FlyBoeing
Topic Author
Posts: 835
Joined: Fri May 05, 2000 2:08 am

Will MX Catch Up With NWA?

Mon Aug 22, 2005 10:33 am

I've been monitoring for a long time but haven't posted in a while. I'm doing some derivatives trading on Northwest stock. Here is what I and the markets know so far:

1) Bankruptcy is probably going to happen soon at the rate that Northwest is burning cash, whether or not the mechanics strike is successful or not. At the moment Northwest seems to have the upper hand but the overall picture is dim for them - saving $176 million doesn't come overly close to closing the $4 million a day hole they're digging for themselves.

2) Northwest seems to be running fine at the moment, although I've heard some reports of the new mechanics being undertrained on NW equipment. Some flights were delayed and two had to return Saturday.

The way I see it, the only uncertainty in the stock is (2) - whether Northwest can keep it up. I've gone into a "short" position because of what I've read here and on other bulletin boards Here is a summary:

1) Some of Northwest's new mechanics are only going through very abbreviated training to work on Northwest's aging fleet.

2) Northwest's MEL count is rising and there's no way that 1,900 people can do the work that 4,500 experienced people did before them.

3) While the pilots and flight attendants are sidelining this fight, they are capable of "work-to-rule" action - making more calls for MX than usual and running the new guys ragged. Pilots and flight attendants have little to lose since airline will go bankrupt anyway.

In a week we'll be certain whether the management was right.

What are your thoughts? Am I right to be short and question management's assertions?
 
solehibob
Posts: 47
Joined: Mon Feb 14, 2005 1:18 pm

RE: Will MX Catch Up With NWA?

Mon Aug 22, 2005 10:37 am

This is a tool to get back to negotiations. Plain and simple.

I also don't see how you get 1900 guys to do the work of 4500. That's just all cowboy tactics.

Even if NWAC mgmt wins this battle they still probably lose the war.
 
EMBQA
Posts: 7798
Joined: Sat Oct 25, 2003 3:52 am

RE: Will MX Catch Up With NWA?

Mon Aug 22, 2005 10:39 am

Some of Northwest's new mechanics are only going through very abbreviated training to work on Northwest's aging fleet

They are not 'green' just of the street...!!! There are thousands-thousands of mechanics that have been laid off post Sept '01 and that is where they got these people from. For all you know they may have been former Northwest mechanics laid off 3 years ago. United cut back to hiring dates of 1989...!!!

Northwest's MEL count is rising and there's no way that 1,900 people can do the work that 4,500 experienced people did before them.

How do you know Northwest MEL count is climbing..? or are we just guessing...? Also, how do you know the 1,900 are not 'AS' experienced..?? or are we just guessing again..?


I also don't see how you get 1900 guys to do the work of 4500

Easy, when 2000 of those 4500 spend much of the day drinking coffee and staying hidden you can get away with less people if they work

[Edited 2005-08-22 03:48:23]
"It's not the size of the dog in the fight, but the size of the fight in the dog"
 
JAFA
Posts: 740
Joined: Wed Aug 27, 2003 1:31 pm

RE: Will MX Catch Up With NWA?

Mon Aug 22, 2005 10:57 am

Quoting Solehibob (Reply 1):
I also don't see how you get 1900 guys to do the work of 4500. That's just all cowboy tactics.

Its 1900 replacements and shifting a big amount maintenance to vendors and manufacturers. Some cleaners and custodians are also part of the figure that is being replaced. Other savings come from not having mechanics perform pushbacks, this is was being done before at many stations.

[Edited 2005-08-22 03:58:21]
 
utapao
Posts: 546
Joined: Sat Jul 09, 2005 10:19 pm

RE: Will MX Catch Up With NWA?

Mon Aug 22, 2005 10:59 am

I've said it a dozen times on this forum. If you have a cause and you believe in it, DEFEND YOURSELF. You will get a lot futher getting the flying public BEHIND you than p*ssing them off because of their perception of your "issues".

Leaving MEX this morning, there were 6 ramp workers sitting on the side (5 yards from our aircraft) on top of tugs and baggage loading equipment talking on cell phones, talking to each other, dozing off, etc. This went on for the 30-minutes that the flight boarded and until we pushed back. Could they have been off duty? Sure. But in uniform and on the ramp... and within the working area of the flight, would someone assume they were off duty? NO!

This is apples and oranges, but it is still related. Few peolple sitting on the right side of the aircraft this morning, watching those guys, would have ANY sympathy six months from now if they struck because of their perceived issues. They might have real issues, but the flying public is what matters. What will 50 people think having seem them this morning?

PEOPLE: Forget the testosterone. Forget the CEO's. Forget the Union Non-Leaders. Get the FLYING PUBLIC behind you.
Sawasdee khrab!
 
solehibob
Posts: 47
Joined: Mon Feb 14, 2005 1:18 pm

RE: Will MX Catch Up With NWA?

Mon Aug 22, 2005 11:04 am

Quoting EMBQA (Reply 2):
Easy, when 2000 of those 4500 spend much of the day drinking coffee and staying hidden you can get away with less people if they work

Ok but get your facts right. That would mean that there are less people working there now than what NW was negotiating for in their contract talks.
 
FlyBoeing
Topic Author
Posts: 835
Joined: Fri May 05, 2000 2:08 am

RE: Will MX Catch Up With NWA?

Mon Aug 22, 2005 11:12 am

Thanks so much for your help - I'm really trying to sort out the arrogance of both management and union advocates on this board and others. My feeling is that because of the two incidents yesterday and the (unrelated) nosegear collapse in Guam the union might have an advantage, which would definitely work to my side.

I'm "short" on the stock - that is, I own 3 put contracts (good for 100 shares) with a strike price of $5. Contracts are good till Septemer 18th. The value of these contracts rises when there's more sentiment that the stock price will drop before then and drops when there's more sentiment that the stock price will rise. It's the inverse of what happens when you own the stock.

There have been several questionable upgrades by analysts citing Northwest's $107 million plan, which surprises the heck out of me. If something goes wrong in the next month Northwest is toast.

Any numbers on MEL counts and planes out of service? Would be INCREDIBLY grateful to know whether one or the other is true:

1) The replacements are Keystone Kops and the MEL list will continue rising until the FAA acts, or:

2) The mechanics were lazy bums who slowed down Friday night and are SOL right now.

Is anyone detecting any sympathy from pilots or flight attendants? Heard the 757-200 tire blowing incident might have had some of that there.

Thanks SO MUCH for your help. Anyone who drops by PHL is welcome to a celebratory beer if this pans out for me.
 
FlyBoeing
Topic Author
Posts: 835
Joined: Fri May 05, 2000 2:08 am

RE: Will MX Catch Up With NWA?

Mon Aug 22, 2005 11:16 am

Sorry about the finance mumbo-jumbo in the last post - I just wanted people to know where I stand. It shouldn't anger anyone who actually owns NWA stock because I haven't actually gone so far as to sell short the stock, which would drive the price down.
 
m404
Posts: 1875
Joined: Tue Nov 25, 2003 4:43 pm

RE: Will MX Catch Up With NWA?

Mon Aug 22, 2005 12:27 pm

As stated, the replacements won't have contract restrictions.
Additional MRO work can be outsourced now over the 38 percent allowed in AMFA contract.
Push backs can be done by IAM personnel so techs do not have to be allocated.
Spare parts that "may" have been withheld by vendors on NWA authority may now be released to avoid spurious write ups.
Heavier maint has supposedly been caught up for the next month or more.

I am curious about the seemingly odd timed pro NWA assessments Morgan Stanley gives occasionally.
Less sarcasm and more thought equal better understanding