The Tulsa Forum by TulsaNow

In light of recent proposals I began wondering how much money Tulsa has given American airlines in the last decade to save jobs and what effect that has had.  Off to the internet I go…

AA come to Tulsa in 1946.  Major multi-million dollar expansions took place in the 1950’s, 60’s, 70’s, and 1980’s without tax payer money.  The airline industry began a decline in 1991.  I cannot find that the airline has paid for a major improvement in Tulsa since then.

At the start of 2003 American Airlines employed nearly 10,000 people in Tulsa.

Vision 2025 gave American Airlines $22,300,000.00 to buy equipment in order to not close the base and save Tulsa jobs – starting in 2003

In 2007 the State of Oklahoma and the City of Tulsa teamed up to give American Airlines another $10,000,000 (4.3mil and 5.7mil respectively) in order to build a new hanger and save jobs but bringing permanent work to Tulsa.

Today American Airlines employs approximately 7,000 in Tulsa.  3,000 less than when we started handing over millions of dollars.

http://www.vision2025.info/project.php?project=moredetail&category=americanairlines
http://www.tulsaworld.com/webextra/continuingcoverage/default.aspx/American_Airlines/34
http://www.tulsaworld.com/business/article.aspx?subjectid=45&articleid=20120821_46_E1_Nearly757638
http://www.tulsabeacon.com/?p=6205

American Airlines seems to be a good employer.  They are important to the local economy.  They appear to be a good corporate citizen.  I do not hate American airlines or have any ill-will towards them.  I hope they are successful and grow their base in Tulsa.  But…

It appears they have become addicted to the tax payer trough.  With no guarantees of saving jobs we hand over millions of dollars.  If we buy them new equipment and build them a new hanger (as well as subsidizing a quality work force) and they still continue to cut jobs… how far do we go?

If American says give me another $50mil or we are leaving – do you succumb?  If we do, how much do we give to Bok when they threaten to move to OKC?  How much do we give to Nordam or OneOK?  If you threaten to leave you get something… if you are a good corporate resident of Tulsa you don’t.

I’m conflicting and seeking perspective.  I want what’s best for Tulsa (to hell with principles of free markets and no corporate welfare)… but in the long run is redistributing tax payer money to corporations best?  Is letting good jobs go best when “everyone else is doing it?”

I believe our tactic of providing infrastructure for corporate as well as TIF and other tax incentives is a better way than other handouts, but I still have my doubts.

Thoughts?

So over 9 years the Tulsa tax payers have indirectly paid AA employees $3,328 per employee.

Damn, at $30 a copy, that works out to about 110 lawn mowings. 

Ed, what do you have going on this weekend?

No.  Not at all.  Over 9 years Tulsa tax payers have directly paid AA management $3,328 per employee that actually went to management annual bonuses.  While the employees were actually enjoying the "benefit" of also giving concessions to same management.

Edit; the bonuses total over $300 million for the 4 years previous to 2011.

So, I will state again.  We continue to award tax payer money to a business that engages in failing management. 

Yes, we should be thankful for the jobs that American provides, but in turn, as a business it is their responsibility to support the communities that provide them with a workforce.  According to their website over the last ten years they've spent $2.4 billion in airport and facility infrastructure improvements is Las Angeles, New York, Brazil, San Francisco, Mexico City, and London.  They've spent hundreds of millions in just the last few years. Reviewing the community involvement portion of their website, they cite millions of dollars in activities supporting the various communities that they operate in.  Unfortunately that does not include Tulsa.

It is their prerogative to spend corporate funds where they see fit.  It is also their prerogative and the responsibility of their stockholders to promote and reward management as they see fit.  It is not our responsibility to support them.  If they can spend hundreds of millions on facilities in other communities in a down economy as they themselves are facing bankruptcy, I see no need for us to shower them with cash from our pockets.

Wow. Thanks Heir.

I read in TW yesterday %40 of Tulsan's live paycheck to paycheck. So, the question I want answered is how did this money trickle down find it's way through the local economy and create associated businesses? Also, do these associated businesses have an impact on the quality of our air as well as employment? (still waiting on a cost/benefit analysis)

edit: Gassie, apparently Corporate welfare is ok with the RINO's in the Chamber. But please, none for their sheeple.

Tea- i intentionally avoided making this a dem/rep or liberal/conservative debate.  Both play the corporate welfare game and both talk about hating it.  Let that angle be, please.

