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UPS To Furlough 300 Pilots.  
User currently offlineBoeingfever777 From United States of America, joined Jul 2009, 409 posts, RR: 53
Posted (4 years 7 months 1 week 6 days 1 hour ago) and read 8046 times:

UPS plans pilot furloughs, sees gradual recovery

Bummer grande... Wonder how this will effect their delivery of new 76F's?


Faire du ciel le plus bel endroit de la terre.
18 replies: All unread, jump to last
 
User currently offlineJetJeanes From United States of America, joined Oct 2004, 1431 posts, RR: 1
Reply 1, posted (4 years 7 months 1 week 6 days 1 hour ago) and read 8035 times:

Wow 300 pilots is really quite a few. I wonder if they overhired anticipating more growth after the screwup of The Dhl/Abx loss.


i can see for 80 miles
User currently offlineFXramper From United States of America, joined Dec 2005, 7298 posts, RR: 85
Reply 2, posted (4 years 7 months 1 week 5 days 23 hours ago) and read 7699 times:
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Word is 5X will lose a few thousand managers too in this realignment.

Quoting Boeingfever777 (Thread starter):
Wonder how this will effect their delivery of new 76F's?

It will and it won't be positive.

Quoting JetJeanes (Reply 1):
I wonder if they overhired anticipating more growth

FX might appreciate the bandaid (-5% pay cuts and 4a2b) mgmt gave us to protect jobs now; nah...   


User currently offlinePlaneAdmirer From United States of America, joined Jul 2009, 564 posts, RR: 0
Reply 3, posted (4 years 7 months 1 week 5 days 23 hours ago) and read 7699 times:

The strange thing about this furlough, is that UPS has generally been upbeat in their analyst meeting suggesting the worth to the Great Recession has past. It's time for an analyst to ask a follow up question.

User currently offlinePITrules From United States of America, joined Jun 2000, 3203 posts, RR: 5
Reply 4, posted (4 years 7 months 1 week 5 days 21 hours ago) and read 7405 times:

The pilots of UPS have offered well over $100 million in savings to the company through voluntary measures such as job sharing, leaves of absences, giving up sick time, etc etc. With this move to furlough, UPS is giving up those savings and instead demanding contract concessions in exchange for not furloughing. The company was as profitable last quarter as it was when it signed its current pilot agreement.


Quoting PlaneAdmirer (Reply 4):
The strange thing about this furlough, is that UPS has generally been upbeat in their analyst meeting suggesting the worth to the Great Recession has past. It's time for an analyst to ask a follow up question.

That question is why are they furloughing front line employees when reinstating raises for managers:

"UPS said it is now feeling confident enough to reinstate pay raises for 40,000 employees after freezing management wages in early 2009 for a savings of about $100 million."

Furloughs are not uncommon in the airline industry. But I can't think of any example of a consistently profitable airline initiating a furlough? Maybe I'm wrong; can someone name one?

[Edited 2010-02-08 20:45:16]

[Edited 2010-02-09 17:44:16 by srbmod]


FLYi
User currently offline777STL From United States of America, joined Dec 2004, 3642 posts, RR: 3
Reply 5, posted (4 years 7 months 1 week 5 days 21 hours ago) and read 7390 times:

Quoting PITrules (Reply 5):
But I can't think of any example of a consistently profitable airline initiating a furlough? Maybe I'm wrong; can someone name one?

It happens all the time and not just in the airline industry. Lay offs/furloughs aren't exclusive to companies operating in the red. Plenty of profitable companies use it as a tool to *stay* in the black.



PHX based
User currently onlineFlighty From United States of America, joined Apr 2007, 8541 posts, RR: 2
Reply 6, posted (4 years 7 months 1 week 5 days 21 hours ago) and read 7331 times:

Quoting PITrules (Reply 5):
But I can't think of any example of a consistently profitable airline initiating a furlough? Maybe I'm wrong; can someone name one?

