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Robert Milton's Letter To Union Leaders

Sat Mar 22, 2003 2:49 am

Here is a copy of Milton's letter to union leaders, somewhat interesting.

March 14, 2003
Letter to union leaders :
As we approach March 15th -- the date by which I indicated we should aim to complete changes to our labour cost structure -- I believe that a lot of thinking has gone into ways to reduce these costs. As I outlined at our meeting on February 6th, the changes and savings being sought are permanent, involving fundamental structural changes in the way we work and do business. Given the further deterioration in the state of the industry, however, a number of temporary cost savings are also required immediately as we continue to work to implement permanent changes. Despite the dialogue underway, no definitive outcomes have yet been reached with any labour group and the challenges we face collectively continue to grow.
I commend some of you for the seriousness with which you have approached these discussions and ask all of you to re-double your efforts in the days ahead. As leaders, if it is obvious that things are not going to magically fix themselves (whether it’s the economy, low cost competition, or the geo-political situation), how then can we not immediately make the changes needed to turn things around?
As we strive to reach our objective of $650 million in permanent, annual labour cost savings, we must keep in mind that with every month that passes without a solution, we will have approximately $54 million less dollars as a Corporation to deal with our future. Each day that goes by without progress only serves to limit our options and further threatens the jobs we are collectively trying to protect. I am eager to continue the constructive dialogue, but I must reiterate that time is of the essence.
I know it is difficult. I know this is not the way you traditionally see things, where the overriding objective is always to negotiate wage increases and improve conditions for your members. But you are the elected leaders of our unionized employees in extraordinary times, and their careers and pensions are at stake if changes aren’t made now.
It is obvious from what is happening in the U.S., with evermore frequent news of American Airlines’ potential bankruptcy filing, that this situation is not going away and that Air Canada is not alone. One leading U.S. analyst reported this week that in the near term, American, Continental, Northwest and Delta will all be under bankruptcy protection.
As we saw with both USAirways and United, an inability on the part of labour unions to agree to cost relief on a timely basis contributed to their bankruptcy filings. Employees of those two companies have been hurt far more severely subsequent to their bankruptcies, and their futures are now largely out of their hands.
So as leaders we face two questions: do we act decisively and do what it takes to avoid a fate none of us wants, or do we stand frozen staring at the oncoming headlights waiting for some miracle to happen? There is only one answer and that is to act decisively now.
Without your leadership and a sincere willingness to deal immediately with the issues before us, the future of this company and your members remains unsettled.
There have been many media reports attributed to several of you in the past few weeks speculating on
Air Canada’s situation. I’d ask you to always consider both the positive and negative effect your words have on Air Canada’s employees and our customers. I applaud the positive statements made but I would ask those amongst you prone to be negative to carefully consider your words in the future. The careers of our employees are in the balance. The negative stories simply bolster our competitors while at the same time erode customer and employee confidence.
In particular, I’ve read comments to the effect that other stakeholders, including Management, must participate in this structural cost reduction effort. I agree entirely and management will participate. Just as our 3,000 managers did from 2001 to 2002, they will once again take pay reductions to take effect as soon as cost reduction programs are implemented for unionized employees.
If we are to find lasting, permanent solutions to the issues we face, all Air Canada employees, both unionized and non-unionized, must participate.
This leads us to the issue of third party and government participation. There are no miracle solutions which will fix the problems that have been identified and the government does not hold the answers. While we will continue to work with the industry to reduce the costs imposed by the government on Canada’s airlines, the question we must ask ourselves is how can any third party be reasonably expected to take a risk on Air Canada if the 36,000 employees of this company are unwilling to act quickly and make the changes we need? The ball is in our court collectively and we must act now.
Again, thank you for your efforts to date, but there is much more to be done…fast!
Robert Milton
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RE: Robert Milton's Letter To Union Leaders

Sat Mar 22, 2003 6:20 am

Good letter, I hope it gets through the unions collective heads that this time its for real!
"Clive Beddoe says he favours competition, but his actions do not support that idea." Robert Milton - CEO Air Canada
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RE: Robert Milton's Letter To Union Leaders

Sat Mar 22, 2003 6:56 am

I think it's a poor letter. AC's current financial morasse is due partly to union work rules, but also due to mgmt strategic errors.

I see Milton asking the unions to abandon their collective agreements (which, incidently Milton agreed to) while he's offering nothing in return.

Where is Milton's ownership & accountability of his strategic mistakes (over-amibitious expansion, massive unaffordable fleet renewal, purchase of CP)?

I hope the unions stick to their guns & refuse to budge unless Milton offers to resign.

I dumped at the gybe mark in strong winds when I looked up at a Porter Q400 on finals. Can't stop spotting.

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