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US Seeks Court Order To Cut Pay 23%  
User currently offlineDLKAPA From , joined Dec 1969, posts, RR:
Posted (9 years 10 months 1 week 5 days 7 hours ago) and read 3907 times:

Sorry if I'm a little late with this one, but this can't be good.

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=6327447&src=rss/businessNews§ion=news

41 replies: All unread, showing first 25:
 
User currently offlineZvezda From Lithuania, joined Aug 2004, 10511 posts, RR: 64
Reply 1, posted (9 years 10 months 1 week 5 days 7 hours ago) and read 3879 times:

Let's hope 23% is sufficient.

User currently offlineContrails From United States of America, joined Oct 2000, 1833 posts, RR: 0
Reply 2, posted (9 years 10 months 1 week 5 days 6 hours ago) and read 3847 times:

It'll be enough, after management has laid off 10,000 employees, cut a third of their routes, and sold/leased/whatever a few dozen aircraft.

I sympathize with all the US employees out there.



Flying Colors Forever!
User currently offlineOkie From United States of America, joined Jul 2003, 2989 posts, RR: 3
Reply 3, posted (9 years 10 months 1 week 5 days 6 hours ago) and read 3827 times:

It may be just more sword rattling for leverage or US is just going to jump in and use the court to bypass negotiations.

In either case the management at US is trying to force the situation to a quick resolve.

I do not want to take sides here but from the outside of the pay issue looking in there does seem to be some foot dragging going on.

The down side of the court stepping in would be that the bankruptcy judge would be sole decision maker and could set a precedent for future bankruptcies involving other airlines (DL comes to mind) and take the employees and their unions out of the loop.

Okie


User currently offlineFlaps From United States of America, joined Feb 2000, 1261 posts, RR: 4
Reply 4, posted (9 years 10 months 1 week 5 days 6 hours ago) and read 3767 times:

Who is the judge?

Most wont automatically circumvent the union contracts. Although they may do so it wont be done arbitrarily as labor still has a great deal of political influence, espicially in the run up to a presidential election. I expect this one to get very close and careful scrutiny. Above and beyond the usual scope.


User currently offlineJc2354 From United States of America, joined May 2004, 572 posts, RR: 0
Reply 5, posted (9 years 10 months 1 week 5 days 5 hours ago) and read 3729 times:

Does anyone know the salaries, benefits, golden parachutes, of the senior management at US Air? Are they taking at least a 23% paycut as well?


If not now, then when?
User currently offlineBENNETT123 From United Kingdom, joined Aug 2004, 7480 posts, RR: 3
Reply 6, posted (9 years 10 months 1 week 5 days 5 hours ago) and read 3711 times:


Assuming that the court goes along with this, how will US pay levels compare with other airlines.

Unless US has been paying well above the norm, I suspect that a lot of CV's are being typed up as we speak.

I also suspect that this is going to impact on morale and customer service unless the Chiefs are taking the strain as well.


User currently offlineDLKAPA From , joined Dec 1969, posts, RR:
Reply 7, posted (9 years 10 months 1 week 5 days 4 hours ago) and read 3682 times:

I also suspect that this is going to impact on morale and customer service unless the Chiefs are taking the strain as well.

Doubt it.


User currently offlineSupa7E7 From , joined Dec 1969, posts, RR:
Reply 8, posted (9 years 10 months 1 week 5 days 2 hours ago) and read 3597 times:

According to usairways.com, they have 22 people at VP level and above. Let's say they all make as much as Bruce Lakefield, who makes $400,000. That brings us to $8.8 million a year. The real total is probably lower, obviously.

US Airways has 3,328 pilots. Let's say they make on average $100,000. Of course, mainline pilots all make more than that. Anyway, that adds up to $332 million yearly, not including pension payments, which non-union people do not have.

Using the most conservative estimate possible, pilot pay is 37.8 times higher than corporate officers.

Where do you think money can be saved?