Profitable companies lay people off all the time. But yes, with airline companies it's rarer.


User currently offlinenewark777 From United States of America, joined Dec 2004, 9348 posts, RR: 29
Reply 7, posted (4 years 7 months 1 week 5 days 21 hours ago) and read 7317 times:

Quoting Flighty (Reply 8):
But yes, with airline companies it's rarer.

Probably because a profitable airline is a rarity.



Why grab a Heine when you can grab a Busch?
User currently offlineTommy767 From United States of America, joined Aug 2003, 6584 posts, RR: 8
Reply 8, posted (4 years 7 months 1 week 5 days 21 hours ago) and read 7271 times:

Quoting newark777 (Reply 9):
Probably because a profitable airline is a rarity.

Hey Harry,

How goes it? Good to see you back on a.net. Big coincidence, I just referenced you in the "how does an airline decide on airport clubs" thread because EWR-SLC came up and I remember you took a trip to Utah in high school. IIRC, you said you flew CO over DL and I was a bit surpised by it (or was it the opposite?) Check it out, hope all is well.

--Tommy



"Folks that's the news and I'm outta here!" -- Dennis Miller
User currently offlinenewark777 From United States of America, joined Dec 2004, 9348 posts, RR: 29
Reply 9, posted (4 years 7 months 1 week 5 days 21 hours ago) and read 7239 times:

Quoting Tommy767 (Reply 10):
How goes it? Good to see you back on a.net. Big coincidence, I just referenced you in the "how does an airline decide on airport clubs" thread because EWR-SLC came up and I remember you took a trip to Utah in high school. IIRC, you said you flew CO over DL and I was a bit surpised by it (or was it the opposite?) Check it out, hope all is well.

Doing well, just working, haha. It was actually DL over CO, because CO didn't offer nonstop EWR-SLC, and I believe they still don't.



Why grab a Heine when you can grab a Busch?
User currently offlineBennett123 From United Kingdom, joined Aug 2004, 7610 posts, RR: 3
Reply 10, posted (4 years 7 months 1 week 5 days 15 hours ago) and read 7023 times:

Are those on futlough paid by the airline, (what proportion of normal pay).

Are the airlines compelled to re hire them, do the pilots have the option to go elsewhere?.


User currently offlineFXramper From United States of America, joined Dec 2005, 7298 posts, RR: 85
Reply 11, posted (4 years 7 months 1 week 5 days 13 hours ago) and read 6685 times:
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Quoting Bennett123 (Reply 12):
Are those on futlough paid by the airline

No. A furlough is more like a temporary layoff, which may be due to economic conditions at the specific employer or in the economy as a whole. They prolly get to keep benefits, eg. health insurance.

Quoting Bennett123 (Reply 12):
Are the airlines compelled to re hire them,

Yes.

Quoting Bennett123 (Reply 12):
do the pilots have the option to go elsewhere

Yes.


User currently offlinegoDIA From United States of America, joined Mar 2000, 96 posts, RR: 0
Reply 12, posted (4 years 7 months 1 week 5 days 11 hours ago) and read 6003 times:

Word is 5X will lose a few thousand managers too in this realignment.



I have a friend who is one of those 300 pilots...he was only hired four years ago and has been willing to offer the aforementioned "concessions" to management. He's an Air Force veteran, loads of hours on T-38s, E-3s and C-20s while on active duty, and has been an airline pilot since 1999. Unfortunately, this is the third time he has to deal with a furlough (twice at NW before he took the job at UPS), and he is only 50 from the bottom of the seniority list. Please explain to me how a company that has a VERY profitable year (enough to give bonuses to executives and end pay freezes to 40,000 others) can justify the elimination of these pilots' jobs? How much can this possibly save them?

This is another example of how "cost cutting," "realignment," or "trimming the fat" is not merely an exercise in economics...it affects REAL people and their families. Where are those pilots going to go where they can expect to make even 50% of their current salary? Nobody else in the industry is hiring that much. Executives get bonuses and pilots get furloughed...what a wonderful world.



