David T From Canada, joined Nov 2001, 210 posts, RR: 0 Posted (9 years 3 months 4 weeks 1 day 10 hours ago) and read 1809 times:
Here's an interesting topic for 0248, Tuesday morning due to a lack of sleep and my temporary cold!
Mr. Gerry Schwartz made an unsolicited bid to buy Air Canada and Air Canada had no choice but to defend themselves. AC was largely backed into a corner and the only way out was a clever counter bid which included a bankrupt (not official, but close enough) airline which they did want as a whole along with the enormous DEBT which came with Canadian. Largely it was the servicing of the debt, unprepared management joining both airlines, union issues, customer service issues, lesser with the sad day of Sept. 11, etc which has landed AC in the difficult times they are in. AC says they will be leaner and meaner, but lets face it, that's putting a bright face on something that you were forced into.
Why is Mr. Schwartz not held more accountable for his actions?
Why doesn't AC file a MASSIVE law suit against his company?
Why didn't AC's legal minds not interpret properly that the initial bid would be tossed out by a provincial judge anyway. (Sorry, can't remember if Mr. Schwartz did a counter offer which was subsequently tossed...?)
Needless to say, we cannot predict whether AC would have entered protection with or without Mr. Schwartz's meddling, but we can safely say that unless a Canadian suitor did not come along and buy Canadian very soon, it would have collapsed entirely. (You can't go 10 years with annual losses and expect to emerge from bankruptcy, Canadian was doomed)
So, at the end of the day, AC feels they have no choice but to possibly do business with Mr. Schwartz and his interest in Aeroplan, the airline suffers daily and Mr. Schwartz continues to buy out sections of his Toronto neighborhood so he a his CHAPTERS owner wife can build a bigger house! (Yes, I have boycotted Chapters as a result)
OK... Time to hit the 'ole sack... Pleasant dreams Mr. Schwartz, enjoy your front row seats at the Rapters game while honest working Air Canada employees don't know where there next pay check may come from!
David T From Canada, joined Nov 2001, 210 posts, RR: 0 Reply 2, posted (9 years 3 months 4 weeks 1 day 9 hours ago) and read 1761 times:
Canuckpaxguy: I think the point is that I opened several questions if anyone would like to take a stab, perhaps having some legal airline background may assist in the answers? Perhaps hear from AC employees on their view regarding what got them to this point. Should Mr. Schwartz be under greater scrutiny then what he is today?
Have we overlooked Mr. Schwartz as a key ingredient to what put Air Canada in the place it is today?
Yyz717 From Canada, joined Sep 2001, 15989 posts, RR: 59 Reply 3, posted (9 years 3 months 4 weeks 1 day 8 hours ago) and read 1742 times:
Have we overlooked Mr. Schwartz as a key ingredient to what put Air Canada in the place it is today?
No.
AC is the author of its own misfortune from incompetent mgmt to militant unions. Gerry Schwartz did not force AC to then buy CP to defend itself. The purchase of CP by AC was voluntary and just one of a string of strategic errors that Milton is now famous for. It just happened to be coincidental to GS's offer to buy both airlines together.
If there are any lawsuits in the offing, it should be from the millions of investors who saw their AC common stock wiped out by Milton's incompetence and the BoD's ineffectiveness.
Panam, TWA, Ansett, Eastern.......AC next? Might be good for Canada.
YOW From , joined Dec 1969, posts, RR: Reply 4, posted (9 years 3 months 4 weeks 1 day 6 hours ago) and read 1699 times:
Have we overlooked Mr. Schwartz as a key ingredient to what put Air Canada in the place it is today?
Gerry Schwartz is not the cause of AC's misfortunes. Like Yyz717 said, it's the result of poor management decisions. Over the past year, having personally asked several AC employees the question at several different stations across the country "Would AC have been better off with Schwartz taking over AC?" most have said yes, especially original AC employees. Now I know the dozen or so employees I've posed this question to doesn't necessarily reflect the sentiments of 30,000 employees, but it sure is an interesting trend.
Yyz717 From Canada, joined Sep 2001, 15989 posts, RR: 59 Reply 5, posted (9 years 3 months 4 weeks 1 day 3 hours ago) and read 1656 times:
"Would AC have been better off with Schwartz taking over AC?"
I argue yes. Schwartz would have held Milton accountable, unlike the hapless AC BoD. All of Milton's strategic follies would have been vetted by Onex mgmt prior to implementation.
Panam, TWA, Ansett, Eastern.......AC next? Might be good for Canada.
Whiteguy From Canada, joined Nov 2003, 681 posts, RR: 0 Reply 7, posted (9 years 3 months 4 weeks 1 day ago) and read 1588 times:
As I've said before, the takeover was not voluntary. Thanx to Schwatrz and the deal with the Liberal Government, AC is in the position it is in now. Now most CP people get to keep their jobs with a company they hate, and AC people are losing their jobs. 307 more layoffs for CAW members as of Feb 28/04.
Yyz717 From Canada, joined Sep 2001, 15989 posts, RR: 59 Reply 8, posted (9 years 3 months 4 weeks 21 hours ago) and read 1532 times:
As I've said before, the takeover was not voluntary.
Sure it was. The Federal govt did not have the legislative mandate to dictate ANY takeovers by ANY private sector companies in ANY industry. This would be anarchy.
AC & CP are/were private sector companies run by their mgmt & bod's....the CP takeover was absolutely voluntary. The Feds CAN (and did) dictate no layoff clauses etc....but AC bought CP willingly and lustily.
Panam, TWA, Ansett, Eastern.......AC next? Might be good for Canada.
Goose From Canada, joined Aug 2003, 1840 posts, RR: 17 Reply 9, posted (9 years 3 months 4 weeks 12 hours ago) and read 1479 times:
YYZ717 is correct.... AC's takeover of CP was entirely voluntary. The Feds had little or no leverage over AC to pressure them to take over CP. AC saw opportunity in CP's floundering, and was worried sick about CP finding a suitor in AMR CorpAmerican Airlines..... and having to face a revitalized, reorganized and strong CP within 5 or 10 years.
AC's management figured they could successfully combine the two's market share into a near-monopoly, and then manage their combined debt by aggressively man-handling the market and controlling fare prices. Then, they'd have a liscence to print money, literally.....
.... it didn't work. They didn't count on WestJet and its LCC kin making the gains they did, in such a short span of time. Labour issues proved thorny, and costs ballooned. Then came 9/11........
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