I don't need to be lectured, Sparticus. I was responding to Gaspar's note. You couldn't answer my questions.

Thanks for showing up though.... ;)

I agree with cannon fodder that this is not a partisan issue. Let's try to stay focused on the facts and not TeatownClown's effort to paint that everything is connected to party politics.

That's a fat example of calling the kettle black....RM, where might I be dividing this issue down political lines? A mere comment does not over rule the fact that you are a chamber maid. :D And I am a truth teller.

It would also be interesting to compare the drop in number of flights AA offers out of Tulsa Int'l over that same 10 year period.  I used to fly AA a lot, but I rarely fly them anymore because I can usually get a more convenient or direct flight to either coast on United/Continental and use SW for most flights in the, well, southwest.

Make no mistake, the airline industry business model has struggled to adapt to the deregulated environment of the past 30+ years in general, but particluarly the last 11 years since 9/11.  Every major surviving airline but for SW has gone through bankruptcy, with AA being the last.

But AA clearly played the various communities in which it had maintenance bases to see who would give them the most money.  The KC base (acquired with TWA) disappeared and it became a battle between Ft. Worth and Tulsa.  If the conditions of the Tulsa/airport authority-owned buildings have slipped as much as reported, then I think we need to step up and invest in those assets for AA or whoever we try to lease them to if AA goes away.  That's very different than simply again buying equipment and tools for a private company and hoping they love us back in return. 
 

You are more like a bank teller handing out counterfeit bills.

When I started with the company 25 years ago, I think there were about 100,000 employees nationwide.  That may be down to 70,000 or so now, but I could be wrong.  My shop alone shrank from about 120 jobs to half of that. 

There are several reasons for the reduction.  In avionics, newer electronics do more with less.  They're more reliable than the old 727 and DC-10 stuff, so maintenance is reduced.  Engines and airframes, however, are just as labor intensive as ever.  They're essentially hand crafted.  Between the reductions in force and the upcoming retirements of many AA workers, there will be a labor shortage out there quite soon.  The average age of the work force on the base is in the low to mid 50s. 

As for handing over tax monies to AA, I'll reserve judgement on that for now.  I'm clearly unwilling to trust AA management, but that comes from long experience watching their actions belie their words.  I am not an impartial observer.

And as for this weekend, Conan, I'll be out taking photos somewhere, perhaps at the Glow Run.  I certainly don't want to cut someone's grass when I haven't cut my own for a very long time.  There are a few pathetic green shoots coming up near the infamous weed flower garden that SWMBO put in.  It would be cruel to hack them down with the mower.  They're very lonely.

Roundup.

http://www.cbsnews.com/8301-505123_162-42843483/as-tax-breaks-for-pfizer-end-jobs-disappear/

http://www.annarbor.com/news/pfizer-lesson-tax-incentives-often-dont-live-up-to-their-promise/#.UDeC5KOsfd4

Like Pfizer, it could just postpone the inevitable.

Ooh...I like that. Any future corporate welfare from Tulsans to AA should be repaid with more direct flights to *(_________) 


*where (__________) is not = DFW

Or how about just requiring the gate personnel or flight attendants to be pleasant to people from Tulsa.  Or Tulsa residents don't have to pay the extra bag fees.

Ooh! I have an idea, perhaps they could institute a new policy where the staff is required to be pleasant and helpful to all customers.  Of course they would probably have to negotiate with the union to push that one through and it would cost billions in concessions.

ORD?

The ticket and gate agents aren't unionized, Gas. 

Remember the days when flying was a special event?  You know, back when we had stewardesses and decent food on the flights.  Of course, that was before deregulation when the evil gummint set the prices for air travel.  If you want friendly service, charter a jet.  Otherwise, if you want WalMart ticket prices, expect WalMart service.

Ronald Reagan deregulated the airlines. I agree with you.

$700 is not a cheap ticket, to get to Birmingham and back. If I'm paying $350 a flight I expect amazing service. If I'm paying $10 a flight they should still be friendly.

