contract.  I'd be very tempted to take it, but as I wrote earlier in this thread, I have to be more concerned about Mary's medical coverage, and if AA succeeds in eliminating medical coverage for retirees, I'll just keep working. 

It's late and I'm starting to ramble, so I'll end here.  If anyone has a question, don't hesitate to ask.

Good luck!  Hope it gets better!

I am afraid it won't...

If the contract is set aside, the union will just put the previous text on the table as the starting point.  The problem there is the givebacks that so many unions are caving into these days.

There's something exquisitely depressing about this, and I think it's because most of us never hear about the nuts and bolts of these types of negotiations.  We definitely hear about the results in the news, and we sometimes hear about the pre-negotiation media posturing if the contract being worked on (voided?) is huge enough.  But you never really get to see just how much leverage a company has over its employees until it's contract negotiation time.  You also never see exactly where it's applied.     

It's a major tell that asking you to cover more of your own healthcare is a core management demand.  That points up a sad truth of the whole medical-coverage-as-benefit argument.  It's not the benefit itself that costs too much, it's the care being paid for.  That's a crucial distinction that we never hear talked about.  Even during the HCR debate, Obama was never particularly clear about what costs he was trying to contain.

Anyway, I'm sorry that this is the process and that the process seems to be grinding forward to what seems the inevitable conclusion, which is a hollowed out contract a shred of its former self.  Not a good thing, really, at all. 

/derail.

I was looking over some of the information today.  While it's true that AA will offer qualified employees about $40K to take early retirement, at the same time they're increasing the retiree's medical insurance fee to just under one thousand dollars per month for an employee and spouse.  That would be roughly half my retirement pay each month.  So if I retired, I'd see a 75% pay cut.  I can't afford that and I can't afford to be without insurance, so I'll probably keep working if at all possible.

Look, I’m the first to admit I’m not a union fan.  I’ve also known several people who bragged about how much they were getting over on AA.  One bragged about getting three to four hours of sleep on their shift at AA.  He was also fond of calling in with migraines when he was hung over.  A machinist I knew was a well-known sprint car racer in the area who bragged one time that over the previous year, he’d machined far more parts for sprint cars in his work area than he had airplane parts.  Another had an affinity for making custom motorcycle parts on his shift.  I had yet another drop by my shop one time when I had my own business offering to sell me “surplus” reamers and end mill bits that AA had to “age from inventory” so they allowed him to take them home.  These were new tools still with the rubbery coating over the cutting bit.  I refused to buy them as I won’t support theft.  

That said, I realize those may have been the only four jagoffs working at AA, and everyone else is a company man who works their entire shift, doesn’t stop to play dominoes, and doesn’t steal tools and parts from the parts bin or tool crib.  I’ve also known some really honorable people who worked their whole lives there.  I guess my big issue with unions is many workers tend to think they work for the union and forget they wouldn’t have a job in the first place if it were not for the employer.  Working closely with union laborers in a variety of situations, I’m frequently within earshot of all sorts of negative slurs hurled at the employing company.  I don’t know if the union mentality cultivates it or I only seem to know the few union a-holes in Tulsa County.

I may not be much of a union guy, but a deal is a deal and if you spent the majority of your adult life at AA and expected a certain retirement, you should get that retirement, Ed.  I don’t envy the position you are in and I honestly have to say it bothers me no end that a corporation can negotiate a contract with its labor force then march into court and have the entire agreement nullified by the judgement of one judge.  Best of luck to you.

I don't doubt that some, or even many, take advantage of union rules so they can skate by while others do the real work (although that happens plenty in non-union work, too!), but this is precisely why strong unions are important. If we can get sane and enforced work rules alongside, that's all to the good.

TWU, by all accounts, is a strong union.  I guess I’m missing your point.

I grew up near Pittsburgh, where strikes sometimes involved violence.  By comparison, TWU is middle-of-the-road.  My Dad's union was composed of salaried employees, and it was milquetoast.