User currently offlineFlyf15 From , joined Dec 1969, posts, RR:
Reply 9, posted (9 years 10 months 1 week 5 days 2 hours ago) and read 3586 times:

No actually Supa, it looks like (using your example) that corporate officer pay is 4 times that of pilots.

With 22 pilots...and airline isn't going to get anywhere.


User currently offlineSonOfACaptain From United States of America, joined May 2004, 1747 posts, RR: 6
Reply 10, posted (9 years 10 months 1 week 5 days 1 hour ago) and read 3543 times:

Let's say they make on average $100,000. Of course, mainline pilots all make more than that.

Well after this pay cut, we can't say that anymore. Pretty soon US pilots are going to be paid high salary regional jet pay.

-SOAC



Non Illegitimi Carborundum
User currently offlineA330323X From United States of America, joined Oct 2003, 3039 posts, RR: 44
Reply 11, posted (9 years 10 months 1 week 5 days ago) and read 3516 times:

I find it very interesting to note that the TWU-Dispatchers, who reached a consensual agreement with the company, are only facing a 10.3% cut in wages.

Who is the judge?

Most wont automatically circumvent the union contracts. Although they may do so it wont be done arbitrarily as labor still has a great deal of political influence, espicially in the run up to a presidential election. I expect this one to get very close and careful scrutiny. Above and beyond the usual scope.


The judge is Hon. Stephen S. Mitchell, the same judge US had for its first bankruptcy. He has a record of being quite friendly to US.

Also, note that this is an 1113(e) motion, which is a temporary, emergency motion. After getting this relief, US will still need to negotiate permanent agreements with the unions. If they can not negotiate permanent agreements, then they will file a 1113(c) motion for permanent relief, which is much more difficult to get.

Does anyone know the salaries, benefits, golden parachutes, of the senior management at US Air? Are they taking at least a 23% paycut as well?

Bruce Lakefield makes $425,000. He claims to not have a golden parachute.

I don't know about senior management, but general low- and mid-level non-union management employees are rumored to be taking about a 15% cut in wages.



I'm the expert on here on two things, neither of which I care about much anymore.
User currently offlineA330323X From United States of America, joined Oct 2003, 3039 posts, RR: 44
Reply 12, posted (9 years 10 months 1 week 5 days ago) and read 3502 times:

Also, in addition to the wage cuts, I understand the 1113(e) motions will also:

Eliminate the 279 minimum active mainline fleet count;

Provide for outsourcing of covered work in the event of a union slowdown or sickout or mass retirement (this is just begging to be abused);

Allow US to outsource heavy maintenance on the A330 to the extent it is not already permitted to do so (this indicates that US expects to lose the A32X arbitration ruling next week).

The 1113(e) motions will NOT provide for out-of-seniority furloughs.



I'm the expert on here on two things, neither of which I care about much anymore.
User currently offlineA330323X From United States of America, joined Oct 2003, 3039 posts, RR: 44
Reply 13, posted (9 years 10 months 1 week 4 days 17 hours ago) and read 3366 times:

US AIRWAYS FILES MOTION FOR INTERIM RELIEF UNDER SECTION 1113 (e)

Company seeks to build cash for slow winter season
but will continue to negotiate with unions pending Court ruling

ARLINGTON, Va., Sept. 24, 2004 -- US Airways Group, Inc. today filed a motion seeking interim relief from the company’s collective bargaining agreements with the Air Line Pilots Association (ALPA), Association of Flight Attendants (AFA), Communications Workers of America (CWA), International Association of Machinists and Aerospace Workers (IAM), and certain units of the Transport Workers of America (TWU), under Section 1113(e) of the U.S. Bankruptcy Code.

The motion was filed with the U.S. Bankruptcy Court for the Eastern District of Virginia, which is overseeing US Airways’ Chapter 11 restructuring.

In its motion, the company emphasized that the request for interim relief is made in order to maintain US Airways as a going concern and “preserve approximately 34,000 jobs, preserve air service to hundreds of communities, build the cash reserves needed for the winter, give customers comfort that there is adequate cash for continued operations, and ultimately, avoid the threat of liquidation.”