Military Jet Noise--the Sound of Freedom!
User currently offlinetaxpilot From United States of America, joined Sep 2006, 98 posts, RR: 1
Reply 13, posted (4 years 7 months 1 week 5 days 11 hours ago) and read 5679 times:

Quoting goDIA (Reply 15):
Please explain to me how a company that has a VERY profitable year (enough to give bonuses to executives and end pay freezes to 40,000 others) can justify the elimination of these pilots' jobs? How much can this possibly save them?

They are profitable because they have raised prices, which has cut volume. My business and others have taken their UPS packages elsewhere. Thus, less need for aircraft and pilots. Just business.


User currently offlinerangercarp From United States of America, joined Nov 2009, 144 posts, RR: 0
Reply 14, posted (4 years 7 months 1 week 5 days 10 hours ago) and read 5413 times:

Quoting goDIA (Reply 15):
Please explain to me how a company that has a VERY profitable year (enough to give bonuses to executives and end pay freezes to 40,000 others) can justify the elimination of these pilots' jobs?


Easy. They cut back on routes or frequency due to low volumes. Less flights means they need less pilots fly them. Profitable or not, they are not going to pay people to fly empty planes. And if they did they would not be profitable for long.



iwgbtp!
User currently offlinePITrules From United States of America, joined Jun 2000, 3203 posts, RR: 5
Reply 15, posted (4 years 7 months 1 week 5 days 3 hours ago) and read 2659 times:

Quoting Bennett123 (Reply 12):
do the pilots have the option to go elsewhere?.

Not in this economy

Quoting FXramper (Reply 13):
They prolly get to keep benefits, eg. health insurance.

No benefits or health insurance.

Quoting rangercarp (Reply 16):
Easy. They cut back on routes or frequency due to low volumes. Less flights means they need less pilots fly them. Profitable or not, they are not going to pay people to fly empty planes. And if they did they would not be profitable for long.

The union and the company have previously agreed to address reduced flying and staffing with the aformentioned voluntary programs such as job shareing, etc which would have saved well over $100 million through 2012.

Quoting goDIA (Reply 14):
How much can this possibly save them?

It will cost them. Because of yesterday's decision to furlough, the previous staffing agreement is null and void. So it will cost them over $100 million in savings over the next few years.

It wil cost them severely to reshuffle and retrain remaining pilots to fill the void in ANC. ANC is the most junior pilot base, and removing 300 of the most junior pilots will remove 50-80% of the First Officers there.

It will cost them additionally because there is now an over time ban in effect for the pilots (a legal move per the UPS/pilot agreement), in an effort to bring the furloughees back sooner. Its only been 24 hours, but due to this overtime ban there have already been a handfull of flights out of ANC (to SDF and Asia) which have been severely delayed or not gone out. Anyone want to guess how much revenue is in the back of an Anchorage UPS MD-11 or 744?

By UPS' own admission, they would need to keep the 300 pilots furloughed for 3 years for it to be cost affective. One hell of a gamble considering UPS is not counting on any further economic recovery in that period, not to mention any possible FAR duty limit changes in Congress as a result of the Colgan crash. That is the question analysts and shareholders need to be asking.

So one might ask "Why would they do this?" As stated earlier, it is about long term contract concessions, even if it means increased costs over the next couple years.



FLYi
User currently offlinelightsaber From United States of America, joined Jan 2005, 13124 posts, RR: 100
Reply 16, posted (4 years 7 months 1 week 5 days 1 hour ago) and read 2205 times:
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Quoting FXramper (Reply 3):
Word is 5X will lose a few thousand managers too in this realignment.

Ouch... Not that much of a surprise... Fewer to manage.

Quoting 777STL (Reply 7):
It happens all the time and not just in the airline industry. Lay offs/furloughs aren't exclusive to companies operating in the red.

   I know of quite a few people in that situation today.