Given the demographics of Oklahoma's population, there are numerous TWU members who can only be described as conservatives.  I wouldn't be surprised to find they're a majority.  But like any other workplace, there are some who shirk their obligations.  That isn't exclusive to union shops, and in fact, I could find some in management who really need to find more suitable employment.  People will be people, after all.

This is the first union job I've had.  My previous one was in electronics manufacturing, where the company hired a consultant to tell them how to keep a union out.  (As an aside, perhaps I could find work as a consultant too, since I have both writing skills and a good line of BS!)  He told them to develop a very detailed employee relations handbook and to stick to the guidelines exactly as if a union were there policing it.  And you know what?  It worked.  Or at least it did until the layoffs reached someone's well-connected son-in-law.  Then it went straight to h#ll.  Chaos ensued on the factory floor and the company was eventually sold to a competitor.  That was years after I left.  I don't miss it.

Gotta go.  My OT shift starts at 4AM.  Since AA has few qualms about taking my money, I can't see any reason to have doubts about taking theirs.  Tomorrow's work is computer mods.  It's not particularly hard, but it will keep me busy for 8 hours and the time should pass quickly.

That mentality/action by the "Harvard MBA" types is pretty much the gist of a significant amount of the bitching I do here.  And the last 30 years or so of them being able to buy the US Congress to enable their bad behavior.

I agree.  That retirement is part of your earnings of the past.  To take it away now is like saying that you need to give back part of you salary/wages from years ago.  Retirement benefits to date should be non-negotiable.  Future benefits are a different story.

This to me is not a union or non-union issue.

Huge issue for everyone.  Goes hand in hand with the massive failure that 401k's have been, as compared to a defined benefit pension.

I believe the AA retirement is a defined benefit pension that is in potentially serious difficulty.

You're right.  AA retirement is a defined benefit plan that was frozen on Nov 29, 2011.  Employees no longer accrue time toward it, and the amount it will pay out is likewise frozen.  For someone close to retirement, that's not a big issue, but for an employee who's perhaps in his mid-forties, it certainly is a concern.  AA wanted to dump all their pensions on the Pension Benefit Guarantee Corporation, which is funded through fees from corporations.  PBGC didn't want to take on the additional burden since they're already running a deficit.  Basically, they guarantee a pension up to about $50K/year, so that would cover the flight attendants and mechanics, but the pilots with their much richer plan would be screwed.  Long story short - they negotiated a deal.  We keep our AA pension at the frozen level.  Dunno about the pilots.

Pretty much any defined benefit plan has been allowed to be used as a "personal playground" of the corporation for many years now.  Unlike the previous "arms length" that was required.

When the company goes under, they take the pension down with them way too often in this country.  Another shame on Congress's for the last 30+ years - that they allowed this.  But then, they have been bought and paid for lo these many years....

The only failure in the 401K system is it requires someone to need to take time to pay attention to what their account is doing and to have some basic understanding of investments.  A company matching my contribution on a 1:1 basis tax-deferred up to a certain amount is a no-brainer good deal.

As far as defined benefit plans, it’s not just corporate malfeasance creating such a drain on them.  Take a look at what the government has done with Social Security retirement age.  Take a look at what foreign countries are trying to do about raising their retirement age.  

A major problem is having a significant amount of people on your payroll who aren’t producing a dime for the corporation going onto plans after 20-30 years of service instead of 40 to 45.  It makes a huge difference.  A corporation or government simply cannot afford to pay for massive amounts of idleness without some sort of financial repercussion down the road especially with the number of boomers who are and have retired in the last 10-15 years and who are planning to retire in the next several years.

That's what the investment income is supposed to be for. When the administrators use it as their own personal hedge fund or lock most of the assets up in company stock it tends not to work out as well. You'll note that most companies still have defined benefit pension plans..for upper management. (AFAIK, most white collar professional firms also have defined benefit pensions in addition to the 401k) Either way, the companies that have been able to dump their pension plans on the PBGC without actually going out of business are getting an enormous advantage. AFAIK, the PBGC rescue doesn't even count as income for them. If a bank writes off part of your mortgage, you get a nice 1099 and get to pay income tax. (YMMV at the moment, as there are temporary rules in place exempting some writedowns from taxation)

Actually, the problem with 401ks is that they track the market.  They track ups and downs.  This is great if you retire on an up year, but awful if you retire on a down year.  And of course we had several down years, there. 