Some interesting articles outside of TUL/DFW...........

http://www.azcentral.com/business/articles/20120823us-airways-inches-toward-merger-deal.html (http://www.azcentral.com/business/articles/20120823us-airways-inches-toward-merger-deal.html)

http://www.azcentral.com/business/articles/2012/08/06/20120806iag-eyes-stake-american-airlines.html (http://www.azcentral.com/business/articles/2012/08/06/20120806iag-eyes-stake-american-airlines.html)

http://www.cnbc.com/id/48690018 (http://www.cnbc.com/id/48690018)

http://www.azcentral.com/business/articles/20120705us-airways-chief-says-merger-delay-ok.html (http://www.azcentral.com/business/articles/20120705us-airways-chief-says-merger-delay-ok.html)

]http://www.azcentral.com/community/tempe/articles/2012/07/25/20120725american-ceo-bashes-us-airways-calls-desperate.html] (http://www.azcentral.com/community/tempe/articles/2012/07/25/20120725american-ceo-bashes-us-airways-calls-desperate.html)

http://www.azcentral.com/business/articles/20120711merger-dance-rating-american-airlines-options.html (http://www.azcentral.com/business/articles/20120711merger-dance-rating-american-airlines-options.html)

http://www.azcentral.com/business/articles/2012/08/17/20120817american-seeks-again-cancel-pilots-contract.html (http://www.azcentral.com/business/articles/2012/08/17/20120817american-seeks-again-cancel-pilots-contract.html)

http://www.azcentral.com/business/articles/20120823pilots-american-airlines-plan-strike-vote.html (http://www.azcentral.com/business/articles/20120823pilots-american-airlines-plan-strike-vote.html)

And from other articles that I will find, the proposed joint operations will be based out of Alliance Ft. Worth, that operations in Phoenix/Tempe will cease and be moved to  Alliance.

The service represents the culture. Those who work in customer service fields know that the customers are more arrogant, less tolerant and more demanding than ever before while the average customer service employee is making less and less money for dealing with them. It has become an adversary relationship. Many of these customers aren't even paying for the flight, their employers are, which makes the argument about cost pretty irrelevant. If you're paying for it and aren't happy with the cost, do what we all did before commercial jet service: cars, buses, railroads. That would keep the airline services mostly commercial, special events, wealthy and elite...like it used to be before de-regulation.

When the pay is so low, and the customers so nasty, its easy to just reflect their behavior or find another dead end, low pay job. Not saying its right, because its not, just reporting what I've seen.

I now believe the sky is falling. Gaspar and I agree on something...

Reagan probably would have, had it not already happened under President Carter in 1978.

I was wrong. My bad.

Reagan deregulated and broke up the phone company. I was confused,

Yes, I remember it well. The anti-business, big government democrat de-regulated an entire industry, thus introducing competition, lower prices and jet travel to the masses, while the anti-labor republican put us all at risk by firing air traffic controllers who were replaced with less capable, overworked employees thus ushering in a whole new era of overworked, underpaid service employees. The golden years.

My favorite saying I heard from a small businessman under Reagan...."If you paid taxes this year you need to fire your accountant".

I thought "the Contract" was Gospel for organized labor.  I remember there being a no strike clause in the Air Traffic Controllers' contract but they went on strike anyway.  The Controllers broke the contract.

You're right about the no strike provision for air traffic controllers, Red.  They went on strike anyway because their management wasn't interested in negotiations.  Why should they when the controllers had to stay on the job regardless?  When the controllers walked, they all lost their jobs. 

Pennsylvania once had a law forbidding teacher strikes, and just like the FAA, the local school boards would draw out negotiations knowing that the teachers were over a barrel.  Then one district walked out and the state threatened to jail the union leaders.  Their response was essentially, "Go ahead, but then who's going to teach your kids?"  Shortly afterward the law was thrown out.

Now the pilots at AA are threatening a strike in contravention of the Railway Labor Act that governs all of us.  None of us can strike until there's a long, drawn out process that involves negotiation, arbitration, an offer of mediation, and finally, a release from the National Mediation Board. It's as stylized as kabuki theater. The pilots have been in 'negotiations' with AA since 2007 or 2008, I think.

But under the RLA, it's illegal for the pilots to strike.  They did this once before, going out on strike for nearly 4 minutes during the Clinton administration.  At 12:04 AM, after a midnight strike deadline, he ordered them back to work.  The pilots union was fined millions of dollars, more than the union had on hand, in fact, and that had an enormous effect on subsequent negotiations.   

What happened to the law that after the membership voted to strike there was a 30 day cooling off period before the strike vote become effective?