“We have had constructive discussions this past week with all of our labor groups and we will continue to seek consensual agreements with our unions, pending the Court’s ruling on the motion,” said Bruce R. Lakefield, US Airways president and chief executive officer. “Nevertheless, we must move quickly to secure cost reductions, build cash reserves and send the signal to our financial partners and our customers that we will actively manage this restructuring and not allow the company to be swept up in speculation about our future.”

The interim relief request seeks $38 million per month in cost reductions from labor groups, effective immediately upon the Court’s approval. In addition, US Airways will implement capital expenditure reductions and a series of actions to be announced shortly to reduce non-labor and management costs and generate an additional $5 million per month of savings. These actions do not require court authorization.

US Airways told the court that it meets the “irreparable harm” standard for interim relief and must secure cost savings immediately because financial projections show that in order to avoid a cash crisis in early 2005, it must accrue roughly $200 million in additional cash.

“Over the next six months, we will be faced with significant aircraft lease payments, the traditional seasonal slowdown in both business and leisure travel, and the likely sustained impact of high fuel prices. Waiting for a cash crunch to be right in front of us is simply too late, and if we were forced to implement interim relief at a later date, the pay cuts would be deeper and even more painful. While I don’t relish asking US Airways employees to make sacrifices, securing this short-term relief while we continue to negotiate new permanent labor agreements will allow us to complete an orderly restructuring and implementation of our Transformation Plan,” said Lakefield.

US Airways is the nation’s seventh-largest airline, serving nearly 200 communities in the U.S., Canada, Europe, the Caribbean and Latin America. US Airways, US Airways Shuttle and the US Airways Express partner carriers operate over 3,300 flights per day. For more information on US Airways flight schedules and fares, contact US Airways online at www.usairways.com, or call US Airways Reservations at 1-800-428-4322.



I'm the expert on here on two things, neither of which I care about much anymore.
User currently offlineA330323X From United States of America, joined Oct 2003, 3039 posts, RR: 44
Reply 14, posted (9 years 10 months 1 week 4 days 17 hours ago) and read 3361 times:

The motion is available at http://www.transformingusairways.com/html/pdf/media/Motion.pdf.

Everything is as I expected it, except the IAM-Mechanics motion has been changed from the first version. Now, US is permitted to outsource heavy maintenance on both the A330 and the A32X to the extent it is not already permitted to do so. It's yet another sign that US expects to lose the A32X arbitration ruling next week. It's just a shame that the only satisfaction the IAM will get out of it will be knowing that they were right all along.



I'm the expert on here on two things, neither of which I care about much anymore.
User currently offlineAirframeAS From United States of America, joined Feb 2004, 14150 posts, RR: 24
Reply 15, posted (9 years 10 months 1 week 4 days 17 hours ago) and read 3353 times:

Look at it this way: At least the court order is to cut pay, not jobs. I think thats pretty fair. This should be the LAST time US ever asks for cut in paychecks. If they ask for it again then I think the employees should say no. US has probably gone too far in asking for pay cuts. Sooner or later, the employees might be working for free....which would suck.


A Safe Flight Begins With Quality Maintenance On The Ground.
User currently offlineDeltaAgent1 From United States of America, joined Feb 2004, 104 posts, RR: 2
Reply 16, posted (9 years 10 months 1 week 4 days 17 hours ago) and read 3342 times:

I'm sure our pilots at DL are watching this unfold with interest.

User currently offlineChock2throttle From United States of America, joined Aug 2004, 25 posts, RR: 0
Reply 17, posted (9 years 10 months 1 week 4 days 17 hours ago) and read 3338 times:

Not good news for US. The airlines are about to enter the winter months in the USA. Fuel prices have just recently risen AGAIN. Winter operations require much more care, including De-Icing. If you don't know, Type one propylene glycol (De-Ice) fluid costs nearly $5USD a gallon. This and the added fuel cost, and this recent announcement spell disaster for US. IMO.