This is not to say that it doesn't have a place in retirement investment.  But it definitely demands that you have a level of expertise and active participation that something like a pension does not.  While I think that level of engagement is acceptable for some, I'm not ready to suggest that it's the best choice for everyone. 

Company pension plans which heavily invest in their own stock also track the market.

The point is, with a 401K or IRA, you can control your own destiny if you pay attention to what is happening and seek to learn even just a little about investments.  I’m not even counting on SSI being available for me in another 20 or so years.

Guess work....is that like hard work in your vocab?

Some people can. SWMBO cannot. Due to some ethics compliance issues, she gets to choose between a few stock and bond index funds, a couple of funds that invest in developing countries, and treasuries. The only market timing she gets to do is moving funds from stocks or corporate bonds to treasuries when it looks like the market is going to take a dump and vice versa.

Expecting everyone to become learned enough to wisely invest in the stock market is like expecting everyone to become learned enough to wisely select their Congresspeople. Some people can and will do it, but most won't or can't.

Ah, public policy to ensure the lowest common denominator can continue to be just that!  The key to a country's success!

In other words, to be a certified financial planner.  1:1 is good if you can get it.  Many, if not most don't.  But there is good news on the horizon - the average value of a 401k in this country is at an all time high since Fidelity began tracking them in 1998.  $74,900.  PLENTY for anyone's retirement!!  Yep, now if only we had all been trained as certified financial planners instead of whatever career it is we chose!  Wow, another one of the "personal responsibility" moments....dumb engineering school!


I'm more than a little curious about where you see all those non-producers retiring after 20 years of doing nothing...I want a job like that...I could still put in 20!!  Except for the manager's doing the cutting (and the was oil, so that was obvious), I have never been in a company where there were people just sitting around not producing a dime for the corporation.  In fact, most of those companies cut meat rather than fat when they did the cutting.  There just wasn't that much fat.  Maybe I have just been blessed to work with a lot of good, decent, hardworking people who get up every morning thinking about doing a good job when they go to work (or they are just so scared of getting dumped, they dare not have any other thought?).  Haven't met that person yet who gets up thinking "how can I screw off all day and stick it to the company".  They must be out there - I keep hearing about them all the time - I just haven't had the misfortune to work with them.  Maybe before I reach retirement time, I will be so afflicted...

That even includes the big - moderately well unionized - company - and we have gone from around 120,000 at the bottom of the Bush adventure to over 170,000 now.  Not too bad for such a defective economy - oh, wait, that is the Fox fantasy....   Still waiting to find the malingerer there.

Control your own destiny....  


Wow!.... I mean, like, WOW!!!

You are for someone else controlling your destiny?  Who?  The government?  Some corporate board?  Some small business which might not exist in five years?  Wow!... I mean, like, WOW!!!

What, you aren’t bright enough to plan for and manage your own retirement with a little help?  You’re supposedly an engineer, I doubt you are very good at letting others do things for you, why would seeding your retirement be any different?

You gotta be kidding.  Where is the "LOL"??

If someone has been living on an income that has only allowed them to save $74,900 in about 30 years, chances are they will be able to live on $74,900 plus Social Security.  At zero interest rate, $74,900 is about $210/mo for 30 years.  Most Oklahomans are unhealthy enough to plan on dying within 5 years of retiring so, again at zero interest rate, $74,900 would be about $15K per year on top of SS.  That will keep most of your SS benefits below the income tax level.  You also get an extra exemption for being over 65.  There are tax advantages to being old.  I have a few years to go but I help mom with her tax return.

If your employer does not match any of your 401K contributions, chances are they would not have had a defined benefit program either.

My airplane habit is too expensive for me to retire anytime soon,  even if my 401K had done a lot better.