That's part of the Railway Labor Act and here's how it works in a nutshell:

First, the parties must negotiate.  They can negotiate for years.  If there's no agreement, they can ask for a mediator. If he can't get the parties to agree, they can ask for binding arbitration.  It's almost always refused because both parties have to agree to bring in an arbitrator. If they still can't agree, one or both parties can ask the National Labor Relations Board to release them for 'self help'. If the NLRB releases them, they enter that 30 day cooling off period, at the end of which, the union is free to strike and the company is free to impose new work rules.  Of course, if they do strike, the President can declare a transportation emergency and order them back to work.

Assuming that by the posting you have in the past defended or represented the unions.  You are well versed on the long drawn out requirements that must be carried out, unless a wild cat strike interferes, it protects the employees from missing pay checks that in some cases takes years to regain their losses.   

The United States Conciliation Service was established to bring all affected parties to the table and help them to negotiate in good faith with clean hands. 
     
Since the days of John L Lewis and his coal miners some of the strikes have become violent.  Some of the columnists looking over their shoulders are suggesting we have slipped into a depression.  Like the great depression unions and management led to violence and violence bred violence.     

The present negotiations under way are the results of a divided table and greed on both sides whereas they believe the City is the “cash cow” that can be milked at will.  We cannot hang the sword of David over our heads with a hair forever.   

I like pipe unions.  I wish there were one more in the gas line to the house heater.  It would make it a lot easier to change out the well tank.  ;D

You can get a slip joint union that you only have to saw the pipe and put the union it and tighten it.

I don't want to do any sawing. I just want to disconnect and reconnect.  Fortunately, I think I can tilt the new water tank to get it in place. I certainly hope so since I already bought it today at Attwoods.

I cannot believe the founding fathers ever intended for the governing bodies to tell the citizenry that “We are going to tax you millions of dollars in a bouncing economy.   We will reserve millions of dollars for us to be used as a slush fund.  Now if you approve we will let you buy things with any left over.”

The raising of tax money was reserved to the voters to benefit the quality of life and common defense instead of taxing the population for government’s personal follies.  It has been the intent for the citizen to institute the taxing measures to improve the livelihoods of the society as a whole not in the reversal as being ask of the voters “How d0 you want to spend the tax money?”   

I've really been wanting to ask if you're Ming the Merciliess in your avatar.

Sorry, back to the regularly scheduled 'huh'?

Somehow, I manage not to have a problem with the way most of the airport money is being spent based on the document posted earlier. If the buildings and pavement really are in need of refurbishment, have at it, I say. No sense in being a slumlord. If we don't want to keep it up, we should sell it. I'm having a little more trouble with buying equipment for AA, but I understand that's how the arrangement already works. What I really don't like is the part about possibly paying for the equipment and then having ownership pass to the tenants after a period of years. If they want to own it, they should buy it.

It's the rest of it that I'm having more trouble wrapping my head around. More details would be nice.

_________________________________________________________________________________
Negative; just a devils’ advocate reacting to the information being distributed by the elite to the helpless poor who see the days of the Gentile as being fulfilled in the '40's.     

(http://www.cmt.com/shared/media/images/amg_covers/200/drd100/d110/d110393dj8n.jpg)

Gleason said it best. "And away we go!"

Wow...that was actually a rhetorical question.  But...OK....

The bankruptcy judge, in a precedent rule of the court, in the court finding the AA can nullify the contract with their pilot’s, allowing entering a new field to negotiate with other sources.  This will open a can of worms with the manage/labor cooperation among all the unions now in jeopardy, shows how the corporations of America are going be on a “bust the unions” rampage. 

These contracts are signed in good faith and when such can be broken by a single person then the working poor is being push further into poverty.   It is a sad day for them and a day to celebrate for corporate America.           

http://www.kjrh.com/dpp/news/local_news/bankruptcy-ruling-expected-wednesday-for-american-airlines

Ed, any more you can disclose on this?  Or do you know anything yet?

It is said that Tulsa has nearly as any jobs as their total population.  By the traffic on the expressways in the mornings, there seem to be many coming into the city to work.  Since AA is touted as the major employer is there any information as to the percentage whose residence is outside the county/city area?  Since the Burbs are duplicating the retail markets once exclusive to Tulsa, by the rule of the thumb sales tax will decrease. 

Inflation increases cash such as when a $100,000 dollar average house inflated to $140,000 dollars you increase the cash flow as the feds increase dumping money into the lenders coffers and added the economy shows increases the GDP.  Was it GM that closed its plant in OC after the perks ran out? 

Before the citizens of Tulsa are committed for the next 17 years lets leave it lie on the table for those emergencies that the bonding statutes were enacted for. 