User currently offlineAirframeAS From United States of America, joined Feb 2004, 14150 posts, RR: 24
Reply 18, posted (9 years 10 months 1 week 4 days 17 hours ago) and read 3331 times:

I'm sure our pilots at DL are watching this unfold with interest.

oh, Im sure. The DL pilots are the only ones who has not contributed to their own airline while the other workgroups have had although they are not unioned dont have much of a choice/control over that.

Ive said this before and Im going to say it again and will keep saying this over and over:

"The glitter and glam of being a high paid pilot in the 60s-80s, those days are over. Times change, expecially post 9/11, pilots need to make lifestyle adjustments including pay rate changes. Welcome to 2004!"

Take a pay cut or you'll be out of a job, wandering out on the streets living in some cardboard box because you rejected the companies latest proposal. You snooze, you lose. Plain and simple.



A Safe Flight Begins With Quality Maintenance On The Ground.
User currently offlineDeltaAgent1 From United States of America, joined Feb 2004, 104 posts, RR: 2
Reply 19, posted (9 years 10 months 1 week 4 days 16 hours ago) and read 3322 times:

AirframeAs, from the standpoint of a DL employee who would do just about anything for the company, I do hope the bankruptcy judge in the case of US
does give US the pay reduction on a permanent basis.
Plain & simple-our pilots are the most "underworked" & "overpaid" service workers in the industry.


User currently offlineAirframeAS From United States of America, joined Feb 2004, 14150 posts, RR: 24
Reply 20, posted (9 years 10 months 1 week 4 days 16 hours ago) and read 3316 times:

Plain & simple-our pilots are the most "underworked" & "overpaid" service workers in the industry.

Well, thats going to change...just watch! Its going to be overworked and underpaid, then the DL pilots will have something to really complain about.



A Safe Flight Begins With Quality Maintenance On The Ground.
User currently offlineSydscott From Australia, joined Oct 2003, 2930 posts, RR: 20
Reply 21, posted (9 years 10 months 1 week 3 days 19 hours ago) and read 3155 times:


"Allow US to outsource heavy maintenance on the A330 to the extent it is not already permitted to do so (this indicates that US expects to lose the A32X arbitration ruling next week).

THis would also give US a starting point for layoffs as more outsourced maintenance = less required company workers.

"Does anyone know the salaries, benefits, golden parachutes, of the senior management at US Air? Are they taking at least a 23% paycut as well?"

Quote from the motion filing;

"The debtors have already made, and continue to make, significant permanent reductions with respect to management and administrative employees. They have begun to implement a program of cost savings of approximately $40 million annually. Management and administrative payroll is projected to be significantly further reduced over the next 30 days."

So let us not criticise US management for not taking a hit as well.


User currently offlineUAL747DEN From United States of America, joined Dec 2003, 2392 posts, RR: 11
Reply 22, posted (9 years 10 months 1 week 3 days 18 hours ago) and read 3145 times:

I see a lot of people on here that don't understand business at all. Most of you are complaining about the so called "Golden parachute" that the upper executives have. The reason that executives have these deals is because if they didn't there would be no skilled execs working for US. No one wants to work for a company that is not doing well and when you are a high level executive you have your choice of multi million dollar companies to go work for so US has to offer the "GP" before they will even conceder US. If they decided to save that money they would have a lot of employees with nothing to do because there would be no management.


/// UNITED AIRLINES
User currently offlineA330323X From United States of America, joined Oct 2003, 3039 posts, RR: 44
Reply 23, posted (9 years 10 months 1 week 3 days 18 hours ago) and read 3133 times:

"Allow US to outsource heavy maintenance on the A330 to the extent it is not already permitted to do so (this indicates that US expects to lose the A32X arbitration ruling next week).

THis would also give US a starting point for layoffs as more outsourced maintenance = less required company workers.

Actually, if you read the 1113(e) motion, the relevant language reads "to the extent not already permitted under the terms of the basic agreement between the parties, a provision permitting the Company to outsource all heavy/base maintenance activities on all Airbus narrow-bodied and wide-bodied aircraft, provided that no mechanic and related employees will be furloughed as a result of the outsourcing". Common sense also applies here--US does not currently conduct (and has not ever conducted) Airbus heavy maintenance, so outsourcing it should not result in furloughs, as there are not workers presently dedicated to the work.