KJRH FB post:

Something about spiting one’s face comes to mind...

TWU represents 7 different employee groups.  Five of them voted to accept the "last best" contract proposal.  The mechanics and related did not.  I'm in that group.  I voted to accept it because while my frustration and anger called for a NO vote, my family comes first and I have to protect their interests. 

Jason Whitely, a reporter from Dallas, has been live tweeting from the courthouse in NYC where the bankruptcy hearing is being conducted.  His Twitter feed is @JasonWhitely.  He wrote that AA wants to continue talks with the two dissenting groups in order to reach a consensual agreement.  While that may be true, it's also possible that AA is doing so to remain in compliance with the Railway Labor Act.  They haven't made any significant progress since negotiations started nearly five years ago, so there's little hope that will change at the eleventh hour.

AA bought 460 new aircraft last year, yet they're saying they don't have enough money to pay people to fix or fly them.  It's a wonderment.

Apparently they have also heard that you have to buy the new car before declaring bankruptcy. It's easy to make the payments once you can stop paying your other debts. (or in this case abrogate labor contracts)

The thing that really annoys me about the whole thing is that labor has (collectively) given back billions of dollars in pay and benefits over the last 10 years, yet they still take the blame and face the brunt of the consequences for the bad decisions of management.

It's a common situation in General Aviation.  Buy a plane because you can get the financing but neglect to determine if you can afford to keep or operate the plane.  Looks like it's spreading to the airlines.

So I'm a little late to the party, but I saw this in the news: http://stateimpact.npr.org/oklahoma/2012/07/30/the-ghost-ad-thats-made-american-airlines-tulsa-union-mad/

A hint to the fine folks at TWU Local 565: If you're going to go to all the trouble of hiding the registration info and trying to up the intrigue factor by concealing your identity, don't take a picture with your shiny iPhone 4 and upload it to a website without first stripping the EXIF data, or at least turning off your GPS. Doubly so if it's the main image on your website and you don't want people to know that you were at the union office when you took the picture of the banner.

I take no position on the merits, only the cheesiness involved in people not taking credit for their actions.

Number Of Tulsa American Airlines Workers To Lose Jobs: 140

http://www.newson6.com/story/19748716/number-of-tulsa-american-airlines-workers-to-lose-jobs-140?utm_source=dlvr.it&utm_medium=twitter (http://www.newson6.com/story/19748716/number-of-tulsa-american-airlines-workers-to-lose-jobs-140?utm_source=dlvr.it&utm_medium=twitter)

Turns out they're also laying off all the baggage handlers here, I believe at the end of October. I'm not sure who is getting the outsourcing contract, though.

http://www.newson6.com/story/19748716/number-of-tulsa-american-airlines-workers-to-lose-jobs-140?utm_source=dlvr.it&utm_medium=twitterTWU 514 says the company was originally planning to cut 2,700 jobs in Tulsa, but local union leaders were able to get that number reduced to 1,300.  TWU 514 says 742 workers accepted the company's early out offer.  Another 50 workers will be displaced by American Airlines from other facilities who have greater seniority.  That leaves the number of jobs eliminated at 443.
 (http://www.newson6.com/story/19748716/number-of-tulsa-american-airlines-workers-to-lose-jobs-140?utm_source=dlvr.it&utm_medium=twitterTWU 514 says the company was originally planning to cut 2,700 jobs in Tulsa, but local union leaders were able to get that number reduced to 1,300.  TWU 514 says 742 workers accepted the company's early out offer.  Another 50 workers will be displaced by American Airlines from other facilities who have greater seniority.  That leaves the number of jobs eliminated at 443.)

Good grief.  There is a difference between "jobs cut" or "jobs eliminated" and "people laid off".  Do journalists even read what they write before posting it?  The number of jobs eliminated is 1,300 (actually from the article it looks like it is 1325), not 443.  443 is apparently the number of employees being involuntarily terminated. 