Quoting goDIA (Reply 14):
I have a friend who is one of those 300 pilots...he was only hired four years ago

Ouch... I know a pilot hired three years ago... (or was it four?), so it sounds like he'll be hit too!  
Quoting PITrules (Reply 17):
It wil cost them severely to reshuffle and retrain remaining pilots to fill the void in ANC. ANC is the most junior pilot base, and removing 300 of the most junior pilots will remove 50-80% of the First Officers there.

The pilot I know lived near SEA but was based out of ANC.

Quoting taxpilot (Reply 15):
They are profitable because they have raised prices, which has cut volume. My business and others have taken their UPS packages elsewhere. Thus, less need for aircraft and pilots. Just business.

Not a surprise. Express freight is a very competitive business. Volume is down due to the economy too.

Quoting PITrules (Reply 17):
By UPS' own admission, they would need to keep the 300 pilots furloughed for 3 years for it to be cost affective. One hell of a gamble considering UPS is not counting on any further economic recovery in that period, not to mention any possible FAR duty limit changes in Congress as a result of the Colgan crash. That is the question analysts and shareholders need to be asking.

Are they looking at duty limits or a commuting limit? A commuting limit would hit ANC hard too..

The numbers do seem to not add up.

Quoting PITrules (Reply 17):
So one might ask "Why would they do this?" As stated earlier, it is about long term contract concessions, even if it means increased costs over the next couple years.

In a way it makes sense. UPS must be cost competitive.


Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently offlinePITrules From United States of America, joined Jun 2000, 3203 posts, RR: 5
Reply 17, posted (4 years 7 months 1 week 5 days ago) and read 2096 times:

Quoting lightsaber (Reply 18):
Are they looking at duty limits or a commuting limit? A commuting limit would hit ANC hard too..

I believe duty limits are at issue. Duty limits would be reduced, and furthermore, duty limits for night time operations would be reduced even more. If there is a limit on commuting as well then that's a further restriction as like you mention ANC is a long way from anywhere.

Quoting lightsaber (Reply 18):
In a way it makes sense. UPS must be cost competitive.

I agree 100%. But does being "cost competitive" include all the nonsensical costs associated with this furlough listed above; not to mention lost employee goodwill?


As an aside, here is a gem:

"ATLANTA (TheStreet) --UPS (UPS Quote) moved Thursday to address its "problem" -- too much cash -- by raising its dividend."

"We are going to be back soon hopefully to that problem of what to do with excess cash generation," Kuehn said. "We have no intentions of building a large hoard of cash"

http://www.thestreet.com/story/10674...using-cash--to-raise-dividend.html

Too much cash? I wish all the airlines had this problem!

I'm generally conservative when it comes to politics and the economy, but not to the point where it is 100% about the BOD and shareholders, and 0% about the frontline folks who move the goods (unless you can teach all shareholders how to load, fly, and maintain an MD-11).

This is rediculous; this company enjoys a duopoly with FedEx, and is wildly profitable.

Quoting lightsaber (Reply 18):
The numbers do seem to not add up.

        



FLYi
User currently offlinelightsaber From United States of America, joined Jan 2005, 13124 posts, RR: 100
Reply 18, posted (4 years 7 months 1 week 4 days 20 hours ago) and read 1950 times:
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Quoting PITrules (Reply 17):
I agree 100%. But does being "cost competitive" include all the nonsensical costs associated with this furlough listed above; not to mention lost employee goodwill?

No. There is something more going on. In my above post the 'numbers do not add up' was meant to be towards the cost savings of UPS doing this. Reading my own post, that wasn't clear. Oops...

I should mention the pilot I know who is probably being furloughed was once a mentor. I do not believe friend is the right word, but it is an individual I respect. Just to be clear, he was hired as a UPS 747 co-pilot. I believe in 2005-2007 (I'm unsure of the exact year as he wasn't mentoring me when he went to UPS.)

Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
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