I know this is the Tulsa Now forum and not the Jenks, Bixby, BA, Owasso, Sand Springs, Sapulpa Forum.  However, a case could be made that Tulsa used to have an unfair monopoly on the retail market, robbing the surrounding communities of their rightful sales taxes.

that's a ridiculous assumption.  Retail uses are dictated by demand. All those surrounding  town s had retail uses.

So the pilots and their union are trying to inflict further problems between AA and the flying public.

http://video.cnbc.com/gallery/?video=3000117695&play=1 (http://video.cnbc.com/gallery/?video=3000117695&play=1)




http://www.cnbc.com/id/49124783 (http://www.cnbc.com/id/49124783)

http://articles.latimes.com/2012/sep/21/business/la-fi-american-airlines-20120921 (http://articles.latimes.com/2012/sep/21/business/la-fi-american-airlines-20120921)

Yes, some of the pilots have (apparently) been refusing to fly when anything is broken, rather than merely consulting the MEL and finding that having a seat out of service is not in fact a safety issue. That and taxiing very, very slowly. At least that's what people are saying. It's made for an interesting couple of weeks for SWMBO.

30 years ago the thought of a Lowes or Reasor's within Bixby city limits was ridiculous.  There were the little mom and pop stores of course but I don't think Tulsans are/were worried about the sales tax those kinds of places were taking.

I thought you were a developer then??  You know how anemic retail was in those towns.  All small mom and pop's like Red said.  And while there was support from the local population, when someone got "serious" about shopping, they went to town - Tulsa.  ALL of the little towns around experienced that.  Owasso, from personal experience - small department store on Main street - within pennies of the same prices for the same items at the big stores in Tulsa (often lower) - yet people would drive to Tulsa to shop.

Well there's your problem right there.

http://newyork.cbslocal.com/2012/10/01/american-airlines-flight-makes-emergency-landing-at-jfk-after-row-of-seats-come-loose/

“Safety is our top priority,” American Airlines spokesperson Matt Miller said in a statement. “We never have – and never will – compromise the safety and reliability of our fleet.”

"our feet", I think he meant "feet."

 ;D

From the Airline Biz Blog at the Dallas Morning News.  This is an excellent source of breaking news in the industry:

On the item just below this, we noted the story about an American Airlines Boeing 757 jet out of Boston that was diverted to New York Kennedy on Saturday because a row of seats was loose.

Now, we understand, American has found another airplane with a loose set of seats.

The first one had recently undergone a maintenance overhaul at a third-party vendor in North Carolina. The other one had undergone maintenance out of American’s Tulsa base.

American now thinks there might be a problem with the mounting system on some 757 coach seats. Here’s a Monday afternoon statement from American:

“An initial internal investigation into why a row of seats became loose on an American Airlines Boeing 757 bound from Boston to Miami on Saturday has indicated that there could be a possible issue with a certain model of seats and how they fit into the tracking used to secure the seats.

“Out of an abundance of caution, American has decided to proactively reinspect eight 757s today that could possibly have this same issue. The seats were installed by American maintenance and contract maintenance. The issue does not seem to be tied to any one maintenance facility or one workgroup.”

Again, we’re told, the seats hadn’t come free from the floor, but weren’t firmly held down in their tracks. They were loose, not free.

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

Glad I don't sit in coach.  ;D

And then the "uh oh" alarm sounds...

AP: American Airlines' Loose Seats Traced To Airline's Tulsa Maintenance Base

http://www.newson6.com/story/19707846/american-airlines-loose-seats-traced-to-tulsa-maintenance-base
 (http://www.newson6.com/story/19707846/american-airlines-loose-seats-traced-to-tulsa-maintenance-base)

Part of their new cost saving measures:

As a cost-cutting measure American Airlines now outfitting their planes with folding chairs. Pick yours up at gate before you board. Unfortunately the folding chair is considered an extra bag and you will be expected to pay a $25 fee.

Was I to make such a post like that it would go over like a lead balloon crash and reported by seismograph as an earth quake. A little humor does keep people awake..

It would be of interest to how much AA pays on their lease and how much was paid on a “Finders Fee” to recruit AA to open the aircraft repair.

Douglas offer it seems like was 7 million for the building to be used in continuing to manufacturing airplanes.  Had Douglas purchased the building it would have produced the jobs and with their vested interest the city would have saved millions.