(140 people who have to relocate, plus 443 apparently laid off, plus 742 early retirements = 1325 jobs eliminated from the Tulsa base)

While certainly better than the 2,700 feared, 1,325 eliminated jobs is a pretty major hit for a city such as Tulsa.  I had not been expecting us to take that big of a hit, especially after they announced that they are completely closing the Alliance base.

Doesn't really matter though; a friend of mine who works for them now and has for about 10 years doesn't know a damn thing about what is going on.  If layoff numbers have now been finalized, wouldn't it be proper form to inform those affected?  Oh, wait...I forgot, this is AMR management we're talking about.

What a bunch of a-holes.

Actually, this is the union we are talking about, not AMR management.  The union is where this information came from.

Ah, correct.  My mistake.

However, it doesn't keep AMR management from being a bunch of a-holes.

With the Union running a close second.   The only people who lose are the AA employees, including non-union that are non-bigwigs.

It's official, AA merges with US Airways:

http://www.azcentral.com/business/us-airways-american-airlines-merger/articles/20130213us-airwaysamerican-airlines-merger-is-official.html (http://www.azcentral.com/business/us-airways-american-airlines-merger/articles/20130213us-airwaysamerican-airlines-merger-is-official.html)

We saw.  Been watching all the buildings at TIA getting packed up.

Maint or Administration? Phoenix is ticked because the HQ is moving to TX so they are losing a Forune 500 Co. based there, much like if they close (hope that they don't) the maintenance facility in Tulsa.

Sorry, bad joke.  Not packing up.  Nobody sell their home.

So... I've not heard yet, but will the two airlines join under one brand or will AMR own and operate US Air and American? The whole logo and paint re-design even looks more foolish if they are going to all become US Airways.

I believe the plan was to keep the American name and continue to call the FF program AAdvantage, but with Dougie in charge instead of the almost-Canadian. News reports indicate that is what will actually take place.

It will be interesting times in light of Parker's previous success in merging USAir and America West. :P

Its going to be called American Airlines and will be run by the US AIR CEO.

So it will look like AA on the outside and will look like USAIR on the inside.

The only real advantage of the US/America West (we called it America Worst) was new routes, the rest of it went from bad to worse.

Which for some of my friends working out there, they think is good thing.

KRMG reported employees would be seeing a 4.3% pay increase as a result of the merger.  Not sure how long it will be until upper mis-management pulls that away like Lucy pulling the football away from Charlie Brown though.

Tweeted by KOTV reporter:

(https://o.twimg.com/1/proxy.jpg?t=FQQVBBgraHR0cDovL3N0YXRpYy5vdy5seS9waG90b3Mvbm9ybWFsLzF3SUo3LmpwZxQEFgASAA&s=exHcILUmUX0Ln6kNS_vcFMg7ZJwvnY68y5aHEgbaQ9Q)

I had a feeling there was a golden handjob er handshake in there for a few execs.

Merger Means Another Attempt at Funding Airport Improvements

http://kwgs.com/post/merger-means-another-attempt-funding-airport-improvements (http://kwgs.com/post/merger-means-another-attempt-funding-airport-improvements)

He must be rewarded for doing such a stellar job as CEO of AMR.

Well, at least the important people are protected!!  God forbid they should suffer in this time of uncertainty and economic turmoil.

Here's an idea "if you build it they will come" is not the only economic development plan. Even for Kevin Costner it only netted one game.


Sent from my iPad using Tapatalk HD

Don't knock it though.  Ray Kinsella made a smile-load of 20s off that field.

Just sayin'...

Sounds like American/US Airways merger has hit an iceberg:




http://www.azcentral.com/business/news/free/20130815amr-ask-us-judge-approve-airline-merger-plan.html (http://www.azcentral.com/business/news/free/20130815amr-ask-us-judge-approve-airline-merger-plan.html)

http://www.azcentral.com/business/consumer/articles/20130814us-airways-amr-say-regulators-case-block-merger-weak.html (http://www.azcentral.com/business/consumer/articles/20130814us-airways-amr-say-regulators-case-block-merger-weak.html)