There will no doubt be furloughs as part of any future permanent IAM agreement or 1113(c) motion, but let's not make this seem any worse than it already is.



I'm the expert on here on two things, neither of which I care about much anymore.
User currently offlineSydscott From Australia, joined Oct 2003, 2930 posts, RR: 20
Reply 24, posted (9 years 10 months 1 week 3 days ago) and read 3079 times:


"There will no doubt be furloughs as part of any future permanent IAM agreement or 1113(c) motion, but let's not make this seem any worse than it already is."

"This would also give US a starting point for layoffs as more outsourced maintenance = less required company workers."

Actually I wasn't talking about furloughs. Definition of furlough is "to allow or force someone to be absent temporarily from work." I was talking about permanent reductions in the numbers of maintenance employees especially if the IAM and Management can't learn to live, or talk, with one-another. It wont happen now as part of this motion, but it should happen as part of the final business plan if US survives that far into the future. I have no doubt that the IAM wont like the 23% pay cut either if the Court allows it!!!

As a side item if US doesn't get the $800m it wants from the Unions I read in the footnote that "The Debtors presently anticipate that any 1113 (c) proposals made to the unions in Chapter 11 will seek over $950 million in total labor cost savings measured on a 2004 "status quo" basis." So US already has its fallback position ready to file when/if negotiations fail.


25 NKP S2 : A33032X: "US does not currently conduct (and has not ever conducted) Airbus heavy maintenance" They do the A330's. It's currently performed in-house.
26 NIKV69 : I wish US would do the honorable thing and go under. Why are they trying to get a judge to force the help to give more? It will not work. The employee
27 A330323X : US does not currently conduct (and has not ever conducted) Airbus heavy maintenance They do the A330's. It's currently performed in-house. Sorry if I
28 Aa717driver : Airframe--Delta pilots haven't "contributed". You can spin that any way you want but none of the other work groups "contributed". They are non-union a
29 Sydscott : "Why are they trying to get a judge to force the help to give more? It will not work. The employees have given enough." US wants to be a low cost carr
30 Aa717driver : Sydscott--That is my point. The unions are right to look skeptically at the "plan" because it doesn't add up. The company will still be woefully ill-e
31 Sydscott : "The unions are right to look skeptically at the "plan" because it doesn't add up." The plan doesn't add up because the cost base isn't there yet. La
32 AirframeAS : Airframe--Delta pilots haven't "contributed". You can spin that any way you want but none of the other work groups "contributed". Thats right! The DL
33 Boeing7E7 : Good God this airlilne needs to die. Enough is enough. LIQUIDATE ALREADY! Sometimes a time comes where it's just time to go. That time has come.[Edite
34 Post contains links A330323X : Judge Mitchell has granted US Airways' request for an expedited hearing on the 1113(e) motion. The hearing will take place Thursday, October 7. There
35 Post contains images 7E72004 : I don't want to see US fail, but i think (in my opinion) that they are going to end up liquidating.
36 Moman : I agree with 7E72004. I don't see any way that US can be a low cost carrier. The company does not appear to be dynamic enough to survive. Too bad for
37 7E72004 : I wonder if US would have the problems it has if they did not merge with Piedmont...i know the merger was in 1989 but one just has to wonder.
38 Moman : I've read once that most of US's problems come from poor integration from the Allegheny/Mohawk?/Piedmont mergers. Moman
39 ACAfan : FROM THE TEXT OF THE DOCUMENT: 4. This is truly “stop-gap” relief that will only address the Debtors’ immediate cash crisis. The proposed modifi
40 AirframeAS : "Just keep swimming, just keep swimming, just keep swimming swimming swimming" They can keep swimming...but if its a long long swim...sooner or later
41 A330323X : I've read once that most of US's problems come from poor integration from the Allegheny/Mohawk?/Piedmont mergers. While I don't necessarily agree with
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